New free trade deal to heighten economic ties with South Korea
New free trade deal to heighten economic ties with South Korea
The Viet Nam-South Korea Free Trade Agreement (FTA) will serve as a milestone to strengthen the two countries' economic relations, expected to reach US$70 billion in trade by 2020.
This was revealed at a seminar yesterday on economic co-operation between Viet Nam and South Korea in the Post-FTA era.
Under the FTA, signed in December, the two countries will remove import tariffs on more than 90 per cent of all products once the FTA is implemented, probably in June.
"This will not only expand trade and investment opportunities between the two countries, but help reinforce co-operation in various sectors, including industry, energy, agriculture and infrastructure," said Hae Moon Chung, Secretary General of ASEAN-Korea Centre.
According to the latest data from South Korea, the country rose to become Viet Nam's largest foreign investor last year in terms of both value and number of projects. This put it ahead of Japan, Taiwan and Singapore.
Viet Nam has risen as a manufacturing hub for Korean companies. More than 4,000 Korean firms having been set up here, including big corporations such as Samsung Electronics, POSCO Steel, LG electronics, Hyundai Heavy Industries and SK Energy.
Bilateral trade reached $30.3 billion in 2014, making South Korea Viet Nam's third-largest trading partner, after China and the United States.
Viet Nam is South Korea's eighth largest trading partner and the second largest among ASEAN member countries, next to Singapore, Chung said.
However, Viet Nam has a high trade deficit with South Korea. The country's exports reached just nearly $8 billion in 2014 while it imported up to $22.3 billion worth of goods from the north Asian nation.
Experts agreed that the bilateral FTA would help create additional economic gains for the two countries through accelerating export and investment co-operation that can benefit even small and medium enterprises.
According to Hoang Van Thang, Deputy Minister of Agriculture and Rural Development, the export structures of the two countries are complementary and have little direct competition.
Thang suggested the South Korean government remove unnecessary non-tariff barriers for Vietnamese products to help increase the presence of Vietnamese goods in Korea, especially agricultural commodities.
Apart from the bilateral FTA, economic relations between Viet Nam and South Korea will further be intensified due to co-operation in Korea-ASEAN and Korea-Mekong relations, said Chung.
The ASEAN-South Korea FTA and Regional Comprehensive Economic Partnership (RCEPT) with 16 member countries are in-progress and scheduled to be concluded before the end of this year.
"The FTAs engaging Viet Nam and South Korea will help realise the commitment made by leaders of the two countries to lift the bilateral trade volume to $70 billion by 2020," said Daejoo Jun, South Korean ambassador to Viet Nam.
Experts from the two countries yesterday also discussed the status and prospects of bilateral economic co-operation focusing on the industry, agriculture and infrastructure sectors, the three areas that receive high attention from both governments and businesses.
The seminar was organised by the National Research Council for Economics, Humanities and Social Sciences of Korea (NRCS) in collaboration with Thai Nguyen University of Economics and Business Administration.
