Viet Nam and South Korea are working to bring their two-way trade turnover to US$100 billion by 2020. — VNA/VNS Photo
The Viet Nam-Korea Free Trade Agreement (VKFTA), which took effect on December 20, 2015, has played an important role in attracting investments from the South Korea to Viet Nam and helping the Southeast Asian nation integrate deeper into the regional economy.
Le An Hai, Deputy Director of the Vietnamese Ministry of Industry and Trade (MoIT)’s Department of Asia and Africa Markets, made the statement at a forum on VKFTA utilisation and implementation held in Ha Noi yesterday. Viet Nam is currently the fourth largest recipient of foreign direct investment (FDI) from South Korea, while the East Asian country is the biggest foreign investor in Viet Nam with total registered capital of more than US$58 billion, Hai stressed.
“The target of increasing bilateral trade volume to $100 billion by 2020 is possible towards creating more linkages between the two countries,” he said, adding that the prominent feature in bilateral trade relations was that the structure of imports and exports has been complementary, not directly competitive.
He said that products on which Viet Nam and South Korea committed to reduce taxes have shown good growth after the VKFTA entered into force.
He suggested that the governments should support businesses in taking advantage of preferential commitments to attract investment, increase exports and technological innovation.
“Businesses should actively study new markets, including taxes and quotas, as well as new management mechanisms,” he added.
Park Chulho, General Director of the Korea Trade-Investment Promotion Agency (KOTRA) in Ha Noi, said that the free trade deal with Viet Nam has opened opportunities for South Korean businesses to expand their markets. The seminar would help enterprises of both nations to share experience and take advantage of preferential policies offered by the VFKTA, he said, adding that the move will foster two-way trade in the future.
Important discussions, including a report on Vietnamese companies’ business capacity and analysis on the goods origin certification system in Viet Nam and in South Korea, were presented at the event. Thanks to Viet Nam’s tax reduction roadmap and preferential policies, some sectors like energy, high-quality agriculture, environment and manufacturing industry will attract more investors from South Korea, said an MoIT representative, adding that South Korea is likely to continue to be a leading FDI investor in Viet Nam in the coming years.
Two-way trade jumped from $500 million in 1992 to $61.5 billion in 2017, of which $14.8 billion came from Viet Nam’s exports, up 30 per cent from the previous year, and $46.7 billion from the Southeast Asian country’s imports, a year-on-year increase of 45.3 per cent. South Korea ranked first among 125 nations and territories pouring capital into Viet Nam, with total registered capital hitting $57.7 billion as of late December 2017. — VNS