The Viet Nam-South Korea Free Trade Agreement, which came into effect in December 2015, has given a big boost to economic ties between the two countries, a Korean diplomat told a seminar in HCM City on Thursday.
Speaking at a seminar on how to capitalise on the deal, Moon Byung Chul, commercial counsellor at the Republic of Korea consulate general, said bilateral trade was worth US$45.1 billion last year, a year-on-year increase of more than 20 per cent.
It grew by 30 per cent in the first seven months of this year to $35.5 billion, he said.
Investment by Korean firms in Viet Nam has also gone up significantly, rising to $54 billion as of last June, making it the largest foreign investor in Viet Nam, he added.
Yoon Joo Young, director of the Korea Trade-Investment Promotion Agency (KOTRA) in HCM City, said Viet Nam is Korea’s third largest trade partner and the largest investment destination in the ASEAN bloc, with about 4,500 Korean firms operating in the country.
Park Hyung Min from the Korean Ministry of Trade, Industry and Energy said while his country’s trade with other partners has reduced, it has remained robust with Viet Nam.
He believed that the FTA would further boost bilateral investment and trade ties.
Unmindful of opportunities
But according to delegates, Korean firms have capitalised on the lower tariff duties under the FTA to boost exports to Viet Nam while Vietnamese firms have not.
As a result, Viet Nam’s trade deficit with Korea has widened sharply since the FTA came into effect, delegates said.
According to Korea Customs Service, exports to Viet Nam in January-July this year were worth $26.95 billion, up 50 per cent from the same period last year, which is three times the overall export increase rate for Korea of 16.3 per cent.
Nguyen Quang Phuc from the Ministry of Industry and Trade’s Import-Export Department said Korean firms have taken advantage of the FTA while Vietnamese enterprises are passive in getting information about it, even unmindful of it, thus missing out on its much-touted benefits.
But when his ministry organises seminars on the FTA’s provisions, not many businesses take part or send the right employees, he said.
Dang Thai Thien, deputy head of supervision and management at HCM City customs, said compared to the South Korea-ASEAN FTA, the Viet Nam-South Korea FTA offers more benefits to Vietnamese firms exporting to Korea, more products enjoy tariff incentives and rules of origin are easier.
Both Phuc and Thien urged Vietnamese firms to be more active in getting information about the latter to boost export to Korea.
Yoon said Vietnamese firms should contact the Viet Nam-Korea Free Trade Agreement Support Centre, which was established last year, for consultancy and accurate and detailed information on the FTA as well as help to resolve difficulties related to non-tariff barriers and obtaining certificates of origin. — VNS