HÀ NỘI (BizHub) – Bilateral trade between Việt Nam and South Korea is expected to reach US$70 billion by 2020 due to the Việt Nam – South Korea Free Trade Agreement (VKFTA) which came into effect one year ago.

South Korean Ambassador Lee Hyuk in Việt Nam told Công Thương newspaper that as of September, the export value from South Korea to Việt Nam rose 12 per cent, while the export value from Việt Nam to South Korea increased 32 per cent year on year.

Of note, exports from South Korea to Việt Nam exceeded the export value from South Korea to Japan, a traditional and long term export market of South Korea. This is being seen as the greatest success since the VKFTA came into effect in December 2015, he said.

Export products from Việt Nam to South Korea include textiles, crude oil, seafood, fibers, wood and wood products, while products that were shipped from South Korea to Việt Nam were computers, electronic products and their components, machines, equipment and telephone components.

An increase in Việt Nam’s exports to South Korea had contributed to the growth in Việt Nam’s total export value and had balanced exports and imports between the two countries, Lee Hyuk said.

From 2017, 18 items would join tariff reductions under the VKFTA, so the trade value between the two countries was expected to increase and become more balanced, he said.

In addition, South Korea had become the largest investor in Việt Nam, in both volume and value, with a total investment capital of $49 billion. South Korea had also been the second largest donor of official development assistance (ODA).

Lee Hyuk said in 2016 that bilateral trade between Việt Nam and South Korea was expected to exceed $40 billion. The two countries anticipated that the value would reach $70 billion in 2020 due to taking full advantage of the VKFTA.

Of note, investment from South Korea’s enterprises in Việt Nam would assure that the bilateral trade value meets its target, he said. South Korean enterprises believe the investment environment in Việt Nam would continue to improve, he said.

Lê An Hải, deputy head of the Ministry of Industry and Trade’s Asian Market Department, said based upon commitments of VKFTA, in the coming years the two countries would improve their economic and politic relationships.

Việt Nam is to focus on building preferential mechanisms for South Korea, while South Korea is to continue to open its market for Việt Nam’s goods, according to Hải.

Local enterprises should take full advantage of the VKFTA to build cooperation to export products to South Korea and other regional countries, he said.

The ministry would work to ensure a fair business environment and create favourable conditions in business and investment activities for foreign enterprises in Việt Nam, including South Korean firms, Hải added. - VNS