The Vietnam-South Korea Free Trade Agreement (VKFTA), which the two countries signed earlier this year, took effect on December 20, according to Vietnam’s Ministry of Industry and Trade (MoIT).
The two countries officially inked the VKFTA in Hanoi on May 5, 2015 then proceeded to complete ratification procedures in order to implement the pact.
With the VKFTA coming into effect, bilateral trade is seen to get a boost, with businesses in the two economies getting to enjoy trade and investment preferential status.
The two sides are now set to establish ministry-level joint committee and subcommittees on goods trade, customs, trade defense, sanitary and phytosanitary measures, and technical barriers to trade in line with moves to accelerate implementation of the agreement, according to a report by VGP News, Vietnam’s national news agency.
The MoIT disclosed that trade between Vietnam and South Korea has increased “57 folds” since 1992, pegged in 2014 at US$28.8 billion.
Last year, South Korea was the third largest trade partner of the Southeast Asian country, after China and the U.S. In turn, Vietnam is South Korea’s sixth largest export market. Two-way trade recorded an increase of 5.7% in value last year from 2013, with Vietnam’s exports to Korea estimated at $7.1 billion in 2014, up 7.9% year-on-year, and its import placed at $21.7 billion, up 5%.
According to Vietnam’s General Department of Customs, bilateral trade in the first 11 months of this year totaled $33.6 billion, a year-on-year growth of 27.6%.
As of October 20 this year, South Korea is the biggest investor in Vietnam out of 105 nations and territories, with 4,777 projects worth $43.6 billion in total, said MoIT.
These projects are mainly in the industrial processing and manufacturing, real estate, retail and wholesale, and construction sectors.
Nearly 3,000 South Korean enterprises are operating in Vietnam, creating jobs for more than 400,000 residents.
Photo: Dennis Jarvis
