The ASEAN-Korea Free Trade Agreement (AKFTA) is expected to create more trade opportunities for Vietnam as well as other ASEAN member countries, helping narrow Vietnam’s consistent large trade deficit with South Korea, heard an ongoing meeting in Hanoi.
The AKFTA, effective from June 1, 2007, has already scrapped taxes on 70 per cent of on goods imported from ASEAN, paving the way for Vietnam’s further exports of seafood and processed products, said Tran Trung Thuc, an official of the Vietnamese Ministry of Trade (MoT), at the 18th meeting of the ASEAN-S. Korea Trade Negotiation Committee, held from June 5-8.
Meanwhile, Kim Han-soo, Deputy Minister of South Korean Foreign Affairs and Trade, said the agreement would contribute to reducing the US$3 billion yearly trade deficit between Vietnam and S. Korea and create more jobs for Vietnam’s workers.
He also added that investment flows from S. Korea to ASEAN countries, including Vietnam, are likely to increase.
In January-May period this year, South Korea invested US$733.8 million into 105 projects in Vietnam, raising its total investment into the country to over US$8.72 billion for 1,392 projects, only second to Singapore.
Currently, S. Korea is Vietnam's sixth largest trading partner, with bilateral trade accounting for 6.6 per cent of Vietnam’s total import-export turnover from 2002 to early 2006.
However, Vietnam has consistently recorded a trade deficit with S. Korea, in large part due to the foreign country’s increased investment in Vietnam and the ASEAN nation’s imports of machinery, spare parts and equipment, cars and materials for garment and textiles manufacturing.
S. Korea mainly imports seafood, crude oil, coal, electrical equipment, footwear, woodwork products, rubber, household utensils and coffee from Vietnam. (VNA, Vietnam Panorama)
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