For 20 years since the establishment of diplomatic relations, the Republic of Korea has been a very important economic partner of Vietnam. The Vietnam-Korea relationship has rapidly deepened in all fields such as political and economic, social and cultural, trade and investment, education and people-to-people exchanges. Regarding Vietnam- Korea relations over the past years, Vietnam Business Forum interviewed Mr Oh Jae-Hack, Korean Consul General in Ho Chi Minh City. Duy Khang reports.
How do you evaluate the bilateral trade relationship between Korea and Vietnam, especially since the signing of the ASEAN-Korea Free Trade Agreement?
Korea and Vietnam have comprehensively promoted their political, economic, social and cultural cooperation and mutual exchange programmes since 1992 when the two countries' diplomatic relationship was officially established. Among those various cooperative achievements, I evaluate that the two countries’ two-way trade and investment have shown remarkably rapid increasing growth performance.
The entry into force of the FTA between Korea and ASEAN in June 2007 is especially considered a tipping point to upgrade the bilateral economic cooperation between Korea and Vietnam. Since then, average annual exports from Korea to Vietnam increased 25 percent, and imports from Vietnam to Korea increased by 26.3 percent, during 2006 to 2010.
I think that these high trade growth rates have resulted from the synergy effect of the ASEAN-Korea FTA and the accession of Vietnam to the WTO in January 2007. Accordingly, the volume of Korea’s investment in Vietnam has increased and simultaneously, the two countries’ two-way trade has also grown rapidly.
When the grace period is finished and preferential tariff rates are officially applied to trade goods, the ASEAN-Korea FTA will take a larger role in expanding trade between Vietnam and Korea.
With the population of 89 million, Vietnam is a large consumption market. Has this caught the attention of Korean companies?
Vietnam’s population is the 14th biggest in the world and the 3rd in Southeast Asia, after Indonesia and the Philippines, and more than half of the population is less than 30 years old. Such a large population is a great potential for Vietnam in terms of the manufacturing sector and consumption market. At the same time, Vietnam is also rich in natural resources, energy, mineral, water, and aquatic products.
With respect to Korea, Vietnam is a gateway of Southeast Asia to access to North American, European, Middle Eastern and ASEAN markets. Vietnam and Korea have mutually supplementary economic structures.
Based on these rich natural resources, Vietnam has been developing soundly and has a favourable position; therefore, Korea evaluates Vietnam as a great country to invest in, not only for exporting but also for bilateral long-term win-win growth and co-prosperity in the future.
Vietnam and Korea have pledged to double trade to US$20 billion by 2015, according to you, is it a possibility?
In his State visit to Vietnam in October 2009, Korean President, His Excellency Lee Myung-Bak, expected that Korea and Vietnam’s two-way trade would reach US$10 billion in 2009, and the two countries should make efforts to double it by 2015.
Since then, Korean enterprises have sincerely realized their investments in Vietnam in spite of the challenges of the 2008 global financial crisis. They have also effectively promoted exports of manufactured-in-Vietnam products to North America and Europe, and greatly contributed to the export growth of Vietnam.
Thanks to that, two-way trade between Vietnam and Korea has increased 44 percent from US$12.98 billion in 2010 to US$18.63 billion at the end of 2011. Our two countries have agreed to double our trade volume after 6 years from 2009, but I anticipate that we will reach that goal in 2012, the 20th anniversary of our two countries’ diplomatic relations. That will be a milestone for trade between our two countries.
As a newly appointed Korean Consul General in HCMC, do you have any specific plan to promote bilateral trade between Korea and Vietnam in the coming time?
First, I hope that Vietnam will successfully fulfil its ambitious social and economic development strategies which are focused on becoming a developing country with higher and higher scientific technology.
Secondly, I hope that Korean enterprises will contribute to the development of Vietnam in such fields as light and heavy industries, and IT, which are essential for national development, and I also hope for further development of trade relations between Korea and Vietnam.
During my tenure, in my capacity, I will make efforts to expand our two countries’ mutual cooperation and support trade relations as well as other fields such as investment, infrastructure development, green growth like new renewable energies, transport and distribution of goods and finance between Vietnam and Korea.
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