Korea Importers Association (KOIMA) and Vietnam Trade Promotion Agency (VIETRADE) in collaboration with the Vietnam Trade Office in South Korea recently organized a seminar and trade exchange between Vietnam and South Korea enterprises in Hanoi. On the sidelines of the seminar, Vietnam Business Forum has an interview with Deputy Minister of Industry and Trade Tran Quoc Khanh. Anh Phuong reports.
Can you tell us about economic cooperation potential between Vietnam and Korea?
Currently, Korea is regarded as the fourth largest economic partner and the second largest foreign investor in Vietnam. In terms of disbursed FDI capital, Korea was ranked above Japan, with nearly US$8.26 billion. In 2011, trade turnover of Vietnam - Korea reached nearly US$19 billion and since the beginning of the year to May 2012, it reached more than US$8 billion.
With the presence and large scale investment from South Korean investors as mentioned above, the potential to develop trade between the two countries is huge. In addition, at the official visit of Prime Minister Nguyen Tan Dung to South Korea early last March, the two countries gave a joint statement: "To promote economic cooperation for mutual benefits. Thereby, the two countries announced the start of negotiation for a bilateral Free Trade Agreement (FTA) Vietnam - South Korea after completing the necessary internal procedures in the two countries." The FTA will contribute to further political, economic and cultural relations between the two countries and the closer strategic partnership Vietnam - Korea.
Would you please talk more about FTA between Vietnam - South Korea?
Recently, the Korean Ministry of Commerce said it would continue to promote the completion of the bilateral Free Trade Agreement (FTA) with some countries of the Association of Southeast Asian Nations (ASEAN), to further promote the country's trade volume with ASEAN countries.
As for Vietnam, Korea will have meetings at ministerial level to achieve unity in order to sign FTA soon. This also partly explains that Korea is scarce of resources and relies heavily on exports for economic growth. Therefore, foreign policy towards actively seeking the free trade agreement with foreign countries is a strategic priority of the Korean government in the future.
What is your assessment on trade exchange between Vietnam - South Korea?
Vietnam mainly imports machinery, textile materials, leather, petroleum, steel ... Vietnam exports goods to this market are mainly minerals, raw materials, agriculture - forestry - fishery products, textiles, footwear, furniture ... Thereby, typical features in the trade relations between the two countries is the complementary structure of goods and no sign of direct competition.
A good sign for Vietnam's garment enterprises when exporting to South Korea in the near future is that this type of goods would be received large benefit from the commitments in the Free Trade Agreement ASEAN - South Korea (AKFTA) with the average tariff rate for textiles reduced from 8 percent to 0 percent.
However, agricultural products which have been the strength of Vietnam's exports such as tea, pepper, coffee and flowers.... when entering Korean market still face certain barriers. Specifically, failing to meet quarantine requirements, export to the Korean market is not as expected. So, next time, Vietnam proposed Korean to recognize Vietnam’s quarantine results in this field as well as consider the possibility of bilateral Vietnam-South Korea FTA negotiations to create legal mechanisms more favorable for Vietnamese businesses.
In addition, the workshop also noted the interest of many Korean businesses in Vietnam's key products such as seafood, footwear and industrial products from crops (coffee, rubber , kites, spices, tea ...), home appliances, furniture and home office (furniture and office and household appliances from natural or industrial wood ...), etc. ... However, to make Vietnamese goods stand firmly on the market, the Korean side said that Vietnam manufacturers need innovative design, continuously improving the quality to meet international standards and customers’ tastes, ensuring credibility, and strictly fulfilling signed contract.
Mr Yoon Sang Jick, Vice Minister of Knowledge Economy of Korea
In the coming time, Vietnam will be a leading investment partner of Korea. And South Korea is especially interested in qualified and diligent human resources, and rapid speed of economic development, rich resources and abundant high quality products of Vietnam. Currently, Vietnam has a large deficit from Korea but it is possible to improve, just like similar cases occurred between Korea and Japan.
Mr Lee Ju Tae, President of KOIMA
KOIMA makes up about 80 percent of Korean imports, so the attendance of KOIMA member firms in this conference will certainly create more business opportunities for Vietnam to export goods to Korea and vice versa. At the same time, investment relations will develop, creating the foundation for Vietnam – Korea trade in large scale and sustainability.
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