Making the most of opportunities from KVFTA

09:39 | 11/06/2015 Trade

(VEN) - The Korea-Vietnam Free Trade Agreement (KVFTA) was concluded recently becoming an impetus for increasing bilateral trade revenues and opening up many opportunities for Vietnamese exports. However, Vietnamese businesses need to work out the best way to seize the opportunities presented.

Making the most  of opportunities  from KVFTA

Numerous advantages
After the KVFTA takes effect, businesses will make the most of 80-90 percent of the preferences. Several exports such as agricultural products, forest products, seafood, wood furniture, textiles, garments and several kinds of industrial products will see major benefits from the KVFTA.
According to Pham Khac Tuyen, a KVFTA coordinator and the Head of the Northeastern Asia Division under the Ministry of Industry and Trade’s Asia-Pacific Market Department, the agreement will not only reduce tariffs but also minimize non-tariff barriers and technical requirements. For this reason, Vietnamese businesses should tap the opportunities to boost their exports including seafood and tropical fruits.
However, the Republic of Korea (RoK) has established high requirements in terms of food quality, safety and hygiene. In addition, Korean consumers prioritize domestic products. For this reason, foreign imports have to compete with domestic products in the RoK. Vietnamese businesses need to know about this and connect with reputable Korean distributors.
The KVFTA will open the market for machinery leasing services thus providing Vietnamese businesses with opportunities to renew their technology in an economical manner, rather than buy new machinery.
Active integration
To make the most of the opportunities from the KVFTA, Korean Chamber of Commerce and Industry in Vietnam General Secretary Hong Sun suggested that Vietnamese exporters closely follow and cooperate with Korean companies to boost their exports. They also need to comprehensively understand their key products and receive support from the government.
Hong Sun also said that the RoK had organized many workshops to provide updates on the KVFTA among medium and small enterprises, while distributing lots of information about the KVFTA. Korean businesses can easily access business association and government websites to understand specific itineraries for each and every product.
Vietnam has favorable natural conditions for agricultural development. However, it has weaknesses in terms of technology. Hong Sun said that to enter the Korean market, particularly the market for farm and forest products and seafood, Vietnamese businesses need to make careful preparations and partner with strong Korean companies in agriculture to overcome Korean barriers in terms of quarantine. In relation with Korean partners, Vietnamese businesses need to provide sufficient information about their products, prices and capabilities. Meanwhile, they should avoid slow feedback and presenting unfeasible schemes to their Korean partners./.

By Huong Phuong