Support industries: The flaw and promise in RoK - Vietnam economic cooperation

10:00 | 11/03/2019 Cooperation

(VEN) - The Republic of Korea (RoK) and Vietnam aim to reach US$100 billion in bilateral trade by 2020. RoK Ambassador to Vietnam Kim Do Hyon discussed the ties between the two countries with Vietnam Economic News’ Thanh Tam.

support industries the flaw and promise in rok vietnam economic cooperation
RoK Ambassador to Vietnam Kim Do Hyon

How do you assess economic cooperation prospects between the two countries?

Many RoK enterprises have invested in Vietnam and achieved success. Effective investment benefits the RoK and helps Vietnam become a global production base. However, to achieve the goal, cooperation with RoK enterprises in support industries must be strengthened, and merger and acquisition (M&A) deals must be completed to enable technology transfer from the RoK to Vietnam, facilitating the development of support industry enterprises in Vietnam.

In my opinion, it is very important to contribute to the development of Vietnam’s manufacturing sector and support industries. The RoK government is committed to helping Vietnam in its development process.

The implementation of the Korea-Vietnam Free Trade Agreement (KVFTA) has yielded positive effects in economic cooperation. How do you assess the opportunities provided by the agreement?

Thanks to the KVFTA, RoK enterprises investing in production in Vietnam have enjoyed many tax incentives. However, even before the KVFTA went into effect, most information technology (IT) components and spare parts were also entitled to tax incentives according to the World Trade Organization or the Information Technology Agreement (ITA). Therefore, I think that the benefits of the KVFTA are not only tax incentives, but also the conditions it provides for the two countries to further promote economic cooperation.

However, the level of preferential utilization of the KVFTA is not high. The customs authorities of the two countries should coordinate to promote its implementation and enhance its efficiency.

The KVFTA has also contributed to promoting the exchange of people between the two countries, as well as cultural and educational exchanges.

What do you think about the target of US$100 billion in bilateral trade by 2020?

During the visit to the RoK by Vietnamese National Assembly Chairwoman Nguyen Thi Kim Ngan, Vietnamese Minister of Industry and Trade Tran Tuan Anh and Korean Minister of Trade, Industry, and Energy Sung Yunmo signed a memorandum of understanding (MoU) on an action plan for attaining US$100 billion in bilateral trade by 2020. I think that the trade structure between the two countries is more important than the target of US$100 billion in bilateral trade. Currently, the trade structure between the two countries is unbalanced. To resolve the problem, we need to develop support industries so that RoK enterprises investing in Vietnam can export more Vietnamese products to foreign markets.

Thanh Tam