08:38 | 11/01/2019 Cooperation
(VEN) - During her recent visit to the Republic of Korea (RoK), National Assembly Chairperson Nguyen Thi Kim Ngan witnessed the signing of a memorandum of understanding (MoU) on an action plan to achieve the US$100 billion bilateral trade target set for 2020 in a balanced manner.
Trade between Vietnam and the RoK has increased by 87 times, from US$0.5 billion in 1992 to US$43.6 billion in 2016, with breakthroughs achieved since the free trade agreement between the two countries took effect on December 20, 2015. In 2016, bilateral trade grew 19.1 percent compared with 2015, and in 2017 compared with 2016, the growth was 41.7 percent. In 2016, the RoK was Vietnam’s third largest trading partner. In 2017, it surpassed the US to rank second, after China, with bilateral trade reaching US$61.7 billion.
Notably, in 2009, Vietnam and the RoK set a US$20 billion target for bilateral trade in 2015, but the achieved result was US$36.5 billion. In 2013, the two countries set a new target of US$70 billion for 2020, but this year, the target has been raised to US$100 billion. These figures reflect the determination of both sides to upgrade bilateral trade relations and make them more substantial.
The potential for trade and investment expansion between Vietnam and Korea stems from many reasons.
(1) Goods traded between the two countries do not compete but complement each other, enabling each side to bring its advantages into play for mutual prosperity.
2) The RoK economy is thriving, resulting in higher purchasing power and increased import demand.
(3) The RoK is promoting the implementation of its “Look South” policy in an effort to expand trade with ASEAN member states to the level of its trade with China.
(4) Major distribution groups and food processing giants from the RoK, such as Emart and Lotte, have come to Vietnam to seek outsourcing services.
(5) Both countries have taken advantage of preferences presented by the RoK’s free trade agreements (FTAs) with ASEAN and Vietnam.
(6) The RoK is one of the leading foreign investors in Vietnam in terms of number of foreign direct investment (FDI) projects and capital. The RoK’s FDI in Vietnam has created a source of products for export, some of which are now present in global distribution channels, creating a driving force for Vietnamese exports.
(7) High-ranking leaders of both countries consider bilateral economic cooperation and trade ties a major component of diplomatic activities. The MoU signed during NA Chairperson Nguyen Thi Kim Ngan’s visit to the RoK is expected to create a new impulse for bilateral trade growth, investment and economic cooperation.
Vietnam still faces a deficit in trade with the RoK. To achieve the US$100 billion target in a balanced manner, Vietnam believes the following measures are required to reduce the trade deficit gradually:
(1) Promoting the manufacturing of international-standard products of clear origin and competitive prices for export to the RoK. Exports to this market should be products that suit the tastes of local consumers and the Vietnamese community in the RoK.
(2) Organizing export activities in a professional and effective manner; accessing RoK importers, distributors and retailers; inviting RoK importers to Vietnam to survey domestic companies, providing them with design consultancy and ordering products for sale in the RoK or supply to global distribution systems of major groups.
(3) Disseminating updated information about the RoK’s import regulations and procedures.
(4) Restricting the import of products that can be made in Vietnam; coping flexibly with trade protectionism and dealing on a timely basis with trade disputes to protect Vietnam’s legitimate interests.
(5) Management authorities, business associations and Vietnam’s representatives in the RoK, as well as the RoK’s representatives in Vietnam, should support companies.
Nguyen Duy Nghia