Vietnam has benefited more than other Southeast Asian countries who have signed free trade agreements with South Korea, say Korean trade officials.
Dug Gyou Bok, deputy director of Korea Trade-Investment Promotion Agency (Kotra)'s Asia and Oceania Team, said Vietnam has used the agreement to boost exports and lure more foreign direct investment from Korea.
Bok said Vietnam's exports increased 32.5 percent in the first seven months of 2010 while average export growth in ASEAN members was about 24 percent during the same period. The country's exports to South Korea grew 16.3 percent in 2009, he added.
The agreement between Korea and ASEAN members took effect for goods in 2007 and services and investment last year. ASEAN, as the Association of Southeast Asian Nations is often known, comprises ten countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Korea eliminated 70 percent tariffs in 2007 and completed its committed tariff reductions early this year for the ten members, while Vietnam aims to complete its commitments by reducing tariffs from the current 7 to 20 percent to between 5 and zero percent by 2018. This reduction will be effected on half of tariff lines by 2015.
Bok said the multilateral agreement has brought opportunities for Vietnam to export more telephone set parts and wood chips, products that have also brought in investments from Korea.
Kotra said Vietnam's export to Korea in the sectors grew respectively by 98.6 and 600 percent from January to July this year while that of traditional goods like seafood, shoes and agricultural products increased stably.
Korean electronic giant Samsung has exported US$1 billion worth of products so far from its $670 million mobile phone factory that it opened last September in the northern province of Bac Ninh.
However, the two-way trade was in favor of Korea, according to Kotra. South Korean exports to Vietnam increased 35.2 percent to $5.12 billion in the first seven months of this year, more than three times higher than its imports from the country during the same period.
Yon-Jip Jung, deputy general director for Free Trade Agreement Policy under the South Korean Ministry of Foreign Affairs and Trade, said Vietnam was one of the Korea's best partners in the Southeast Asian bloc, and it wanted to further boost bilateral trade and investment ties.
Jung said the ministry planned to promote the agreement to boost trade and investment in both countries and would explore respective advantages as the countries completed negotiations on a bilateral free trade agreement.
Both sides will focus on goods that bring more benefits in bilateral than multilateral pact of which many members have different interests and goals.