Vietnam and South Korea agreed to conclude a free-trade deal by the end of next year as they seek to expand trade by more than three times and work toward an agreement for two nuclear power plants.
The two sides agreed to the faster timetable as South Korean President Park Geun Hye met the Vietnamese counterpart Truong Tan Sang in Hanoi today. They reached a target of $20 billion in annual trade in 2012, three years earlier than planned, and want to boost that to $70 billion in 2020, the leaders said at a briefing in Hanoi.
"We hope Vietnam will continue to improve the business environment and help resolve any obstacles faced by South Korean companies in Vietnam," Park said.
The two leaders' promise signals they may be close to overcoming disputes that have stalled free-trade negotiations that began last year, including Vietnam's demand to get greater access for its marine products to the South Korean market, said Cheong In Kyo, an economics professor at Inha University in Incheon.
"Today's agreement revives momentum for the talks and demonstrates how serious the two presidents are about a free trade deal," Cheong said in a phone interview.
Concluding the pact could help South Korean efforts to sign similar deals with Indonesia and Malaysia, and speed momentum toward the nuclear power plants, according to Cheong. In June, Vietnam awarded South Korea the right to jointly conduct a preliminary feasibility test for the plants, the first of several steps before the two countries can sign a deal, according to the Trade Ministry in Seoul.
South Korea and Vietnam set up diplomatic ties in 1992, 17 years after the end of the Vietnam War in which South Korea sent troops to support military operations by its ally, the U.S.
Samsung Electronics Co. runs factories in Vietnam that accounted for an estimated $12 billion in Vietnam's exports last year, according to the Korea Trade Investment Promotion Agency in Seoul. Vietnam exported $62 billion worth of goods in the first half of the year overall, the Vietnamese Statistics Office said June 27.
Vietnam has sought to improve relations with South Korea while maintaining its traditional friendship with North Korea. Park said Vietnam and South Korea agree that North Korea's development of nuclear weapons threatens regional peace.