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The prospects of Vietnam - Korea FTA

Thu, 11 Dec 2014. Last updated Thu, 25 Jun 2015 08:57

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Vietnam - Korean Free Trade Agreement is entering into the decisive negotiation to create a milestone in a South Korea visit of Prime Minister Nguyen Tan Dung. In the visit, Vietnam PM will attend in the 25th anniversary of ASEAN-ROK Dialogue Relations.

In March 2010, Vietnam and Korea established the Joint Working Group on the theme of Vietnam - Korea Free Trade Agreement. The members of this group are coming from government agencies and research institutions of 2 countries. The Joint Working Group aims to carry out joint studies on the feasibility of signing a free trade agreement between two countries. If Vietnam - Korea FTA will be signed in the near future, this will become one of free trade agreements hitting a record of the fastest negotiation's speed. According to statistics, Korean Samsung factories in Vietnam accounts for 20% the total export turnover of the country's merchandise. Along with that, 70,000 jobs were created and 200 enterprises manufacturing auxiliary components are still effectively operating. However, the business operation of Samsung and other Korean enterprises in Vietnam will welcome more prospects if the Vietnam Korea FTA is signed.

 

Korean Trade and Commerce Minister Korea Bark Tae Ho speaks at a press conference

 

The process of negotiating Free Trade Agreement between Vietnam and Korea was launched since 2012. This process has been constantly promoted by strong political commitment of leaders from 2 countries. If Vietnam Korea Free Trade Agreement will be signed at the end of 2014 or in the early 2015, the agreement will reach a record of the fastest negotiation's speed in comparison to other free trade agreements which were already signed. Free Trade Agreements are often accompanied by the worry about the disadvantages of local enterprises in domestic market. Nonetheless, Vietnam - Korea FTA can minimize this anxiety. The reason for this is that the highlight of Vietnam - Korea trade relations is complementary relations. Export goods of Vietnam - Korea are complementary goods. Korea export to Vietnam market products that Vietnam still cannot manufactured, on the other hand Vietnam also export to Korea items which Korean economy are in need. Thereby, it can be clearly seen that there are no direct competition in Vietnam Korea trade relation.

 

Shrimp - one of major export commodities in Vietnam

 

Currently, Korea is an important market of Vietnam products, especially major export products such as fisheries, textiles, wood, agricultural products. Meanwhile, Vietnam mainly imports machinery, steel and means of transport, etc. from Korea. After 22 years of establishing diplomatic relations, Vietnam and Korea relations upgraded to strategic partnership cooperation in 2009. Vietnam - Korea FTA will be the catalyst to strongly develop the diplomatic and trade relations between two countries. 

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