Vietnam-South Korea Trade Booms on FTA
South Korea has become Vietnam’s second-largest trade partner while the latter has climbed to the fourth place of the former's top trade list.
|A bilateral FTA has prompted trade between Vietnam and South Korea. Photo: Internet|
Trade between South Korea and Vietnam has jumped for three consecutive years since a bilateral free trade agreement (FTA) pact took effect in December 2015 as the Southeast Asian nation seeks to diversify its trade partners.
Trade between the two nations has grown at a double-digit pace for two years in a row since the implementation of their FTA. The growth was 23.8% in 2015 and 20.1% in 2016. Korea has surpassed the United States to become Vietnam’s second-largest trade partner, after China.
According to the Korea Trade-Investment Promotion Agency (KOTRA), the FTA enabled tariff reductions in the category of intermediate goods such as electronic components, semiconductors, telecom devices and displays.
Bilateral trade increased 43% year-on-year to reach $58.5 billion in the 11 months through November this year, making Vietnam South Korea’s fourth-largest trading partner, according to the Korean Ministry of Trade, Industry and Energy.
Ministry data showed that South Korea’s combined exports to Vietnam reached $43.7 billion between January and November this year, up by 48.4% from a year earlier, with semiconductors, displays, wireless communication equipment and electronic parts accounting for 46.7% of the exports to Vietnam..
Meanwhile, Korea spent $14.8 billion on imports from Vietnam, up 22.3% during the same period, mostly in wireless communication equipment, clothing and other daily necessities.
With fast-growing exports, Korea’s trade surplus with Vietnam also widened to $28.9 billion in the first 11 months of the year.
Tuan Minh / BizLIVE