Vietnam to become one of Korea’s four crucial export markets

The blossoming relationship is cornerstone to Korea’s export success, resulting from opportunities and advantages from the Vietnam-Korea Free Trade Agreement (VKFTA), according to the Korea Trade-Investment Promotion Agency (Kotra).

Accordingly, Korea will focus on connecting local manufacturers with foreign buyers in general and Vietnam in particular during the first half of this year.

According to Han Kyung Joon, deputy director of Kotra Hanoi, the VKFTA, through the provision of ample tax incentives, is expected to help bilateral trade turnover increase by a significant margin.

“Besides, signing other FTAs such as the Europe-Vietnam Free Trade Agreement (EVFTA) and the Trans-Pacific Partnership, will help Vietnam achieve deeper integration into the global economy and make Vietnam become the world’s manufacturing and export hub, opening numerous opportunities for Korean exports to Vietnam,” Joon said.

Automotive spare parts, fibre, and housewares will be the key Korean export products to Vietnam due to the new tax incentives as well as Vietnamese people’s increasing purchasing power. According to Joon, notably, the Vietnam Automobile Manufacturers’ Association’s (VAMA) statistics show that in 2015, 244,914 automobiles were sold in Vietnam, a 55 per cent increase on-year. The figure is expected to reach 260,000 units in 2016. Regarding electric housewares, the 90 million strong domestic market presents a
great opportunity for Korean producers to increase their sales.

Kotra Hanoi has been playing an important role in helping Korean SMEs to penetrate the Vietnamese market by supplying information about the investment environment, organising business-to-business (B2B) meetings and large-scale exhibitions.

Besides, on March 2, Kotra celebrated in Hanoi and Ho Chi Minh City the opening of a support centre for both nations’ businesses to apply the VKFTA.

The centre aims to introduce specific information about the VKFTA, while simultaneously helping the two countries’ enterprises to take advantage of the agreement. Experts working at the supporting centre have thorough knowledge about the ins and outs of the VKFTA and a great deal of experience in consultancy. Thus, they will help the two countries’ enterprises deal with problems, including non-tariff barriers, procedures for certificates of origin among others, which may arise during the agreement’s implementation.