Local firms harness power of FTA

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According to the Free Trade Agreement (FTA), Korea and ASEAN countries removed tariff barriers for more than 92 per cent of imported goods in 2010.

According to Ministry of Industry and Trade figures, in the first 10 months of this year, Vietnam’s export products to South Korea were estimated more than $3.86 billion, up to 60.2 per cent year-on-year. If the growth rate is maintained, Vietnam’s exports to South Korea will hit $5 billion in 2011.

Vietnam Textile and Garment Association figures showed textile and garment export turnover to South Korea was $100 million last month and $700 million for the first 10 months of this year, a record 140 per cent increase.

Reason for this growth is that after the FTA was signed, the average tariff rate for textiles reduced from 8 to 0 per cent, textiles from 13 to 0 per cent.

However, many Korean enterprises operating in Vietnam are also benefiting with total investment over $1.8 billion in Vietnam.

Vice chairman of the Vietnam Leather and Footwear Association Diep Thanh Kiet said: “Many export orders for textile, leather and footwear come from Vietnam-based Korean enterprises.”

After the FTA, other goods such as crude oil, glass, footwear, furniture, candy, agriculture-forestry-fishery products, vehicles and electronics will raise strongly.

According to the Association of Seafood Exporters and Producers of Vietnam, Vietnam’s seafood exports to South Korea rose 28 per cent in 2010 and 30 per cent this year.

In the same situation, opportunities for Vietnam’s fruit and vegetable exports to South Korea are expanding. In the first 10 months of this year, Vietnam’s fruit and vegetable exports to South Korea increased 100 per cent year-on-year.