Vietnam is an important trade partner and a strategic destination of businesses from the Republic of Korea (RoK), experts said at a workshop held in Ho Chi Minh City on July 16.

According to the Korean Ministry of Trade, Industry and Energy, Vietnam is the fourth biggest trade partner of the RoK, and an attractive destination in the investment expansion policy to the south of many Korean businesses and groups.

Bilateral trade has increased to 68.3 billion USD in 2018 from just 500 million USD since the two nations established diplomatic ties in 1992.

Particularly, two years after the signing of the Korea-Vietnam Free Trade Agreement (KVFTA) in 2015, the bilateral trade doubled.

The RoK has risen to become the biggest foreign direct investor of Vietnam with total investment of 64.5 billion USD, which is expected to increase in the coming years.

Nguyen Thi Huyen Ngoc, of the Investment Promotion Centre in the South under the Ministry of Planning and Investment, said Vietnam and the RoK have favourable conditions to cooperate in trade and investment, especially in high technology and supporting industry. 

With a population of over 96 million and average annual economic growth of 7 percent, Vietnam is a potential consumption market, she said, adding that the favourable geographical position also enables the country to access to nearly half of the global markets with only 6-8 flying hours.

Another advantage of Vietnam in attracting foreign investment is favourable export activities through bilateral and multilateral free trade agreements, she noted.

Yoon Jooyoung, Chief Representative of the Korea Trade and Investment Promotion Agency (KOTRA) in HCM City, said the utilisation of incentives from the KVFTA and the ASEAN-Korea Free Trade Agreement (AKFTA) has yet been as effective as expected. 

While 90 percent of made-in-Korea goods imported into Vietnam could take advantage of tax incentives, only 47 percent of made-in-Vietnam goods exported to the RoK could do that, he noted.

Experts held that businesses should develop strategies to optimise incentives from free trade deals while State management agencies should simplify procedures to get preferences.