VietNamNet Bridge – The export revenue of some key export products to the Republic of Korea (ROK) has increased sharply recently, since Vietnamese enterprises have taken full advantage of the Free Trade Agreement (FTA) between ASEAN, of which Vietnam is a member, and ROK.

Deputy Minister of Industry and Trade Nguyen Thanh Bien has predicted that the two way trade revenue between Vietnam and South Korea would reach $10 billion this year. The figure is expected to be higher at $15 billion by 2015.

“The two way trade revenue between Vietnam and South Korea in 2003-2006 was between $3 billion and $4.5 billion. However, the figure soared to $6.5 billion in 2007 and it is expected to rise to $10 billion this year. The sharp increase in the two way trade turnover is attributed to the ASEAN-ROK FTA,” Bien said. 

According to Bien, the number of C/O (certificate of origin) form AK used by Vietnamese exporters has increased (exporters using C/O form AK can enjoy preferential tariff when exporting goods to South Korea). In 2009, Vietnamese enterprises used 33,479 C/Os form AK to export $1.66 billion worth of goods to South Korea, accounting for 86 percent of Vietnam’s total export revenue to the country.

“This is a very high percentage if comparing with other FTAs that Vietnam has signed,” Bien said.

The number of C/Os form AK to be used in 2010 is forecast to be much higher than in 2009. According to the Ministry of Industry and Trade (MOIT), in the first half of the year, $842 million worth of goods were exported to South Korea with C/O form AK out of the total export revenue of $1.2 billion worth of exports to the country. As such, the number of C/O form AK has increased by 70 percent over the same period of the last year.

According to Bui Huy Son, Director of the Asia-Pacific Department under MOIT, a lot of export items have seen the export revenue increasing sharply thanks to the FTA. These include seafood exports (the seafood export revenue to South Korea in the first seven months of the year reached $179 million, an increase of 11.7 percent over the same period of the last year), garment products ($155.2 million; 64.2 percent), crude oil and coal.

Why do Vietnamese enterprises can take full advantage of the ASEAN-ROK FTA better than other FTAs? According to analysts, there are many reasons. However, the most important reason is that the current characteristics of South Korean market allow Vietnamese enterprises to penetrate the market more easily. Meanwhile, South Korean invested enterprises in Vietnam have been very interested in using C/O form AK to export goods to South Korea.

At the workshop discussing the measures to heighten the effects of the ASEAN-ROK FTA held in Hanoi last week, Lee Yun Young, a senior official from the ROK’s Ministry of Foreign Affair and Trade, said the Vietnam-ROK team work would gather in Hanoi early this week to consider the impacts of the ASEAN-ROK FTA.

Source: Dau tu