Free trade agreement between Viet Nam and the Republic of Korea (VKFTA) would be an effective channel to increase the bilateral trade to US$70 billion in 2020, said an official of the Trade Promotion Agency under the Ministry of Industry and Trade.

An electronics spare parts production line at the South Korean-invested Synopex Viet Nam Company in Ha Noi's Quang Minh Industrial Park. South Korea is the fourth largest export market and the second largest import market of Viet Nam.

Bui Huy Son, head of the agency, said the VKFTA was signed on May 5, 2015 and came into effect on December 20, 2015.

One key point of the FTA was to basically not have any direct competition in trade between the two countries.

This would create favourable conditions for enterprises in the two countries.

A month after the VKFTA came into effect, import and export of goods between the two countries went on well, Son said.

Of the goods exported by Viet Nam to South Korea, industrial and manufacturing products accounted for 87 per cent of the total national export value while farming and fishery products claimed 12.6 per cent of the total export value.

Viet Nam mainly imported material and machines for production from South Korea.

However, positive results lasted for a short period, Son said, but added that the two countries believed their enterprises would take advantage in making investments and trading under the bilateral FTA to exponentially increase the bilateral trade in the future.

According to Viet Nam's General Department of Customs, the bilateral trade value increased from $500 million in 1992 to $36.5 billion in 2015.

South Korea was the fourth largest export market and the second largest import market of Viet Nam.

In the first two months of this year, the value of exports from Viet Nam to South Korea reached $1.47 billion, 30.6 per cent higher than during the same period last year.

The key export products included telephones and their components, petrol, farming products, computer and electronic products.

VNS