The business community in HCM City and provinces in the southern region have been informed in detail of the Vietnam-Republic of Korea Free Trade Agreement (VKFTA).

At a conference titled ‘The Vietnam-RoK Free Trade Agreement (VKFTA): Commitments and its Impacts on Vietnamese Enterprises’ held in HCM City on May 22, the Ministry of Industry and Trade introduced the agreement’s key points.

Pham Khac Tuyen, head of the Northeast Asia Division under MoIT’s Asia-Pacific Market Department, said the opportunity for Vietnamese commodities to enter the RoK will be greater than ever, because the agreement has abolished taxes on many Vietnamese goods.

Concerning imports, Tuyen said it is now easier for Vietnam to get access to materials and parts used for the manufacturing of garments and textile, footwear and electronics at cheaper prices, thus reducing the risk of reliance on certain countries for these vital materials.

Specifically, tax commitments in the VKFTA will see the RoK liberalise 97.2 percent of its import tariffs, including many key exports of Vietnam such as agro-products and seafood.

According to Tuyen, the challenges for Vietnamese enterprises and the domestic market are not big because the Vietnam-RoK trade relationship is complementary.

He added that Vietnam’s commitment regarding services and investment will help the country form a more transparent and open environment to draw investment from the RoK as well as other countries.

Tran Ngoc Liem, deputy director of the Vietnam Chamber of Commerce and Industry in HCM City, said that challenges from the VKFTA will force Vietnamese enterprises to improve their competitiveness, thus preparing them for the tougher competition from other upcoming FTA agreements with the United States, the European Union and the Customs Union of Russia, Belarus and Kazakhstan.

Vietnam-RoK trade has increased tremendously from 500 million USD in 1992 to 26 billion USD in 2014 with an annual growth of 20 percent.

The RoK is Vietnam’s third biggest trade partner, fifth biggest export market and second biggest import market.

The Northeast Asian country is also the leading investor in Vietnam with 4,140 valid projects and a combined capital of 37.43 billion USD as of the end of 2014.-VNA