Yarn produced at the Dong Phat JSC in Hanoi. (Source: VNA)

Hanoi (VNA) - Free trade agreement between Vietnam and the Republic of Korea (VKFTA) would be an effective channel to increase the bilateral trade to 70 billion USD in 2020, said an official of the Trade Promotion Agency under the Ministry of Industry and Trade.

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 Vietnam to the Republic of Korea (RoK), industrial and manufacturing products accounted for 87 percent of the total national export value while farming and fishery products claimed 12.6 percent of the total export value. Vietnam mainly imported material and machines for production from RoK.

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 Vietnam's General Department of Customs, the bilateral trade value increased from 500 million USD in 1992 to 36.5 billion USD in 2015. RoK was the fourth largest export market and the second largest import market of Vietnam.

In the first two months of this year, the value of exports from Vietnam to RoK reached 1.47 billion USD, 30.6 percent higher than during the same period last year. The key export products included telephones and their components, petrol, farming products, computer and electronic products.-VNA