Le An Hai, Deputy Director of the Ministry of Industry and Trade (MoIT)'s Department of Asia and Africa Markets, said that he expected in the next 3-6 months, Vietnam will have an action program so that the two sides can support each other to enhance exports and imports with focus on supporting industries, high technology and consumer goods.
Bilateral trade between Vietnam and South Korea is set to reach US$100 billion by 2020.
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Two-way trade between the two countries jumped from US$500 million in 1992 to $61.5 billion in 2017, of which $14.8 billion came from Vietnam's exports, up 30 percent from the previous year, and $46.7 billion from the Southeast Asian country's imports, a year-on-year increase of 45.3 percent. The two sides also hope to increase bilateral trade to $100 billion by 2020.
The agreement has also played an important role in attracting investments from the South Korea to Vietnam and helping the Southeast Asian nation integrate deeper into the regional economy. Vietnam is currently the fourth largest recipient of foreign direct investment from South Korea, while the Northeast Asian country is the biggest foreign investor in Vietnam with total registered capital of more than $58 billion.
"The target of increasing bilateral trade volume to $100 billion by 2020 is reachable towards creating more linkages between the two countries," Hai said, adding that the prominent feature in bilateral trade relations was that the structure of imports and exports has been complementary, not directly competitive.
He said that products on which Vietnam and South Korea committed to reduce taxes have shown growth after the VKFTA entered into force.
However, according to MoIT, the utilization rate of opportunities and incentives in VKFTA of Vietnamese firms has remained low and hasn't met expectations.
According to a survey by Shinhan Customs Service, only 24 percent of surveyed Vietnamese enterprises took advantages of VKFTA.
The ministry attributed the low utilization rate to the restriction in accessing information of enterprises. In addition, there is a lack of understanding of origin management methods, classification of the raw materials list, and restrictions on the establishment of mutual recognition regimes on certificates of origin.
Besides, the study and application of incentives in VKFTA cannot also be implemented in a short time and need time, it said.
To strengthen the utilization of opportunities provided by VKFTA, Choi Dae Kyoo, expert in customs and tax services under the Vietnam-Korea Free Trade Agreement Supporting Center, suggested that enterprises need to change and raise the awareness and knowledge of their staffs, especially those in business research and development divisions, in accessing to information and data on FTAs to be able to come up with appropriate measures.
At the same time, the establishment of an information-sharing network with enterprises, which have already experienced in utilizing free trade agreements such as VKFTA, is very necessary, the expert recommended.
Hai suggested that the governments should support businesses in taking advantage of preferential commitments to attract investment, increase exports and technological innovation.
Businesses should actively study new markets, including taxes and quotas, as well as new management mechanisms, he said.
