Expanding Exports to South Korea

According to data released by customs authorities, the bilateral trade value was US$4.2 billion in 2005, US$4.7 billion in 2006, US$6.6 billion in 2007 and US$9.9 billion in 2008 despite difficulties triggered by the global economic crisis. In 2009, the two-side trade turnover sank 8.5 % to US$9 billion because of direct effects of the global economic downturn.

 

For many years, Vietnam has always suffered a deficit in merchandise trade with South Korea. In 2009, the deficit on the Vietnamese side was US$4.8 billion, higher than the total export turnover of Vietnam to this market through the 2005-2008 period.

 

According to statistics, in 2009, South Korea was the seventh largest importer of Vietnam’s goods while the East Asian nation was the largest exporter to Vietnam. South Korea is the fourth largest trade partner of Vietnam in 2009.

 

South Korea is always a key partner in the Vietnamese trade strategy. With growing trade promotion activities in recent years, more Vietnamese enterprises have traded with the East Asian country. In 2009, nearly 9,800 Vietnamese companies have trade revenues with South Korea in 2009 and the figure was already 7,250 companies in just the first five months of 2010.

 

According to the latest statistics from the General Department of Customs, the two-way trade turnover totalled US$4.3 billion from the star of 2010 to the end of May, up 41.2 % over the same period in 2009. Specifically, Vietnam spent US$3.4 billion on imports from South Korea, accounting for 10.8 % of its total import expenditure, while it earned US$900 million from exports to the East Asian nation, up 32.4 % from year on year and accounting for 3.6 % of Vietnam’s total export value.

Vietnam’s main exports to South Korea in the first five months of 2010 included seafood, apparel, crude oil, coal, timber and wooden products. The top 10 exports made up over 62 % of Vietnam’s export earnings to South Korea in the January-May period.

 

Meanwhile, Vietnam’s key imports from South Korea consisted of fabric, steel, machinery, equipment, tools, parts, petroleum, plastic materials, computers, electronic products and parts, textile materials, leather shoes, ordinary metal, automotive parts and ships. The top 10 imports accounted for nearly 72 % of Vietnam’s spending on imports from South Korea.

 

South Korean is an important market for Vietnamese enterprises. Vietnam’s export earnings from this market were equal to nearly 26 % of its spending on commodities from the East Asian nation. Thus, Vietnamese businesses should expand their exports to the South Korean market to pare the country’s trade deficit. With many cultural similarities, Vietnamese companies will have more opportunities of success on this market and the two nations can complement each other with opportunities to exploit the fullest strengths of each country.

 

This is confirmed by Vietnamese Deputy Finance Minister Do Hoang Anh Tuan at the dialogue meeting between the Vietnamese Finance Ministry and South Korean enterprises held in Hanoi, which was attended by leaders of the General Department of Taxation, the General Department of Customs and more than 100 South Korean companies operating in Vietnam.

 

This is the second time the Ministry of Finance hosted a dialogue with South Korean companies with the aim of facilitating South Korea’s export, import and investment activities in Vietnam. At the meeing, South Korean Ambassador to Vietnam, Park Suk Hwan highly appreciated the efforts of the Vietnamese Government and the Ministry of Finance in eradicating troubles of customs and tax-related administrative procedures for the business community, including South Korean businesses. He also expressed hopes that the Ministry of Finance would pay more attention to reforming customs and tax administrative procedures to promote economic activities of Korean companies in Vietnam.

 

At the conference, Deputy Minister Do Hoang Anh Tuan spoke high of South Korean companies’ contributions to the economic reform development in Vietnam. Currently, the Ministry of Finance is carrying out the second phase of the Government’s Project 30 on cutting off administrative procedures. Under the plan, the ministry will reduce from initial 239 procedures to 88 and eliminate five impractical procedures. The ministry expects to receive comments and feedbacks from the business community to continue improving existing mechanisms and policies to facilitate operations of foreign investors in Vietnam.