Exports to Korea still have many opportunities to accelerate
Korea is one of the export markets of Vietnam’s products, why say that exports to Korea still have many opportunities to accelerate?
Vietnam’s fourth largest export market
The fourth largest export market of Vietnam is South Korea after the US, EU and China.
According to a report by the General Statistics Office, in November 2022, Vietnam exported more than $22.5 billion worth of goods to South Korea, up 13.4% over the same period.
In 2020, although the Covid epidemic has not been reduced, Vietnam’s total export turnover to South Korea still reached over 78.1 billion USD, up 18.3% compared to previous years.
In which, exports reached more than 21.9 billion USD, up 14.9%, mostly from agricultural, forestry and fishery products and low value added goods to groups with high technology content such as electronics, mechanics, high value consumer goods.
Especially, enterprises with foreign direct investment capital contribute more than 70% of Vietnam’s export turnover. Of which more than ½ are electronic products and more than ¼ are of enterprises from Korea, Samsung.
That shows the important contribution of Korean foreign-invested enterprises to Vietnam’s exports.
High-class agricultural products of Vietnam such as fragrant rice, brown rice, aromatic fruits, seafood products are also expanding their way to Korea. Most recently, the enterprise won a contract to export 20,000 tons of rice to South Korea, which is expected to be exported in early 2023.
With the FTAs being implemented, Trung An Hi-tech Agriculture Joint Stock Company has continuously won contracts to export rice to Korea over the years.
According to Mr. Pham Thai Binh and General Director of Trung An High-tech Agriculture Joint Stock Company, Korea is one of the fastidious markets with high standards, but once it has conquered this market, there is no need to worry about lack of customers.
Therefore, being exported to Korea, being trusted by the country has helped Vietnam improve its position in the market. In the future, fresh mangoes and bananas are the typical products exported to this market.
Korean exports still go far
The ASEAN-Korea Free Trade Agreement (FTA) and the Regional Comprehensive Economic Partnership (RCEP) which are being implemented have created many advantages and benefits for Vietnamese enterprises to boost exports to Korea and at the same time increase tariff preferences.
Director of the WTO Center under the Vietnam Federation of Industry and Trade Ms. Nguyen Thi Thu Trang said that the ASEAN-Korea Free Trade Agreement (FTA) and the Regional Comprehensive Economic Partnership Agreement have just been put into effect, but have created many significant benefits for Vietnamese businesses, reducing costs, time and human resources.
More importantly, the quality of the implementation of the Free Trade Agreement with Korea, reflected in the preferential tariff rate, is also much better than in other markets.
According to data from the Import-Export Department – Ministry of Industry and Trade: The use of preferential rates under C/O VK under VKFTA reached US$5.8 billion, accounting for 26.35%; AK samples under AKFTA reached 5.4 billion USD, accounting for 24.58%.
The total rate of using preferential C/O for Vietnamese goods exported to Korea in a free trade agreement last year reached nearly 51% of the total export turnover to this market, just behind India and Chile.
According to experts, the structure of import and export goods of the two countries Vietnam – Korea is complementary and has little competition. Export turnover to Korea increased sharply, shortening the trade deficit between domestic markets.
Therefore, we say that exports to Korea still have many opportunities to accelerate, because this is a difficult market and not every country can meet the strict demands of this country. That shows that Vietnam is a very strong country in the international arena in the import and export industry