The 15th Free Trade Agreement between Korea and Vietnam was signed in Hanoi on May 5 in the presence of Vietnamese Prime Minister Nguyễn Tấn Dũng. Minister of Trade, Industry & Energy Yoon Sang-jik and Vietnamese Industry & Trade Minister Vu Huy Hoang signed the Korea-Vietnam FTA which will eliminate 94.7 percent and 92.4 percent of their tariffs based on the amounts of imports respectively.

The 12 percent tariffs imposed on textile goods exported from Korea are scheduled to be eliminated so that small firms in Korea can increase their exports. Other tariffs on auto parts, electric rice cookers and the 20 percent one on mixer and vegetable juice machines will be removed in steps.

According to the Korea International Trade Association, exports from Korea to Vietnam reached US$6.58 billion in the first quarter of this year, showing an 18.3 percent increase from a year earlier. In that quarter, only China and the United States recorded more exports to Vietnam than Korea did. The increase in the exports is especially eye-catching in that Korea’s overall exports declined 2.9 percent in Q1 this year, when those to the ASEAN region,

Japan and China dropped 17.6 percent, 22.0 percent and 1.5 percent as well, respectively.

During the same period, Korea’s imports from Vietnam increased 17.3 percent to US$2.03 billion and the bilateral trade volume raised 18.1 percent to US$8.61 billion. The latter broke the US$30 billion mark last year, when the volume added up to US$30.34 billion by showing a 7.4 percent growth.

Last year, Korean companies accounted for 14.7 percent of the imported goods market of Vietnam to be second only to China, which took up 29.6 percent of it.