Vietnam is South Korea's ninth-largest trading partner, with $21.09 billion worth of products shipped to the Southeast Asian country in 2013. The two countries, South Korea and Vietnam have initialed free trade agreement with the aim to boost bilateral trade by removing tariffs and other barriers.

Following Saturday's initialing in Seoul, South Korea will seek to formally sign the deal within the first half of this year and obtain parliamentary approval as soon as possible before implementing it by year-end, the Ministry of Trade, Industry and Energy said.

In December, South Korean President Park Geun-hye and Vietnamese Prime Minister Nguyen Tan Dung announced the effective conclusion of bilateral FTA negotiations.

The ministry said that the latest FTA will likely help small and medium enterprises to ship more textiles, auto parts, cosmetics and electronics goods to the Vietnamese market.

The deal would allow South Korean firms to compete better with their Japanese competitors in the Vietnamese market.