Maintaining a large trade deficit with South Korea has positive implications as the export structure of the two sides is complementary and the main import is machinery and raw materials for domestic production.
Talk to Tuoi Tre , Mr. Do Quoc Hung, Deputy Director of the Asia - Africa Market Department ( Ministry of Industry and Trade ), said that Korea is a trade partner and a export market Vietnam's third largest, after China and the US.
Exports are therefore expected to be further promoted through cooperation programs between the two countries during the visit of the Korean president.
Maintain large trade deficit
2022, Vietnam Export to Korea 24.3 billion USD and maintained a trade deficit of 37.8 billion USD. The export commodity structure of the two sides has clearly complemented each other, with little direct competition.
In particular, Vietnam mainly exports products produced by Korean FDI enterprises (phones and components, computers, electronic products and components, machinery and equipment spare parts). In contrast, Vietnam exports products with strengths such as agricultural and aquatic products, processed foods, textiles, footwear, and wooden furniture.
South Korea is the second largest supplier after China for components, accessories, machinery, equipment, and raw materials. These are input materials for manufacturing industries, especially export manufacturing industries.
Accordingly, Korea is the country where Vietnam has the highest level of trade deficit second largest after China. The Deputy Director of the Asia-Africa Market Department said that the trade deficit with Korea is positive due to the import of machinery, equipment, and raw materials for domestic production.
However, Mr. Hung said that in the long term, we still need to pay attention to developing bilateral trade in a more balanced direction through applying various measures to facilitate and support Vietnamese enterprises to access the Korean market in a diverse and effective manner.
However, the Ministry of Industry and Trade acknowledged that the slow recovery of the world economy after COVID-19, high inflation, decreased demand for goods, and tight monetary policies in countries... are affecting Vietnam's import and export activities in general and with Korea in particular.
In particular, Korea is foreign investors largest in Vietnam and enterprises investing in Vietnam also account for a large proportion in Vietnam's import and export structure with the world.
Therefore, the leader of the Ministry of Industry and Trade predicts that trade between Vietnam and South Korea cannot grow strongly in 2023.
In addition, South Korea is currently applying trade defense measures on a number of Vietnamese exports, including gas lighters, Ferro-Silico-Manganese alloys, plywood, and copper pipes.
Promoting trade facilitation
South Korea is also taking measures. anti-dumping for products imported from Vietnam including plywood products, Ferro-Silico-Manganese alloy products and copper pipe products.
Mr. Hung also commented that there is still a lack of connectivity between the Vietnamese business sector and the Korean business sector. This makes it difficult for domestic businesses to take advantage of opportunities to access technology transfer, access modern and effective production management methods, and participate in the supply chain...
Therefore, further trade facilitation is the goal in order to expand the scale of trade.
Priority will be given to agricultural and aquatic products, processed foods, strengthening cooperation in supply chain linkages through encouraging Korean investment in Vietnam, supporting Vietnamese enterprises to participate deeply in the supply chain...
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