Tasks and Solutions to Bring Vietnam - RoK Trade to Reach 100 billion USD

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On December 11, 2020, the Vietnamese Ministry of Industry and Trade and the Republic of Korea's Ministry of Trade, Industry, and Energy signed an action plan to achieve a more balanced bilateral trade turnover of 100 billion USD by 2023. Despite significant efforts, the target was not met. In 2023, the trade turnover between Vietnam and RoK amounted to 79.43 billion USD, an 8% decrease from 2022. This decline included a 2.9% reduction in exports to 25.94 billion USD and a 12.3% reduction in imports to 53.49 billion USD.

The leaders of Vietnam and RoK had anticipated raising the bilateral trade turnover to 100 billion USD by 2020, a goal that was not realized. A significant factor was the global impact of the Covid-19 pandemic in 2020. The target for 2023 also fell short as both exports and imports diminished, with imports from RoK to Vietnam dropping by 12.3% to 53.49 billion USD, reflecting a reduction of over 7.5 billion USD, according to the General Statistics Office in 2024.

To reach the ambitious goal of increasing bilateral trade turnover between Vietnam and RoK to 150 billion USD by 2030, both nations must first aim to hit the 100 billion USD target as soon as possible. From the nearly 80 billion USD mark in 2023, achieving the 100 billion USD milestone in two-way trade turnover requires either a 25% growth rate for one year or a growth rate of nearly 12% for two consecutive years. The outlook for Vietnam-RoK trade relations suggests that trade turnover is likely to continue its upward trend in the years ahead, with the potential to meet an average growth rate of 12% per year. To realize this goal, the Vietnamese Government, authorities at all levels, and businesses must concentrate on executing the following tasks and solutions:

First, it is crucial to fully understand the Party and State policies and guidelines on foreign economic relations. Concurrently, one must effectively execute the Strategy for Import and Export of Goods to 2030, which was established in conjunction with Decision No. 493/QD-TTg, dated April 19, 2022, by the Prime Minister, endorsing the Strategy for Import and Export of Goods to 2030.

Second, both sides should capitalize on and enhance the favorable conditions arising from the elevation of relations to a "Comprehensive Strategic Partnership" to bolster trade between the two nations. They should continue leveraging the commitments to tariff reduction under the multilateral and bilateral trade agreements signed by Vietnam and RoK to boost trade turnover.

Third, it is crucial to fully understand the Party's guidelines and policies on attracting foreign investment and to effectively implement the Foreign Investment Cooperation Strategy for the 2021-2030 period, which was issued in conjunction with Decision No. 667/QD-TTg dated June 2, 2022, by the Prime Minister. Building on this foundation, and considering the commitments on investment incentives in multilateral and bilateral agreements with RoK, the Government should develop specific incentive policies to sustain and increase FDI capital from RoK into Vietnam.

Fourth, Vietnam needs to enhance its capacity to export goods to RoK. The government and ministries should analyze and establish a product structure for exports to Korea that complements the import structure from RoK. They must also develop standards for exported goods to meet RoK's stringent requirements, and intensify trade promotion and local collaboration efforts.

Fifth, the government and local authorities should establish favorable mechanisms, policies, infrastructure, and procedures to facilitate the import and export activities of RoK's FDI companies. This is particularly true for firms with substantial investment capital that significantly contribute to Vietnam's import and export turnover with RoK and the global market, such as Samsung Vietnam and LG Vietnam Company.

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