Seafood products are processed at Ngo Quyen Seafood Processing Joint Stock Company in Kien Giang province for export to Japan, the RoK, Australia and Europe (Source: VNA)Hanoi (VNA) – The Republic of Korea (RoK) has surpassed the US, the EuropeanUnion and ASEAN for the first time to become Vietnam’s second-largest tradepartner, after China.
According to theGeneral Department of Vietnam Customs, in the first half of this year, tradevalue between Vietnam and the RoK reached 29.12 billion, accountingfor 14.7 percent of total national trade value, of which export value from Vietnam to theRoK stood at 6.57 billion USD while import value from the RoK toVietnam was 22.56 billion USD.
That import valuewith strong growth at 51.2 percent year-on-year made Vietnam’s trade deficitwith the RoK increase to 15.99 billion USD, higher than its tradedeficit with China at 13.72 billion USD.
The Ministry ofPlanning and Investment said these figures showed that Vietnam had promotedimports from the RoK and that country, therefore, became the secondlargest goods supplier of Vietnam, after China. Vietnam mainlyimported machines and equipment from the RoK for RoK investors’factories to produce export goods in Vietnam.
Nguyen Duc Thanh,Director of the Vietnam Institute for Economic and Policy Research, said thisdevelopment and current structure of import and export goods reflected thetrend of dependence on trade of some large RoK enterprises, especially Samsung.
Some 15 billion USD of the 22.5billion USD import value from the RoK to Vietnam was spent to import machinery,equipment and spare parts; computers, electronic products and their components;and phones of all kinds and components. These products were required forSamsung’s investment projects in Vietnam.
Economic expert Dinh Tuan Minhsaid it was a positive development if imports from the RoK consistedmainly of equipment and material for production, however, it was a differentstory if the imported items were consumption goods.
Tran Toan Thang, head of theWorld Economic Department at the National Centre for Socio-economic Informationand Forecast, said this development was unavoidable.
Vietnam and the RoK hadexpected this change in the structure of trade when negotiating the Vietnam-RoKFree Trade Agreement. According to the expectation, imports from the RoK wouldincrease and this change would diversify Vietnam’s import and export markets toavoid dependence on one market.
However, those changes came earlierthan expected, Thang said.
Vietnam must depend on theimport of equipment and material for production because the domestic supportindustry has not developed for the short term, he said. The nation has seenlarge volumes of import items for the processing of export products.
The important thing was that Vietnamshould depend on countries that will bring more benefits. If it depends onimports from the United States, European Union or OECD with high qualityproducts, Vietnam will have imported material of high quality and will thusprocess higher quality export products, Thang said.
In addition, putting a stop toimports was impossible once tariff barriers were lifted according tocommitments of free trade agreements signed between Vietnam and somecountries, he said.
The key solution was for othercountries to make use of the FTA to export their goods to Vietnam while Vietnam wouldalso do the same to promote its exports to those countries, he said.
Meanwhile, Vietnam shouldimprove further development of its support industry to reduce the import ofequipment and material, leading to a trade deficit cut in the future.-VNA
VNA
