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 European
Union and ASEAN for the first time to become Vietnam’s second-largest trade
partner, after China.
According to the
General Department of Vietnam Customs, in the first half of this year, trade
value between Vietnam and the RoK reached 29.12 billion, accounting
for 14.7 percent of total national trade value, of which export value from Vietnam to the
RoK stood at 6.57 billion USD while import value from the RoK to
Vietnam was 22.56 billion USD.
That import value
with strong growth at 51.2 percent year-on-year made Vietnam’s trade deficit
with the RoK increase to 15.99 billion USD, higher than its trade
deficit with China at 13.72 billion USD.
The Ministry of
Planning and Investment said these figures showed that Vietnam had promoted
imports from the RoK and that country, therefore, became the second
largest goods supplier of Vietnam, after China. Vietnam mainly
imported 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 this
development and current structure of import and export goods reflected the
trend of dependence on trade of some large RoK enterprises, especially Samsung.
Some 15 billion USD of the 22.5
billion 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 for
Samsung’s investment projects in Vietnam.
Economic expert Dinh Tuan Minh
said it was a positive development if imports from the RoK consisted
mainly of equipment and material for production, however, it was a different
story if the imported items were consumption goods.
Tran Toan Thang, head of the
World Economic Department at the National Centre for Socio-economic Information
and Forecast, said this development was unavoidable.
Vietnam and the RoK had
expected this change in the structure of trade when negotiating the Vietnam-RoK
Free Trade Agreement. According to the expectation, imports from the RoK would
increase and this change would diversify Vietnam’s import and export markets to
avoid dependence on one market.
However, those changes came earlier
than expected, Thang said.
Vietnam must depend on the
import of equipment and material for production because the domestic support
industry has not developed for the short term, he said. The nation has seen
large volumes of import items for the processing of export products.
The important thing was that Vietnam
should depend on countries that will bring more benefits. If it depends on
imports from the United States, European Union or OECD with high quality
products, Vietnam will have imported material of high quality and will thus
process higher quality export products, Thang said.
In addition, putting a stop to
imports was impossible once tariff barriers were lifted according to
commitments of free trade agreements signed between Vietnam and some
countries, he said.
The key solution was for other
countries to make use of the FTA to export their goods to Vietnam while Vietnam would
also do the same to promote its exports to those countries, he said.
Meanwhile, Vietnam should
improve further development of its support industry to reduce the import of
equipment and material, leading to a trade deficit cut in the future.-VNA