The Vietnam-South Korea FTA took effect last December and it was hoped to bring great opportunities to Vietnamese businesses to boost exports to South Korea. Vietnam also puts high hopes on TPP, which, once taking effect, would help Vietnamese products penetrate large markets such as Japan, the US, Canada and Australia.
However, analysts commented that even with FTAs, Vietnamese businesses would still have to struggle to bring their products to the world market.
Regarding Vietnam-South Korea trade, the two-way trade turnover is somewhat inclined to South Korea.
|Vietnam puts high hopes on TPP, which, once taking effect, would help Vietnamese products penetrate large markets such as Japan, the US, Canada and Australia.|
South Korean products have been flooding the Vietnamese market, partially thanks to the South Korean expanding retail network in Vietnam. Lotte Mart and E-Mart both have been expanding in the market.
In 2014, South Korea was recognized as Vietnam’s third trade partner, after China and the US, while Vietnam was among South Korea’s 10 largest export markets.
This is reflected in the sharp growth in the imports from South Korea. In 2014, Vietnam imported $21.7 billion worth of products from the market, while in 2015, it imported $27.9 billion.
Though Vietnam’s exports to South Korea have increased, this is not enough to make a breakthrough.
Hong Won Sik, general director of Lotte Vietnam Shopping, said many Vietnamese products have been favored by South Korean consumers, including pork, beer, coffee, honey, fruits, wooden and ceramic furniture.
He said Lotte has been making efforts to organize trade promotion campaigns to introduce Vietnamese products in South Korea.
Over the last two years, Vietnam’s export turnover to South Korea through Lotte network has reached $5 million.
A wide range of Vietnamese goods has been displayed at Lotte Mart in South Korea, but the goods just account for 5 percent of total goods in the chain.
Nguyen Hong Trang, managing director of Son Kim Fashion (SKF) said SKF had working sessions with Lotte Mart on bringing SKF products into Lotte Mart in South Korea.
However, the two sides could reach agreements on only some issues, including pricing.
According to Trang, once FTAs are implemented, tariffs will no longer be barriers. It is the price, design and quality which will decide whether Vietnamese products can penetrate foreign markets.
Non-tariff barriers could also prevent Vietnamese products from entering foreign markets. And in most cases, Vietnamese businesses need patience to conquer foreign markets.
The Dong Thap provincial agriculture department and Vietnamese agencies reportedly had to spend five years to prepare documents and follow necessary steps just to export 3 tons of Dong Thap mangoes to Aeon supermarket chain in Japan.