Main competitors of Vietnam in Korean market
• The largest importing sources of South Korea
Asian countries: Due to its close and advantageous geographical location for trade, South Korea tends to import many goods from Asian countries/territories. In 2022, total imports of goods from countries in this region accounted for 60.47% of South Korea's total import turnover. Notably, in the top 10 largest import sources of South Korea, there are 7 countries/territories in Asia, accounting for 46.25% of this country's total import turnover.
The US, Australia, Germany: Apart from Asian countries, these are the other three of South Korea's top 10 import sources in 2022. The import value from the United States was 82.13 billion US dollars (accounting for 11.23%), from Australia was 44.93 billion US dollars (accounting for 6.14%), and from Germany was 23.61 billion US dollars (accounting for 3.23%). These are all developed countries with advantages in industrial raw materials and industrial products.
It can be seen that the above-mentioned import sources currently dominate South Korea's import market for the majority of goods, from machinery and equipment to clothing and wood products. Among these import sources, there are many large economies with high competitiveness and many export products similar to Vietnam. so Vietnamese goods are evaluated to face a high level of competition when entering the Korean market.
Table 1 - Top 10 importing sources of South Korea in 2022
| No. | Importing partner | Import value in 2022 (billion USD) | Proportion in South Korea’s total imports (%) |
| 1 | China | 154.58 | 21.14% |
| 2 | United States | 82.13 | 11.23% |
| 3 | Japan | 54.71 | 7.48% |
| 4 | Australia | 44.93 | 6.14% |
| 5 | Arab Saudi | 41.64 | 5.69% |
| 6 | Chinese Taipei | 28.27 | 3.87% |
| 7 | Vietnam | 26.72 | 3.65% |
| 8 | Germany | 23.61 | 3.23% |
| 9 | Qatar | 16.57 | 2.27% |
| 10 | Indonesia | 15.73 | 2.15% |
Source: ITC Trade Map, 2023
• FTA partners
By the end of 2022, South Korea had a total of 22 FTAs in effect (with 59 economies) and 7 FTAs under negotiation. Thus, goods from these 59 partners when exported to the Korean market will enjoy preferential tariffs under the FTAs with South Korea.
It should be noted that South Korea's FTA partners cover most continents in the world. Therefore, Vietnam's export products must compete fiercely in the Korean market, not only with the economies of the region, but also with many other countries around the world.
Table 2 - South Korea’s FTA and FTA Partners
| No. | FTA | Partners |
| 1 | 22 FTAs in effect | • 10 American partners: Chile, Peru, The US, Canada, Columbia, Panama, Costa Rica, Honduras, El Salvador, Nicaragua • 14 Asian partners: 10 ASEAN countries, India, China, Japan, Israel • 33 Europe partners: EFTA (Iceland, Liechtenstein, Norway và Switzerland), EU (27 countries), Turkey, The UK • 2 Oceania partners: Australia, New Zealand |
| 2 |
7 FTAs under negotiation (not including FTAs under negotiation of new member) In addition, Guatemala is negotiating to join the South Korea – Central America FTA |
GCC (Arab Saudi, Qatar, Kuwait, Bahrain, Oman, UAE), Ecuador, Uzbekistan, Guatemala, Mercosur (Argentina, Brazil, Paraguay, Uruguay), Russia, China, Japan, Malaysia. |
Source: Ministry of Trade, Industry and Energy of South Korea, 2023
To learn more about South Korea's Free Trade Agreement, businesses can visit the following link: https://www.fta.go.kr/main/situation/kfta/ov/ (Website on South Korea's free trade agreements by the Ministry of Trade, Industry and Energy).
• GSP partners
The Generalized System of Preferences (GSP) is a preferential tariff mechanism provided by South Korea unilaterally to least developed countries. South Korea has applied the GSP mechanism to 47 countries on the 2018 United Nations list of least developed countries, including:
- 13 Asian partners
- 33 African partners
- 1 American partner
Unlike FTA, GSP is South Korea's unilateral preferential mechanism, so this country can change the beneficiaries and conditions for enjoying GSP at any time, depending on its policies in each period. Furthermore, preferential tariffs under GSP are often not as competitive as preferential tariffs under FTAs. However, tariff reductions under South Korea's GSP mechanisms also create certain advantages for beneficiary countries.
In ASEAN, Cambodia, Laos and Myanmar are enjoying South Korea's GSP preferences. However, these countries often take advantage of better tariff preferences under the ASEAN Trade in Goods Agreement (ATIGA) instead of enjoying GSP preferences.
Source: Center for WTO and International Trade
