Korea, Vietnam sign FTA

Korea and Vietnam signed a free trade agreement (FTA) in Hanoi, the trade ministry said Tuesday.

The pact, when ratified by the respective parliaments of the two nations, will make the Southeast Asian country Korea's 15th tariff-free trading partner and boost Seoul's exports of automobiles, electronics and beauty products.

The two nations aim to have the pack go into effect this year.

The ministry said domestic builders and small- and medium-sized machinery manufacturers will benefit from the deal because Vietnam is undertaking many rural development projects.

Industry and Trade Minister Yoon Sang-jick signed the deal with his Vietnamese counterpart Vu Huy Hoang in Hanoi, Tuesday, with Vietnam's Prime Minister Nguyen Tan Dung observing the event.

"The FTA will help expand Korea's investment in Vietnam and contribute a lot to the latter's economic development," Yoon said. "Korea will also benefit from the FTA. I believe the Korea-Vietnam FTA will become a model case of a win-win relationship."

Under the FTA, Vietnam will remove its import duties on 89.9 percent of all products from Korea over a 15-year period after the pact is implemented.

Seoul will do the same on 95.4 percent or 11,668 out of the total 12,232 products imported from Vietnam, according to the ministry.

Rice, red peppers, onions and some other sensitive agricultural products to both sides were not part of the negotiations, it said.

The ministry said the agreement will put Korean companies in a better position to compete with Japanese firms in Vietnam, which have enjoyed increased competitiveness in price following the Vietnam-Japan economic partnership agreement in 2009.

Last year, Korea exported some $22 billion worth of goods and services to Vietnam, making it one of the world's largest destinations for Korean products.

Bilateral trade between the two countries also reached more than $30 billion last year, the largest ever since the countries established diplomatic ties in 1992.

Source: Korea Times