Hanoi (VNA)🔯 – The free trade agreement between Vietnam and the Republic of Korea (RoK) will bring enormous economic benefits for the Southeast Asian country, Vietnamese Ambassador to the RoK Pham Huu Chi said in an interview with the Vietnam News Agency on the sidelines of the 29th Diplomatic Conference in Hanoi on August 22-26.

He said the pact will help Vietnam improve its business environment and accelerate economic restructuring towards increasing added value and competitiveness in the global value chain. It is also expected to attract investment from the RoK into Vietnam , he said, adding that the RoK is one of the leading nations in technology, especially energy, mechanics and electronics. The efforts to draw RoK investment will help Vietnam develop technological skills and production capacity, he said. Tax reductions under the deal will create new opportunities for Vietnamese farm produce and seafood as well as garment-textile, timber and mechanical products to enter the RoK. Vietnam is the RoK’s first trade partner that can export high-tax-rate products like garlic, ginger, honey, and sweet potatos to the RoK, he noted. The free trade agreement between ASEAN and the RoK will generate more opportunities for Vietnamese export commodities than that of other rivals like China , Indonesia , Malaysia , and Thailand . The RoK agreed to an annual import quota of 10,000 tonnes of Vietnamese shrimp at zẻo tariff, which will be raised to 15,000 tonnes by 2020. As an ASEAN member, Vietnam also benefits from the ASEAN-RoK free trade agreement which has enabled the bloc to export 5,000 tonnes of untaxed shrimp to the RoK. But currently, Vietnam only ships 2,500 tonnes of without tax shrimp to the market. The Ambassador, however, also pointed to challenges that Vietnam is facing, including the RoK’s tariff reductions – which will create more pressure for domestic businesses. The difference between import-export structure of the two countries is likely to make Vietnam run a trade deficit with the RoK. Vietnam and the RoK set up diplomatic ties in 1992 and since then bilateral relations have grown rapidly. The establishment of the strategic cooperative partnership in 2009 has helped deepen the bilateral rapport. The RoK is now the biggest investor in Vietnam with nearly 5,000 projects worth about 50 billion USD and the third largest trade partner, after China and the US, with two-way trade reaching 37 billion USD in 2015 and likely to hit 70 billion USD by 2020.-VNA