Recently South Korea and Vietnam announced a free trade deal for Vietnam to reduce import duties for all South Korean products by nearly 90% over the next 15 years while South Korea will cut import duties by over 95% for Vietnamese goods. The goal of the bilateral agreement is to increase trade between the two nations to $70 billion a year by 2020. Currently South Korean and Vietnamese trade is about $30 billion annually.
South Korean Trade Minister Yoon Sang-jick said that, “The Korea-Vietnam FTA will be a key example of a mutually beneficial FTA by expanding South Korean firms’ investment in Vietnam while also boosting trade between the two countries.” After two years of talks the agreement signed in Hanoi will help both countries increase their GDP. South Korean government estimates are that this deal will increase South Korea’s GDP by a full 3%.
These kind of bilateral deals are important for Asia as they reduce trade barriers, lower costs and are generally seen as being beneficial to both parties.