Vietnam signed a free trade agreement (FTA) with South Korea in Hanoi on 5 May, with the intention of doubling bilateral trade within five years.
As part of the agreement, Vietnam will eliminate tariffs on 89.9 per cent of Korean imports over 15 years, while South Korea will remove import tariffs on 95.4 per cent of Vietnamese products, according to the Korea Times.
"The FTA will help expand Korea's investment in Vietnam and contribute a lot to the latter's economic development," Korean industry and trade minister Yoon Sang-jick told the publication. "Korea will also benefit from the FTA. I believe the Korea-Vietnam FTA will become a model case of a win-win relationship."
Bilateral trade is expected to reach US$70bn by 2020 as a result of the FTA, with Korea expecting to boost its automobile, electronic and beauty product exports, while Vietnamese machinery manufactures, as well as its agricultural and seafood producers, are expected to benefit from the agreement.
According to Reuters, two-way trade between Korea and Vietnam grew 6 per cent last year to US$29bn.