Seminar on Vietnam - South Korea FTA hears of potential Vietnam possesses in manufacturing.
Vietnam will become the largest manufacturing center for exported goods to the US, the EU, and Japan, Mr. Jang Soo-young, an expert on free trade agreements (FTAs) and the TPP at the Korea Trade-Investment Promotion Agency (Kotra), told a seminar on the Vietnam - South Korea FTA in Hanoi on March 2.
External and internal factors will see Vietnam become a major global manufacturing and export center, he said, especially its participation in significant trade deals such as the TPP and the Regional Comprehensive Economic Partnership (RCEP) and being member of the ASEAN Economic Community (AEC).
“Investment by TPP and AEC members into Vietnam will continually increase,” Mr. Jang believes. “As at the end of 2015 investment by TPP and AEC members accounted for 59 per cent of all foreign direct investment in Vietnam.”
Regarding internal factors, he pointed to two important matters that could make Vietnam become a global manufacturing center. “Increases in the minimum salary in Vietnam have been lower in the last four years,” he said. The increase was 17.5 per cent in 2013 then 14.9 per cent, 14.8 per cent, and 12.4 per cent in 2014, 2015 and 2016, respectively.
Another factor lies in the working age of the population, which totaled 54 million in 2015, or 58 per cent.
When comparing the competitive advantages held by Vietnam to regional countries, Mr. Jang said that the minimum salary is only a touch higher than in Myanmar and Cambodia but their infrastructure remains poor.
The seminar was attended by Deputy Minister of Industry and Trade Do Thang Hai, Mr. Ryu Hang Ha, Chairman of the Korean Chamber of Commerce in Vietnam (Kocham), and Mr. Jeahong Kim, Chairman of Kotra Vietnam, among others.
Another event held in Hanoi on March 2 to help boost trade cooperation between Vietnam and South Korea witnessed the signing by Kotra and Vietnam’s Directorate for Standards, Metrology and Quality (STAMEQ) of a memorandum of understanding that will ease the burden placed on South Korean enterprises by cumbersome procedures. For this purpose, the Korean Institute of Accreditation will transfer technology and safety inspection systems from South Korea to Vietnam.