9 Facts: Vietnam and South Korea’s Path to Shared Prosperity
How trade and investment can overcome a treacherous historical legacy.
1. Korea and Vietnam, despite a long history of animosities, are making progress toward concluding a serious free-trade agreement.
2. This is all the more impressive as South Korean soldiers comprised the second-largest foreign fighting force in the Vietnam War.
3. Vietnam began to put aside that history when its government agreed to normalize relations with South Korea in 1992.
4. Two decades later, Vietnam is Korea’s seventh-largest export market, ahead of countries such as Russia and India.
5. Similarly, Korea is Vietnam’s fifth-largest export market, behind only China, the United States, Japan and the European Union.
6. Korea found in Vietnam an eager customer for its sophisticated telecom products, specialized machinery, automobiles and trucks.
7. Koreans became good customers for Vietnam’s textiles, seafood and petroleum products.
8. From 1992 to 2013, the combined exports from one to the other soared from $500 million to $21.2 billion, a 42-fold increase in 21 years.
9. Korea is also the Vietnam economy’s fourth-largest foreign investor, with more than $26 billion in foreign direct investments (FDI). Big investors include Samsung and LG Electronics, producing electric appliances, auto components and smart phones.
The significant rapprochement between Korea and Vietnam could help jumpstart more serious negotiations in East Asia, such as between Korea and Japan.
Any such new open-trade arrangements would be good news for the region’s peace as well as its economy.
Source: Japan And South Korea Need To Come To Economic Terms by Robert Shapiro (Forbes, December 2, 2014)