Vietnam slipped into a trade deficit of US$6.4 billion with the Republic of Korea (RoK) during the first quarter of the year, representing a fall of 39.3% year on year, according to the Vietnamese Trade Office in the RoK.

The country’s three-month import-export turnover with the RoK also declined by 20.8% year on year to US$18.1 billion.

Of the total value, Vietnamese exports fell by 4.8% to US$5.9 billion, while its imports also endured a decline of 26.7% to US$12.3 billion.

As of March the RoK remained Vietnam’s largest foreign investor with 9,619 projects capitalised at US$81.5 billion, making up nearly 18.4% of total foreign investment in the Vietnamese market.

A representative of the Vietnamese Trade Office in the RoK attributed this decline in trade turnover to the rising trend of trade protection in several countries, high inflation, and the United States’ move to adjust interest rates, a factor leading to the depreciation of the Vietnamese currency (VND) against the US dollar.

Furthermore, regional and global geopolitical tensions coupled with the RoK’s stringent sanitary and phytosanitary measures (SPS) continue to be a hindrance impacting the export of agricultural, aquatic products, and processed foods.

Industry insiders pointed out that there remains a positive outlook for trade turnover between Vietnam and the RoK as both countries are benefitting from the signing of several bilateral and multilateral free trade agreement (FTAs).

Moreover, the import-export structure of the two countries is complementary to each other with little direct competition.

Local firms are therefore advised to continue improving product quality in a bid to meet the RoK’s stringent regulations on food safety, analyse the consumer segment, and join trade fairs to further penetrate the market.

VOV