Republic of Korea (ROK) has plans to shift its trade focus with Vietnam as China and US undergo a trade dispute. South Korean mega-corporations such as Samsung Electronics Corp have already migrated their production lines to Vietnam. Many predict that Vietnam will surpass US and become ROK’s second largest export market.

President of ROK, Moon Jae-In now seeks for partnerships with various countries in South East Asia to expand its Samsung manufacturing overseas and potential export markets. Moon Jae-In explained that the trade dispute between China and US will potentially produce a negative effect on the economy of ROK during his visit to Vietnam last month.

The ROK government predicts that under Trump’s policies on trades, US will place further restrictions onto imports from ROK creating an unreliable partnership between the two. Furthermore, ROK’s parternship has ceased progress with China for over a year since ROK’s development on its Terminal High Altitude Area Defense (THAAD).

Exports of Korean corporation- manufactured products from Vietnam was a high 50% of the total exports last year, a 10% increase from the previous three years. The Korean International Trade Association (KITA) expects the Vietnamese export market to become its second largest export market by 2020.

According to a study by Korea Trade Promotion Corporation (KOTRA), ROK is one of the most prominent investors in Vietnam. From last year’s January to November, the country has invested a foreign direct investment (FDI) total of US $74 billion, a historic high. Currently, there are as many as approximately 5,500 Korean-invested corporations in Vietnam.

Indeed, ROK’s expansion in trades has its inclusions, and manufactured goods in Vietnam are to be exported mainly to US and China at the end. The Korea Institute for International Economic Policy (KIEP) believes that although markets in ASEAN cannot completely replace US and China, but with the current trade dispute,  South East Asian countries and especially Vietnam, will be able to help ROK expands into the Asian markets.

Source: United Daily News