Dynamic Patterns of Korea-Vietnam Trade Relations

Abstract

This paper analyzes the dynamic patterns and trends pertaining to bilateral trade between Korea and Vietnam over the past decade. The principal findings of this paper are as follows. First, the commodity trade patterns between Korea and Vietnam have remained virtually unchanged, even though the volume of bilateral trade between the two has expanded significantly over the past decade. Second, Korean exports have been characterized by a high and growing share of intermediate goods, and Korean imports by a high and growing share of consumption goods. Third, the technological level of Korea's exports to Vietnam is much higher than that of Vietnam's exports to Korea. Fourth, Vietnam's exports are less diverse than Korea's. Fifth, bilateral trade between Korea and Vietnam has been less intense than these countries' trade with other countries in recent years. Sixth, Korea-Vietnam bilateral trade has principally been inter-industry trade. Seventh, Vietnam enjoys a comparative advantage largely in either primary products or low-technology manufactures, whereas Korea enjoys a comparative advantage primarily in manufactured products and machinery and transport equipment. Finally, the high degree of trade complementarity between Korea and Vietnam makes it plausible that a freer trade agreement may bring about greater benefit for both countries.