Vietnam and South Korea Strengthen Economic Ties with Ambitious Trade Goals

In a significant step toward deepening economic partnership, Vietnam and South Korea have reaffirmed their commitment to boosting bilateral trade and industrial collaboration. On April 14, 2025, Vietnam’s Minister of Industry and Trade, Nguyễn Hồng Diên, and South Korea’s Minister of Trade, Industry and Energy, Ahn Dukgeun, co-chaired key meetings in Hanoi to advance their shared economic agenda, setting an ambitious target of US$150 billion in trade by 2030.

Trade Milestones and Future Targets

The 14th meeting of the Vietnam-South Korea Joint Committee on Trade, Industry and Energy Cooperation, alongside the 8th meeting of the Joint Committee on Implementation of the Vietnam-Korea Free Trade Agreement (VKFTA), marked a pivotal moment for both nations. The ministers expressed satisfaction with the progress achieved in recent years, noting that bilateral trade in 2024 reached approximately US$81.5 billion, reflecting a 7.3 percent increase from 2023. This growth, achieved despite global economic headwinds such as rising protectionism and trade tensions, underscores the resilience of the partnership.

Both sides agreed that enhancing trade cooperation could serve as a buffer against international economic challenges, particularly for businesses facing market uncertainties. To this end, they committed to an Action Plan aimed at achieving a more balanced trade volume of US$150 billion by 2030—a target that, if realized, would nearly double current figures. This plan includes strengthening dialogue in distribution and logistics, sectors critical to streamlining trade flows between the two countries.

Task forces such as “Korea Plus in Vietnam” and “Vietnam Plus in South Korea” will play a central role in supporting enterprises, stimulating investment, and proposing innovative cooperation initiatives. These mechanisms are designed to bridge gaps between policymakers and businesses, ensuring that the benefits of trade agreements translate into tangible outcomes for companies on both sides.

Industrial and Technological Collaboration

Beyond trade, the meetings highlighted a shared commitment to industrial and technological advancement. A key focus was the Vietnam-South Korea Centre for Technology Cooperation on Critical Mineral Supply Chains, established under a memorandum of understanding signed in June 2023. This center aims to secure stable supplies of critical minerals—vital for industries like electronics and renewable energy—amid growing global competition for resources.

Further collaboration is planned through the second phase of the Vietnam Technology Advice and Solutions from Korea project (VITASK 2), which will promote medium- and long-term cooperation in materials and components. South Korea also pledged support for Vietnam’s industrial ambitions, including assistance in shipbuilding workforce training, job placement, and the drafting of Vietnam’s Law on Industrial Development. Such initiatives reflect a mutual interest in building a robust industrial ecosystem that benefits both economies.

Energy Cooperation: A Path to Sustainability

Energy emerged as another cornerstone of the discussions, with both ministers reaching consensus on collaboration across electricity, oil and gas, liquefied natural gas (LNG), nuclear power, and clean energy. Vietnam welcomed South Korean investment in LNG and oil and gas projects, provided they align with Vietnamese legal frameworks and offer mutual benefits. This openness to investment signals Vietnam’s intent to diversify its energy mix and meet growing domestic demand.

A particularly intriguing development was Vietnam’s interest in South Korea’s co-firing ammonia technology, currently under trial. This technology, which involves blending ammonia with traditional fuels to reduce carbon emissions, could play a role in Vietnam’s transition to cleaner energy sources. Both sides agreed to explore joint studies for potential application in Vietnam, a move that could position the country as a regional leader in sustainable energy practices if successful.

Two memoranda of understanding signed during the meetings further cemented energy ties. One agreement, between Vietnam’s Electricity and Renewable Energy Authority and South Korea’s Nuclear Industry Policy Bureau, focuses on nuclear energy cooperation. The other, between Vietnam’s EVNNPT and South Korea’s KEPCO, targets collaboration in electricity transmission—a critical area as Vietnam seeks to modernize its power grid to support industrial growth.

Maximizing the Benefits of VKFTA

The VKFTA, now a decade old, has been instrumental in driving trade and investment between Vietnam and South Korea. During the 8th implementation meeting, both ministers acknowledged the agreement’s contributions and committed to deepening cooperation in areas such as customs procedures, rules of origin, trade defense measures, food safety, and quarantine protocols. Addressing technical barriers to trade was also a priority, with the goal of enabling businesses to fully capitalize on the agreement’s benefits.

The VKFTA has been a game-changer for Vietnamese exporters, particularly in agriculture and manufacturing, by providing preferential access to the South Korean market. Similarly, South Korean firms have leveraged the agreement to expand their footprint in Vietnam, a fast-growing economy with a strategic location in Southeast Asia. Strengthening the implementation of VKFTA is seen as essential to sustaining this momentum and achieving the 2030 trade target.

Broader Implications for Regional Stability

The Vietnam-South Korea partnership extends beyond economics, carrying implications for regional stability and geopolitical dynamics in Asia. South Korea, a key ally of the United States, and Vietnam, a significant player in ASEAN, share an interest in fostering a rules-based international order amid rising tensions in the Indo-Pacific. Their economic collaboration could serve as a model for other bilateral relationships in the region, demonstrating how trade and investment can underpin broader diplomatic ties.

Analysts suggest that the focus on critical minerals and clean energy aligns with global trends toward securing supply chains and combating climate change. If Vietnam and South Korea can establish reliable frameworks for cooperation in these areas, they may attract interest from other nations seeking to join similar initiatives. However, challenges remain, including ensuring that investments comply with local regulations and deliver equitable benefits to both parties.

Public and Business Sentiment

Reactions to the outcomes of the meetings have been largely positive among business communities in both countries. Vietnamese exporters, in particular, view the US$150 billion trade target as an opportunity to expand their market share in South Korea, especially in sectors like textiles and electronics. South Korean investors, meanwhile, see Vietnam as a promising destination for manufacturing and energy projects, given its competitive labor costs and strategic proximity to other ASEAN markets.

Public sentiment, as gauged through social media platforms and local reports, reflects cautious optimism. While many Vietnamese citizens welcome the prospect of job creation and technological transfer, some express concerns about the environmental impact of large-scale energy projects. South Korean stakeholders, on the other hand, emphasize the need for transparent and fair trade practices to ensure a balanced partnership.

Looking Ahead: Challenges and Opportunities

As Vietnam and South Korea work toward their ambitious goals, several factors will shape the trajectory of their partnership. Global economic conditions, including potential shifts in trade policies under new administrations in key markets like the United States, could pose challenges. Domestically, Vietnam must navigate legal and regulatory hurdles to accommodate foreign investment, while South Korea faces pressure to maintain competitiveness in high-tech industries.

Nevertheless, the agreements signed during the Hanoi meetings—ranging from the minutes of the Joint Committee session to the Action Plan for the US$150 billion trade target—provide a clear roadmap for progress. The memoranda on nuclear energy and electricity transmission, in particular, highlight the strategic depth of the relationship, extending beyond commerce to address shared priorities like energy security and sustainability.

As both nations move forward, the success of their collaboration will likely hinge on sustained dialogue and adaptability to changing circumstances. For now, the renewed commitment to economic ties offers a glimpse of what a stronger Vietnam-South Korea partnership could achieve, not just for the two countries but for the broader region as well.