The Korea-Vietnam Free Trade Agreement, which took effect a year ago, has mainly expanded exports from South Korea to Vietnam. South Korea’s shipments to Vietnam in the first 10 months climbed 12 per cent from the same period last year.

Rising exports have made Vietnam the world’s third largest importer of South Korean products during the January to October period after China and the US. South Korea’s exports to Vietnam include a wide range of products from iron and steel and garment materials to phones and consumer goods.

In particular South Korea was the biggest seller of computers and electronics to Vietnam, with a total value up 26.3 per cent from the year-ago period. It was also the second biggest supplier of machinery to Vietnam, where exports were up 9.5 per cent. Fuel shipments from South Korea increased fivefold.

Vietnam has been recording a larger trade deficit with South Korea since 2010. The deficit hit nearly $19 billion last year. About 42 per cent of South Korean exporters increased their shipments to Vietnam following the enactment of the Korea-Vietnam FTA in December 2015. A majority expected the free trade deal to continue helping their business in 2017. For years, South Korea has been the biggest foreign investor in Vietnam, driven by major projects of electronics giants LG and Samsung,