According to figures released by the Korea International Trade Association (KITA), total trade turnover between Vietnam and South Korea reached $79.43 billion in 2023, with imports into Vietnam sinking by 12.3 per cent to $53.49 billion.

Vietnam’s exports also saw a small dip, of 2.9 per cent, from $26.72 billion in 2022 to $25.94 billion last year, which led Vietnam to post a trade deficit of $27.55 billion, down 19.5 per cent.

KITA said Vietnam surpassed Japan for the second year running to maintain its position as South Korea’s third-largest trading partner. Two way trade turnover between South Korea and Japan stood at $76.67 billion last year. China still holds its position as South Korea’s largest trading partner, with turnover in 2023 reaching $267.66 billion, followed by the US with $186.96 billion.

KITA attributed the drop in trade and commerce with Vietnam to the decline in chip and semiconductor exports. South Korea’s semiconductor shipments to Vietnam tumbled 21.6 percent year-on-year to $12.73 billion in 2023.

At the same time, four other export items - flat panels and sensors, petroleum products, wireless communications equipment, and synthetic resins - also fell.

Trade between Vietnam and South Korea has increased exponentially since diplomatic relations were established in 1992, when bilateral trade turnover was only $500 million.

Bilateral trade was further enhanced in 2014 by the signing of a free trade agreement between the two countries. At the time, Vietnam was South Korea’s eighth-largest trading partner, but its ranking then jumped to fourth just a year later. In 2022, Vietnam, for the first time, outpaced Japan to become South Korea’s third-largest trading partner.