Vietnam is the second largest textile and garment exporter to South Korea, making up one-fourth of South Korea's garment market, after China.
A worker packages t-shirts at NhaBe Corporation in HCM City
South Korea imported US$627.4 million in textiles and garments from Vietnam in the first four months of this year, according to the Vietnam Textile and Apparel Association (Vitas).
The turnover marks an increase of 8.25 percent over the same period last year.
The growth is part of a larger trend. After the ASEAN – Korea Free Trade Agreement (AKFTA), Vietnam's textile and garment industry saw significant growth.
In 2011, the sector's export turnover to South Korea was $900 million. A year later it increased to $1.1 billion and in 2013 it reached $1.6 billion. Last year's total of $2.4 billion was a staggering 27 percent increase over that of 2013.
The growth should only continue with the recently signed AKFTA. According to its open-access commitment, Vietnamese textile and garment products that satisfy certificate of origin norms will enjoy zero tariffs once the agreement takes effect from January 1, 2016. Currently, Vietnamese firms pay a tax of 8 to 13 percent.
The FTA would be a considerable opportunity for both countries' enterprises, said Vitas. South Korea is Vietnam's fourth largest importer of textiles and garments, accounting for more than 10 percent of the market's export turnover, according to the Ministry of Industry and Trade. It is forecast that textile and garment turnover in the South Korean market could reach $16.3 billion for 2015, increasing 11.6 percent year-on-year.
South Korea currently provides nearly 20 percent of Vietnam's textiles and with the large volume of ancillary materials it also exports.
