The bilateral free trade agreement between Vietnam and South Korea (VKFTA) came into effect on Sunday, seven months after signing.
The trade pact was signed on May 5 in Hanoi, and the two countries last week exchanged a diplomatic document to officially implement the agreement on December 20, according to both Vietnamese and South Korean trade ministries.
Both nations have finished ratifying the trade deal as per local laws, the Vietnamese Ministry of Industry and Trade said on Sunday.
The VKFTA covers a wide range of initiatives, among them tariff elimination and reduction, investment, intellectual property, customs facilitation, trade safeguards, technical barriers to trade, e-commerce, competition, and institutional and economic cooperation.
The trade accord will open up 94.7 percent of Korea's market and 92.4 percent of the Vietnamese market in terms of import volume, the South Korean Ministry of Trade, Industry and Energy said in a press release on December 16.
The East Asian country is also committed to eliminating 95.4 percent of tariffs on Vietnam, which in return will remove 89.2 percent of tariff lines to its partner country.
A tariff line is a product as defined in lists of tariff rates, according to the World Trade Organization's glossary.
Vietnam and South Korea are the third-biggest trade partner of each other, while China and the U.S. stand at the first and second places, respectively, for both nations.
Bilateral trade value between the two countries jumped 57 times from US$0.5 billion in 1992 to $28.8 billion last year, according to the Vietnamese trade ministry.
In 2014 Vietnam's exports to South Korea topped $7.1 billion, while imports stood at $21.7 billion, logging a $14.5 billion trade deficit with its Korean partner.
In the Jan-Nov period this year, bilateral trade value reached $33.6 billion, up 27.6 percent from a year earlier, according to the General Department of Vietnam Customs.
Vietnam mostly sells textile and garment products, seafood, wood and wooden products, computers, electronics and components to South Korea.
As of October 20, South Korea had surpassed Japan to become Vietnam's largest foreign investor, with total foreign direct investment (FDI) of $43.6 billion in 4,777 projects, according to the Vietnamese Ministry of Planning and Investment.
South Korean businesses mostly operate in production and manufacturing, real estate, wholesaling and retailing and construction sectors, with more than $5 billion worth of FDI earmarked for these four fields.
There are now nearly 3,000 South Korean firms operating in Vietnam, recruiting some 400,000 local workers.
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