Brazil and Vietnam set bilateral trade goals

Within his working trip to Brazil to attend the G20 Summit in Rio de Janeiro last week, Vietnamese Prime Minister Pham Minh Chinh held bilateral talks with Brazilian President Luiz Inácio Lula da Silva.

“Based on the foundation of common achievements and awareness about shared interests for a strategic vision for the Brazil-Vietnam relationship, both sides have agreed to lift their bilateral relations to a strategic partnership [from a comprehensive partnership forged in 2007],” read a joint statement released at the talks. “The two leaders have directed the two foreign ministers to conduct negotiations on the concrete contents of the strategic partnership so that it can be completed as soon as possible.”

According to the Vietnamese Ministry of Foreign Affairs, the two sides have agreed to coordinate in implementing measures to strengthen the bilateral relations commensurate with the new framework of relations, including increasing delegation exchanges and contacts at all levels, especially at high levels.

Both nations will also coordinate to effectively carry out cooperation documents signed during Prime Minister Pham Minh Chinh’s official visit to Brazil in September 2023, including an education cooperation agreement, an action plan to implement the MoU on agricultural cooperation, and a plan to deploy cooperation for 2024-2025 between the two diplomatic academies.

Brazilian President Luiz Inácio Lula da Silva met with Vietnam’s Prime Minister Pham Minh Chinh last week

Vietnam and Brazil will also coordinate to soon organise the third meeting of the Vietnam-Brazil Joint Committee on Economic and Trade Cooperation, the first meeting of the Joint Committee on Science and Technology, and the ninth meeting of a political consultation mechanism between the two ministries of foreign affairs.

In addition, the two countries will also work with each other on plans to train young football talents, and at the same time, to promote the expansion of cooperation in new areas suitable to the needs of both sides such as high technology, digital transformation, energy transition, biofuels, environmental protection, and climate change response.

“Recognising the urgency of a just energy transition that meets the needs of developing countries, the two leaders have underscored the important role of biofuels in decarbonising the transport sector,” the joint statement said. “They have agreed to maintain dialogues in bioenergy and renewable energy and other initiatives in a bid to reduce inequalities within and among countries.”

New leverage

Notably, PM Chinh repeated Vietnam’s proposal on triggering negotiations on a free trade agreement (FTA) between Vietnam and the Common Market of the South (Mercosur) which includes Brazil, Argentina, Uruguay, and Paraguay.

In 2021, member countries had a combined GDP of roughly $2.2 trillion, according to World Bank data. The bloc is a high potential market for various Vietnamese key consumer goods such as telephones, mobile phones and parts, electrical products, garments and textiles, and footwear.

President Silva agreed that Brazil will continue working with other member states of the Mercosur on the early negotiations of the FTA in 2025 with a view to “bringing about positive benefits to both sides, contributing to the development of each nation.”

Vietnam expects that this FTA will “lead to breakthroughs in economic, trade and investment cooperation between the two countries, bringing substantial benefits to businesses and peoples” of both sides.

Vietnam also suggested that Brazil soon recognise Vietnam’s market economy status, which has also been positively recognised by the Brazil leader.

Rodrigo Santiago, vice president of the Rio de Janeiro Chamber of Commerce and Industry last week said that since PM Chinh’s visit to Brazil in 2023, and his current visit, the bilateral trade between the two economies has increased remarkably. Vietnam is now Brazil’s 17th largest supplier and the 18th biggest trading partner.

According to Santiago, Brazil sees substantial potential in collaborating with Vietnam, especially in high-tech industries, semiconductors, agriculture, energy security, renewable energy, science and technology, climate change, digital transformation, and South-South cooperation.

“Particularly, Brazil expects the Vietnam-Mercosur FTA will be clinched as soon as possible as it can facilitate Brazilian companies to expand their presence to the ASEAN market via Vietnam,” said Santiago.

Boosting trade and investment

Vietnam and Brazil last week also agreed that they will create all best conditions for exporters from both sides, so that the two economies’ bilateral trade can reach $10 billion in 2025 and up to $15 billion by 2030.

Brazil is a top trading partner of Vietnam in Latin America, with the two-way trade hitting $7.1 billion last year from $1.53 billion in 2011. In the first 10 months of 2024, the figure came at $6.58 billion.

Vietnam largely exports aquatic products, rubber, garments and textiles, footwear, and steel to Brazil while importing soybeans, wheat, corn, animal feed, raw materials, and cotton of all kinds.

At present, Brazil has seven projects in Vietnam with total registered capital of only $3.85 million, which is largely found in the manufacturing and processing, wholesale, retail, and scientific and technological sectors. Vietnam has invested about $700 million in two projects in Brazil.

PM Chinh last week met with leaders of four Brazilian corporations: aerospace company Embraer, meat producer JBS, Oceanside One Trading, and smart card solution supplier Alterosa.

Jose Serrador, global vice president of Embraer, the world’s third-largest commercial aircraft manufacturer after Boeing and Airbus, stated the company’s desire to continue enhancing comprehensive collaboration with Vietnam.

Serrador pledged to swelling ties with Vietnam, especially in exploiting routes such as Hanoi-Ho Chi Minh City and Hanoi-Con Dao, and in defence trade. In Vietnam, Embraer has handed over five E190 aircraft to Bamboo Airways.

Meanwhile, Marcio Rodrigues, CEO of meat producer JBS, proposed making Vietnam a strategic hub for the group’s Asian market. His proposal was hailed by the Vietnamese leader, who invited JBS to expand investments in Vietnam, including facilities for livestock processing, food security, and leather production.

Roger Zen, chairman and CEO of Oceanside One Trading, told PM Chinh that this group wants to expand business and investment cooperation with Vietnam. It has inked a $120 million export deal for automotive tyre products with a subsidiary of Vietnam’s state-run Vinachem for the Brazilian market.

Roger Zen also underlined that Oceanside One Trading wishes to continue importing goods from Vietnam and expanding exports to the country, with an annual trade growth target of 15–20 per cent.