New Zealand-Vietnam ties flourish in new direction

Tredene Dobson, New Zealand Ambassador to Vietnam

Could you shed some light on the achievements of trade and investment ties between the two countries?

In 2020, the prime ministers of New Zealand and Vietnam launched a strategic partnership. By March, Vietnam was New Zealand’s 14th-largest trading partner. Two-way merchandise trade in 2020 topped $1.93 billion, and now both sides are striving to increase the level of two-way trade to $2 billion by 2024.

This year, as we are looking forward to turning the ambitions within the strategic partnership into a detailed action plan, which will guide both for the next three years.

Despite COVID-19, I am delighted that our trade has continued to grow. New Zealand’s exports to Vietnam have seen good growth in a number of sectors, particularly food and beverage with over 25 per cent growth. This shows the confidence that Vietnamese consumers have in New Zealand’s high-quality products. And in a sign of just how complementary our two-way trade is – Vietnam has grown its machinery exports to New Zealand by more than 28 per cent over the last year.

Vietnam and New Zealand are partners in free trade agreements (FTAs). What are the focus areas within these agreements?

We have both leapt at the opportunities that closer economic partnership and integration bring and that is why we are seeing relations between the two countries truly taking off. For example, in the 10 years since the ASEAN-Australia-New Zealand FTA was signed, trade has grown by over 300 per cent, which shows what you can do with a high-quality trade agreement. One of the great advantages of trade agreements is that they create opportunities for more flexible supply chains. With the pandemic resulting in a growing trend of trade protectionism, we see such deals as an important part of both countries’ trade recovery strategy, helping to put New Zealand and Vietnam in the best possible position to recover from the economic impacts of COVID-19 and seize new opportunities for exports and investment.

It is not just the trade deals though; Vietnam and New Zealand are working closely in other areas, including the World Trade Organization and the Asia-Pacific Economic Cooperation (APEC). This year, New Zealand is the official APEC host and, for the first time ever, we are hosting the entire year virtually. This is an opportunity for New Zealand to lead on the world stage and to play a role in shaping the future of the Asia-Pacific region.

Also, Vietnam has received nearly 2.5 million vaccine doses in April and May through the COVAX Facility, for which New Zealand was one of the first countries to support and has so far committed $27 million to the facility.

How do you see the expansion of New Zealand’s enterprises in Vietnam in the past few years, and what are potential sectors for investors?

There are some areas within our trade and economic relationship that are strongly growing such as agriculture, education, aviation, and IT.

Agriculture is a great example as both countries have been able to benefit from the relationship. We have an agricultural cooperation arrangement which supports bilateral trade but is also helping to reduce agricultural greenhouse gas emissions and promoting food safety and rural development.

In terms of our agricultural trade, we are fortunate to have very complementary products. New Zealand’s kiwi fruit and apples have consolidated their position in the Vietnamese market, and our cherries are also becoming increasingly popular, especially during Lunar New Year. New Zealanders enjoy nuts and tropical fruits from Vietnam, including the iconic dragon fruit and rambutans.

Trade from both sides is growing, and at the business level there is interest in developing and deepening partnerships and in green tech and other creative sectors.

The pandemic has presented challenges for students travelling to New Zealand. Previously, nearly 3,000 Vietnamese students were studying in New Zealand, and we hope that we can re-establish these numbers when borders are safe to open again.

There has, however, been somewhat of a silver lining though as education providers have become a little bit more creative – New Zealand’s education institutions have been developing flexible in-Vietnam options, such as joint programmes and study centres, and there are ongoing exchanges about online learning and curriculum development.

Technology is a new area in our bilateral relationship but has a lot of potential and is now New Zealand’s third-largest export sector. We have some world-leading companies that are working with Vietnamese partners in diverse areas such as cutting-edge healthcare software, detailed meteorological forecasting, and technology in renewables and climate-resilient agriculture.

What should Vietnam do to facilitate more businesses to develop, expand, and invest into Vietnam?

For New Zealand, we generally find that investment follows trade. Companies have established relationships and gained knowledge about the market after trading with Vietnamese partners for decades.

Once again, we will also work closely on the implementation of FTAs to help continue to transform Vietnam into an attractive investment location in the region. This includes the development and utilisation of e-certification to directly transfer information between government agencies of both countries. It will thus facilitate smooth cross-border trade, increase transparency, and ensure strict border management.

Importantly, we need to ensure that the relationship is always moving forward – to take advantage of new opportunities, new technologies, and new ways of doing business. We are fortunate that both countries’ businesspeople and our governments share that way of thinking.