Prospects of Argentina-Vietnam trade and investment cooperation for 2024 and beyond: key drivers

From a commercial standpoint, Argentina and Vietnam have developed a solid and enduring trade relationship. In 2023, Argentina became Vietnam's 29th largest trading partner, with total trade reaching $3.446 billion. In the first seven months of 2024, bilateral trade stood at $1.986 billion.

Francisco Jose Franco Martinez, deputy head of Mission Head of the Economic, Commercial and Investment Section, Embassy of Argentina to Vietnam

Within Latin America, Argentina is Vietnam's third-largest trading partner, following Brazil and Mexico. Conversely, Vietnam has consistently been among Argentina's top 10 trading partners over the past decade, solidifying its position as Argentina's leading partner in Southeast Asia.

A key strength in Argentina-Vietnam trade relations lies in the complementarity of their economies. This synergy has paved the way for mutually beneficial trade exchanges. Vietnam exports a diverse range of products to Argentina, including mobile phones, computers, electrical products, footwear, textiles, clothing, iron, steel and other products.

Meanwhile, Argentina is a significant supplier of agricultural products and raw materials, such as soybean meal, corn and wheat, which are crucial to Vietnam's growing economy, particularly its animal feed industry. These products not only satisfy local demand but are also exported to third countries.

Recently, high-quality products from Argentina, such as beef, wine, olive oil, seafood, and poultry, have gained popularity in the Vietnamese market, especially in high-end restaurants, hotels and coffee shops. Argentina also exports high-tech industrial products to Vietnam, including animal vaccines and biotechnological pharmaceuticals, contributing to maintaining the quality standards in animal and human health as required by Vietnamese law.

A key priority for both Argentina and Vietnam is the negotiation of a Free Trade Agreement between Mercosur and Vietnam. Argentina is a strong advocate within the Mercosur bloc, actively promoting negotiations for this agreement. Such a deal is viewed as a crucial step in enhancing bilateral trade and unlocking new opportunities for both economies. This commitment to advancing negotiations underscores the strategic importance of the Argentina-Vietnam partnership and the shared vision of fostering even deeper economic ties.

Trade missions are vital in strengthening the economic relationship between Argentina and Vietnam. Business representatives from the Mercosur-ASEAN Chamber of Commerce will visit Vietnam in November to attend trade fairs and engage in business-to-business meetings with Vietnamese companies, exploring new business opportunities. This follows a series of Vietnamese missions in 2024, where companies, accompanied by institutional delegations, explore opportunities in Argentina.

Through the Embassy of Argentina in Vietnam, daily communication channels are maintained with numerous companies to facilitate connections between Argentine and Vietnamese enterprises. The embassy provides commercial matchmaking services, including virtual meetings, translation services and organising business agendas for companies from both countries. Additionally, it offers valuable commercial information for Argentine companies, including sectoral reports, data on tariffs, consumption, production, taxes, export and import data, sector fairs, regulations and other relevant commercial information.

The outlook for investment cooperation between Argentina and Vietnam is equally encouraged, driven by strong commercial complementarity and solid trade flows. These conditions create opportunities for foreign direct investment (FDI) in Vietnam, where products imported from Argentina are processed, manufactured and industrialised. These products are often exported to third countries, promoting the economic benefits of this partnership and generating employment and positive spillovers throughout the Vietnamese economy.

A prime example is the leather sector, where an Argentine leather processing company established a factory in Vietnam in May 2023. This facility imports leather from Argentina, processes it in Vietnam and exports the finished products to other markets, while also serving domestic demand. Another Argentine-owned leather processing factory is set to open in Vietnam in November 2024, further underscoring the economic complementarity between the two countries.

Both Argentina and Vietnam have introduced substantial government incentives and policies to encourage FDI. In Argentina, a recently launched incentive regime for large investments (RIGI Scheme) aims to attract FDI by offering benefits such as tax reductions, customs exemptions and enhanced investment stability in strategic sectors, including infrastructure, mining, technology and agriculture. This initiative highlights Argentina's proactive approach to creating a favourable environment for investors.

Both Vietnam and Argentina offer highly favourable environments for FDI due to these robust government policies. It is crucial for private companies from both countries to explore potential joint ventures and collaborative ventures in each other's territories to take full advantage of these incentives.

The Embassy of Argentina regularly engages with Vietnamese companies with substantial financial capacity to explore opportunities for FDI in Argentina or potential joint ventures with Argentine companies, particularly in sectors like lithium, telecommunications and energy.

Argentina and Vietnam are currently negotiating two critical agreements that could significantly boost reciprocal investments: a Double Taxation Avoidance Agreement and the renewal of the Bilateral Investment Treaty. Both countries aim to align these treaties with new international standards, providing a robust legal framework that will thereby encourage increased FDI flows in both countries.

Furthermore, high-level visits play a crucial role in promoting the bilateral relationship. In 2023, a significant visit from Vietnam to Argentina was led by the Chairman of the National Assembly, Vuong Dinh Hue.

Earlier in 2024, Argentina's Foreign Minister, Diana Mondino, visited Vietnam, and the Undersecretary of Agricultural Markets is scheduled to visit Vietnam in September. These visits reaffirm the political will on both sides to advance key issues of mutual interest, particularly in trade, and to establish future action plans.

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