Vietnam builds trade ties with Middle East

Prime Minister Pham Minh Chinh’s official visits to the UAE and Qatar last week, along with a working visit to Saudi Arabia, have yielded substantial outcomes, especially in trade and investment.

In Dubai, Vietnam and the UAE adopted a joint statement on upgrading their relationship to a comprehensive partnership, signing a bilateral comprehensive economic partnership agreement (CEPA) to further drive trade and investment.

“The two sides pledge to actively implement the CEPA to unlock $20 billion in bilateral trade, creating mutual economic benefits,” the statement read.

“Vietnam is among Asia’s fastest-growing economies, and we are their largest regional trade partner,” stated Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, as reported by the Emirates News Agency.

“Our non-oil trade with Vietnam saw a 38 per cent growth in 2022-2023, surpassing $12 billion in 2023. National companies like DP World, Mubadala, and Borouge have also made significant investments in Vietnam.”

Prime Minister Pham Minh Chinh met with Amin Al-Nasser, president and CEO of Saudi Aramco, Photo: Nhat Bac

New leverage for trade

According to Vietnam’s Central Institute for Economic Management, the CEPA is expected to create new opportunities in trade and investment between Vietnam and the UAE. This agreement, Vietnam’s first free trade agreement with a Middle Eastern country, will enable stronger trade ties not only with the UAE but also across the Middle East and Africa.

The content of the CEPA includes trade in goods; trade in services; investment facilitation; rules of origin; intellectual property; digital trade; trade remedies; sanitary and phytosanitary measures; technical barriers to trade, customs and trade facilitation; government procurement, legal - institutional issues; economic cooperation; and small- and medium-sized enterprises.

The agreement is expected to open up opportunities for UAE service providers across various Vietnamese sectors, including business services, financial services, healthcare, tourism, and transportation.

“Vietnam and the UAE are committed to making utmost efforts to substantially expanding investments in areas of mutual interest, such as oil and gas, renewable energy, information technology, innovation, digital transformation, green transition, logistics, and agricultural production and processing,” said the statement. “Given its expertise and experience, the UAE stands ready to share its experience with Vietnam in building the Vietnam International Financial Centre in Ho Chi Minh City, and invest in this project.”

During the Vietnam-UAE business roundtable in Dubai last week, PM Chinh reaffirmed Vietnam’s commitment to protecting the legitimate rights and interests of businesses and investors; avoiding the criminalisation of civil, administrative, and economic relations; fostering an open, transparent, equal, and healthy business environment in the spirit of “harmonising benefits and sharing risks.”

He highlighted Vietnam’s policy of selectively attracting foreign investment in areas such as science, technology, renewable energy, green finance, and the development of financial centres in Ho Chi Minh City and the central city of Danang.

PM Chinh also met with Suhail Mohamed Al Mazrouei, CEO of the UAE’s $300 billion Mubadala Investment Group, who expressed interest in expanding investments in Asia, particularly in infrastructure, oil and gas, seaports, technology, and roads. Mubadala plans to send a delegation to Vietnam to discuss potential projects, especially in oil and gas, with PetroVietnam and other Vietnamese partners.

The UAE is currently Vietnam’s largest export market and second-largest trading partner based in West Asia. Between 2018 and 2022, bilateral trade averaged around $5 billion annually, with Vietnam consistently posting a trade surplus of $3-4 billion.

By the end of last year, two-way trade reached nearly $4.7 billion, marking a 5.9 per cent increase from the previous year, of which Vietnam’s exports reached over $4 billion – up 4.3 per cent, and imports touched $676 million – up 16 per cent.

At present, Vietnam’s goods account for about 2.2 per cent of the UAE’s total import value, and the Emirates’ goods hold around 0.2 per cent of Vietnam’s import value.

Last week, many agreements were signed between the UAE and Vietnam (see box).

During his working visit to Saudi Arabia, PM Chinh held talks with Saudi Arabia’s Crown Prince and Prime Minister Mohammed bin Salman Bin Abdulaziz Al Saud, with both leaders agreeing to position economic cooperation as a central pillar of their bilateral relationship. They set a target to increase trade from $2.68 billion in 2023 to over $10 billion by 2030.

The two nations signed an MoU to establish a framework for cooperation that covers trade, industry, investment, and also the digital economy. PM Chinh also encouraged Saudi Arabian investment in strategic projects in Vietnam, particularly the establishment of a crude oil and petrochemical hub for the Southeast Asian market.

In discussions with Amin Al-Nasser, president and CEO of Saudi Aramco, Prime Minister Chinh welcomed the company’s interest in placing investment in oil refining, petrochemicals, and petrol distribution in Vietnam. Al-Nasser suggested that the country create favourable conditions for Saudi Aramco to successfully enhance cooperation with Vietnamese partners.

Following the meeting, PetroVietnam and Saudi Aramco signed an MoU that will deepen cooperation in oil and gas trading between both. Saudi Aramco, with annual revenues nearing $500 billion and assets exceeding $660 billion, is one of the largest companies globally in terms of finances.

Fostering trade relations

In Qatar, PM Chinh and his counterpart, Sheikh Mohammed bin Abdulrahman Al Thani, agreed to expedite negotiations on a bilateral free trade deal and a separate agreement between Vietnam and the Gulf Cooperation Council. Additionally, both sides are considering a visa exemption agreement for ordinary passport holders to ease travel between the two countries.

PM Chinh expressed hope that Qatar’s investment funds, including the Qatar Investment Authority (QIA), would expand their activities in Vietnam, focusing on infrastructure, energy, seaports, and agricultural production.

“The QIA has been exploring real estate and industrial investment opportunities across Vietnam,” explained Nguyen Minh Hang, Deputy Minister of Foreign Affairs.

With assets of approximately $475 billion, the QIA plans to send delegations to Vietnam to discuss investment projects with relevant Vietnamese authorities. In 2023, bilateral trade between Vietnam and Qatar was valued at $497 million, a 32 per cent increase from the previous year.

Many agreements were inked between Vietnam and Qatar last week (see box). They mark a significant step in Vietnam’s efforts to strengthen its economic and trade relations with the Middle Eastern. By diversifying its global partnerships, leaders say the nation is positioning itself as a key player in the regional economy.

Agreements signed during PM Chinh’s official visit to the UAE

- AI development and application between Viettel and UAE’s Presight

- Aviation cooperation between Vietjet and Emirates; and between Vietnam Airlines, Emirates, and Etihad Airways

- Development of Can Tho port between Vietnam Maritime Corporation and UAE’s DP World

- Cooperation in banking-finance, construction, high-tech agriculture, seaports, aviation, energy, and human resource supply between T&T Group and UAE’s Golden Nile Investment

- Data centre development between Vingroup and UAE’s BenyaGroup

- Logistics ecosystem and seaport system development between Vingroup and Abu Dhabi Ports Group

- Electric vehicle manufacturing between Vingroup and Emirates Driving Company

Agreements signed during PM Chinh’s official visit to Qatar

- Protocol between both governments on amending the agreement for air services signed in 2009

- MoU on sports cooperation between the two governments

- MoU on legal cooperation between the justice ministries of both nations

- MoU between the Diplomatic Academy of Vietnam and the Diplomatic Institute under Qatar’s Ministry of Foreign Affairs

- MoU between Vietnam’s State Capital Investment Corporation and Qatar Investment Authority

- MoU between Vietnam’s T&T Group and Qatar’s JTA International Investment Holding on investment in a sports complex and trade centre in Hanoi.

Vietnam-UAE trade boost imminent Vietnam and the United Arab Emirates are set to benefit from an economic cooperation deal slated for inking this year, with trade and investment forecast to improve.

Vietnam to finalise trade agreement with UAE Vietnam and the United Arab Emirates (UAE) are eager to negotiate on the comprehensive economic partnership agreement (CEPA) between the two nations, aiming for a boost in trade and investment.

PM urges early conclusion of Vietnam-UAE CEPA negotiations Prime Minister Pham Minh Chinh called for the early conclusion of negotiations on the Vietnam-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA) at a reception in Hanoi on August 26 for UAE Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi and leaders of 19 major UAE corporations.