Vietnam extends trade reach with upcoming agreements

From this month onwards, representatives from Vietnam’s Ministry of Industry and Trade (MoIT) and other relevant ministries will hold meetings with counterparts in the UAE to negotiate a comprehensive economic partnership agreement (CEPA). It is hoped that the deal will be signed later this year.

Vietnam extends trade reach with upcoming agreements, Photo : Le Toan

Over a week ago, Vietnamese Minister of Industry and Trade Nguyen Hong Dien and UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi clinched a ministerial declaration on kicking off negotiations on the CEPA between both economies, soon after Vietnam had completed relevant procedures.

At present, both nations are discussing the draft terms of reference. After being agreed on and adopted by both sides’ authorised agencies, the proposals will be officially negotiated. Vietnam has already completed a feasibility study on the agreement.

According to Minister Dien, the CEPA can bring about numerous opportunities for the two economies. “Vietnam is becoming a manufacturing hub for many types of important commodities in the region and the wider world. Meanwhile, the UAE has many strengths as a transshipment port and financial and logistics centre,” Dien said. “Thus the CEPA will help enhance the combined strengths of the two sides and create a momentum for growth in their trade and investment ties.”

Minister Zeyoudi added that the UAE wants to expand economic ties with Vietnam. “The UAE is Vietnam’s number one Arab trade partner, accounting for 39 per cent of its total trade with the Arab countries. The CEPA will help enhance economic and trade ties in unprecedented ways while supporting the private sector’s access to both markets. It will also create new investment opportunities, which will result in a higher volume of trade exchanges,” he said.

Zeyoudi added that many ministries and sectors in charge of areas such as energy, industry, and logistics services in the UAE are all supporting the negotiations.

“UAE businesses are interested in this agreement because it will provide a new impetus for both nations’ economic cooperation and trade relationship based on mutual benefits,” Zeyoudi stressed.

According to the MoIT, two-way trade hit nearly $4.4 billion last year, with Vietnamese exports valued at $3.84 billion – down nearly 18 per cent on-year, and imports worth $550 million. Meanwhile, accumulatively as of March 20, Vietnam had 36 UAE valid projects registered at $71.4 million, reported Vietnam’s Ministry of Planning and Investment.

In recent years, Vietnam and the UAE have been boosting cooperation in oil and gas. Vietnam has just suggested that both countries sign a new MoU on energy cooperation and create better conditions for UAE partners to soon work with Vietnam in the oil and gas sector.

It is also suggested that both sides consider a possibility of constructing a centre for transporting and storing crude oil and petrochemical products in Vietnam, which will be provided for Asian markets.

It is also recommended that UAE’s oil and gas companies and PetroVietnam boost cooperation in exploring and exploiting oil and gas in Vietnam, exchanging technical skills and expertise, and training high-quality talent. In addition, both nations are also expected to increase cooperation in developing electricity transmission lines in Vietnam.

Meanwhile, in addition to the CEPA, Vietnam is now mulling over clinching a free trade agreement with the Southern Common Market. Commonly known as Mercosur, the South American trade bloc was established in 1991 and its current full members are Argentina, Brazil, Paraguay, and Uruguay.

Under the MoIT’s plan, besides taking full advantage of existing 15 trade agreements, Vietnam will also boost negotiations of new deals like the CEPA and with Mercosur in order to expand trade with nations there.

Last year, Mercosur’s two-way trade with Vietnam grew 9.2 per cent on-year to over $12 billion, including more than $3.3 billion worth of Vietnamese exports, up 3.4 per cent, and imports of $8.7 billion, up 11.6 per cent.

The South American nations in question are strong in producing and exporting farm produce, animal feed, industrial materials, and natural minerals, while Vietnam’s exports to the region include electronics and telecommunications equipment, garments and textiles, and footwear. Thus, Vietnam and Mercosur are complementary in goods structure, and not direct competition. Currently, Mercosur has no preferential trade deal with nations that have goods that directly compete against Vietnam.

Luis Pablo Maria Beltramino, Argentinian Ambassador to Vietnam, told VIR that trade between Argentina and Vietnam “has grown steadily”.

“Over the past 10 years, Argentina recorded a cumulative growth in exports to Vietnam of 600 per cent, while exports from Vietnam to Argentina in the same period increased by 700 per cent. This trend shows both countries have a sustainable relationship in trade,” Beltramino said.

The products that Argentina exports to Vietnam are mainly agricultural goods that are incorporated into Vietnam’s value chain and then exports to other countries, the ambassador added.

“That is why we can say we are de facto strategic partners in agriculture. For its part, Vietnam exports final consumer goods to Argentina such as mobile phones, electronic products and components, textile products, footwear, rubber products, ceramics, machinery, and industrial spare parts, among others,” he explained.

Beltramino added that he is confident that the commercial relationship between Argentina and Vietnam will continue to grow, especially in the agribusiness sector.

“We also maintain cooperation with Vietnam in terms of technical assistance in agricultural development and innovation, such as technology to improve rice and soybean production, the control of foot-and-mouth disease, and more,” he said.

Vietnam, UAE to soon kick off negotiations of comprehensive economic partnership agreement Minister of Industry and Trade Nguyen Hong Dien and Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi of the United Arab Emirates (UAE) have signed a Ministerial Declaration on starting negotiations on a comprehensive economic partnership agreement (CEPA) between the two nations right after Vietnam completed its procedures. ​