Vietnam-UAE trade boost imminent

Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade of the United Arab Emirates, met with Nguyen Hong Dien, Minister of Industry and Trade of Vietnam more than a week ago in the Middle East nation on the progress of the completion of negotiations of the bilateral Comprehensive Economic Partnership Agreement (CEPA), which is expected to be clinched in mid-2024.

The CEPA is hoped to act as a key driver for both nations’ trade and investment ties, which are flourishing now.

“The CEPA is expected to usher in new opportunities in bilateral investment and trade ties between Vietnam and the UAE as it is the first free trade deal to be inked by Vietnam with a nation in the Middle East region, laying firm groundwork for the Southeast Asian nation to boost trade and investment cooperation not only with the UAE but also with the whole Middle East and African regions,” commented Vietnam’s Central Institute for Economic Management, adding that the UAE is now a crucial transiting market in the Middle East and Africa.

“The UAE wants to intensify cooperation with Vietnam in all industries, and would like to announce that the UAE president is scheduled to pay an official visit to Vietnam in mid-2024 when the CEPA is expected to be signed,” stated Minister Zeyoudi.

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, government procurement, economic cooperation, and more besides.

According to Vietnam’s Ministry of Industry and Trade, the CEPA can bring about many opportunities for the two countries.

“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,” said Minister Dien. “Thus, the CEPA will help promote the combined strengths of the two economies and create a large propellant for growth in their trade and investment ties.”

In late January, Vietnam’s Prime Minister Pham Minh Chinh met with Minister Zeyoudi in Hanoi.

He suggested that the UAE promote investment funds to operate more in Vietnam, and that both nations study and negotiate the Vietnam-UAE Investment Protection Agreement to help ensure the rights and benefits of investors in their respective territories.

The UAE has also been asked to support Vietnam in building and operating the International Financial Centre in Ho Chi Minh City and the National Innovation Centre in Hanoi. In addition, the Vietnamese side has also asked the UAE to assist it in developing the Halal food industry and its energy industry.

Zeyoudi said that the UAE government committed to continue boosting cooperation with Vietnam in these industries, while also encouraging and facilitating UAE investors to come to Vietnam in a more significant number. At present, the UAE has 40 valid ventures in Vietnam, registered at only $71.7 million. “Vietnam is now a big exporter of various types of goods, and the UAE wants to act as a sustainable supplier for Vietnam,” Zeyoudi said. “UAE businesses are interested in this agreement as it will provide a new impetus for both nations’ economic cooperation and trade relationship based on mutual benefits.”

The UAE is currently the largest export market and the second-largest trade partner (after Kuwait) of Vietnam in West Asia. In the 2018-2022 period, total bilateral trade revenue averaged at about $5 billion a year, with Vietnam enjoying an annual trade surplus of as much as $3-4 billion.

In 2023, total two-way trade value sit at nearly $4.7 billion, up 5.9 per cent on-year, of which Vietnam’s exports reached over $4 billion – up 4.3 per cent, and imports touched $676 million – up 16 per cent.

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

In past years, Vietnam and the UAE, which is among the world’s 10 largest oil producers, have been boosting cooperation in oil and gas. Vietnam has recommended that both countries sign a new MoU on energy cooperation and create new advantages 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 proposed that UAE oil and gas companies and PetroVietnam be facilitated to boost cooperation in investing in exploring and exploiting oil and gas in Vietnam, exchanging technical skills and expertise, and training high-quality human resources. In addition, both nations are also expected to increase cooperation in developing electricity transmission lines in Vietnam.

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. ​

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