Australia-Vietnam Comprehensive Partnership Enhanced
After signing the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), the total trade turnover between Vietnam and Australia in 2014 reached approximately US$6 billion, up from US$5.1 billion in 2013. Australia is currently the 8th biggest market for Vietnamese exports and 11th biggest market importing to Vietnam. In the first 2 months of 2015, Vietnam exported US$455 million to Australia.
In 2014, total exports to Australia reached US$3.99billion, a 13.7% increase from 2013. Vietnam imported US$2.06billion in total from Australia in the same year, giving Vietnam a US$1.93billion trade surplus.
As of the end of 2014, Australian companies had invested in 320 active projects in Vietnam, with a total registered capital of US$1.65billion, ranking 19 out of 101 countries home to companies investing in Vietnam. The largest such project is a nickel-mining project in Son La province owned by Ban Phuc Nickel Mines Co., Ltd, with registered capital of US$136million.
However, the size of average Australian investment at US$5.2 million per project in 2014 was far below the national average foreign investment amount per project of US$14.3 million. According to Vu Tien Loc, president of Vietnam Chamber of Commerce and Industry (VCCI), trade and investment between the two countries is not yet reaching its potential or achieving the expectations of either party.
Both countries are putting effort in enhancing the investment environment as well as eliminating or at least loosening trading barriers, enabling a deeper approach to both markets. Moreover, opportunities are expected to increase when Vietnam, Australia and the other 10 countries finish negotiating the Trans-Pacific Partnership (TPP), which is so far on course to happen in 2015. The TPP, with the purpose of creating a free trade area of partner countries in the Asia Pacific area, will increase opportunities for investors in both markets.
According to Deputy Minister of Industry and Trade Tuan Anh, through the opening up of export markets under the TPP agreement, Vietnamese enterprises which may benefit include those involved in:
- Agro-fisheries products
- Garments and textiles
- Footwear leather
Currently, Vietnam and Australia are enhancing the strategic nature of the bilateral relationship at a high level. On March 17-18, 2015, Vietnamese Prime Minister Nguyen Tan Dung visited Australia, and together with his Australian counterpart Prime Minister Tony Abbott promised to further the comprehensive partnership in a wide range of areas including education, development assistance, investment and trade. Moreover, the two nation’s Ministries of Foreign Affairs signed the Action Plan for 2015-2017 to implement in the words of PM Dung, “concrete programmes and projects for the two countries interests, for peace, stability, cooperation and common development of the region”.
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