Recently, at the headquarters of Vietnam Chamber of Commerce and Industry (VCCI), Dr Doan Duy Khuong, Vice President of VCCI, had a meeting with Mr Trevor Thomas, Senior Representative of South East Asia cum Minister Counsellor of the Treasury Department of the Australian Government. The purpose of the visit is to learn about economy, trade and investment of Vietnam to have the basic information to advise the Australian Government to take right decisions on economic cooperation and investment with Vietnam. Six months ago, Trevor Thomas also made similar visits to VCCI.
As expected, VCCI will sign a cooperation agreement with the Australian Chamber of Commerce and Industry (ACCI) at Perth in 2013, on the occasion of the 40th anniversary of establishment of the diplomatic relations between two countries.
According to VCCI, the trade turnover between Vietnam and Australia for many years has increased from US$32.3 million in 1990 to US$3.06 billion in 2005, in which Vietnam continued to have surplus export to Australia. In 2006, total trade turnover between two countries reached US$4.2 billion, of which Vietnam exported US$3.2 billion and imported US$1 billion.
One of the turning points in the trade relations between two countries was marked by the fact that the two governments signed an agreement to conclude bilateral negotiations for Vietnam’s access to WTO in March, 2006. In 2008, imports and exports reached nearly US$5.6 billion, of which Vietnam exported US$4.2 billion to Australia and imported US$1.3 billion.
Vietnam mainly exported crude oil, seafood, cashew nuts, furniture, handicrafts, coffee, garments, footwear, rubber, and rice to the Australian market and imported commodities such as cereals, pharmaceutical, marine, food processing machinery, electrical equipment, metal, steel, food, and chemical, etc.
In 2009, the imports and exports of both countries decreased compared to 2008, reaching only US$3.32 billion, of which export value of Vietnam reached US$2.27 billion and import value was US$1.05 billion. In 2010, the trade turnover between two countries reached US$4.14 billion, of which Vietnam’s exports to Australia reached US$2.7 billion and imports was US$1.44 billion.
In 2012, export turnover of Vietnam to Australia increased by nearly 29 percent compared to 2011, reaching more than US$3.2 billion. The major commodities exported to Australia include cameras, video recorders, components (up 138 percent), gasoline (up 113 percent), steel (up 96 percent), pepper (up 68 percent), and transport equipment and parts (up 50 percent). While imports from Australia into Vietnam fell by nearly 17 percent, approximately US$1.8 billion, but the two-way trade turnover has exceeded US$5 billion.
Regarding investment cooperation, as of May 11, 2012, Australia has a total of 274 valid projects in Vietnam with a total registered capital of US$1.323 billion and chartered capital of US$566.3 million, ranking 21 out of 98 countries and territories investing in Vietnam.
In particular, Australia is a financial aid provider of Vietnam. The Australian development aids aim to reduce poverty and achieve sustainable development of economy and society. The Australian government’s aids are implemented by the AusAid.
So far, the Australian people have been already familiar with a lot of Vietnamese imports. Australia continues to make a commitment to open markets and commercial liberalization in the future so the Vietnamese exporters will have more opportunities to increase exports to this market.
Australia does not apply quota to imports from Vietnam. However, tariffs on textiles and shoes are very high. Meanwhile, the competition with partners such as China and some ASEAN countries has been increased because these countries, particularly China and India, have big advantages of the textile goods.
Food, fruits and agricultural products imported to Australia must be tested through an import risk analysis (IRA) of the Australian Biosecurity agency. This process will be decided by two functional agencies of two countries. The processing speed depends on relationship between Australia and its partner; however, the process between Vietnam and Australia is still fairly slow.
Besides, trade and tax policies of Australia are quite transparent, but non-tariff barriers (i.e. standards of food safety, technical standards) are rather tight so the Vietnamese businesses should make an in-depth research on those before starting businesses with this market.