Vietnam and MERCOSUR to soon start FTA negotiations

Tuesday, 23/05/2023 09:48
Vietnam and the Southern Common Market (MERCOSUR) will soon start negotiating a free trade agreement to jointly exploit the space on trade and promote investment.
 Meeting with the President of Brazil, Prime Minister Pham Minh Chinh asked Brazil to support and promote the early start of FTA negotiations between Vietnam and the MERCOSUR. (Source: VGP)

MERCOSUR, consisting of four countries (Brazil, Argentina, Uruguay, and Paraguay), is the world's fifth largest economic bloc, and is a high potential market area for various Vietnamese key consumer goods.

Although there have been 15 free trade agreements with over 60 major economies effectively implemented, thereby expanding export markets, increasing tariff preferences and facilitating trade, Vietnam has considered negotiating a free trade agreement (FTA) with the MERCOSUR to make this FTA a driving force to exploit the Latin American market.

In 2022, Vietnam's two-way trade with the four South American markets reached more than USD12 billion, up 9.2% over the same period. In which, Vietnam's exports reached more than USD3.3 billion, up 3.4%; imports reached USD8.7 billion, up 11.6%.

In terms of the Americas, two-way trade reached an impressive USD153.9 billion, up 10.7% compared to 2021. In which, Vietnam's exports exceeded USD128 billion, up USD12.2 billion; imports reached USD25.7 billion, up 3%, bringing the trade surplus with the Americas to more than USD102.5 billion.

According to the Ministry of Industry and Trade, MERCOSUR countries have strengths in producing and exporting agricultural products, animal feed and industrial raw materials, while Vietnam's main export products to MERCOSUR are electronic equipment, telecommunications, textiles and footwear.

The structure of goods that are complementary and not directly competitive is also a strength for Vietnam in approaching this market.

Promoting the early start of FTA negotiations between Vietnam and the MERCOSUR was emphasized by the head of the Vietnamese Government, Prime Minister Pham Minh Chinh, during a meeting with Brazilian President Lula Da Silva in Hiroshima, Japan on May 21. The Prime Minister asked Brazil to support and promote the early start of FTA negotiations between Vietnam and the MERCOSUR.

Brazil has for many years been Vietnam's largest trading partner in Latin America, with trade turnover in 2022 reaching a record of USD6.78 billion.

Currently, Vietnam has completed an internal review related to the negotiation of an FTA with the MERCOSUR, and hopes that the two sides will soon start negotiations to sign this agreement, creating favorable conditions for trade and investment between Vietnam and the member countries of the bloc./.

Compiled by BTA