FTA creates breakthrough for Vietnam-Chile trade

FTA creates breakthrough for Vietnam-Chile trade

Vietnam and Chile are marking a decade to their free trade agreement that has created a boost for trade and economic ties between the two countries. Vietnamese businesses, in particular, have made good use of incentives to promote exports to the South American country.

Good growth

Chile became the first South American nation to set up diplomatic ties with Vietnam on March 25, 1971. Over the past 50 years, Vietnam and Chile have developed good friendship and cooperation. In particular, the two sides are concretizing measures to promote their comprehensive partnership through the cooperation agreements in the fields of trade, investment, agriculture, science and technology.

The fourth session of the Vietnam-Chile Free Trade Council, Hanoi, May 6

Deputy Minister of Industry and Trade Do Thang Hai said at the fourth session of the Vietnam-Chile Free Trade Council that despite the difficulties posed by the Covid-19 pandemic, two-way trade reached US$1.28 billion in 2020, an increase of 4.43 percent compared to a year ago and 2.5-fold higher than the figure recorded in 2013, prior to the free trade agreement.

In the first four months of the year, trade turnover between the two countries increased by 15.3 percent to US$401.1 million compared to the same period last year, with Vietnam’s exports reaching US$321.3 million, a year-on-year increase of 11.8 percent. Meanwhile, Vietnam’s imports from Chile saw a 31.6 percent increase, reaching US$79.8 million.

The 2011 Vietnam-Chile Free Trade Agreement has boosted trade and economic ties between the two countries despite the absence of commitments on services and investment.

Enhancing efficiency

Geographical distance is one of the major obstacles for the development of trade and economic relations between the two countries. However, with advantages in terms of friendship and cooperation, dynamic economy and high level of trade openness as well as incentives provided by the trade pact, the two sides are offered numerous opportunities to promote the relationship to new heights.

Deputy Minister of Industry and Trade Do Thang Hai noted that both countries are members of the 2018 Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Exports to Chile are expected to increase once Chile ratifies the agreement. In addition, the CPTPP will pave the way for greater Vietnamese export inroads into Peru, Bolivia, and the south of Brazil and the north of Argentina through the Free Zone of Iquique in Chile.

Deputy Minister of Trade at Chile’s Ministry of Foreign Affairs Rodrigo Yanez said Vietnam is not only an important partner in bilateral cooperation, but also a solid ally in multilateral forums, such as Asia-Pacific Economic Cooperation (APEC) and World Trade Organization (WTO). At the WTO’s second Trade Policy Review (TPR) session for Vietnam, the country was recognized as complying with international commitments and implementing important trade policies in a transparent manner. Yanez added that his country was promoting cooperation with other countries in Asia and is willing to join the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA).

On the occasion of the 50th anniversary of the establishment of diplomatic relations between Vietnam and Chile, Vietnamese President Nguyen Xuan Phuc held phone talks with Chilean President Sebastian Pinera to discuss orientations and specific measures to enhance the comprehensive partnership. The two leaders agreed on several measures, including maintaining the regular exchange of high-level delegations, carrying out cooperative mechanisms effectively and frequently, and boosting multilateral and inter-regional trade cooperation frameworks in the context of the global economy and trade seriously affected by the Covid-19 pandemic.

VietNam Economic News