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3 FTAs strongly complement Vietnam-Australia trade

07/06/2022

With the support from 3 FTAs in effect including: CPTPP, RCEP and AANZFTA, in the first five months of 2022, Vietnam-Australia trade reached over USD 6 billion, of which exports reached  USD 2,335 billion, an increase of 33%.

According to Vietnamese Ambassador to Australia Nguyen Tat Thanh, Vietnam and Australia are common members of at least three free trade agreements (FTAs), including: the ASEAN-Australia-New Zealand FTA (AANZFTA), the CPTPP Agreement and most recently the Regional Comprehensive Economic Partnership (RCEP). These 3 FTAs are strongly supporting the trade and investment of the two countries.

With the potential and reasonable complementation from the structure of the import-export business, Vietnam has risen to become the 12th largest trading partner of Australia, and vice versa, Australia is the 10th largest trading partner of Vietnam, one level higher than in 2020.

According to the General Department of Customs, in 2021, the total two-way trade turnover between Vietnam and Australia for the first time exceeded the USD 12.4 billion mark, an increase of more than 49% compared to 2020. Vietnam's exports to Australia reached more than USD 4.45 billion, an increase of more than 23% and Vietnam's import turnover from Australia reached nearly USD 8 billion, an increase of approximately 70%, compared to 2020.

Over the first five months of 2022, export turnover from Vietnam to Australia reached nearly USD 2.35 billion, an increase of 22% over the same period. In which, aquatic products increased by 53.3% over the same period; vegetables and fruits increased by 22.75%. Rice products, after strong promotions in 2021 in a number of major Australian states, continued to achieve good growth, in the context of Australia reducing rice imports from the world.

In addition, other strong industrial products of Vietnam such as iron and steel of all kinds increased by more than 478%, rubber, electric cables, computers and components also increased sharply.

In the opposite direction, Australia is becoming a supplier of raw materials for many manufacturing industries of Vietnam with essential input materials, such as coal, iron ore, metals, cotton, wheat, fodder, etc.

Accordingly, imports from Australia over 5 months reached USD 3.7 billion, an increase of 26% over the same period. Total two-way trade between the two countries over five months reached more than USD 6 billion.

Not only trade, CPTPP is a lever to increase investment between the two countries. As of the end of 2021, Australia has invested in about 550 projects in Vietnam, with a total value of only nearly USD 2 billion, making it the 19th largest FDI country in Vietnam.

Also last year, Vietnam and Australia completed the signing of the Enhanced Economic Engagement Strategy, which aims to support the shared ambition of making the two countries each other's top trading partners and doubling bilateral investment.

 

Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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