Hang Nguyen is a Ph.D. candidate at the Royal Melbourne Institute of Technology University in Australia. Here she considers the reasons for promoting Vietnam-Australia trade relations.
Vietnam and Australia officially established diplomatic relations in February 1973 and have sought to foster their relationship since then. In 2009, Vietnam and Australia elevated their bilateral relations to a new height: Vietnam-Australia Comprehensive Partnership. This is a crystal clear indication of Hanoi and Canberra’s desire to expand and deepen Vietnam-Australia relations on a wide range of areas from economics, politics, security to people-to-people exchange. Among those areas, trade has an increasingly important role in consolidating the Vietnam-Australia partnership.
Vietnam-Australia trade and economic cooperation has generated enormous benefits for both countries. In 2014 Australia jumped to become the fourth biggest market for Vietnamese exports. In 2015, Australian merchandise with Vietnam reached AUD 7,965 million and Australian businesses invested more than AUD 1,457 million in Vietnam. Australia’s services exports to Vietnam increased approximately 32.8 per cent or AUD 299 million from AUD 911 million in 2011 to AUD 1,210 million in 2015. Australia’s services imports from Vietnam rose up to 17.7 per cent or AUD 134 million in 2011 to a total of AUD 890 million in 2015. Vietnam is one of 15 top two-way trading partners of Australia in 2015.
While Russia, Brazil and China – the world’s largest developing economies – are slowing down, Vietnam’s economic growth rate remains stable at 6.7% in 2015 and 6.3% in 2016. This makes Vietnam among the fastest-growing economies in the world in these years. Australia, the world’s twelfth largest economy, known for its promotion of global trade and investment liberalisation has seen various business opportunities in Vietnam. With Vietnam placing more emphasis on trade and investment, and building up its physical and legal infrastructure, Vietnam’s demand for professional services in financial and legal counselling, civil engineering, and construction will grow considerably. With Australia caring about supplier diversity, Australia will see Vietnam as a good supplier of crude oil, telephones, aquatic products and agrifood products. Fortunately, Australia can provide the expertise needed by Vietnam and Vietnam can provide the commodities needed by Australia. As highly complementary economies, there are huge untapped potentials in Vietnam-Australian trade and economic relations. In order to strengthen the trade bonds between the two nations Australia and Vietnamese governments should continue to work closely to support the bilateral trade expansion through economic cooperation projects and business outreach activities. Followings are the recommendations that the two governments should take into consideration to provide a good prospect for Australia and Vietnam trade relations:
· Vietnam and Australia need to broaden the convergence of their interests and benefits in trade cooperation. The two countries need to strengthen their cooperation in their respective advantages in consumer goods (seafood and agricultural products), mining and manufacturing industry, while exploring the possibilities for closer cooperation in renewable energy, high-tech products, and services sectors (tourism, education, healthcare, social welfare, banking and finance, and transport).
· Vietnam and Australia need to put more efforts on trade and investment facilitation. Enhancement of trade and investment facilitation assists Vietnamese and Australian business communities to succeed in trade and investment in Vietnam and Australia, and eventually contribute to economic growth and job creation in both countries. A Vietnam-Australia Trade and Investment Facilitation Mechanism should be initiated as it may increase two-way services and merchandise trade between Vietnam and Australia, and at the same time, may help create a more transparent and predictable business environment for Vietnamese and Australian companies.
· Vietnam and Australia should continue to support and promote the multilateral trading system. The two governments can foster their economic cooperation through their active participation in the multilateral trade and economic agreements that they are signatories, namely the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) and the Asia-Pacific Economic Cooperation (APEC). These multilateral trading systems create regulations and conditions for progressive trade liberalisation and market-oriented transfer of technology among its members. As supporters of these multilateral trading systems, Vietnam and Australia are enabled to tap their trade potential, expand their trade scale and increase their trade volume.
As the Vietnam-Australia bilateral relations continue to develop, the opportunities available to Australian and Vietnamese business communities will also continue to open up. Now is the good time for Vietnam and Australia to enhance two-way trade in both goods and services. A sound and stable trade relations between Vietnam and Australia are not only benefiting the two peoples but also contributing to the Asia-Pacific economic development and prosperity.