Last updated: Tuesday, May 21, 2013
Vietnam - Middle East Trade Relations ThrivePosted: Tuesday, July 24, 2012
Vietnam has established trade links with many important Middle East markets such as the UAE, Saudi Arabia, Turkey, Kuwait and Israel. Thus far, economic and commercial cooperation relations have achieved initial successes and promised high prospects of future cooperation.
Economic and trade relations between Vietnam and the Middle East have flourished in the past time. The two sides have already established the relatively sufficient legal framework for developing and strengthening comprehensive trade cooperation. A lot of bilateral agreements and protocols have been signed to create the legal framework for cooperative activities between the two parties like Trade Agreement, Agreement on Economic, Scientific and Technological Cooperation, Maritime Transportation Agreement. Official cooperation mechanisms like activities of joint committees, bilateral cooperation between ministries and localities, and cooperation between trade promotion organisations have been promoted to play greater roles in two-way relationship. Some joint committees between Vietnam and the Middle East has been established and operated effectively, including the Intergovernmental Committees with the UAE and Iraq, the Joint Committees with the UAE, Turkey, Oman , Kuwait, Saudi Arabia, Iran and other nations.
In 2011, although Middle East economies were affected by global economic downturn, the two-way trade between Vietnam and the Middle East still reached US$5.13 billion. Particularly, Vietnam took over US$2.5 billion from its exports to this market while spending US$2.63 billion on imports from there. Up to now, Vietnam has trade relations with all 16 Middle East countries. Its key exports to this region are agricultural products, foods, electronic appliances, computers and apparels. However, building materials, footwear, electric wire and cables, furniture, office equipment and wooden products are of high demand there but Vietnam has not successfully tapped. Mobile phone is a newcomer in the Middle East but it has quickly emerged to be a top five export of Vietnam to this area.
From its successes here, it is clear that the Middle East is an important market for Vietnam, especially in such aspects as trade, investment, labour export, and oil and gas cooperation. Understanding the importance of the Middle East market, on September 9, 2008, the Prime Minister issued the Decision No. 125/2008/QD-TTg approving the Vietnam - Middle East relations promotion project for the 2008 - 2015 stage. The project introduced solutions to uplift Vietnam - Middle East cooperation in politics, diplomacy, investment, oil and gas, labour, trade finance - banking, transportation, tourism, information, culture, sports, agriculture, science and technology, education and training, security and defence.
In deploying cooperation contents concerning industry and commerce, on December 15, 2008, the Minister of Industry and Trade signed Decision No. 6583/QD-BCT to launch an action programme for promoting the above project from 2008 to 2015. Accordingly, Vietnam strives for trade turnover of US$9.6 billion with the Middle East by 2015, of which US$7.5 billion belongs to Vietnam, representing average annual export of 27 percent. The overall objective of the action programme is to promote economic and commercial cooperation with the Middle East market and step up Vietnam’s advantageous exports like agricultural products, foodstuffs, handicrafts and industrial merchandise.
Regarding oil and gas cooperation, the action programme highlights the implementation of signed oil and gas projects and expansion of petroleum activities in the Middle East by taking advantage of favourable opportunity to sign oil - gas exploration and production contracts, diversify imported crude oil and LNG sources to serve Vietnam’s energy security strategy.