Expanding Trade Promotion in New Markets

Saudi Arabia is a high potential market thanks to its developed oil and gas industry, which generates significant foreign exchange every year and makes it a top member of the Organization of the Petroleum Exporting Countries (OPEC). Economic and trade relations between Vietnam and Saudi Arabia have positively expanded in the past years, with annual trade turnover growth of 10 percent. In 2009, Vietnam earned US$82.4 million from exports to the Middle Eastern nation and spent US$351 million on Saudi Arabian products.

 

Vietnam’s main exports to Saudi Arabia include apparel, computers, electronic products and accessories, footwear, timber, wooden products, cashew nuts, pepper, plastics, rice, tea, seafood and coffee, while it imports plastic materials, chemicals, chemical products, animal feeds and materials, iron and steel - strengths of Saudi Arabia.

 

Presently, bilateral trade relations focus on five issues: Promoting strategic cooperation in energy and food security; enhancing cooperation in trade and investment to bring two-way trade turnover to US$1 billion in 2-3 years and to facilitate mutual market penetration of Saudi Arabia and Vietnamese goods; strengthening relations between Southeast Asia and the Persian Gulf, with the immediate priority to advance negotiations to sign the ASEAN - Gulf Cooperation Council (GCC) Free Trade Agreement; boosting Vietnam's labour exports to Saudi Arabia; and building the legal framework to ensure cooperation and development for each country.

 

Tunisian market: Although the cooperation between Vietnam and Tunisia is still limited and two-way trade remains modest, Vietnam’s exports to Tunisia have steadily increased in recent years. Vietnam mainly imports fertilizers, plastic materials, seafood and agricultural products from the African nation. Two-way trade reached nearly US$16 million in 2009.

 

In Algeria, Minister Vu Huy Hoang met with Algerian counterpart and attended the Vietnam - Algeria Business Forum. Vietnam and Algeria have a good relationship and the two sides have exchanged visits at all levels. Although Algeria is one of the largest African trade partners of Vietnam, bilateral trade turnover is still modest. The Southeast Asian nation mainly exports coffee, rice, seafood and pepper to the African nation. Vietnam earned US$17.8 million in 2008 and US$83.0 million in 2009 from exports to this market.

Middle East and North African countries characteristically are rich in oil and gas. During his visit, Minister Vu Huy Hoang and Petroleum and Mineral Resources Minister Ali Al Naimi of Saudi Arabia, on behalf of the two governments, signed a protocol on cooperation in petroleum and mineral resources. Previously, the Vietnam National Oil and Gas Group (PetroVietnam) also partnered with Saudi Aramco, a state-owned national oil company of Saudi Arabia, to enhance bilateral cooperation.

 

In Algeria, PetroVietnam Exploration and Production Corporation (PVEP), an affiliate of PetroVietnam, is holding 40 percent interest and obligations in Block 433a and Block 416b in Touggourt, in southeast Algeria. In its development strategy, State-owned PetroVietnam identifies Algeria as the key to expand oil and gas investment cooperation in North Africa. The group expects to start commercial production here in 2011.

 

Currently, oil and gas cooperation between Vietnam and Tunisia has experienced positive development. PVEP is exploring Guelala and Tanit blocks in Tunisia where the corporation is an operator with 60 percent interest.

 

With regard to African and Middle Eastern markets, the Ministry of Industry and Trade will propose that the Government introduce assistance for big companies to set up distribution channels in these markets. The Ministry will strengthen collaboration with the Vietnam Chamber of Commerce and Industry (VCCI) and exporting companies to promote sales in these markets and categorise importers to help Vietnamese exporters to seek out best partners.