Bolstering Cooperation in Various Fields

10:25:35 AM | 3/15/2023

The bilateral relationship between Vietnam and Australia has grown tremendously since the two countries established diplomatic relations in 1973. In 2017, Australia and Vietnam announced that their bilateral relationship had been upgraded to a Strategic Partnership. And on March 15, 2018, in Canberra, Prime Minister Nguyen Xuan Phuc and Prime Minister Malcolm Turnbull signed a Joint Statement on Establishing a Strategic Partnership between Australia and Vietnam.

National Assembly Chairman Vuong Dinh Hue (R) meets Australian Prime Minister Anthony Albanese, Canberra, Australia, November 2022

This decision demonstrates the maturity, growth and diversity in the bilateral relationship between the two countries, spanning many areas of cooperation such as politics, trade and investment, education, security and defense.

Major trade partner

According to Vietnam's Minister of Industry and Trade Nguyen Hong Dien, the bilateral trade relations between the two countries have made substantial progress, despite the negative impacts of the COVID-19 pandemic and the global economy over the past time. Bilateral trade turnover has exceeded the target of US$10 billion set by the senior leaders and reached US$15.7 billion in 2022, increasing by 26.9%. Australia has become Vietnam's 7th largest trade partner and Vietnam is also Australia's 10th largest trade partner.

That result reflects the coherence and complementarity between the two economies, as well as the positive effects of a number of free trade agreements to which the two countries are members, such as the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Vietnam's strong exports to Australia that record impressive growth include coffee, seafood, iron and steel products and products from iron and steel, and electronic components. In particular, vegetables, fruits and rice also increased by double digits.

Vietnam's imports from Australia include raw materials and input materials for production such as coal of all kinds, wheat, cotton of all kinds, scrap iron and steel, and iron and steel of all kinds.

Facing difficult forecasts about the world economic situation in 2023, at the recent meeting with Australian Ambassador Andrew Goledzinowski, Minister Nguyen Hong Dien proposed that the Australian Embassy strengthen coordination with the Ministry of Industry and Trade in implementing trade promotion activities, and urgently deploy periodic cooperation mechanisms to review the situation and find solutions to remove difficulties and obstacles in commercial relations and industrial cooperation between the two countries.

Regarding investment, Australia's investment in Vietnam is still quite modest. By the end of 2021, Australia had invested in about 550 projects in Vietnam, with a total value of nearly US$2 billion, making it the 19th largest country investing in Vietnam. Currently, Australia's FDI accounts for only 0.5% of the total FDI value in Vietnam.

Investment fields are mainly the processing industry, manufacturing, accommodation and catering services, construction and real estate, agriculture, forestry and fishery, healthcare, mining, arts and entertainment, and education. Prominent Australian investors in Vietnam include many large corporations and companies such as Austal, Blackstone Minerals, BlueScope Steel, CBH Group, LOGOS, Linfox, Mavin Group, SunRice and RMIT University.

Vietnam invested in Australia in 80 projects with a total investment capital of over US$520 million. Vietnam's investment in Australia mainly focuses on agriculture, forestry and fishery; and the wholesale, retail and manufacturing industries.

Mr. Nguyen Xuan Thang ( second from left), President of the Ho Chi Minh National Academy of Politics and Chairman of the Party Central Committee's Theoretical Council and Australian Ambassador Andrew Goledzinowski ( first from left),  at the launch of the Vietnam Australia Center

Diverse fields of cooperation

In the overall relationship between Vietnam and Australia, education-training cooperation plays a very important role. With more than 30,000 Vietnamese students and doctoral students studying in Australia, educational cooperation contributes not only to the development of Vietnam's human resources and Australia's economy, but also a strong cultural link and friendship bridge connecting the peoples of the two countries. It is estimated that about 80,000 to 100,000 Vietnamese alumni have studied in Australia and returned to Vietnam to start businesses in many fields.

In the field of innovation and high technology, Australia is one of the pioneer investors in information technology after Vietnam opened its doors, including communication satellites, undersea optical cables and the first ATMs. Although Australia did not maintain cooperation in these areas, many Australian investors have returned and they are expecting to return to their position as a leading partner in the high-tech sector in Vietnam, especially in artificial intelligence, and quantum computers.

Minister of Foreign Affairs Bui Thanh Son (R) receives his Australian counterpart Penny Wong

Over the past time, Vietnam has grown more robust thanks to the focus on production based on abundant labor resources. The Australian Government has been implementing the Aus4Innovation program since 2018 to help promote Vietnam's technological innovation process. Australia is planning to extend this project for another 4-5 years as well as increase capital for this project.

In terms of clean energy, and renewable energy, Australia has been investing in wind farms both onshore and offshore. The Australian Energy Regulatory Authority is also ready to negotiate with the Vietnamese energy regulator for effective coordination.

With the strong relationship of the past 50 years, the leaders of the two countries agreed to consider upgrading the relationship to a Comprehensive Strategic Partnership at an appropriate time. This is a very positive signal, demonstrating strong mutual trust as well as practical and effective cooperation in many fields between Vietnam and Australia.

By Quynh Chi, Vietnam Business Forum