Vietnamese Prime Minister Pham Minh Chinh and UAE Vice President and Prime Minister Mohammed bin Rashid Al Maktoum attend the signing ceremony of the Comprehensive Economic Partnership Agreement (CEPA)

Promoting bilateral trade and investment

The official visit by Prime Minister Pham Minh Chinh to the UAE on October 28 marked an important turning point in elevating the relationship between the two countries. The visit promoted comprehensive cooperation and opened opportunities for UAE investment in Vietnam, while facilitating access for Vietnamese goods and services to the Gulf market. During the visit, the two sides signed the Comprehensive Economic Partnership Agreement (CEPA) aiming for US$10 billion in trade turnover and deeper ties with other Middle Eastern countries.

The trade deal includes 18 chapters, 15 annexes and 2 bilateral letters. It outlines tariff reductions, with the UAE removing tariffs on 99% of Vietnamese exports, and Vietnam eliminating tariffs on 98.5% of UAE exports. It also includes favorable terms for trade and investment, aligning with global trends in digital transformation and green development. This deal is an enhanced free trade agreement capable of meeting future development trends, balancing the interests of both countries and boosting bilateral trade and investment.

According to Mr. Truong Xuan Trung, First Secretary and Head of the Vietnam Trade Office in the UAE, CEPA is a major step forward in bilateral cooperation, providing a solid legal framework for collaboration in multiple sectors. By reducing or eliminating tariffs on many goods and services, the trade pact will create new opportunities for businesses, enhance foreign direct investment (FDI), and facilitate market access in the near future.

Promising market

Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade - MoIT), said that the UAE serves as a strategic gateway for Vietnamese goods and services to penetrate the Middle Eastern and African markets. Despite global economic challenges, the UAE has maintained stable growth, creating opportunities for Vietnamese businesses facing difficulties in major markets such as the EU, the U.S. and China.

Currently, the UAE is Vietnam’s largest export market in the Middle East and Africa. According to the General Department of Vietnam Customs, as of September 2024, trade value between Vietnam and the UAE totaled nearly US$5 billion, an increase of over US$1.4 billion compared to the same period in 2023.

Vietnam's exports to the UAE totaled US$4.31 billion, a 43.67% increase, or US$1.31 billion more than the previous year.  As a result, Vietnam achieved a trade surplus of nearly US$3.66 billion with the UAE. Among the key export items, phones and components play a dominant role, valued at US$2.54 billion, an increase of 56.85% compared to 2023. Other products such as computers and electronic components (US$357 million), machinery and spare parts (US$380 million) and footwear (US$151.2 million) also recorded impressive growth.

Vietnam’s potential to expand exports to the UAE remains significant, especially for products such as seafood, pepper, cashew nuts, coffee, fruits and vegetables, textiles, footwear and construction materials.

In addition, the UAE ranks among the top 20 countries in the world for outbound FDI and is considered an attractive destination for investment promotion, trade, tourism and labor activities.

However, despite its potential, exporting to the UAE requires Vietnamese businesses to strictly comply with Halal certification regulations. Products must not contain prohibited ingredients and must not come into contact with equipment, materials or food items that are not permissible under Islamic law. Furthermore, fierce competition from regional rivals demands that businesses enhance product quality and refine their market strategies.

Mr. Tran Thanh Hai advised Vietnamese enterprises to take a cautious approach to minimize risks. He recommended partnering with agents or distributors in the UAE, opening representative offices or branches, or exploring franchise opportunities. The MoIT is actively working with relevant agencies to assist businesses in promoting trade, advertising products, and identifying customers in this promising market.