Hugely untapped potential for trade cooperation

Pakistan and Vietnam officially established diplomatic relations on November 8, 1972. Over the past 50 years, the two countries have elevated their cooperation ties and signed many memorandums of understanding to further boost their good traditional relationship, including the trade agreement (May 2001), the memorandum of understanding on the establishment of the Vietnam-Pakistan Joint Committee (April 2002) and the agreement on avoidance of double taxation (March 2004).

Speaking at a conference to introduce the Pakistan TEXPO Textile Exhibition 2023 and Vietnam-Pakistan trade and investment cooperation opportunities in Hanoi, Mr. Bui Trung Nghia, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), said that Vietnam-Pakistan trade value has tended to increase in recent years. In 2021, the value reached more than US$794 million, up 54.41% over 2020, and climbed to over US$904 million in 2022, up 12.17% year on year. Particularly, the two countries have great potential for cooperation in the textile and garment industry. In 2022, Pakistan imported nearly US$77 million worth of yarn from Vietnam and exported nearly US$100 million worth of fabrics, textiles, footwear, yarn and cotton to Vietnam. Vietnam has a large garment and footwear manufacturing industry, with the export value of textiles and garments, leather and footwear amounting at US$71 billion (including US$44 billion from textiles and garments and US$27 billion from leather and footwear).

Vietnam’s key exports to Pakistan include mobile phones and components (US$193 million), tea (US$102 million), pepper, seafood, yarn, rubber, chemicals, machinery, equipment and spare parts. Its main imports from Pakistan are fabrics, cotton, textile materials, pharmaceuticals, fibers and chemicals.

Pakistani Ambassador to Vietnam Samina Mehtab said, there are still untapped opportunities for Pakistan and Vietnam. Therefore, she hoped that the business communities of the two sides will step up cooperation to improve bilateral trade in various fields, especially in the textile-garment and leather-footwear industries.

Further boosting bilateral trade cooperation

To reinforce and push the bilateral trade cooperation, Vietnamese Ambassador to Pakistan Nguyen Tien Phong said that the two sides need to work together to encourage, increase awareness and enhance the exchange of delegations at all levels: High-level, ministerial level, association level and Chambers of Commerce and Industry and create favorable conditions for businesses of the two countries to contact and seek cooperation chances to foster economic and trade cooperation. To effectively organize delegation exchanges, the two countries need to carefully gather information, and cooperate with potential partners beyond B2B, G2G and P2P. We need the participation of government agencies through B-G-B and G-B-G mechanisms to bring practical results, not only generated by MOUs but also by commercial and economic contracts.

In addition, it is necessary to establish information channels through the embassy and the trade office to provide timely and effective information for businesses of the two countries, and further exchange information on trade and investment policies, trade, industrial and investment activities, trade fairs and exhibitions held in each country, imported and exported merchandise that each side has comparative advantages.

Regarding trade promotion, the two sides need to strengthen cooperation in trade and investment promotion in industrial and commercial projects, said Ms. Le Thi Mai Anh, Head of Asia Office, Asia-Africa Market Department, the Ministry of Industry and Trade. Currently, Pakistan enjoys many GSP+ benefits from the EU and Vietnam also signed EVFTA and 16 new generation FTAs with major economic center partners in the world. The two sides need to consider taking advantage of Vietnam’s rule of origin and accumulation with EVFTA and GSP+ regulations that Pakistan enjoys from the EU in exported and imported materials for the textile and garment industry. They may potentially sign a Preferential Trade Agreement (PTA).

She also noted that the two sides also need to consider removing barriers, import and export procedures and difficulties in payment to further boost bilateral merchandise trade.

To realize the potential of bilateral trade cooperation, it is necessary to strengthen trade promotion programs to enable businesses of the two countries to understand each other's needs, said VCCI Vice President Bui Trung Nghia. Especially, Vietnamese companies can survey actual market situations and import demands in Pakistan in particular and access South Asian markets through Pakistan.

“Pakistani import regulations and policies and recommendations for Vietnamese goods, especially agricultural and food products exported to Pakistan, need to be introduced. It is also necessary to acquire the experiences of Vietnamese and Pakistani companies in exporting and distributing Vietnamese goods in Pakistan,” he added.

VCCI Vice President Bui Trung Nghia hoped that, in the coming time, more Vietnamese businesses will learn, approach and do business in Pakistan which has a population of more than 230 million and a GDP of nearly US$400 billion. Together with trade promotion agencies and partner organizations in Pakistan, the Vietnamese Embassy in Pakistan and the Ministry of Industry and Trade, VCCI is willing to support Vietnamese companies to make market expansion plans by establishing a business or cooperating with Pakistani businesses there to find partners, penetrate the market and understand Pakistani consumer tastes to enhance product quality to better meet South Asian market standards, including those in Pakistan.