Vietnam and New Zealand investment and trade opportunities

Bilateral relations between Vietnam and New Zealand remain strong, with renewed focus on investment opportunities in areas such as renewable energy, real estate and aviation. We will discuss new areas for business and research cooperation between the two countries, as well as top items in the commodity trade basket.

New Zealand’s growing interest in investing and expanding business in Vietnam has ushered in a new chapter in bilateral relations between the two countries. New Zealand businesses are actively seeking support from the Vietnamese government to take advantage of opportunities in key sectors such as renewable energy, real estate and aviation.

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This was echoed at a meeting between New Zealand business representatives and Vietnamese Prime Minister Pham Minh Trinh as part of his official visit to New Zealand on 10 March 2024. Prime Minister Chin then held discussions with the Prime Minister of New Zealand. Christopher Luxon in Wellington the next day. The two leaders led the press conference with a central message advocating the promotion of comprehensive cooperation.

This article discusses recent developments in the bilateral relationship between New Zealand and Vietnam, with a particular focus on areas ripe for investment, trade and cooperation.

Current developments in bilateral relations

Prime Minister Chin began his official visit to New Zealand on March 9, 2024, accompanied by a high-level delegation. In their meeting with Prime Minister Luxon, the two leaders reaffirmed their commitment to strengthen political trust and strategic cooperation, and outlined plans for the implementation of the Vietnam-New Zealand Agreement. strategic partnership.

Key areas highlighted for increased cooperation include defence, security, agriculture, culture, education and people-to-people exchanges. Luxon has revealed that it is making a huge investment of NZ$6.24 million (approximately US$3.8 million) in Vietnam’s horticulture sector. Discussions also focused on increasing bilateral trade between Vietnam and New Zealand to USD 2 billion by the end of 2024 and USD 3 billion by 2026.

Finally, the two leaders pledged mutual support in regional and international forums, underscoring their commitment to regional stability and cooperation.

Sustainability and innovation are key to Vietnam-New Zealand cooperation

Prime Minister Chinh’s official visit included discussions with senior representatives, meetings with heads of associations and prominent companies, working sessions with local scientific, technical and educational institutions, and meetings with the Vietnamese community in New Zealand. .

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Speaking at one of the seminars, he reiterated Vietnam’s efforts to attract foreign investment by prioritizing quality, efficiency and sustainability. He emphasized the importance of green practices and the application of science and technology, and encouraged New Zealand businesses to deepen their involvement across a range of sectors.

Potential areas for cooperation identified by the Prime Minister include:

• green economy and digital economy.
• Circular knowledge-based economy.
• Science and Technology (S&T);
• electronics;
• Electric vehicle (EV).
• semiconductor;
• essential minerals;
• green finance.
• biotechnology;
• health care;
• High-tech agriculture.and
• Developing high quality human resources.

In addition, New Zealand is home to approximately 15,000 Vietnamese, and Prime Minister Chinh has expressed his desire to facilitate the integration of Vietnamese companies operating in the country into global supply and production chains to benefit both countries. He emphasized the importance of continued support. At the same time, he also pledged to provide unwavering support and optimal conditions for foreign companies to invest and operate effectively and sustainably within Vietnam’s rapidly growing economy.

In particular, New Zealand business representatives expressed strong interest in Vietnam’s investment attraction policies, especially infrastructure development. They also outlined demands for cooperation and opportunities for capacity building across a range of sectors, from education and training to climate change mitigation, green transport, energy transition and sustainable agriculture.

Background: Vietnam-New Zealand relations

Vietnam and New Zealand officially established diplomatic relations on June 19, 1975. In 2009, the two countries upgraded their bilateral relationship to a comprehensive partnership, and further elevated it to a strategic partnership in 2020. These developments have contributed to strengthening political trust between the two countries. Promote continued exchanges of high-level and other delegations between the two countries.

Recent diplomatic visits and trade agreements

2022, former Prime Minister of New Zealand Prime Minister Jacinda Ardern makes official visit to Vietnam, has reached a major agreement to allow the import of Vietnamese limes into New Zealand, overcoming long-standing biosecurity concerns. Furthermore, the import of pomelo was approved, and trade relations between the two countries developed significantly. Prime Minister Ardern announced these initiatives alongside former Trade Minister Damian O’Connor on a trade mission aimed at boosting trade relations and promoting the New Zealand brand in Vietnam.

The visit included engagement with both political and commercial hubs and highlighted progressive gains in areas such as agriculture and food production technology. Additionally, efforts were made to restore New Zealand’s attractiveness as a destination for Vietnamese students, and the importance of educational ties between the two countries was emphasized.

New Zealand considers Vietnam to be an important geopolitical and economic partner in the region, and Vietnam has consistently prioritized and promoted multifaceted cooperation with New Zealand.

Trade between Vietnam and New Zealand

Expanding trade ties is an important part of Vietnam-New Zealand relations. In 2023, bilateral trade between the two countries soared to over USD 1.3 billion, with total imports reaching USD 680.6 million and total exports reaching USD 648.9 million.

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According to the UN COMTRADE database, Vietnam’s exports to New Zealand reached US$941.97 million. Top export products from Vietnam include electrical and electronic equipment (US$404.97 million), footwear gaiters (US$92.09 million), machinery, nuclear reactors and boilers (US$60.3 million), furniture, lighting signs and prefabricated buildings (US$60.3 million). 47.86 million USD). , non-knitted or crocheted apparel products (US$41.19 million).

Meanwhile, New Zealand’s exports to Vietnam totaled US$576.3 million during the same period. The main exports from New Zealand to Vietnam are dairy products, eggs, honey, edible products (US$ 313.44 million), edible fruits, nuts, citrus peels, melons (US$ 116.65 million), timber and wood products. , charcoal (US$ 32.33 million), other edible preparations (US$ 20.95 million), fish, crustaceans and aquatic invertebrates (US$ 13.37 million).

Impact of trade agreements

The economic partnership between Vietnam and New Zealand is strengthened by the membership of several countries. free trade agreement (FTA)include:

• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP);
• Regional Comprehensive Economic Partnership (RCEP) agreement; and
• ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) Agreement.

Collectively, these FTAs ​​establish a facilitative trade framework and enable both countries to pursue bilateral trade volume targets of US$2 billion.

Specifically, under the AANZFTA, many of Vietnam’s tariffs on goods trade with New Zealand will be eliminated by 2020. Additionally, the CPTPP will eliminate all remaining tariffs on exports from New Zealand to Vietnam. In particular, this includes charges such as:

• Tariffs of up to 34% will be imposed on sausages and other processed meats by 2027.
• It will impose tariffs of up to 15% on remaining steel lines by 2028.and
• Tariffs of up to 59% will be imposed on wine, beer and spirits by 2029.

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As noted by New Zealand’s Ministry of Foreign Affairs and Trade (MFAT), under the CPTPP, Vietnam opened its government procurement market for the first time. Due to the large market size and demand for a variety of goods and services, this move offers a wide range of prospects for both New Zealand’s established industry and specialist exporters. Additionally, the country has implemented transitional measures aimed at promoting competitiveness, gradually giving New Zealand companies equal status with domestic suppliers.

New Zealand investment in Vietnam

As of November 2023, New Zealand was involved in 52 projects in Vietnam, with a total registered capital of US$208.35 million. This ranks New Zealand 39th out of 143 countries and territories investing in Vietnam.

The investments were made in a wide range of areas including real estate business, education and training, processing and manufacturing, agriculture, forestry and fisheries, management and support services, and construction.

Specifically, New Zealand has committed to provide Vietnam with non-refundable official development assistance (ODA) of NZ$26.7 million (approximately US$16.27 million) from 1 July 2021 to 30 July 2024. This assistance will focus on areas such as: agriculture, climate change adaptation, education, and COVID-19 relief.

Opportunities abound and prospects bright for New Zealand companies in Vietnam

The growing economic ties between Vietnam and New Zealand present several avenues for strengthening partnership and investment. These include sectors such as renewable energy, real estate development, aviation, agriculture, and technology.

Furthermore, MFAT highlights the rapid development of Vietnamese supermarket chains related to fresh produce. This growth will facilitate valuable product-to-market mechanisms for exporters and facilitate faster delivery of New Zealand products to consumers. Resources such as wood and aluminum have great potential in driving Vietnam’s infrastructure development, as they are in high demand, especially in the manufacturing industry.

Overall, Vietnam’s vibrant economy and commitment to fostering a favorable business environment provide New Zealand businesses with many channels for growth, while also contributing to the progress of the country’s development.