The Vietnamese and Australian Governments today [December 21] announced the Enhanced Economic Engagement Strategy, which sets out a roadmap to boost bilateral trade and investment cooperation.

The Strategy would serve as the foundation for Australia and Vietnam’s effort to double the investment and become top ten trading partners.

Australia’s Minister for Trade, Tourism, and Investment Dan Tehan welcomed the Strategy as the foundation for Australia and Vietnam’s effort to double the investment and become top ten trading partners.

“Whether on the streets of Ho Chi Minh City or on the farms of western Victoria, the Australia-Vietnam economic relationship will provide opportunities for investment and trade,” Tehan said.

“Australia and Vietnam have complementary economies - we are partners more than competitors. Our supply chains are becoming more closely entwined, meaning together we are exporting to markets around the world.”

Australia’s Ambassador to Vietnam Robyn Mudie and Vice Minister of Vietnam's Planning and Investment Tran Quoc Phuong present the Australia-Vietnam Enhanced Economic Engagement Strategy (EEES) on Dec 21. Photo: Embassy of Australia in Hanoi

“The implementation of the Economic Engagement Strategy will unlock mutually beneficial opportunities and boost our trade and investment relationship, especially in key areas such as education, resources, agriculture, manufacturing, and digital economy.”

“As both our countries emerge from the pandemic and begin our economic recovery, the strategy presents tremendous opportunities for both our nations,” he added.

Vietnam's Prime Minister Pham Minh Chinh and his Australian counterpart Scott Morrison meet on the sideline of COP26. Source: VNA

In endorsing the Strategy, Vietnam’s Minister of Planning and Investment Nguyen Chi Dung noted “success in achieving the common objectives of the Strategy will further enhance the economic position of Vietnam and Australia, contributing to the safety, security and shared prosperity of the Asia-Pacific region”.

The Strategy also highlights the importance of strengthening the rules-based global trading system as the basis for open international trade and working together to address economic challenges and coercive economic practices.

For the past 20 years, bilateral trade turnover expanded by an average of 8.6% per year, significantly higher than the similar rate of around 5.8% between Australia and ASEAN country members.

In 2020, trade revenue between Vietnam and Australia stood at AUD14.6 billion (US$10.4 billion).

Meanwhile, Vietnam’s investment in Australia rose five-fold from AUD155 million ($110.5 million) in 2008 to AUD785 million ($559.4 million) in 2020.

Investment capital from Vietnam to Australia reached its peak during the 2010-2014 period when the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) kicked off in early 2010.

In return, FDI from Australia to Vietnam as of December 2020 stood at AUD1.38 billion ($980 million), ranking 20th among the largest investors to Vietnam, mainly in fields of manufacturing, agriculture, forestry, and fishery.

Amid severe Covid-19 impacts, bilateral trade turnover continued on the upward trend and reached a record high of AUD14 billion (US$10 billion) in the first ten months of 2021, a surge of 50% year-on-year.