Vietnamese Prime Minister Pham Minh Chinh (R) and his Czech counterpart Petr Fiala shake hands ahead of their talks in Hanoi on April 21 morning.

Vietnam is Czechia’s most important partner in Southeast Asia, says Fiala

The Czech Republic considers Vietnam its most important partner in Southeast Asia and wants to ramp up cooperation with Vietnam in all fields, Prime Minister Petr Fiala told his host, Prime Minister Pham Minh Chinh, during their talks in Hanoi on April 21.

Fiala, who is in Hano for an official visit to Vietnam on April 20-22, said Vietnam is a potential economic partner of the Czech Republic, and more and more Czech businesses are interested in expanding their investment and business in Vietnam.

Chinh for his part reiterated Vietnam’s consistent policy of promoting relations with its traditional friends, including the Czech Republic, a priority partner in central Europe.

He welcomed Fiala on his first official visit to Vietnam which he said would provide fresh impetus to the traditional friendship and multifaceted cooperation between the two countries.

Fiala, who is in Hano for an official visit to Vietnam on April 20-22, said Vietnam is a potential economic partner of the Czech Republic, and more and more Czech businesses are interested in expanding their investment and business in Vietnam.

Chinh for his part reiterated Vietnam’s consistent policy of promoting relations with its traditional friends, including the Czech Republic, a priority partner in central Europe.

He welcomed Fiala on his first official visit to Vietnam which he said would provide fresh impetus to the traditional friendship and multifaceted cooperation between the two countries, cited VOV.

Meanwhile, Fiala said the Czech Republic supports strengthening cooperation on sustainable fisheries development between the European Union and Vietnam, and expects the European Commission will soon remove the IUU yellow card for Vietnamese seafood exported to the bloc.

The two leaders agreed to step up cooperation in security-defense, culture, education-training, labour, science-technology, transportation, and tourism. To this end, they said the two sides will soon consider opening cultural centres in each country and direct flights to promote investment, tourism and people-to-people exchanges.

Chinh thanked the Czech Government for creating favourable conditions for Vietnamese expatriates to integrate and live stably in their host country, making a positive contribution to local socio-economic development and bridging the friendly ties between the two countries.

The two PMs also exchanged views on regional and international issues of mutual concern, affirming that the two countries should continue to closely coordinate and support each other at international forums and organizations.

With regard to the East Sea issue, the two sides reaffirmed their support for the peaceful settlement of disputes in accordance with international law, especially the 1982 United Nations Convention on the Law of the Sea (UNCLOS 1982).

After the talks, the two PMs witnessed the signing of cooperation documents in the field of mutual legal assistance in criminal matters, investment and education.

Vietnamese, RoK business associations cooperate in electronics, photonics

The Hanoi Supporting Industries Business Association (HANSIBA), the Buk District Office of the Republic of Korea (RoK)'s Gwangju city, and the Korea Association for Photonics Industry Development (KAPID) signed an MoU for cooperation in electronics and photonics industries.

Speaking at the signing ceremony, Nguyen Hoang, Chairman of HANSIBA, said that businesses from Vietnam and the RoK have boasted strong economic cooperation in recent years. Large Korean corporations are actively expanding in Vietnam.

For cooperation to reach new heights, the business communities of the two countries need to make new steps and new ways in economic fields, particularly electronics and photonics industries, according to VNA.

At the signing ceremony (Photo: VNA)

Hoang said that HANSIBA now has more than 200 member enterprises operating in supporting industries and high technology including electronics and photonics, two areas of the RoK's interest.

HANSIBA and Korean partners are focusing on developing support industries, high technology, microchips, as well as photonics and electronics at the Hanship industrial park south of Hanoi.

They are developing a plan asking for support from the two countries' Governments. The MoU signing is a concrete, positive and new step in the implementation of the economic cooperation strategy between Vietnam and RoK, he said, adding businesses will be supported from recruitment and labour training to technology transfer, factory construction, tax, land, and other preferential policies.

A representative of the Buk District Office of Gwangju city said that the district is a production "base" of the RoK, with many businesses operating in the photonics, electronics, and semiconductors industries.

He hopes after the visit by the district delegation to Vietnam, the cooperation between the two sides will reach new heights with more concrete results.

Petrol prices decline following April 21 adjustment

The retail prices of petrol were revised down as of 5 p.m. on April 21 by the Ministry of Industry and Trade, and the Ministry of Finance.

The price of E5 RON 92 petrol was reduced by VND490 to VND22,680 per litre; whilst that of RON 95 petrol fell by VND610 to 23,630 per litre.

Elsewhere, oil prices also went down, with those of diesel oil and kerosene cut by VND750 and VND259 to VND19,390 and VND19,480 per litre, respectively, VOV reported.

Photo: VOV

Mazut oil was set at no more than VND15,843 per kg, marking an increase of VND640 compared to the current retail price.

The two ministries also decided to extract VND300 per litre from the price of E5 RON 92, VND300 from RON 95-III, and VND300 VND per litre from the diesel price by making use of the petrol price stabilisation fund.

Vietnam creates favourable conditions for businesses: PM

Vietnam's Government always creates favourable conditions for Vietnam and Czech businesses to strengthen cooperation in trade and investment.

Prime Minister Pham Minh Chinh made the statement at the Vietnam - Czech Business Forum organised by the Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with the Embassy of the Czech Republic in Vietnam and the Czech Chamber of Commerce (CCC) held in Hanoi on April 21.

Vietnam is committed to creating the best business environment in accordance with Organisation for Economic Co-operation and Development (OECD) standards which include maintaining socio-political and macroeconomic stability; removing bottlenecks in the economy in terms of legal institutions, infrastructure and human resources; developing supply chains and reducing transaction costs, especially logistics and administrative costs.

Prime Minister Pham Minh Chinh (first left) addresses the Vietnam - Czech Business Forum on April 21. (Photo: VNA)

In his remarks, the PM highlighted the friendship and traditional cooperation between Vietnam and the Czech Republic over the past 70 years. Despite being heavily affected by the COVID-19 pandemic, the economic, trade and investment cooperation between the two countries is still vigorously developing with impressive results, he noted.

Last year, the bilateral trade turnover increased by 15% year on year to 848 million USD. The Czech Republic is now one of the most important trading partners of Vietnam in Central and Eastern Europe. In the term of investment, the Czech Republic has 41 projects in Vietnam with a total registered investment capital of about 92 million USD, ranking 49 out of 141 countries and territories that have direct investment in the Indochinese state, Chinh said.

The Vietnamese leader attributed these achievements to the good friendship between the two countries and the two peoples; the support and attention of the two governments; and the consensus of the business communities of the two parties.

He noted that in the process of construction, national development and international integration, Vietnam welcomes the active participation of foreign investors, including companies from the Czech Republic, VNA reported.

Recognised by the United Nations Conference on Trade and Development (UNCTAD) as one of the 20 most attractive investment destinations in the world, Vietnam believes that Czech companies will achieve more success in the Southeast Asian country.

The Vietnamese Government is committed to continuing to work closely with the Czech Government, increasing the exchange of experiences in areas of potential and mutual interest, such as energy, environment, science and technology, education and travel, Chinh reaffirmed.

For his part, Czech Prime Minister Petr Fiala stated that Vietnam is an important partner of the Czech Republic in Southeast Asia.

Currently, many Czech companies are investing very efficiently in Vietnam, he said, adding that his country has a number of advantages in areas such as the energy transition, healthcare, research and innovation.

By joining the EU-Vietnam Free Trade Agreement (EVFTA), the two sides will make good use of the advantages provided by that agreement to promote stronger economic and trade cooperation, he added.

At the forum, the two PM witnessed the signing cooperation agreements and memorandums of understanding of their businesses.

They included the Memorandum of Understanding between Armex Group and Petrovietnam Power Corporation on the promotion of cooperation, and the collaboration agreement between Czech F AIR and Vietjet Air on training commercial pilots.

Market expansion opportunities from new FTAs

The Vietnam-Israel Free Trade Agreement (FTA) and the Vietnam-UAE FTA are expected to expand the market for Vietnamese goods.

New expectations

The difficulties in the world market have gradually affected the export of Vietnamese goods.

According to preliminary calculations of the Vietnam Textile and Apparel Association (Vitas), the total export turnover of Vietnam’s textiles and garments was estimated at 8.7 billion USD, in the first three months of 2023, down 18.63% over the same period in 2022. This is an unprecedented decrease, even during the difficult period due to the pandemic.

“The export of the textile and garment industry faced difficulties in the first three months of this year. Orders of enterprises fell sharply by 30-40%. Importers in most markets are very cautious when placing new orders,” said Pham Xuan Hong, Chairman of the Ho Chi Minh City Association of Garment, Textile, Embroidery and Knitting.

The difficulty of the textile and garment industry is the general difficulty of export activities in recent times. After a year since Russia launched a military campaign in Ukraine, the conflict situation has not cooled down, even showing signs of increasing tension. This has led to a decline in world economic growth, leading to tight monetary policies, causing negative impacts on the activities of manufacturing and exporting enterprises. In addition, non-trade barriers are established by countries everywhere, creating great difficulties for export activities.

In that context, the completion of the Vietnam-Israel FTA and the start of negotiations for a Vietnam-UAE FTA, are of special significance, helping exporters have more opportunities to expand the market.

Although Israel and the UAE are not big markets, opening up a market has special meaning for businesses, in such a difficult context. In addition, the potential of these markets is quite large, reflected in the growth of goods in these markets.

For example, the two-way trade exchange between Vietnam and Israel was constantly increasing from 1.58 billion USD in 2020 to 1.89 billion USD in 2021 and reaching 2.23 billion USD in 2022, an increase of 17.85% over the previous year.

Israel is currently the 5th largest trading partner and the 3rd largest export market of Vietnam in the Middle East (after the UAE and Turkey).

According to Truong Xuan Trung, First Secretary, in charge of the Vietnam Trade Office in the UAE, Vietnam’s export turnover to the UAE only reached 140 million USD in 2006 but soared to 3.85 billion USD in 2022. Resulting in Vietnam enjoying a trade surplus of 3.27 billion USD.

Particularly, in the first three months of 2023, the total bilateral trade turnover between Vietnam and the UAE was estimated at over 1.12 billion USD, a sharp increase of 22.14% over the same period in 2022, cited NDO.

New FTAs will help expand the market for export products of Vietnam.

General Secretary of the Vietnam Association of Seafood Exporters and Producers Truong Dinh Hoe said, that Israel is in the top 22 seafood export markets of Vietnam. Exports through this market include shrimp, frozen squid, canned tuna, tra fish and others.

Tuna exports to Israel reached 36.63 million USD in 2022 and Israel ranks 4th among the 10 largest tuna import markets of Vietnam (after the US, Canada and Japan). Frozen squid exports to this market also posted at 23.22 million USD in 2022, accounting for 1.7% of Vietnam’s exports of this item and Israel ranked 8th among the top 10 import markets of Vietnam’s squid and octopus. Frozen shrimp exports to Israel reached about 21 million USD and Israel ranked 20th in the top import markets of Vietnamese frozen shrimp.

“Vietnamese seafood products in Israel now have a stable foothold and are favoured and appreciated by this country’s consumers,” said Hoe.

According to the Director of Tri Viet Agricultural Food Trading Production Company Nguyen Huu Tri, UAE is a large market, equivalent to the US market. The UAE has about 12 countries with a total population of about 700 million people. The UAE depends on agriculture in other countries and regions. It is also a market with large purchasing power and high financial capacity. Tri noted that the UAE is one of the three main markets in his company’s development orientation.

Opportunity is only for businesses with good preparation

With market standards not as strict as the US and the EU, new FTAs such as the Vietnam-Israel FTA and the Vietnam-UAE FTA will be an opportunity to bring Vietnamese agricultural products in general and Vietnamese spices, in particular, to penetrate the Middle East market, according to Vice Chairwoman of the Vietnam Agricultural Business Council (VCAC) and Chairwoman of the Board of Directors of Vietnam Organic Nutrition Food JSC, Nguyen Thi Diem Hang.

“However, every market has its regulations. Businesses also need to determine that they must meet the standards of importers. Vietnam is considered the world’s factory, therefore, businesses should remain ready and produce products meeting FDA, HACCP, and ISO standards, as well as other food hygiene and safety standards of Vietnam and the markets that we aim at,” Hang emphasised

FTAs will bring opportunities for all businesses. Accordingly, the opportunity will be for businesses that have built a standard system, to meet demanding markets such as the UAE. Businesses that have not met many standards can enter niche markets like Bangladesh and Pakistan.

Truong Xuan Trung affirmed that to further promote the export of Vietnamese goods to the UAE, Vietnamese enterprises need to apply advanced science and technology in production, change the management method, and minimise intermediary costs, to increase the competitiveness of Vietnamese products.

In addition, the UAE is an Islamic country, so Vietnamese businesses need to learn about Muslim culture and build a Halal certification system, for products to be exported to the UAE.

“When the Vietnam-UAE FTA is signed, the trade and investment relationship between the two countries is expected to continue to grow stronger. The UAE is considered the financial and trade centre of the Middle East, an important gateway to bringing Vietnamese goods to the Middle East, Africa and Europe. In addition, the UAE has a strategic geographical position and a modern logistics system that will create favourable conditions for Vietnamese goods to access and expand to the global market,” Trung said.

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