Vietnam, Iran and Middle East Enhancing Trade Cooperation

4:49:50 PM | 6/15/2014

In the framework of the Vietnam - Africa Business Forum, the Vietnam Chamber of Commerce and Industry (VCCI) collaborated with the Embassy of Iran in Vietnam to organise an introductory conference on business in Iran and the Middle Eastern nations in Hanoi.
Le Thai Hoa, Deputy Director of the Africa, West Asia and South Asia Markets Department, said Vietnam and Iran have friendly cooperation relations and these ties have developed well in recent years. The two sides have exchanged high-level official visits and signed many cooperation agreements, including important ones such as the Agreement on Economic, Cultural, Scientific and Technological Cooperation, the Trade Agreement, the Cultural Cooperation Agreement, the Agreement on Air and Maritime Transport, and the Agreement on Investment Encouragement and Protection.
The two countries also established the Joint Committee on Economic, Cultural, Scientific, Technical and Commercial Cooperation co-chaired by Vietnamese Minister of Agriculture and Rural Development and Iranian Minister of Industries, Mines and Commerce. To date, eight joint meetings have been held, alternately in Tehran and Hanoi, to promote bilateral cooperation.
At the 8th meeting held in Hanoi in May 2013, the two sides agreed to boost cooperation with the aim of bringing the two-way trade turnover to US$500 million a year. Vietnam suggested Iran consider importing rice and foods as well as provide the list of businesses specialised in metals, minerals, chemicals and agricultural products for Vietnamese businesses to contact. To promote bilateral trade relations, the two sides underlined the necessity for clarifying payment mechanisms and accelerating investment promotion. Vietnam pledged to support Iranian investors to study and research the market. Iran hoped to import such commodities such rice, fish, rubber, footwear and apparels from Vietnam and suggested Vietnam import oil or chemicals from Iran. The two sides also agreed on forms of payment, including goods-for-goods exchange, but conditions and terms need to be further clarified by relevant agencies. Iran was ready to send technical specialists to support Vietnam, especially in the mining sector.
Both parties agreed that there are a lot of opportunities for agricultural cooperation, especially in the fisheries sector, and new directly cooperative approaches need to be found soon. At this meeting, the two sides also agreed to quickly conclude the Agreement on Double Tax Avoidance and the Agreement on Customs Cooperation.
At the end of the meeting, the two ministers agreed and signed the Minutes of the 8th Meeting of the Vietnam-Iran Joint Commission on Economic and Commercial Cooperation with new commitments and initiatives.
According to VCCI, Iran wants to strengthen cooperation with Vietnam in industry, construction, transportation, oil and gas, cement production, fertiliser, rubber and tea cultivation and processing and boost trade with Vietnam. Iran needs to import large quantities of 5 per cent broken rice (according to Iranian standards), tea, coffee, pepper, SVR 20 rubber, garments, footwear, and vehicle accessories. Meanwhile, Vietnam can import bitumen, copper, chemicals at competitive prices and reasonable quality from Iran. According to statistics, the two-way trade turnover reached only US$104.3 million in 2013.
In investment, Vietnam National Oil and Gas Group (PetroVietnam) signed a contract to invest US$115 million to explore oil and gas in Danan block oilfield in Iran and inked a memorandum of understanding (MOU) on a US$1 billion production contract. Due to difficulties in the implementation process, Iran agreed to extend for one year the agreement for PetroVietnam to carry out the project in Danan block (August 2012 - August 2013). The group is seeking another rescheduling.
Hoa said to boost Vietnam - Iran trade relations, at the state level, the two sides should further enhance official visit exchanges; conclude cooperation agreements on taxation, tourism and customs to facilitate business operations; and intensify information exchange for import policies, mechanisms and regulations, as well as trade opportunities.
He added that Vietnam proposed that Iran resume importing rice from Vietnam in large volume, organise regular conferences to introduce the potentials and comparative advantages of both nations, and particularly assist enterprises in seeking business opportunities, customers and partners.
Companies and industry associations need to intensify market research and surveys; take part in trade fairs and exhibitions, accelerate trade promotion and conferencing in each country, he noted. In particular, companies need to diversify exports and imports and actively explore and seek investment opportunities.
Quynh Chi