Vietnam-Canada: Unlocking Potential for Enhanced Economic Cooperation

9:12:04 AM | 4/1/2024

Since the establishment of diplomatic relations in 1973, Vietnam and Canada have forged a robust partnership marked by significant achievements in economic, trade, and investment cooperation. The two countries are currently striving to elevate their relationship to unprecedented heights, with the bilateral trade value poised to surpass US$10 billion in the near future.

Delegates at the second plenary session of the Vietnam-Canada Joint Economic Committee

The Vietnam Chamber of Commerce and Industry (VCCI), serving as the voice of the Vietnamese business community, dedicates itself to facilitating the governments and business sectors of both countries in elevating their relationship to unprecedented heights.

Huge potential

Speaking at the second plenary meeting of the Vietnam-Canada Joint Economic Committee at the Ministry of Industry and Trade on March 27, VCCI Vice President Nguyen Quang Vinh strongly affirmed that the trade relationship between Vietnam and Canada is not only a core relationship but is also growing strongly, with huge potential for trade and investment cooperation.

In recent years, Vietnam has demonstrated significant economic strength with impressive growth rates, he said. Vietnam's economy has grown more than 50 times since 1980, ranking second in the world in terms of growth rate. He also emphasized Vietnam's openness to the world, with 16 free trade agreements with major countries and regions around the world.

On investment, Vietnam attracted US$23.2 billion of foreign direct investment (FDI) funds in 2023 alone, asserting its appeal to foreign investors. The processing and manufacturing sector accounted for a majority of FDI funds. On trade, Vietnam's import and export value reached US$683 billion in 2023 and the country has become Canada's largest trading partner in ASEAN and ranked 6th among 40 Pacific countries.

Meanwhile, Canada is also an important partner of Vietnam, with a series of famous brands such as Sunlife, Manulife, Dan-D Foods, CAE and GeoComply. Vinh emphasized that the bilateral cooperation has made great leaps, especially after the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2018.

He believed that the US$10 billion target agreed upon by Prime Minister Pham Minh Chinh and Prime Minister Justin Trudeau is completely achievable.

“Vietnam is striving to become a high-income developed country by 2045 and aiming to raise the share of renewable energy in total electricity generation up to 55% by 2050, providing an enormous opportunity for cooperation between Vietnam and Canada,” he affirmed.

During the meeting, the delegates engaged in discussions on pivotal matters aimed at enhancing the economic and trade collaboration between Vietnam and Canada

Seizing the potential for diverse collaborations

At the meeting, the two governments discussed important issues to boost economic and trade cooperation between Vietnam and Canada. On behalf of the Vietnamese business community, VCCI Vice President Nguyen Quang Vinh proposed measures to expand trade and investment cooperation between the two countries.

Accordingly, Vietnamese and Canadian businesses should be more active and creative to tap the potential of the digital technology revolution and move toward sustainable development. In particular, they will have a lot of opportunities for cooperation and investment in areas where both sides have their own advantages. Vietnam exports such products as mobile phones, computers, apparels, footwear, furniture, seafood, handicrafts, plastic and rubber while Canada has strengths in exporting grain, chemicals, medical equipment, meat products, fertilizers, soybeans and fossil fuels. Vietnam welcomes Canadian businesses to form cooperation in information technology, high technology, innovation, startup, women's business cooperation, green transformation and sustainable development.

Regarding sustainable development, both countries are aiming for a prosperous, greener economy and reduced emissions. The Just Energy Transition Partnership Agreement (JETP) that Vietnam signed with G7 countries is an example. Canada will mobilize US$15.5 billion dollars to support Vietnam in its green transition over the next 3-5 years. This is one of many cooperative activities to reduce greenhouse gas emissions and respond to climate change. Vietnam also set a goal that the share of renewable energy sources will account for at least 33% of total electricity generation by 2030 and at least 55% by 2050. Bilateral cooperation in this field has much room for development.

In addition, Canada and Vietnam can strengthen cooperation in many different aspects such as enhancing the capacity of small and medium-sized businesses in digital transformation and green transformation. The two sides can also cooperate in transforming the traditional economic model to a circular economy and increase business exchanges to develop partnerships that help promote sustainable business.

The governments of both countries should also promote more effective utilization of CPTPP and support increased negotiations and signing of new trade agreements, such as Canada-ASEAN FTA, to open up more priority options for businesses on both sides.

“VCCI, as a national representative of the business community, is committed to sparing no effort to support Vietnamese businesses in strengthening economic cooperation with Canada. VCCI will be a bridge for Canadian businesses to do business and invest effectively in Vietnam while continuing to contribute to building and developing good relations between the two countries,” Vinh pledged.

With great potential and commitment from both sides, Vietnam-Canada cooperation promises to grow stronger in the future and bring more practical benefits to both nations. Trade, investment and development cooperation will create a brilliant future for the strategic partnership between Vietnam and Canada.

By Thu Huyen, Vietnam Business Forum