Vietnam Eyes Opportunities in Latin America

While much of the focus on the Asian presence in Latin America is given to China, other Asian countries are also eager to expand their trade ties to the Western Hemisphere. Vietnam—a Communist country with a free-market economy which grew at nearly 6 percent last year—has been quietly courting Latin American countries, hoping to increase its exports to the region three-fold to $6 billion by 2015 and gain access to the region’s valuable commodity markets. While Vietnam’s overall share of the Latin American market remains very small in comparison to other Asian countries’, the region represents “untapped potential for Vietnamese exporters,” said an official from the country’s ministry of industry. And though Vietnam’s top Latin trade partners are Brazil, Cuba, and Mexico, it’s pursuing deeper economic ties with countries across the entire Western Hemisphere. It has its sights set on trade, but also to expand strategic relationships with Pacific-Rim countries and ideological cohorts in the region.

Vietnam is a member of the Trans-Pacific Partnership (TPP), a group of nine countries negotiating a free-trade area of the Pacific. Chile, Peru, and the United States are the three Western Hemisphere countries in the TPP, though Canada and Mexico have expressed interest in joining. On May 8, TPP countries will meet in Dallas, Texas, for the latest round of talks and Vietnam’s U.S. ambassador told U.S. congressmen in March his government is eager to speed up trade negotiations.

As Latin America’s current TPP members, Chile and Peru can serve as gateways to the region for Asian trade. Consequently, Vietnam is making a push in the South American Pacific. In late March, Chile’s President Sebastián Piñera made a five-day trip to Vietnam to meet with his Vietnamese counterpart, bringing over 100 Chilean businessmen, journalists, and officials. During the visit, Piñera also met with local business leaders, discussing TPP negotiations and Chile’s free-trade agreement with Vietnam, signed in November 2011 and approved by Chile’s congress in March. The FTA will lower tariffs on 9,000 products and could increase bilateral trade to $1 billion once it goes into effect. With this increased bilateral trade, Chile hopes to surpass France as Vietnam’s top wine provider, as well as increasing trade in manufactured goods and information technology. Felix De Vicente, director of the Chilean Promotion Bureau, said during the April visit that “Vietnam will be the gateway for Chile to develop trade with other Asian countries.”

Vietnam also has its eyes on Peru. On April 16, Peru’s Prime Minister Oscar Valdés met with Vietnam’s Deputy Prime Minister Hoang Trung Hai in Lima to discuss trade and opening Vietnam to Peruvian agricultural goods, as well as preparing for Peru’s President Ollanta Humala’s trip to Vietnam later in the year. Earlier in April, Vietnam’s Viettel Group—the country’s largest telecom company—announced it would begin mobile-network operations in Peru in 2013, investing $400 million in the Andean country over the next decade.

In addition to TPP members, Vietnam is approaching economies large and small in a bid to extend its reach in Latin America. Countries in recent trade talks with Vietnam include:

• Cuba: Vietnam has a friendly relationship with Cuba, given commonalities in political ideology. Vietnam’s Communist Party Leader Nguyen Phu Trong visited the Caribbean country in mid-April, when he spoke with Cuban leaders about economic reforms and discussed a bilateral rice cultivation project encompassing nearly 20,000 acres on the island. Trong met with former Cuban leader Fidel Castro, who showed interest in Vietnam’s economic reforms undertaken while maintaining a socialist political system.
• Venezuela: Vietnam’s Deputy Prime Minister traveled to Venezuela on April 18. Both countries signed over 50 cooperation agreements ranging from electricity to agriculture. Government officials announced Venezuela and Vietnam had begun joint oil explorations that could produce up to 50,000 barrels a day in the Andean country. The project is run by PetroMacareo, a joint oil and gas venture created in 2010 with Venezuela’s state oil company Petróleos de Venezuela and Vietnam’s hydrocarbons firm Petrovietnam (PV Oil). Venezuela now pledges to provide PV Oil with 2 million barrels of crude oil each quarter.
• Brazil and Mexico: Vietnam’s largest Latin American markets are a priority, given that bilateral trade with Vietnam in both countries surpassed $1 billion last year. Vietnamese party leaders and government officials visited Brazil and Mexico in April and March, respectively, to talk trade.
• Colombia: Foreign Minister María Ángela Holguin visited Vietnam in late February to discuss growing ties.
• Dominican Republic: Vietnamese investors announced a $60 million project to build an auto and motorcycle assembly plant in the Dominican Republic in early May.
• El Salvador: In mid-April, a delegation from El Salvador’s economy ministry visited Vietnam to negotiate investments in telecommunications by Viettel Group in the Central American country.
• Paraguay: Last month, Vietnamese officials traveled to Paraguay to discuss trade ties and to urge President Fernando Lugo to travel to Vietnam for an economic forum this year.
• Uruguay: The country hosted a forum to discuss expanding bilateral trade with Vietnamese and Uruguayan government officials in April.

Learn More:

• Read an AS/COA Online Explainer about the Trans-Pacific Partnership.
• Read about Chile’s free-trade agreement with Vietnam on the Chilean government’s website.
• Learn about the joint oil venture between Venezuela and Vietnam from Venezuela’s state-run petroleum company.