Pham Viet Chien, the ambassador of Vietnam to Bangladesh, expressed optimism that bilateral trade between Bangladesh and Vietnam would surpass US$2 billion in 2023, the year they will observe their 50th anniversary of diplomatic relations.
Bangladesh and Vietnam had US$739.89 million in bilateral trade in FY21, and by exchanging business delegations and doing cooperative research, that figure may reach US$2 billion.
However, export-import activities between Bangladesh and Vietnam faced a sharp decline in 2020, thanks to the Covid-19 pandemic. Now, both nations have realised that there is a large untapped potential in the domain of bilateral trade, which can unleash a plethora of opportunities.
Vietnam is now one of the world's most dynamically growing economies. With consistent yearly economic growth of more than 6 per cent over the last three decades, it achieved lower middle-income (MDG) status in 2010. Similarly, the Bangladesh economy continues to grow and develop at a rapid pace.
With a population of over 164 million, Bangladesh currently offers a major market for Vietnam. Vietnam has become more eager to improve its commercial and trade links with Bangladesh, which will create a win-win situation for the countries in the domain of bilateral trade.
The Genesis of Their Bilateral Trade
The robust trade relations between Bangladesh and Vietnam have been bolstered through the initiatives taken by Prime Minister Sheikh Hasina when she made a state visit to the country back in 2012. Later, President Abdul Hamid went there in 2015.
During Sheikh Hasina's visit, numerous agreements were reached on important subjects to improve bilateral relations.
In 2018, President Abdul Hamid invited former Vietnamese president Tran Dai Quang and his spouse to visit Bangladesh for a state visit. However, due to the Covid-19 outbreak, there haven't been any similar activities between the two nations in recent years.
Dhaka and Hanoi have set trade and investment concerns. 11 priority sectors were selected, including agricultural trade and pharmaceutical exports from Bangladesh to Vietnam. Several business delegations also visited Vietnam from time to time. Bangladesh and Vietnam have vibrant labour markets, open trade agreements, and support programmes for foreign companies, marking the beginning of their excellent trade cooperation.
Accelerate Bangladesh-Vietnam Bilateral Trade
Bangladesh and Vietnam are working to provide better logistical services and financial products to help trade reach a value of US$2 billion. Developing trade finance products and logistics services was of pressing importance.
Bangladesh's biggest exports to Vietnam are packaged medicines (US$23.5 million), scrap iron (US$5.62 million), and jute yarn (US$5.04 million). Bangladesh's exports to Vietnam have climbed at an average rate of 4.85 per cent during the previous 25 years, from US$25.6 million in 1995 to US$83.8 million in 2020.
Vietnam's biggest exports to Bangladesh were broadcasting equipment (US$103 million), cement (US$60.9 million), and gravel and crushed stone (US$51.4 million).
Vietnam's exports to Bangladesh have climbed at an annualised rate of 36.3 per cent during the previous 25 years, from US$303k in 1995 to US$693 million in 2020. Both parties recognised the tourist sector's strong potential for growth and agreed that a direct air link between the two nations might significantly help. In addition, Bangladeshi pharmaceuticals could establish themselves more firmly in the Vietnamese market. Vietnamese businesses will expand into Bangladesh in search of economic possibilities, and the two nations will work together to streamline banking procedures for trade facilitation.
A New Trade Route and Regional Connectivity
Vietnam has started a new route that connects ports in China, Malaysia, Bangladesh, Singapore, and Vietnam. Bangladesh will soon graduate from LDC countries in 2026, and it will try to enter into several Free trades and Preferential trade agreements with South East Asian emerging economic tigers. Bolstering bilateral trade with Vietnam will provide Bangladesh access to new markets, especially with members of ASEAN.
On the flip side, ASEAN seeks external economic and trading relations with many developed and developing countries. With its economic potential and geographic rapport, Bangladesh can offer ASEAN a bridge between South Asia and South East Asia. Therefore, Bangladesh might be a member of the Association of Southeast Asian Nations (ASEAN) and the regional comprehensive economic partnership (RCEP) to secure a win-win trading relationship.
Bilateral trade between Vietnam and Bangladesh has yet to reach its full potential. Additional investment is needed in Bangladesh's special economic zones and high-tech parks. Although Vietnam and Bangladesh do not have a free trade agreement, both nations have strongly emphasised trade and the need to foster the best possible environments for their respective business communities and entrepreneurs to pursue trade and investment opportunities.
There are many chances for commerce between Vietnam and Bangladesh as both countries work to grow their economies. Bangladesh's RMG sector also imports raw materials from Vietnam for production.
Regarding bilateral relations and the international forum, the two nations' relations have grown strongly, particularly in the areas of shared interest like climate change, which has a very serious impact on both countries.
Vietnam, an ASEAN member, agrees with the 'five-point consensus' regarding 'forcibly displaced' Myanmar nationals.
Thus, Bangladesh-Vietnam trade cooperation will not only be limited to economy but also both of them will experience a spillover of cooperation in various fields of diplomacy and foreign policy.
The writer is a research associate at the Centre for Bangladesh and Global Affairs