In contrast, Vietnam is Italy’s largest trading partner in ASEAN with bilateral trade turnover increasing continuously over the years. Therefore, the official visit to Italy by President Vo Van Thuong will contribute to promoting bilateral trade and expanding business cooperation opportunities for businesses of the two countries.
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| Italy is currently Vietnam's third largest trading partner in the EU. In contrast, Vietnam is Italy's largest trading partner in the ASEAN bloc. (Source: VNA) |
Potential market
Vietnam and Italy have many similarities not only in geography, sentiment, family values, community, cuisine, culture but also in economic structure with many small and medium enterprises. The economies of the two countries are also similar and complementary in terms of industries and products.
Citing data from Vietnam Customs, a representative of the European-American Market Department (Ministry of Industry and Trade) said that in 2022, the import-export turnover between Vietnam and Italy reached 6.2 billion USD, an increase of 11% compared to 2021; of which, Vietnam's exports to Italy in 2022 reached 4.4 billion USD, an increase of 14% compared to the previous year. In the opposite direction, Vietnam imported 1.7 billion USD from Italy, an increase of 3.6% compared to 2021.
In the first 4 months of 2023, the total two-way import-export turnover reached more than 2 billion USD, down 2.7% over the same period in 2022; of which, exports decreased by 3%.
Vietnam's main exports to the Italian market include machinery, equipment, phones, components, computers and components, means of transport and spare parts, iron and steel, coffee, textiles, seafood, etc.
On the contrary, Vietnam mainly imports from Italy mechanical machinery and equipment, plastics and plastic products, pharmaceuticals, furniture, textile accessories, beverages, wine, and vinegar.
The representative of the European-American Market Department also pointed out that Vietnamese products that have competitive advantages when exported to Italy are shelled cashew nuts, coffee, pepper, phones and components, footwear, etc.
Besides, Vietnam still has a lot of room for products to develop in the Italian market such as seafood, vegetables, fruits, cinnamon, star anise, textiles, electric motors, phones, honey components, textiles, medical equipment (masks, gloves, protective gear, ventilators, etc.), pharmaceuticals, machinery, equipment and spare parts, wooden furniture, etc.
In addition, the two countries also cooperate closely in the fields of textiles, footwear, stone mining, energy, etc. and establish the Vietnam - Italy Textile Technology Center, the Vietnam - Italy Footwear Technology Center, and the Vietnam - Italy Stone Mining Technology Training Center. Thereby, making practical and effective contributions to the development of Vietnam's industries.
In particular, in 2019, Vietnam and Italy signed a memorandum of cooperation between the Vietnamese Ministry of Industry and Trade and the Italian Ministry of Economic Development in the energy sector to strengthen and expand cooperation in various energy sectors.
Currently, Vietnam is completing internal procedures to sign an extension of the Memorandum of Understanding on energy cooperation with Italy, expected at the 8th Session of the Joint Committee.
The two sides also continue to promote the exploration of oil and gas blocks at Ken Bau field with the participation of Eni Group; Italy's Eni Group has made many investments and cooperated in the field of exploration and exploitation of oil and gas blocks and has achieved initial positive results. Italy and Eni Group also wish to expand cooperation to other energy sectors such as liquefied natural gas (LNG) and renewable energy.
Within the framework of implementing the Strategic Partnership, in 2014, the Vietnamese Ministry of Industry and Trade and the Italian Ministry of Economic Development signed an Agreement to establish a Joint Committee on Economic Cooperation to further develop bilateral economic and trade relations.
Since 2014, the two sides have successfully held 7 meetings, proposing cooperation contents in many fields such as trade and investment, agriculture, energy, industry, natural resources and environment, transportation, construction, culture, tourism, finance and banking... Thanks to that, two-way trade turnover between the two countries has increased rapidly in recent years.
According to the minutes of the 7th meeting of the Joint Committee, the 8th meeting will take place in Italy and the other side proposed to hold it in late October 2023, in Rome. Therefore, Vietnam and Italy are actively discussing and building the content of the meeting.
Take advantage
During the recent meeting with Mr. Antonio Alessandro - Ambassador of the Republic of Italy to Vietnam, Minister of Industry and Trade Nguyen Hong Dien highly appreciated the bilateral relations between Vietnam and Italy in terms of economy, trade, investment and affirmed that the two countries still have much potential to promote in the coming time.
Especially after the Vietnam-EU Free Trade Agreement (EVFTA) was signed and took effect from August 2020 to present, two-way trade turnover between Vietnam and Italy has had very positive growth.
Minister Nguyen Hong Dien and Ambassador Antonio Alessandro also discussed specific issues of interest to both sides, such as cooperation in the energy sector, especially renewable energy and LNG, as well as solutions to remove obstacles and promote bilateral trade and investment development.
Affirming its role as a bridge, the representative of the Vietnam Trade Office in Italy said: In addition to promoting information for businesses, the Trade Office continues to publish monthly electronic Newsletters and coordinates with the Torino Chamber of Commerce to translate into Italian.
Accordingly, the newsletter covers trade and investment activities, providing useful information for businesses on regulations in EVFTA, specific product lines and opportunities for trade cooperation between businesses.
To remove difficulties in the process of learning, negotiating and implementing import-export and investment contracts between enterprises of the two countries, the Trade Office said it can provide macro and micro support related to each enterprise.
On the other hand, the Trade Office also conducts research on each market segment and industry, publishes research books on the markets of Italy, Cyprus, Malta, Sanmarino and Vatican to introduce to the Vietnamese business community.
In addition, regularly attend conferences, forums, and fairs to create opportunities for contact and trade between the two sides; promote business contacts, visit factories, and offices of Italian companies to provide information support for Vietnamese businesses.
However, Vietnamese enterprises wishing to do business in this market need to carefully understand the market, customs and business practices of their partners to develop specific product development strategies.
In addition to finding the right agent, distributor or business partner, the Vietnam Trade Office in Italy also notes that: Italian businesses appreciate prompt responses to their letters and questions. Furthermore, Italian is the official language, so correspondence with the company, especially the initial contacts, should be prioritized in Italian.
On the other hand, the business habit of relying on the Vietnamese business community as in Germany, Czech Republic, Romania will not be effective in the Italian market. Large corporations should open separate or joint representative offices in Rome or Milan and participate more in communication with Italian partners.
The representative of the Vietnam Trade Office in Italy also reminded Vietnamese enterprises to be cautious in signing contracts and using safe payment methods. In addition, they should regularly contact the Vietnam Trade Office abroad to coordinate in verifying partner information.
To attract and facilitate Italian investors to implement cooperation programs in Vietnam, businesses and related units need to support and promptly respond to requests from the other side. At the same time, handle difficulties in mechanisms and administrative procedures to promote investment and joint venture activities of Italian partners in Vietnam.
In order to promote cooperation in the industrial and machinery sectors, the Ministry of Industry and Trade proposed that Italy support Vietnamese small and medium enterprises to improve their competitiveness in sectors where the country has strengths, such as supporting industries for the textile, garment and footwear industries, so that Vietnam can participate more deeply in the global supply chain.
In addition, within the framework of implementing the EVFTA agreement, the Ministry of Industry and Trade also requested Italy to increase information exchange and update regulations of the EU in general and Italy in particular on goods imported from Vietnam.
Along with that are issues related to quality control; support for establishing a food safety control model and traceability from production to consumption for some key agricultural and forestry products.
In particular, the Ministry of Industry and Trade encourages Italy to invest in agricultural and food processing, fashion design, and supporting industries of Vietnam, thereby expanding trade opportunities for businesses as well as promoting the development of trade relations.
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