Vietnam - Cuba Trade: Growth momentum comes from effective implementation of FTA

Trade growth drivers

From September 21-27, General Secretary and President To Lam and his wife, along with a high-ranking Vietnamese delegation, will attend the Future Summit, the 79th United Nations General Assembly, work in the United States and pay a state visit to Cuba at the invitation of First Secretary of the Central Committee of the Communist Party of Cuba and President of Cuba Miguel Díaz-Canel.

The working trip of General Secretary and State President To Lam to the United States and the State visit to Cuba are the first multilateral foreign activities of a high-ranking Vietnamese leader. For Cuba, this is also the first visit of General Secretary and State President To Lam as the head of the Party and State of Vietnam to Cuba.

The special relationship between Vietnam and Cuba is increasingly strong. Photo: tuyengiao.vn

Regarding the relationship between Vietnam and Cuba, the leader of the European-American Market Department, Ministry of Industry and Trade said that over 60 years of establishing diplomatic relations, it can be said that the position of Vietnam and Cuba has always been side by side, strengthening cooperation to contribute to the development of the two countries and the world.

In particular, the traditional partnership between Vietnam and Cuba in the Americas is a solid foundation for cooperation in all aspects, especially in economics, trade and investment. Before 2019, the import-export turnover of the two countries always achieved an impressive growth rate of over 20%/year.

In 2023, the total trade turnover between the two countries reached 155.5 million USD, of which Vietnam's exports to Cuba reached 155.5 million USD and no data on Vietnam's imports from Cuba was recorded (Source: General Department of Vietnam Customs).

Rice is the commodity that accounts for the highest proportion in the structure of Vietnam's exports to Cuba. Photo: Ngoc Tai

In the first 8 months of 2024, bilateral trade turnover reached 134.7 million USD, an increase of 187% over the same period in 2023, of which Vietnam exported 133.36 million USD, an increase of 184.3% and imported 1.33 million USD from Cuba.

Vietnam's main exports to Cuba are mainly rice, coffee, chemical products, textiles, footwear, computers and components, construction materials, ceramics, machinery and equipment, spare parts..., of which rice is the item with the highest proportion in the structure of Vietnam's exports to Cuba. Vietnam's imports from Cuba are mainly vaccines and pharmaceuticals.

Notably, according to the leader of the European - American Market Department, in the context of deep integration and a series of free trade agreements (FTAs) that Vietnam has participated in, Vietnamese enterprises have been taking advantage of many important incentives to promote export activities. These FTAs ​​not only bring market opportunities but also help reduce tariff barriers, thereby helping Vietnamese goods become more competitive in the international market.

Particularly for the Cuban market, the Vietnam - Cuba Trade Agreement was signed in 2018 and officially took effect from April 1, 2020, the first trade agreement that Cuba signed with an Asian country. According to the commitment in the agreement, most tax lines in bilateral trade exchanges will be eliminated or reduced according to the roadmap. This is a huge advantage for import and export businesses of the two countries.

Affirming that the Vietnam - Cuba Trade Agreement is a great driving force in promoting cooperation, trade and investment between the two countries, during the working session between Vietnamese Minister of Industry and Trade Nguyen Hong Dien and Cuban Minister of Foreign Trade and Foreign Investment taking place in September 2022, the two leaders emphasized the importance of this agreement.

The two Ministers agreed that both sides need to make more efforts to support the business community to make good use of the incentives of the Vietnam - Cuba Trade Agreement (effective from April 1, 2020), especially in the context of many fluctuations in the world situation.

Realizing the guiding views of the leaders of both sides, in recent years, the Ministry of Industry and Trade has maintained the organization of delegations to participate in the International Havana Fair (FIHAV) every two years in Havana, Cuba. In the opposite direction, the Ministry of Industry and Trade has supported the Cuban side with a number of booths at the annual Vietnam Expo and Food Expo exhibitions.

The Vietnam - Cuba Trade Agreement is a great driving force in promoting cooperation, trade and investment between the two countries. Illustrative photo

Mr. Hoang Minh Chien - Deputy Director of the Trade Promotion Department (Ministry of Industry and Trade) - commented that Vietnam is currently Cuba's second largest Asian trade partner and participating in fairs and exhibitions like the above is considered a positive move, aiming to strengthen cooperation with partners in the Cuban market, creating momentum for export turnover growth again in the coming time.

“ Not only Cuba but also Latin American and Caribbean countries are identified as potential markets, continuing to have large import demands for goods that are Vietnam’s export strengths. Therefore, successfully penetrating the Cuban market will open up opportunities for Vietnamese enterprises to deeply access other markets in Latin America, ” informed Deputy Director Hoang Minh Chien.

There is still a lot of room for cooperation.

Assessing the potential for economic, trade and investment cooperation between Vietnam and Cuba, the leader of the European and American Market Department acknowledged that the cooperation between the two countries is having many advantages. First of all, the two countries have a special traditional friendship and this is a solid foundation for cooperation in all aspects, especially in economics, trade and investment.

“The cooperation mechanism of the Vietnam - Cuba Intergovernmental Committee and other legal frameworks between the two countries are relatively complete to create momentum for the development of relations as well as cooperation in all fields ” - the leader of the European - American Market Department informed and added that in the coming time, the Cuban market will continue to have a demand for imported goods because domestic manufacturing industries have not yet had significant developments, this will be an opportunity for traditional Vietnamese products to enter Cuba. This is also a market that is not too strict and Vietnam's export goods can fully meet the standards and regulations on quality and technology.

However, the geographical distance between Vietnam and Cuba increases transportation costs and prolongs transportation time. In addition, difficulties related to the ability to pay and supply energy on the other side are also challenges for Vietnamese enterprises in doing business and investing in this market.

Clearly, market potential exists, however, to turn opportunities into success requires a lot of effort from the business itself, especially in the context of complex and unpredictable economic and trade fluctuations in the world today.

To better exploit the Cuban market, the leaders of the Ministry of Industry and Trade recommend that businesses should proactively seek information about the market and update Cuba's economic - trade - investment policies through state support agencies and units such as the Ministry of Industry and Trade, the Vietnamese Embassy in Cuba, the Cuban Embassy in Vietnam... Actively participate in trade - investment promotion activities, connect trade with Cuban partners to seek business cooperation opportunities.

Along with that, carefully study the regulations and commitments of the Vietnam - Cuba Trade Agreement, actively participate in seminars, forums, and training sessions of the Ministry of Industry and Trade and relevant ministries, branches, and agencies to effectively utilize the incentives of the agreement to promote exports to this market.

The leaders of the European - American Market Department pledged that the Ministry of Industry and Trade, together with relevant ministries, sectors and the Vietnam Trade Office in Cuba, will be a bridge to support the Vietnamese business community in providing market information, connecting with Cuban partners and assisting in resolving difficulties and problems arising in the process of market penetration and business of enterprises.

Source: https://congthuong.vn/thuong-mai-viet-nam-cuba-dong-luc-tang-truong-den-tu-viec-thuc-thi-hieu-qua-fta-347161.html