According to details given by the Ministry of Industry and Trade (MoIT), since the Vietnam-Chile Free Trade Agreement (VCFTA) officially came into force in 2014, the Southeast Asian nation has consistently maintained a trade surplus with Chile.
Most notably, Vietnamese exports to the South American nation have increased fivefold over the last decade. In addition, businesses from the two countries have effectively capitalised on the opportunities brought about by the FTA to tap into each other's markets.
Statistics released by the General Department of Customs indicate that in 2023, amidst challenges occurring in the global economy, two-way trade between both sides hit US$1.57 billion. Of this, Vietnamese exports stood at US$1.2 billion, while its imports climbed to $375.16 million.
Vietnamese exports to Chile have also continued to growth since the beginning of this year. During the nine-month period, bilateral trade value reached US$1.29 billion, with the nation exporting US$1.04 billion worth of goods. Chile is currently the Vietnamese side’s fourth largest trade partner in Latin America, following Brazil, Mexico, and Argentina.
The nation’s key export items to Chile include phones and accessories; machinery, equipment, and other spare parts; textiles and garments; footwear; clinker and cement; rice; bags, wallets, suitcases, hats, umbrellas; and coffee. Among these, phones and accessories make up the largest share of Vietnamese exports to the Latin American country.
Meanwhile, Vietnamese imports from Chile mainly consist of raw materials for producing export goods, such as copper, plantation wood, paper pulp, wine, fresh fruits, animal and vegetable oils, animal feed and ingredients, and scrap metal.
According to the European-American Market Department under the MoIT, in recent years the MoIT and the Ministry of Foreign Affairs of Chile have alternately organised the Vietnam-Chile Free Trade Council (VCFTC)’s meetings.
The council serves as an effective mechanism in which to review the implementation of the VCFTA whilst simultaneously promoting bilateral ties in areas of economics, trade, investment, agriculture, education, healthcare, and science - technology.
The VCFTC’s fifth meeting was held back in June this year in Hanoi under the co-chair of Deputy Minister of Industry and Trade Nguyen Hoang Long and Vice Minister for International Economic Relations of the Ministry of Foreign Affairs of Chile Claudia Sanhueza. It identified key issues that need to be implemented moving forward as part of efforts to boost bilateral economic, trade, and investment co-operation.
Although the VCFTA only includes commitments on goods, it has also provided a significant boost to the economic and trading relations between the two countries.
Experts said the trade pact allows local products to enter the Chilean market with tariff preferences, facilitating their competition with products from other countries. Additionally, the CPTPP, which officially came into effect for Chile in February, 2023, has brought about fresh opportunities for businesses from both sides to expand trade and investment co-operation in each other's markets.
Chile's membership in the Pacific Alliance therefore makes it easier for Vietnamese firms to access not only the Chilean market, but also other member countries of the alliance such as Peru, Colombia, and Mexico.
With a population of over 19 million and high per capita income, Chile has significant consumption demand in South America. Vietnamese products are favoured by Chilean consumers, creating favourable conditions for Vietnamese businesses to export to this market.
As part of efforts to boost the export of Vietnamese goods to Chile, enterprises have been advised to focus on market surveys to gain a thorough understanding of consumer demands and trends; as well as staying updated on Chile's economic, trade, and investment policies through state support agencies, such as the MoIT, the Vietnamese Embassy in Chile, and the Chilean Embassy in Vietnam.
Attention must be paid to trade promotion and connection activities, as well as building brands and marketing strategies through communication channels and international events, with these efforts helping to find co-operation opportunities with Chilean partners, according to experts.
