PM hopes for stronger business partnership with Brazilian enterprises

Prime Minister Pham Minh Chinh attended a Vietnam-Brazil business forum in Rio de Janeiro on the afternoon of 17 November (local time) within the framework of his trip to attend the G20 Summit and bilateral activities in the Latin American nation.

At the forum, delegates and business communities of the two countries were briefed on the potential, strengths, and investment co-operation desires of each side, while solutions were proposed aimed at promoting linkages between the two countries, especially in areas where one side has potential and strengths and the other side has demand.

Rodrigo Santiago, vice president of the Federation of Industry of Rio de Janeiro., expects the free trade agreement between the country and the Southern Common Market (MERCOSUR) to be signed as soon as possible, particularly given the Vietnamese side’s great potential, strategic position in Southeast Asia, and its role as a bridge connecting Brazil with ASEAN.

Leaders of the Federation, the Brazilian Chamber of Commerce and Industry, and Brazilian business representatives such as the Embraer aviation group all assessed that Vietnam is one of the key and most important partners in Asia, stating that Brazilian businesses are keen to step up ties with Vietnam in aviation, semiconductors, agriculture, rubber, fisheries, technology, and innovation.

In his address, Nguyen Huu Tu, deputy general director of the Vietnam Chemical Group (Vinachem) and representing Vietnamese enterprises at the event, said that this year the group's estimated trade turnover in the Brazilian market is set to reach over US$90 million, nearly double that of 2021. The group's tire and tube products under the brands of Danang Rubber and Southern Rubber have gained increasing trust from Brazilian consumers.

Brazil represents an agricultural powerhouse with a huge demand for fertilizer imports. Vinachem is therefore working alongside its partners to put together a ship carrying tonnes of high-quality fertilizers, with the first batches of detergents under the Vinachem brand being sent to Brazil this year, Tu noted.

The group wishes to continue to bolster collaboration efforts with partners and customers in Brazil by following a strategy of developing green chemical industrial products in the field of digital transformation and innovation in the chemical industry whilst supplying technical rubber products for Embraer's modern aircraft products. In addition, it plans to import several products from Brazil such as ores, whilst agricultural products such as production inputs will contribute to the effort to bring the two-way trade turnover between the group and Brazilian partners to US$500 million by 2030.

Brazil sees substantial potential in collaborating with the nation, particularly in high-tech industries, semiconductors, agriculture, energy security, renewable energy, science and technology, climate change, digital transformation, and South-South co-operation. In particular, Brazil expects the Vietnam-Mercosur Free Trade Agreement to be signed soon, therefore enabling Brazilian businesses to get access to the ASEAN market through Vietnam.

Brazilian Minister of Rural Development Paulo Teixeira highlighted the historical significance of the Vietnamese national liberation journey, recalling the visit of President Ho Chi Minh to Rio de Janeiro in search of a path to independence. He underlined the country’s importance in the global food and foodstuff production and supply chain and stressed the need for enhanced co-operation, especially in agricultural technology, to ensure food security not just for the two countries, but also for the global fight against poverty.

In his speed, PM Chinh stated that the mutual relationship is continuing to see positive developments, underpinned by strong political trust. In his talks with President Luiz Inácio Lula da Silva, both leaders agreed to elevate the joint relationship to a Strategic Partnership, he said, stressing that this will serve as a strong foundation to further intensify economic, investment, and trade co-operation between both countries' business communities.

PM Chinh underscored the strong foundation for bilateral ties, citing high political trust, complementary economic strengths, shared cultural values, and aspirations for the causes of peace and national development.

He showed optimism about reaching the two-way trade goal of US$10 billion by 2025 while calling on Vietnamese and Brazilian enterprises invest in each other’s country, boost collaboration in agriculture and food security, renew traditional growth motives, and further explore new co-operation spaces, including aerospace and maritime development and underground spaces.

Vietnam is in the process of seeking selective investment in high-tech projects with high-added value and spillover effects which can connect with domestic enterprises, he said, adding that priority is given to the domains of science technology, innovation, research and development, the green economy, the digital economy, the circular economy, the knowledge-based economy, semiconductor production, hydrogen, renewable energy, and green financing, among others.

With a view to removing roadblocks to ensure that economic ties are on a par with the political and diplomatic relations, the Vietnamese Government leader stated that both sides should soon conduct negotiations for a free trade agreement between Vietnam and the Southern Common Market (MERCOSUR), an agreement on investment promotion and protection, and sign an agreement on visas and accelerate Brazil’s recognition of the Vietnamese market economy status.

To create a conducive environment for sustainable business development, the nation is advancing three strategic breakthroughs in institutional building, strategic infrastructure development, and high-quality human resources training, while all working to improve the business climate.

PM Chinh also desires a more robust partnership between enterprises of both nations, emphasizing the principles of harmonizing benefits and sharing risks, as well as mutual understanding, sharing visions and actions, mutual development, and shared prosperity.

Brazil is currently the Vietnamese side’s leading trading partner in Latin America. In recent years, two-way trade has grown rapidly to reach more than US$7.1 billion in 2023 from US$1.53 billion in 2011. During the past 10 months of the year, the figure amounted to US$6.58 billion. The two sides are therefore aiming to increase trade to US$10 billion by 2025 and US$15 billion by 2030.

The country primarily exports seafood, rubber, textiles, footwear, and steel, while Brazil’s exports to Vietnam mainly consist of soybeans, wheat, corn, animal feed, cotton, and other raw materials.

In terms of investment, as of October, Brazil had invested in seven direct investment projects in Vietnam, with a total registered capital of US$3.85 million, mainly in the manufacturing and processing, wholesale, retail, and scientific and technological sectors.

The Southeast Asian nation has run two investment projects in Brazil with a total registered capital of US$700,000.