Vietnam has been New Zealand’s fastest growing export market in the ASEAN region over that five year period.

Tony Martin
New Zealand Trade Commissioner & Consul General to Vietnam
2015 marked 40 Years of relations between New Zealand and the Association of South East Asia Nations (ASEAN), with total exports from New Zealand to ASEAN standing at NZ$5.9bn as at June 2015.

A growing number of New Zealand businesses in multiple sectors across food and beverage, ICT, geothermal, healthcare, agriculture and aviation sectors have been steadily increasing their presence in the region since the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) came in to effect five years ago. The agreement means a significant proportion of import duty tariffs have either been eliminated or reduced.

Economic growth makes Vietnam viable market
The ASEAN region is expecting to see GDP growth of 4.5% for the year ending 2015 and Vietnam is a key contributor to this with an expected year-on-year growth rate of over 6.5%. The medium-term prospects for economic growth in Vietnam remain strong and with Air New Zealand’s recent announcement of direct flights between Auckland and Ho Chi Minh City there is plenty of cause to see our trade relationship with Vietnam and indeed ASEAN as a region go to another level.

Vietnam has been New Zealand’s fastest growing export market in the ASEAN region over that five year period with exports increasing by 78 percent since 2010. Two-way merchandise trade was NZ$1.07 billion in the year to July 2015, making Vietnam our 20th largest trading partner.

Free Trade Agreements provide real opportunity
This growth has been built on the platform provided by AANZFTA and the recent signing of the TPP Agreement – of which Vietnam and New Zealand are (along with Singapore, Brunei and Malaysia) member countries – will only add further impetus for growth.

There is a real opportunity to access the advantages Vietnam provides for New Zealand businesses in manufacturing for not only local consumption but also to export to third countries within the ASEAN economic community (AEC) and TPP group.

New Zealand manufacturing companies are starting to take advantage of this and there is a small but committed group of New Zealand enterprises operating in clothing manufacturing, timber treatment processing and ICT services already operating in Vietnam with success.

The cost of labour in Vietnam in addition to the opportunities for accessing export markets in the AEC and Trans-Pacific region certainly warrant serious consideration and the number of New Zealand businesses setting up in Vietnam is expected to increase – whether it be directly or through transitioning their operations from other markets – in the next 12-18 months.

Building on our proud history of trade with ASEAN
This year New Zealand celebrated 40 Years of diplomatic relations with ASEAN and as a result the profile of New Zealand in Vietnam has been elevated in this part of the world with substantial activity taking place at both a political and commercial level.

Vietnam’s Prime Minister visited New Zealand in March with a large delegation of more than 200 government officials and business leaders. This visit was recently reciprocated by Prime Minister John Key when he visited Vietnam in mid-November along with the Minister of Economic Development – Hon. Steven Joyce – and a business delegation of aviation and education organisations. A total of 16 key agreements were signed during that period leading to further business opportunities in health, aviation, education and agriculture sectors.

There is a growing culture of collaboration between our two countries and this represents plenty of opportunity for the New Zealand manufacturing sector to export either their products and services, or even their expertise by teaming up with the right in market partner.