Global economic uncertainties, challenges in the Australian economy, high inflation and exchange rate fluctuations are contributing factors to the decline.
|Vietnamese litchi fruit on display in an Australian supermarket. VNA/
HÀ NỘI The Vietnamese Trade Office in Australia reported that bilateral trade between Việt Nam and Australia decreased by 12 per cent in 2023 from the previous year. Trade amounts totalled US$13.75 billion, with Việt Nam shipping $5.22 billion worth of exports and importing $8.53 billion worth of goods from Australia.
The trade office’s report cited global economic uncertainties, challenges in the Australian economy, high inflation and exchange rate fluctuations as contributing factors to the decline.
The decrease in Việt Nam’s exports to Australia was still moderate (-5.3 per cent), in line with an overall 4.4 per cent reduction in the country’s exports over the same period.
The Southeast Asian economy at large showed resilience with its exports to Australia. Crude oil exports were up by 37.4 per cent, as were textiles and garments (+4.9 per cent) and iron and steel products (+1.5 per cent).
Australia’s inflation rate decreased in the later months of 2023, contributing to a strong rebound in bilateral trade after an initial decline after sluggish figures earlier in the year. This rebound holds promising signs for the coming year, said the trade office.
Looking ahead, the trade office remarked it had a positive outlook for bilateral relations with Australia. Việt Nam and Australia have agreed to elevate their relationship to a Comprehensive Strategic Partnership, and they are signatories to crucial Free Trade Agreements including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP) and the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA). The Economic Enhancement and Cooperation Strategy between Vietnam and Australia (EEES) also underscores significant areas of cooperation under development between the two countries.
According to the trade office, the Australian government has outlined four priority areas for cooperation with Việt Nam: agriculture and food, clean energy, mineral resources, and education and training.
Vietnamese products have recently made inroads into the Australian market, with strong growth potential for certain products like confectionery and cereal products (+89 per cent), rice (+19.1 per cent), and clinker and cement (+119.7 per cent).
The trade office remarked, however, that challenges remain regarding the stringent technical regulations products must meet to be sold on the Australian market. Australia has imposed various regulations on imports, emphasising the need for Vietnamese exporters to prioritise product quality over low prices to align with the consumption habits of Australian consumers.
In the agriculture sector, the fragmented scale of production in Vietnam poses challenges in product traceability, quality control, and compliance with strict Australian standards. The trade office recommended exporters to conduct thorough market research focusing on consumer needs, adherence to local laws, and special attention to packaging and quality.