Government News Analysis Trade

Pinoy-Viet trade – a plum for a peach

They seem poles apart in many ways – geographically they sit at opposite ends of their region; one is a presidential, constitutional democracy; the other, a Marxist-Lenninist, one-party state. Their food, language and cultures also have little in common; but all those differences are diminished by one thing they both share. A desire to trade with each other.

The personal invitation from Vietnamese Prime Minister, Nguyen Tan Dung, to Philippine President, Rodrigo Duterte, to visit his country – though largely ignored by the mainstream media – is positive and significant. So too is the fact that the two heads of state spent around 20 minutes in private conversation on the sidelines of the just-ended Association of Southeast Asian Nations (Asean) summit in the Lao capital, Vientiane.

And when Duterte makes that trip to Hanoi – expected to happen sometime before the end of the year – bilateral trade will feature strongly in their talks. Yes, there will be other issues – not least their respective South China Sea disputes with China – but improving trade relations will take much of the focus.

Also, last month, Ramon Lopez, Philippine Secretary of Trade and Industry, met his Vietnamese counterpart, Tran Tuan Anh, at another Asean gathering in Vientiane; the group’s Economic Ministers’ Meeting. And they will meet again at the Vietnam-Philippines Joint Sub-Committee on Trade to be held in the Philippines possibly later this month. On the agenda there will be a number of proposals to improve commercial cooperation and boost trade.

All this is positive news for the Philippine export sector which has been languishing in the doldrums for the past year. But while exports generally have dwindled, Philippines-Vietnam trade has been going in the opposite direction in both volume and value. Last year, the two countries did US$3 billion worth of business – that’s almost double the US$1.63 billion it did in 2014. This year it’s expected to bump up by another 15% at least.

And while the bilateral trade is dominated by two items – Vietnamese rice imports to the Philippines and electronic products (largely computers and accessories, accounting for 40% of all exports to Vietnam last year) going the other way – the mood is very much to expand the spread and variety of goods to be shipped market to market.

Vietnamese brands of noodles, instant coffee and pepper are on the shelves of Philippine supermarkets; Philippine processed food items are increasingly appearing in Vietnamese stores. The Philippine construction industry relies on Vietnamese cement while Vietnam’s farmers depend on the shipments of Philippine cattle feed and fertilizers.

Both Manila and Hanoi value this economic partnership and would like it to develop into other areas of collaboration – cross-investing, people-to-people exchanges, cooperation in tourism and education.

Certainly, there’s a long way to go. Presently, within Asean, the Philippines is only Vietnam’s sixth largest trading partner. Going the other way Vietnam is the Philippines fifth largest among the 10 states. But the framework for much of this desired expansion is already in place – the Strategic Partnership Agreement inked by the presidents of the two countries last November. This specifically targets areas which both sides want to develop – not least investing much more in each others economies.

It is envisioned as a two-way street for trade from which both partners will benefit; in the words of a Vietnamese proverb: “Eat the plum you have been given, but give back a peach”.

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