Chilean Work Papelucho to be Published in Vietnam
	President Luong Cuong's Chile Visit Strengthens Longstanding Friendship

“New vitality” to Vietnam-Chile relations

Vietnam and Chile established diplomatic relations on March 25, 1971, and upgraded to a comprehensive partnership in May 2007. In recent years, bilateral trade relations have made impressive strides and achieved positive results. Particularly, the Vietnam-Chile Free Trade Agreement (VCFTA), approved and put into effect in 2014, has boosted bilateral trade growth and diversified import and export products.

At the invitation of the President of the Republic of Chile, Gabriel Boric Font, and the President of the Republic of Peru, Dina Ercilia Boluarte Zegarra, Vietnam's President Luong Cuong will lead a high-level delegation to pay an official visit to the Republic of Chile, the Republic of Peru, and attend the 2024 Asia-Pacific Economic Cooperation (APEC) Summit Week. The trip lasts from November 9 to 16.

According to Deputy Minister of Foreign Affairs Nguyen Minh Hang, this marks the first visit by a President of Vietnam to Chile in 15 years. The visit coincides with the 55th anniversary of the historic meeting between President Ho Chi Minh and President Salvador Allende, a landmark event that laid the foundation for Chile to become the first South American country to establish diplomatic relations with Vietnam.

Building on that foundation, Vietnam-Chile relations have seen active development, particularly in the field of trade. Chile is now one of Vietnam's most significant partners in the region and the first Latin American country to sign a Free Trade Agreement with Vietnam. Thus, President Luong Cuong's official visit to Chile is expected to infuse "new vitality" into the Vietnam-Chile relationship, especially in areas where both nations recognize substantial potential for cooperation.

Untapped Potential

According to the Ministry of Industry and Trade, prior to the signing of the VCFTA, Vietnamese goods were subject to an average import tax of 6% when entering Chile, and Vietnam consistently experienced a trade deficit with Chile. Since 2014, Vietnam has consistently recorded a trade surplus with Chile. A decade after the FTA took effect, Vietnam's exports to Chile have increased fivefold. Businesses from both sides have effectively capitalized on the FTA’s opportunities to penetrate each other’s markets.

Citing data from the General Department of Vietnam Customs, a representative of the European-American Market Department (under the Ministry of Industry and Trade) noted that despite global economic challenges, bilateral trade between Vietnam and Chile reached USD 1.57 billion in 2023, with Vietnam’s exports totaling USD 1.2 billion and imports at USD 375.16 million.

For the first nine months of 2024 alone, bilateral trade amounted to USD 1.29 billion, with Vietnam exporting USD 1.04 billion to Chile and importing USD 254.5 million from Chile. Significantly, Chile is now one of Vietnam’s four largest trading partners in Latin America, alongside Brazil, Mexico, and Argentina.

Vietnam’s primary exports to Chile mainly consist of consumer goods such as phones and components, machinery, equipment, textiles, footwear, clinker and cement, rice, bags, wallets, suitcases, hats, umbrellas, coffee, and furniture made from materials other than wood. Of these, phones and phone components hold the highest share.

The 5th meeting of the Vietnam - Chile Free Trade Council was held under the chairmanship of Deputy Minister of Industry and Trade Nguyen Hoang Long and Deputy Minister in charge of Foreign Trade, Ministry of Foreign Affairs of Chile Claudia Sanhueza in June 2024.

Vietnam’s imports from Chile are primarily raw materials used for export production, including copper for wires and cables, plantation timber for furniture, fish meal for livestock and aquaculture feed, paper pulp, wine, fresh fruits, animal and vegetable oils, livestock feed, and steel scrap.

The newly appointed Vietnamese Ambassador to Chile, Nguyen Viet Cuong, highlighted that in addition to the VCFTA, bilateral trade between Vietnam and Chile has also received a boost from the CPTPP. Taking effect in Chile since July 2023, the CPTPP has garnered substantial support from both the Chilean government and business community, creating a favorable foundation and environment to attract foreign investors to Chile.

Booth introducing Vietnamese products at Lago Ranco Fair, Chile, April 2022

"Under the frameworks of the VCFTA and CPTPP, there remains significant potential for further development of trade relations between the two countries. Beyond increasing bilateral trade volumes, numerous opportunities exist to unlock market potential, such as reducing tariffs, attracting investment, diversifying sources of raw materials for domestic production, and further opening each other’s markets, particularly for key export goods from both nations," emphasized Ambassador Nguyen Viet Cuong.

The VCFTA and CPTPP continue to serve as strong foundations for enhancing trade and investment relations between Vietnam and Chile specifically, and for expanding each country’s ties within the broader region.

Maximizing FTA Benefits to Boost Exports

With preferential tariffs under the VCFTA and CPTPP, Chile presents a promising market for domestic businesses. However, fully harnessing these opportunities requires considerable effort from enterprises, particularly given today’s complex and unpredictable global economic and trade landscape.

To strengthen exports to Chile, regulatory agencies will continue implementing a series of coordinated and effective solutions. These efforts will focus on enhancing the competitiveness of Vietnamese goods, optimizing the legal environment, and expanding market access opportunities. Key priorities include conducting thorough market research, providing timely and detailed information on consumer demands, consumption trends, and quality requirements in Chile. Additionally, agencies will support businesses in understanding Chile’s legal regulations, technical standards, and non-tariff barriers, while organizing training programs to help companies improve their export capabilities, particularly in meeting international standards for quality and food safety.

For businesses, investing in market understanding is essential. Improving product quality and adopting international standards are also critical factors. Furthermore, companies should be proactive in seeking partnerships and building long-term relationships with distributors and importers in Chile. Establishing a network of reliable partners not only helps mitigate risks but also facilitates market expansion.

Moreover, businesses should maximize the benefits offered by the Vietnam-Chile Free Trade Agreement (FTA). To achieve this, companies need to thoroughly understand regulations on origin, customs procedures, and related tariff policies, which can help reduce costs and strengthen competitive advantages. Collaborating closely with trade promotion organizations, embassies, and the Vietnamese Trade Office in Chile is also vital, as it helps businesses stay updated on market information, explore new opportunities, and resolve any issues that may arise.

Finally, businesses should develop a long-term export strategy that focuses not only on sales growth but also on ensuring sustainability and stability.

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