Vietnam, Cuba See Trade Potential

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Trade growth drivers

The state visit to Cuba by Party General Secretary and State President To Lam next week is expected to strengthen the two countries’ bilateral relationship further, fostering their sustainable trade development.

The special relationship between Vietnam and Cuba. Photo: tuyengiao.vn

Head of the European-American Market Department, Ministry of Industry and Trade said that over 60 years of establishing diplomatic relations, Vietnam and Cuba always strengthen cooperation to contribute to the development of the two countries and the world.

Notably, the traditional partnership between Vietnam and Cuba in the Americas provides a solid foundation for cooperation in all aspects, especially in the economy, trade, and investment. Before 2019, bilateral trade between the two countries always achieved an impressive growth rate of over 20% per year.

In 2023, total two-way trade reached US$155.5 million, of which Vietnam's exports to Cuba reached US$155.5 million, and no import data from Cuba to Vietnam was recorded.

Rice is the commodity that accounts for the highest proportion in the structure of Vietnam's exports to Cuba. Photo: Ngoc Tai

In the first eight months of 2024, bilateral trade reached US$134.7 million, a remarkable 187% increase compared to the same period in 2023. Vietnam's exports to Cuba accounted for US$133.36 million, up 184.3%, while imports from Cuba were US$1.33 million.

Vietnam's primary exports to Cuba include rice, coffee, chemicals, textiles, footwear, computers and components, construction materials, ceramics, machinery and equipment, spare parts, among which rice holds the highest proportion in Vietnam's export structure to Cuba. Vietnam's imports from Cuba are mainly vaccines and pharmaceuticals.

Notably, according to the head of the Europe-Americas Market Department, in the context of deep integration and numerous Free Trade Agreements (FTAs) that Vietnam has joined, Vietnamese enterprises have been taking advantage of many important incentives to promote export activities. These FTAs not only provide market opportunities but also help reduce tariff barriers, making Vietnamese goods more competitive in the international market.

Specifically for the Cuban market, the Vietnam-Cuba Trade Agreement was signed in 2018 and officially came into effect on April 1, 2020, marking Cuba's first trade agreement with an Asian country. As committed in the agreement, most tariffs in bilateral trade have been eliminated or reduced according to a roadmap. This is a significant advantage for import-export enterprises of both countries.

Affirming the Vietnam-Cuba Trade Agreement as a strong driving force in promoting cooperation, trade, and investment between the two countries, during the working session between Vietnamese Minister of Industry and Trade Nguyen Hong Dien and Cuban Minister of Foreign Trade and Investment in September 2022, the two leaders emphasized the importance of this agreement.

Both Ministers agreed that the two sides need to make more efforts to support the business community in taking full advantage of the benefits of the Vietnam-Cuba Trade Agreement (effective from April 1, 2020), especially in the context of a volatile global situation.

Ample room for cooperation

Hoang Minh Chien, deputy director general of the Ministry of Industry and Trade (MoIT)’s Vietnam Trade Promotion Agency, highlighted that not only Cuba but other Latin American and Caribbean countries are also considered potential markets, with increasing demand for products that are Vietnam’s export strengths. Successfully entering the Cuban market could open doors for Vietnamese businesses to penetrate deeper into other Latin American markets.

In the coming years, Cuba will continue to require imports due to the slow growth of its domestic production sectors, presenting opportunities for traditional Vietnamese products to enter the country. Moreover, Cuba is not a particularly strict market, and Vietnamese products are well-positioned to meet the necessary quality and technical standards.

The MoIT, along with related ministries and the Vietnamese Trade Office in Cuba, will continue to act as a bridge, supporting Vietnamese enterprises in terms of market information and connections with Cuban partners. They will also assist the enterprises in resolving any difficulties arising during their market entry and business operations.

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