Enormous potential to boost Australia-Vietnam trade: Ambassador

On the occasion of the new year 2024, Australian Ambassador to Vietnam Andrew Goledzinowski shares with The Investor his views on the prospects of a long-awaited upgrade of Vietnam-Australia relations and potential room to further increase trade, economic, and investment cooperation.

Could you give a brief review of major events in the Australia-Vietnam relationship in 2023 and their significance?

The 50th anniversary of diplomatic relations on February 26 was a unique opportunity to celebrate the strength of the Australia-Vietnam relationship. Throughout 2023, we marked the 50th anniversary year with multiple events including leaders and dignitary visits, the showcasing of both of our cultures, including Australian First Nations culture, and activities that highlighted our genuine friendship and shared interests.

With many other countries also celebrating milestone anniversaries with Vietnam this year, Australia did our best to stand out in the crowd. Both of our posts in Vietnam, the Embassy in Hanoi and the Australian Consulate-General in Ho Chi Minh City, delivered a year-long program of events and activities. We are confident that the program of activities helped to broaden the understanding of Australia across Vietnam.

Some of the major events held throughout the year included:

• The Hanoi reception marking the anniversary, held on February 24, was attended by Foreign Minister Bui Thanh Son and the senior ranks of the Vietnamese bureaucracy. Australian X-Factor winner Isaiah Firebrace, (the world’s highest-streamed Australian indigenous artist), and the Australian Army and Vietnamese Military Bands performed.

• The Come Together Showcase at HCMC’s iconic opera house on February 23 was a unique and highly successful concert featuring Australian and Vietnamese artists.

• The state visit by Australia’s Head of State, Governor-General David Hurley to Hanoi and HCMC in April.

• The official visit by Prime Minister Anthony Albanese in June, where he enjoyed bia hoi and banh mi in Hanoi’s Old Quarter. He also met, along with Prime Minister Chinh, Australia’s Under 20 Women’s soccer team for a coaching clinic with footballers from Vietnamese female community teams.

• The annual Taste of Australia events held in Hanoi and HCMC. Australian Minister for Foreign Affairs Penny Wong attended the Taste of Australia Big BBQ in Hanoi, held at the city’s historic Imperial Citadel on August 22 with more than 1,400 guests.

• The official visit by Australian Minister for Trade and Tourism Don Farrell in April which showcased our complementary economies and potential future opportunities for investment cooperation, including on global supply chain opportunities, trade diversification and energy transition.

• The visit by HMAS Toowoomba to the Saigon River presented a valuable opportunity for military-to-military engagement, and to underline our shared vision for maritime security.

• One hundred guests attended a 50th anniversary dinner in Can Tho, the ‘capital’ of Vietnam’s vitally important Mekong region, on November 21. The event highlighted Australia’s longstanding engagement in the region on a range of issues, including climate adaptation, agricultural research, and bilateral trade and investment.

We highly anticipated an upgrade in bilateral relations this year when the two countries celebrated 50 years of diplomatic ties, but it didn't happen despite several high-ranking exchanges. Can you share the reasons and the outlook of such an upgrade? Any possible state visits in the coming months?

The bilateral relationship between Vietnam and Australia is stronger today than ever, driven by our converging economic and strategic interests, and guided by the Strategic Partnership our prime ministers signed in 2018.

Establishing the Strategic Partnership reflected our mature and diverse bilateral relationship, encompassing wide-ranging cooperation on political issues, trade and investment, education, defence and security, policing, immigration, and combating transnational crime. Since then, cooperation between our two nations has further deepened.

In November last year I had the great honour and privilege to accompany Chairman of the National Assembly Vuong Dinh Hue on his first visit to Australia. During the visit, he and Australian Prime Minister Anthony Albanese announced our intention to elevate our bilateral relationship to the level of a Comprehensive Strategic Partnership (CSP). This will be a significant development in our relationship that will place our nations within the top echelon of our bilateral partnerships, reflecting our high levels of mutual trust. We expect the CSP will further enhance cooperation across the breadth of the Strategic Partnership and establish cooperation on new and emerging challenges, such as climate change and energy transition.

Australian and Vietnamese officials have been engaging closely on the CSP over recent months and we are confident that we are now close to concluding the agreement. As the CSP will provide the framework for advancing our bilateral cooperation over the years ahead, we want to ensure that the agreement captures the full scope of our cooperation and reflects our mutual ambition to continue strengthening the relationship into the future. We look forward to our senior leaders announcing the finalization of the upgrade at a mutually convenient time.

Economy-trade-investment is a key pillar in bilateral ties. Could you give a brief update and perspectives on this area?

Deepening our economic engagement with Vietnam is a top priority for the Australian government, and central to our Strategic Partnership. Australia and Vietnam have complementary economies and increasingly entwined supply chains, which means we are partners more than competitors.

Trade and investment between our countries is on a positive trajectory. In 2022-2023 two-way goods and services trade increased over 40% year-on-year and Vietnam ranked as Australia’s 12th largest trading partner, while Australia ranked as Vietnam’s seventh. However, there is enormous potential to take this even further.

To support this, Vietnam and Australia are implementing the Australia-Vietnam Enhanced Economic Engagement Strategy (EEES) to achieve the ambitious goals of becoming top-10 trading partners and doubling two-way investment. Through the EEES, jointly developed by Vietnam and Australia, we are working on shared priorities, including across education, agriculture, climate change and energy, digital economy, and regulatory reform.

Australia is committed to deepening our engagement with Southeast Asia, particularly our trade and investment ties. This is why the Australian government recently announced the Southeast Asia Economic Strategy to 2040. The Strategy, which complements the EEES, has provided a set of recommendations to ensure Australia and our partners maximize the potential of our economic ties, including through the delivery of a Vietnam Action Plan.

What are Vietnam’s particular areas of interest to Australian companies? How about rare earths and energy, which the Vietnamese government has a special focus on?

Vietnam is an important partner for Australia in a range of areas such as agriculture and education. It is one of the top export markets for agricultural products and there are large numbers of Vietnamese studying in Australia. Recently announced new air routes between our two countries reflect the growth in the tourism sector. Australia is also one of the largest suppliers of resources/minerals to Vietnams. This is likely to grow as our two countries play an important role in future clean energy supply chains.

As we both seek to meet net-zero commitments, the Australian government and companies are exploring investments to support the energy transition. Australia is transitioning from a major fossil fuels supplier to being a strong and trusted partner in the clean energy sector – or as Australia’s Prime Minister likes to put it, a renewable energy superpower.

Our leading corporations are pursuing opportunities to invest in offshore wind farms (Macquarie via its subsidiary Corio Generation). We are also establishing partnerships in the electric vehicle industry in Vietnam and working with development banks to provide grant support and finance to develop green energy infrastructure, which will benefit our enterprises.

For rare earths and critical minerals, Australian companies are leading with their feet in highlighting the potential for Vietnam in diversifying and strengthening resilient supply chains. They are actively looking for good and reliable partners to help build Vietnam’s mining industry. This extends to rare earths, which looks very prospective. But for the sector to be successful, it will be important for the government to send signals on the investment environment to build confidence for international players – including from Australia – to bring their know-how and technical expertise.

Australia is a world leader for mining and rare earths processing technology. Our countries are complementary in many ways. Working together to establish and maintain critical minerals and rare earths supply chains will respond to global clean energy demands.

How do you and Australian companies view Vietnam’s business environment? Do you have any recommendations to improve it?

Vietnam is an attractive investment destination for international businesses. It ranks as one of the most open markets globally, and Vietnam has benefitted strongly from its ambitious agenda of economic integration.

This forward-looking approach has been very successful, in elevating living standards, accessing markets, and providing a framework for the domestic economic reforms needed to attract international investment. This success is also apparent in the positive investment flows into Vietnam, where even in 2023 amidst worsening global conditions, investment recorded positive growth.

However, Vietnam is still a lower-middle income country and despite its advances in the ease of doing business it will need to maintain its positive momentum of reform to ensure it can attain its ambition to be a high-income country by 2045. This includes continuing to improve the productivity and competitiveness of its domestic economy, while making sure its development is sustainable and resilient in the face of climate change. Vietnam is actively focusing on these challenges.

Australia is cooperating with Vietnam to help improve the business environment. We support the efforts made to date and think Vietnam should also continue its efforts to:

· build and diversify its financial and capital markets to ensure it has stable sources of long-term financing to support its future growth and green transition;

· reform its education sector to ensure Vietnam has the university and vocational graduates it needs for its future, including by incentivizing high quality international education providers to come to Vietnam;

· reform its mining sector to encourage high quality investments that will enable Vietnam to become a key global player in critical minerals supply chains;

· strengthen its judicial system to ensure where business disputes occur, these are resolved quickly, transparently and are easily enforceable;

· ensure investment incentives promote partnerships between international and domestic businesses to help increase the capacity and competitiveness of Vietnam’s domestic private sector; and

· promote equitable economic growth, including to increase the number of women-led businesses and economic participation of people with disabilitie. Through determined reform efforts Vietnam has shown remarkable economic development that has brought many benefits to its people. This journey is ongoing, and through continued focus on productivity, competitiveness, green growth and innovation, Vietnam has a bright future.

Australia has been implementing several projects to help Vietnam improve its economic governance and business environment. Could we expect continued assistance from the Australian government?

Australia is proud of its long partnership with Vietnam and its support of economic reform and global integration. This includes longstanding scholarships programs, reaching back over the 50 years since we established diplomatic relations.

More recently, Australia’s Aus4Reform program worked with key Vietnamese economic agencies including the Central Institute of Economic Management, Vietnam Competition Commission, and Vietnam Chamber of Commerce and Industry to help develop an evidence base to support reforms aimed at increasing the competitiveness and productivity of Vietnam’s economy.

Australia’s commitment to development cooperation with Vietnam is ongoing. Reflecting our maturing economic partnership, we will continue to leverage Vietnam’s significant domestic resources and foreign investment, and support Vietnam’s efforts to enter a new phase of economic development.

Given Vietnam’s priorities and challenges to 2045, we are designing a new development program, Aus4Growth. Aus4Growth is a significant step up in our economic development program and will be a partnership between Australia and Vietnam fit for the economic opportunities of the future. Aus4Growth will focus on Vietnam’s ambition to maintain an inclusive growth trajectory for the economy, while achieving its goals for reducing the country’s greenhouse gas emissions through transitions in the energy and transport sectors. It will aim to close gaps in policy and practice to support enhanced economic growth, trade and investment, clean energy and transport, inclusion, and digital acceleration.

What message do you wish to convey to Vietnamese people and The Investor readers on occasion of the New Year?

I really enjoy being in Hanoi for Tet. Last year I visited Hang Ma street in the Old Quarter to see the decorations and I’m still taking care of the kumquat tree I bought as part of the celebrations. At this special time of year, I wish all of your readers a very happy New Year and a healthy and prosperous Year of the Dragon!