Vietnam and New Zealand announce strategic partnership

A Strategic Partnership between New Zealand and Vietnam has been announced, following a virtual meeting of the two countries' leaders.

On July 22, Prime Minister Jacinda Ardern met with Vietnam Prime Minister Nguyen Xuan Phuc to discuss the relationship between the two countries - a relationship which has spanned 45 years.

“The relationship between New Zealand and Vietnam has grown a lot in recent years, particularly in trade and people to people connections,” Ardern said.

Trade between the two reached NZ$2billion in the year ending March 2020, placing Vietnam as New Zealand's 15th largest two-way trading partner.

“New Zealand and Vietnam share a warm and constructive relationship, but there is more we can do together. Vietnam is Chair of ASEAN this year. We have shared interests in peace and prosperity in the region and as supporters of the multilateral rules-based order and regional economic integration,” Ardern said.

To view the full, joint statement from New Zealand and Vietnam leadership, click here.

Expert reaction

Mitchell Pham, chair Digital Council for Aotearoa, member Asia Society’s Global Council, director Augen Software Group 

Doing business and travelling regularly between both countries, I get to be 'in the relationship zone' and observe it at ground level. I feel a palpable positive vibe and a high level of interest between the two countries. I see visitors, I see trade, I see connection between people who are very interested in each other's history, culture, language, cuisine, fashion… and ultimately business opportunities.  

Lifting the relationship to the level of ‘Strategic Partnership’ is a very exciting step forward - hopefully this means that the two governments will be working much more closely on opportunities for both countries to benefit, and the horizon will also extend beyond just trading with each other.  

As an outcome of this new Strategic Partnership, I would love to see the two governments establish an environment and ecosystem for industry, business and community to collaborate between the two countries. 

For each other, New Zealand is an important gateway to the West, Vietnam continues to be an important connection to the ASEAN region. Each country is ahead in some areas while behind in others, so there are many opportunities to share and learn from one another. 

Both countries get to lift the relationship and level of engagement with each other from just trading to include collaboration and even co-creation and joint innovation for region-wide access and impact. 

The opportunity for an NZ-Vietnam ecosystem for economic and social advancement (including a travel bubble) is very real. It's up to both countries to pursue this. 

I am very interested in seeing what goes into the Plan of Action for the Strategic Partnership over the next 12 months. 

See Pham's full reaction with further detail below: 

Vietnam-NZ Strategic Partne... on Scribd

Warrick Cleine, chairman and CEO of KPMG in Vietnam; chairman of NZ Chamber of Commerce in Vietnam 

The latest announcement by the Vietnam and New Zealand Prime Minister’s represent a step-change in the relationship between the two countries.  New Zealand enjoys a wonderful reputation in Vietnam, both at official and societal levels. 

This has been built over decades of constructive engagement.  New Zealand was among the first countries to establish diplomatic relations with Vietnam in 1975, which has been followed by increasing education, business and official ties.  Many Vietnamese are proud to have studied in New Zealand, either privately at school or university, or under programmes such as language training for Vietnamese officials.   

Conversely, organisations such as the Asia New Zealand Foundation and NZTE facilitate internships and missions to Vietnam by young New Zealanders and business leaders. Vietnam has long been an important port of call for visiting New Zealand leaders, either on bilateral meetings or when participating in Vietnam-hosted events such as APEC and ASEAN meetings, and these visits have been reciprocated by Vietnamese leaders traveling to New Zealand.  Two-way trade has increased significantly over the years, with New Zealand exporters in particular enjoying improved market access due to the CP-TPP and other trade agreements, and New Zealand sourced food and dairy products finding their way into the homes of Vietnamese consumers.  “Made in New Zealand” is a powerful and trusted label in Vietnam.  These initiatives and relationships create enduring ties. 

Warrick Cleine/ KPMG (https://home.kpmg/vn/en/home/contacts/w/warrick-cleine-function.html)

The timing of this announcement could not be better. As the world recovers from the COVID-19 crisis, both New Zealand and Vietnam are rare bright spots, having managed the health crisis to prevent meaningful community spread of the virus, and limited the impact on their domestic economies.  Both the Vietnamese and New Zealand domestic populations are enjoying life largely as normal, with border controls protecting this status.  Any initiative which strengthens the ability of the two countries to engage – even if it is virtually for the time being – is immensely valuable.  Maintaining these connections while physical contact is restricted will allow an accelerated return to normal once the health crisis recedes globally. 

 New Zealand needs to build export markets in order to maintain its economic performance, and relatively vibrant economies such as Vietnam are especially important. As Europe and the United States head into an extended recession, much of Asia will enjoy moderate economic growth, even in 2020, with a significant rebound anticipated in 2021.  Needless to say, it is easier to sell into a growing economy than a recessionary one.  It is also clear that geopolitics and diversification of supply chains are increasingly relevant post-COVID.  New Zealand’s exporters and importers must understand and respond to these trends, as they will impact our ability to manage risks going forward and how we are perceived globally.  This is an issue that both New Zealand and Vietnam – as small trading nations – have in common.  They both need to protect and participate in a rules-based trading system, and to diversify both export and import markets. 

The Government can only do so much.

The challenge now is for New Zealand’s exporters to “step up” and take the opportunity in front of them.  While New Zealand boasts a number of world class exporters, both large and small, too many companies have focused exclusively on our largest markets.  I also see too many companies venturing into Asia with a poorly defined story.   They often don’t understand the competitive environment or route to market, and cannot even articulate why an Asian consumer should buy their product.  NZTE received a significant funding boost in the last budget, and intend to make many more New Zealand companies “export ready”.  It is critical that exporters engage with these programmes, do their homework, and come into Asia with a smart and well-defined plan.  In some senses, “brand New Zealand” is only as strong as its weakest link, so we need to work together to make sure we all succeed. 

- Asia Media Centre