08:14 | 05/05/2014 Cooperation
(VEN) - Vietnam has cooperated with Peru in fields such as oil, gas and telecommunications. However, bilateral cooperation results have been incommensurate with the real potential. The opening of the Peruvian Embassy in Vietnam in late 2013 was expected to contribute to promoting the cooperation between the two sides, especially in the fields of trade and investment. Vietnam Economic News’ Phuong Lan spoke with Peruvian Charge d'affaires in Vietnam Luis Tsuboyama.
What are your views on the relations between Vietnam and Peru, especially in the fields of trade and investment?
Diplomatic relations between Peru and Vietnam were established in 1994 and significantly developed over the last two decades. It can be said that both Peru and Vietnam have strived to deepen the bilateral relationship in areas such as politics, economics, trade, investment, science, technology and culture.
Regarding trade relations, although trade between Peru and Vietnam remains small, roughly US$200 million, the index has increased dramatically from US$40 million in 2005 to nearly US$196.7 million in 2012. Vietnam’s main exports to Peru include wood products, furniture, textiles and garments, footwear, rubber and plastics, while Peruvian exports to Vietnam include fish-meal, fish-oil, fruit, vegetables and acrylic fiber.
In terms of investment, we are very pleased to share that two big giants in the field of energy and telecommunications (PetroVietnam and Viettel) have been carrying out and expanding their investments in Peru. Viettel’s investment in Peru has been expected to reach a half of US$1 billion, while that of PetroVietnam has been continually increased. Block 67 production celebration on April 1, 2014 in Lima marked a milestone in the development of PetroVietnam in Peru. In Vietnam, the Peruvian investment flow has remained small for some reasons. One of the main reasons is the lack of a platform where both Peruvian and Vietnamese businesses can meet up, exchange business ideas and discover investment opportunities. The recently established Embassy of Peru in Vietnam will facilitate the meet-up and boost the trade and investment activities between the two countries.
Oil, gas and telecommunications are said to be important and potential fields of bilateral cooperation. What do you think of this opinion?
These fields are certainly important and potential to the cooperation between Peru and Vietnam. This is realized in fact by the successful stories of Viettel and PetroVietnam in Peru. However, besides these fields, we think that there are still other untapped possibilities that both countries could cooperate in the near future.
Economic cooperation between our two countries has developed slightly in recent years. However, it has not matched the potential and expectations of both countries. So what are the reasons for this? (For example barriers, difficulties and so on).
Undoubtedly, the economic cooperation between Peru and Vietnam has been strengthened over recent years. As mentioned above, bilateral trade has steeply increased in recent years but not yet reached the potentials and expectations that both countries have. There are some reasons for this. First, limited understanding of products and services is hindering trade activities between Peru and Vietnam. Second, information about the Peruvian market has not been widespread among the Vietnamese business community. Third, there are still a lot of tariffs imposed on products of Peru and Vietnam, as well as significant transportation costs, which partly demotivate trade activities between two countries. However, it is fortunate that Peru and Vietnam are members of the Trans-Pacific Partnership Agreement (TPP) which is hoped to be signed later this year. The TPP will not only create more incentives for investors and traders, but also ease the procedures of doing business.
What should both countries do to deal with these challenges?
If the TPP achievement is considered to be a mid-term goal, the short-term goal should be increasing the knowledge and awareness of Vietnamese businesses about the products and potentials of Peru through (i) trade promotion conferences, (ii) round-table meetings between enterprises of both countries, (iii) participation in trade events/exhibitions/shows, as well as (iv) cultural exchange events. As such, the Embassy of Peru in Vietnam has been partnering with government agencies, businesses, associations, and other relevant stakeholders to realize this goal.
The Embassy of Peru in Hanoi opened in 2013. Could you share with us its plan to promote trade and investment cooperation between the two countries?
From the newly established, the Embassy of Peru in Hanoi has a very clear mission, which is to promote trade and investment cooperation besides the political mission. As this year marks the 20th anniversary of Peru-Vietnam diplomatic relations (1994-2014), we are going to organize a series of events throughout the year. Those events will mostly focus on the promotion of Peruvian business and culture. Recently, we successfully organized a cultural week in which there were Peruvian food cooking demonstration and a three-night event in order to show the Peruvian gastronomy and dances. Besides, a Pacific Alliance conference was held at the end of April to help the Vietnamese get a snapshot of the Peruvian economy. To build up on this, we are planning to hold a round-table meeting for both Peruvian and Vietnamese businesses in the South this May and June. Moreover, we have been working with relevant parties such as ministries like the Ministry of Industry and Trade, the Ministry of Foreign Affairs, the Vietnam Chamber of Commerce and Industry, trade and promotion centers, corporations, business associations and institutes to boost bilateral trade and investment in the rest of the year.
The TPP is expected to be signed later this year. What do you think Vietnamese and Peruvian businesses should do to take the full advantage of the TPP?
The signing of the TPP would certainly benefit both Peru and Vietnam. Till then, Vietnamese and Peruvian businesses should get themselves prepared for seizing opportunities as well as overcoming challenges created by the TPP. A greater understanding of the market, ways of doing business, improved knowledge of the rules and regulations, improved access to market information, and reform to be more competitive are necessary for businesses of both countries./.