Tapping the Vietnam-Bulgaria trade potential

Lack of market information

Addressing a recent Vietnam-Bulgaria business forum in Hanoi, Deputy Minister of Industry and Trade Cao Quoc Hung said bilateral trade remains modest because businesses still lack information about each other’s markets, products and advantages.

General Department of Vietnam Customs data show that in 2017, trade between the two countries reached US$109.16 million, including US$38.36 million worth of Vietnamese exports to Bulgaria. In the first eight months of 2018, bilateral trade exceeded US$55 million, including US$21.6 million worth of Vietnamese exports to this market. Bulgaria currently ranks 65th among 129 countries and territories directly investing in Vietnam, with nine ongoing projects with total registered capital of US$30.99 million.

VCCI Vice Chairman Doan Duy Khuong also spoke about the gap between the cooperation potential and results. Bulgaria is a potential market with 7.5 million consumers, and a developed economy, while Vietnam is one of the world’s fastest growing economies, with per-capita gross domestic product (GDP) of more than US$2,300. As an open economy, Vietnam has signed free trade agreements (FTAs) with other countries. Vietnam and Bulgaria are complementary economies and can promote cooperation in various fields, such as healthcare, technology and human resource development.

Moreover, Bulgaria, as a member of the European Union (EU) since 2007, can offer a bridge for Vietnam to expand cooperation with other EU countries. Bulgaria was one of the first EU countries to ratify the EU-Vietnam Framework Agreement on Comprehensive Partnership and Cooperation (PCA). Meanwhile, Vietnam offers a gateway to the ASEAN region. “Therefore, linkages between the two business communities, as well as between the two governments, are an important factor helping Vietnam and Bulgaria overcome challenges and difficulties to promote trade and investment cooperation,” Doan Duy Khuong emphasized.

Tapping potential

To promote economic cooperation, trade and investment, in the opinion of Deputy Minister Cao Quoc Hung, Vietnamese and Bulgarian businesses need to pay greater attention to tapping each other’s potential and advantages. He said businesses should take the initiative in building strategies to invest in each other’s market. Trade and investment promotion activities, such as business meetings, workshops and international fairs, should be intensified. Bulgarian Minister of Economy Emil Karanikolov hopes the two countries will hold more dialogues to promote economic cooperation further. “I reaffirm Bulgaria’s support for the EU-Vietnam Free Trade Agreement to be signed in the near future to open new cooperation opportunities for the two countries,” he said.

Minister Emil Karanikolov also indicated that bilateral trade remains incommensurate with the good relations between the two countries. Major Bulgarian exports to Vietnam included pesticides, herbicides, antibiotics, wheat, sunflowers and seeds. Bulgaria has the potential and wants to increase the sale of products in the fields of pharmaceutics, chemicals, electronics, telecommunications, agriculture and agricultural engineering to Vietnam. It is willing to support business initiatives through the exchange of business delegations and organizing workshops to help the sides learn about each other’s potential.

Bulgaria’s strategic location makes it a global transit center connecting Europe with countries in the Mediterranean, Near East and Asia. Vietnamese goods exported to Bulgaria can be processed directly at local ports for export to other European countries and those in the Balkan region. Bulgaria is willing to create the best conditions for Vietnamese businesses to open their warehouses in Bulgaria to make Vietnamese goods available for sale to over 500 million consumers in EU countries.

InvestBulgaria Agency Executive Director Stamen Yanev appealed to the Vietnamese government to take various measures to promote investment in Bulgaria. Vietnamese companies can find essential elements for their successful investment in Bulgaria: the lowest corporate income tax rate in the EU, 10 percent; a skilled workforce; low labor costs; and the lowest operational costs in Europe.

The Bulgarian government has strived to maintain macroeconomic and financial stability while at the same time improving the administrative environment to ensure the lowest tariffs in the EU. It encourages investment along with taking suitable measures to increase financial resources for small and medium companies. The government has also promoted education reforms to tighten the linkages between universities and businesses.