Promoting FTA negotiations with Mercosur and GCC: New opportunities for Vietnam's trade

(Chinhphu.vn) - In the context of the world witnessing many fluctuations, expanding cooperation space and diversifying markets has become an urgent requirement for the Vietnamese economy. The Prime Minister has directed the Ministry of Industry and Trade to preside over and coordinate with ministries and branches to promote the negotiation process of free trade agreements (FTAs) with many potential partners, including the Southern Common Market (Mercosur) and the Gulf Cooperation Council (GCC).

Prime Minister Pham Minh Chinh holds talks with Brazilian President Luiz Inacio Lula da Silva on the sidelines of the expanded BRICS Summit in Brazil in July 2025 - Photo: VGP

Vietnam has now joined 17 FTAs ​​with more than 60 major economies in the world, of which 16 agreements are being effectively implemented, contributing to expanding the market, creating tariff incentives, and improving the investment and business environment. However, with the orientation of deep integration, promoting FTA negotiations with potential regions such as Latin America and the Middle East is considered an important step to enhance the country's position in global trade.

Mercosur – a potential market in South America

Mercosur, which includes four member countries: Brazil, Argentina, Uruguay and Paraguay, is the world's fifth largest economic bloc with nearly 300 million people, accounting for about 70% of the population of South America. This is a region with significant economic and trade scale, and is considered a potential market for Vietnam's key export industries such as textiles, footwear, handicrafts, seafood, and processed foods.

In 2024, Vietnam's exports to Mercosur will reach about 3.4 billion USD, while imports will mainly be agricultural products, minerals, animal feed, and industrial raw materials. The commodity structure between Vietnam and Mercosur countries is complementary rather than directly competitive, creating great room for cooperation in the future.

On the sidelines of the expanded BRICS Summit in Brazil in July 2025, Prime Minister Pham Minh Chinh held talks with Brazilian President Luiz Inacio Lula da Silva. The Prime Minister asked Brazil, in its role as Mercosur rotating chair in the second half of 2025, to support the early conclusion of the Vietnam - Mercosur FTA negotiations. The Brazilian President affirmed his support for this proposal and emphasized that the two Ministers of Industry and Trade need to discuss and coordinate closely to promote consensus within the bloc.

Immediately afterwards, on the evening of August 27, 2025, Minister of Industry and Trade Nguyen Hong Dien had a phone call with Brazilian Foreign Minister Mauro Vieira to concretize the high-level agreement. The Brazilian side announced that it would submit a proposal on FTA negotiations with Vietnam to the nearest Mercosur meeting and committed to promoting internal processes to launch official negotiations in the second half of this year.

According to the Ministry of Industry and Trade, if signed, the Vietnam - Mercosur FTA will create a big boost for trade cooperation, paving the way for businesses on both sides to effectively exploit the complementary advantages in commodity structure. Vietnam can increase exports of processed industrial products, electronics, textiles, and footwear; while stably importing raw materials from Mercosur, helping to diversify supply sources and reduce dependence on some traditional markets.

Prime Minister Pham Minh Chinh met with GCC Secretary General Jasem Mohamed Albudaiwi in January 2025 - Photo: VGP

GCC – a bridge to the open Middle East market

In parallel with the progress in South America, the Ministry of Industry and Trade is also actively promoting the negotiation of the Vietnam - GCC (Gulf Cooperation Council) FTA. GCC includes 6 Middle Eastern countries: Saudi Arabia, United Arab Emirates (UAE), Qatar, Kuwait, Oman and Bahrain - which are economies with rich financial potential, large consumer goods import markets, and at the same time have the need to diversify the supply of food, foodstuffs and light industrial goods.

In January 2025, in Davos (Switzerland), Prime Minister Pham Minh Chinh met with GCC Secretary General Jasem Mohamed Albudaiwi. The GCC Secretary General affirmed that Vietnam is on the priority list for signing the GCC FTA, considering this a win-win, mutually beneficial relationship. Meanwhile, Prime Minister Pham Minh Chinh emphasized that Vietnam attaches importance to deepening multifaceted cooperation with the GCC, while encouraging regional businesses and investment funds to strengthen cooperation with Vietnam; promoting negotiations on the GCC - Vietnam FTA, the GCC - Vietnam Investment Promotion and Protection Agreement, sharing experiences and supporting Vietnam in building an international financial center.

Vietnam has signed a Comprehensive Economic Partnership Agreement (CEPA) with the UAE in 2024, opening a new cooperation framework with the region. If the Vietnam - GCC FTA is signed, this agreement will enhance economic and trade relations with the entire Gulf region, creating conditions for Vietnamese enterprises to access a market of nearly 60 million people with one of the highest per capita incomes in the world.

Vietnam’s export products to the GCC include seafood, processed agricultural products, textiles, wooden furniture, and consumer goods; while the GCC can provide energy, chemicals, and raw materials at competitive prices. This is also an opportunity for Vietnam to attract more investment capital from large funds in the Middle East, especially in the fields of renewable energy, infrastructure, and financial technology.

New impetus for integration and development

Simultaneously promoting two FTA negotiation processes with Mercosur and GCC not only demonstrates Vietnam’s determination to integrate but also demonstrates its strategic vision in diversifying partnerships and expanding economic space. These are two regions with important geo-economic positions, possessing great market potential and complementing the markets with which Vietnam already has FTAs.

According to the Ministry of Industry and Trade, in the context of global trade under pressure, new FTA agreements will be an important lever for Vietnamese enterprises to minimize risks, exploit tariff advantages, and improve competitiveness. At the same time, these agreements also affirm Vietnam's position as a reliable partner, a bridge between Asia, Latin America and the Middle East.

However, to effectively utilize the FTA, domestic enterprises also need to proactively improve product quality, meet technical standards and strict rules of origin; at the same time, build a systematic market access strategy through trade promotion channels and local distribution networks.

Anh Tho

Source: https://baochinhphu.vn/thuc-day-dam-phan-fta-voi-mercosur-va-gcc-co-hoi-moi-cho-thuong-mai-viet-nam-102250910085123243.htm