As a strong message about how the world economy is changing and moving away from old alliances towards new ones, Vietnam and New Zealand have set an ambitious goal of reaching a total trade volume of $3 billion dollars within their two countries combined. This will be a giant opportunity to build upon one of the fastest developing strategic relationships in the Asia-Pacific region.
While the goal may seem to be simply a number associated with trade, it actually represents much more than that—a new and better balance of power within the region.
This agreement comes after Vietnamese Prime Minister Le Minh Hung‘s official visit to New Zealand Prime Minister Christopher Luxon to pledge their mutual support for much closer ties through trade, investment, renewable energy, agriculture, education and security.
For New Zealand, Vietnam not only has a tremendous amount of business potential as a market for New Zealand’s exports but also as an incredible engine of future growth in Asia. As one of the largest economies in Southeast Asia by 2030, New Zealand now has the opportunity to position itself to take full advantage of this rapid growth in Vietnam’s economy.
On the other hand, Vietnam views New Zealand as an important long-term partner and as a source of high-quality agricultural expertise, education and green technologies.
Over the last few years, bilateral trade has increased significantly, with a rise of almost half over just five years, largely due to dairy, timber, fruit, machinery and electronics. However, leaders are not only focused on commerce; each country aspires for greater resilience.
Both nations are investing heavily into various large-scale regional trade agreements and frameworks, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP) and the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA). International political tensions increasingly view these three agreements as deterrents to economic disruption.
There is more than just a ledger of trade between the two countries. Both countries have announced plans to work collaboratively to adapt to climate change, support low-emissions agricultural practices and promote the utilisation of renewable sources of energy, such as wind and solar, as each of these sectors is expected to dictate the competitive landscape in the coming decade.
The relationship between the two countries also includes a people-to-people dimension, which involves expanded scholarships, increased partnerships between universities, and renewed efforts to restart direct air connections, all of which will create greater opportunities for tourism and business travel.
Most notably, the partnership exemplifies a larger strategic trend that sees medium-sized countries increasing their two-way connection to lessen reliance on old-world giants.
In a divisive global economy, New Zealand and Vietnam are banking on something refreshingly traditional—built on belief in one another’s principles, mutual goals, and commitment to the relationship over time.
If they achieve their goal, their USD 3 billion could be the start of much more than that.
