Canada and Vietnam have been trading partners since time immemorial. The first diplomatic relations between the two countries took place in 1973, and an embassy was opened in Hanoi. In addition, the countries also opened a Consulate General in Ho Chi Minh City by mutual consent in 1997 (Government of Canada, 2014). In 1954, Vietnams quit from the International Commission for Supervision and control due to resentments with France. Canada remained a member for over twenty years. The Embassy of Canada is located in Hanoi in Vietnam. On the other hand, the Embassy of Vietnam and a trade office located in Ottawa represents Vietnam in Canada (ibid). Furthermore, Vietnam is also represented by the Consulate General situated in Vancouver.
As long as we can remember, Vietnam is adapting a market driven economy and doing away with the centrally prearranged economy (EDC, n.d.). As a result, there has been an immense growth in the trade between Canada and Vietnam. Economists have indicated that the figures have doubled in the recent past. The Macroeconomic aspects and the dependence of Vietnam on State Owned Enterprises (SOEs) can be obstacles to prospective foreign investors. Irrespective of the challenges, the economy of Vietnam still can offer abundant opportunities for Canadian companies and businesses. Vietnam has a high number of the middle-class population and promising demographics. The Vietnamese government has also prioritized the development and improvement of power supply to boost business in both urban and industrial areas (Hausman et.al, 2005).
Canada-Vietnam relations have experienced an overhaul improvement in the past decades. Even though both countries started slowly on the trade front, the consistency in their bilateral trade cannot be underestimated. In 2012, the two countries reached a $2 billion figure in bilateral trade (Vietnam Chamber of Commerce and Industry, 2013). Vietnam, for instance, has successfully opened a market for Canadian specialty products. Examples include a market for Canadian cattle and an export center for Canadian live seafood. In the same year, the Canadian government managed to hold the First ever Canadian Food Festivals in Vietnam. The events aimed at spreading the best Canadian foods e.g. beef, wine, food, and Ambrosia apples.
The diplomatic and trade relations between Vietnam and Canada has benefited students to a large extent. Canada has left its doors open to allow students from Vietnam to experience their quality education. Institutions of learning in both countries have also launched joint educational programs. The Canada Development Assistance Program has always focused on assisting Vietnam to acquire vocational and skills training. In additional, the students have benefited from acquiring technical know-how in food quality, banking regulations, court legislations, and many others.
Canada is fully committed to promoting the bilateral investment and trade relations with Vietnam. In 2012, the country started negotiations to formulate a Canada-Vietnam Foreign Investment Protection Agreement (FIPA). The agreement intends to attract more investors to conduct business in both countries. On the multidimensional perspective, Vietnam and Canada with other nine nations are committed to implementing the Trans-Pacific Partnership (TPP) negotiations (Vietnam Chamber of Commerce and Industry, 2013). The pact expects to empower the state of trade to all the signatories. The ministries in both countries are partnering together to organize trade missions and improve the profile of each nation to a higher level. The business community is focused on ensuring that the bilateral relations between Canada and Vietnam are a success.
The bilateral relations between Canada and Vietnam are expanding. Statistics indicates a rising figure in trade and development. Vietnam is a major trade partner to Canada. Both countries are members in various multilateral forums. This includes ASEAN Regional Forum, the Asia-Pacific Economic Cooperation (APEC), the United Nations (UN), the Francophonie, and the World Trade Organization (WTO) amongst others.
Development assistance
Canada has remained in the front line to offer developmental assistance to its trade partner, Vietnam. From 1990 to 2012, Canada had provided approximately $793 to support Vietnam economic reforms and policies aimed at alleviating poverty with the society (Government of Canada, 2014).
Canada selected Vietnam as a country of focus in 2009, as a component of the aid effectiveness agenda. Canada was and is still focused on helping the Government of Vietnam to implement effective strategies to reduce poverty. At the same time, the country is committed to improving an environment for investors through the backup of the rural enterprise development and agricultural efficiency (Government of Canada, 2014).
Canada is devoted to assisting Vietnam in promoting transparency and accountability in public institutions. For example, it has assisted in introducing reforms in the State Bank of Vietnam. This has boosted the level of business and also promoted entrepreneurship in SMEs. The citizens have also benefited from programs that improve their skills necessary for employment. The technical and vocational education system has massively reaped from the reform agenda (Auffret, 2013)
The relations have also enhanced food security by empowering agriculture. The Canadian government has assisted Vietnam in various ways. For instance, it has been possible to increase food quality and safety. At the same time, the field of agriculture has experienced new technology that has increased productivity. As a result, the poor population in the rural areas has reduced, and the food is available at affordable prices.
Trade
It is critical to illustrate that the economy of Vietnam experienced a growth of 5.4%. (Government of Canada, 2014). Since 1986, the country has been benefited a lot from a steady growth of the economy. It is also important to highlight the substantial social changes that have helped the country to move forward. The rates of poverty have also been reduced to a tremendous level. In the recent past, Vietnam has fostered its efforts to create a platform that allows it to engage with Canada and other nations in the international stage. The friendly relations have boosted bilateral trade in both countries.
The Bilateral merchandise trade between Canada and Vietnam has four times larger growth than it was in the 2000s. In 2013, the countries experienced a record $2.6 billion in their bilateral trade. Vietnam recorded $2.1 billion in merchandise imports while $426 were from exports. The Canadian direct investment was estimated to stand at $51 in 2012 (Government of Canada, 2014). The Canadian companies have benefited from the opportunities in Vietnam. There are numerous companies that have enjoyed transactions in various sectors (Nguyen, 2010). The most friendly and profitable sectors include Agriculture and Agri-Food, Forest Industries, Education and Training, ICT, and Oil and Gas. Moreover, the Canada’s Global Markets Action Plan opens more opportunity to investors by making Vietnam a priority market. The involvement of both countries in global economic integration like the APEC, WTO, ASEAN and the TPP is beneficial and boosts the economy (Williams, 2013).
In the bilateral trade, Vietnam is popular for exporting products like textiles and garments, footwear, seafood, leather ware, agricultural produce, and handicraft goods. On the other hand, Canada’s main exports include pharmaceutical products, plastics, fertilizers, post-telecommunication equipment, paper powder, and farm machinery (Vietnam Trade Promotion Agency, 2014). The key Canadian companies that are performing well in Vietnam include Tiberon Minerals, GE Canada and GE system, Telesat of Ottawa, International Engineering amongst others.
The success garnered by Vietnam is attributed to the improved status of the social situations in the country. The bilateral relations have assisted the country in meeting its Millennium Development Goals. It is important to note that the nation has benefited from a reduction of poverty levels, eradication of hunger, and improvement in maternal health. Canada has helped Vietnam to meet other MDGs, and the progress is outstanding (Government of Canada, 2015). The government has guaranteed its citizens a universal access to education, improved health care, and accessibility to basic amenities. Canada and Vietnam should focus on measures to improve environmental sustainability. The quality of life is improving because of the positive growth of the economy. Despite the notable achievements, the nation still experiences an economic instability and reforms should be implemented to create a stable economy.
As elucidated above, Canada aids Vietnam in creating supportive policies that induce transparency and accountability in institutions. Nonetheless, SMEs have benefited from the reforms in the banking sector. Moreover, the increase in agricultural competitiveness has enhanced food security by improving food productivity and safety. New marketing techniques have been established to support innovation in the agricultural sector. Vietnam is recognized for its aid effectiveness, and their leadership does not embezzle funds allocated for development projects. The policies, treaties, and agreements between Canada and Vietnam have helped the countries to operate freely resulting in mutual benefits. The trade agreements are significant as they boost economic growth in countries (Clark et.al, 2004).
References
Auffret, P. (2003). Trade reform in Vietnam: Opportunities with emerging challenges (Vol. 3076). World Bank Publications.
Clark, X., Dollar, D., & Micco, A. (2004). Port efficiency, maritime transport costs, and bilateral trade. Journal of development economics, 75(2), 417-450.
EDC. (n.d.). Viet Nam - Export Development Canada (EDC). Retrieved from http://www.edc.ca/EN/Country-Info/Pages/Viet-Nam.aspx
Government of Canada. (2014, November). Canada–Vietnam Relations. Retrieved from http://www.canadainternational.gc.ca/vietnam/bilateral_relations_bilaterales/index.aspx?lang=eng
Government of Canada. (2015, November 6). Vietnam. Retrieved from http://www.international.gc.ca/development-developpement/countries-pays/vietnam.aspx?lang=eng
Hausman, W. H., Lee, H. L., & Subramanian, U. (2005). Global logistics indicators, supply chain metrics, and bilateral trade patterns. World Bank Policy Research Working Paper, (3773).
Nguyen, B. X. (2010). The determinants of Vietnamese export flows: static and dynamic panel gravity approaches. International Journal of Economics and Finance, 2(4), 122.
Vietnam Chamber of Commerce and Industry. (2013, January 28). Vietnam Business Forum - VCCI. Retrieved from http://vccinews.com/news_detail.asp?news_id=27901
Vietnam Trade Promotion Agency. (2014, October 21). Canada: lucrative market for Vietnam’s exporters. Retrieved from http://www.vietrade.gov.vn/en/index.php?option=com_content&view=article&id=2192:canada-lucrative-market-for-vietnams-exporters&catid=20:news&Itemid=287
Williams, B. R. (2013). Trans-Pacific Partnership (TPP) countries: Comparative trade and economic analysis.
