Vietnam is actively negotiating a Free Trade Agreement (FTA) with the Southern Common Market (Mercosur) to leverage it as a driving force for exploring export markets in Latin America.
Mercosur, established in 1991 by Argentina, Brazil, Paraguay, and Uruguay, is a dynamic and competitive economic bloc, holding the position as the 5th largest economy globally. Geographically strategic in East Asia and the Asia-Pacific, Vietnam serves as an essential gateway for Mercosur nations to access the ASEAN market.
Among Mercosur members, Brazil is Vietnam’s largest trading partner in the bloc and in Southeast Asia. According to Vietnam Customs data, in the first half of June 2024, Vietnamese pangasius exports to Brazil reached $4 million, up 5% from the same period last year. Total exports until mid-June 2024 amounted to $50 million, a 47% increase compared to the same period in 2023. January 2024 marked the highest export value at nearly $14 million, an 83% rise from the previous year, while February 2024 saw a 6% decrease to nearly $6 million.
Since the beginning of the year, Brazil primarily imported frozen pangasius and frozen pangasius fillets from Vietnam under HS code 03046200. The largest supplier in the first five months was Hung Ca 2, accounting for 19% of the export value.
Vietnamese pangasius exports to other Mercosur markets also show potential. By the end of May 2024, exports to Argentina reached nearly $1.5 million, up 238%; to Uruguay over $700,000, a slight 2% increase. Paraguay, a significant exporter of agricultural products, livestock, and electricity, remains limited in importing pangasius from Vietnam, with Vĩnh Hoàn being the only Vietnamese enterprise exporting to this market in the first five months of the year.
Geographical distance, language differences, and lack of direct cargo and passenger transport routes lead to high logistics costs for goods from Vietnam to this market, and there is no free trade agreement between the two parties.
With these potentials, it is anticipated that Vietnam and the Mercosur bloc will soon establish their first FTA, paving the way for export trade cooperation, including pangasius exports to this market.
VFM
