Logistics investment as a 'lever' for Vietnam - UAE agricultural trade

On the afternoon of August 26, Deputy Minister of Agriculture and Rural Development Tran Thanh Nam met with Mr. Thani Bin Ahmed Al Zeyoudi, Minister of State for the United Arab Emirates (UAE) Ministry of Economy.

Deputy Minister Tran Thanh Nam praised the cooperation between the UAE Ministry of Economy and various Vietnamese ministries in promoting trade between the two countries. The Ministry of Agriculture and Rural Development welcomed the Comprehensive Economic Partnership Agreement (CEPA) between Vietnam and the UAE, which is progressing towards a final outcome with positive prospects from both parties' commitments.

Opening up a wide range of agricultural, forestry, and fishery products is not only significant for Vietnam but also helps UAE consumers benefit from lower-priced imported goods from Vietnam.

One of the achievements during the recent COP 28 in December 2023 was the signing of a "Memorandum of Understanding on Food Diversity" between the Ministry of Agriculture and Rural Development of Vietnam and the UAE Ministry of Environment and Climate Change. This serves as a basis for both sides to promote bilateral cooperation in agricultural production and agricultural goods exchange.

Currently, Vietnam's agriculture sector is trending towards developing high-quality, value-added export products and diversifying export markets, including increasing exports of agricultural, forestry, and fishery products to the global Halal market.

Vietnamese agricultural, forestry, and fishery products are considered suitable for the Halal market, with Vietnam's advantageous geographical location near major Halal markets such as the UAE. The primary Halal food exports from Vietnam are raw and semi-processed agricultural, forestry, and fishery products, with eight main export items including confectionery and cereal products, rice, seafood, cashews, coffee, fruits and vegetables, pepper, and tea.

On the UAE side, Mr. Thani Bin Ahmed Al Zeyoudi noted progress in the CEPA agreement and investment opportunities.

Mr. Thani bin Ahmed Al Zeyoudi stated that Vietnam and the UAE are in the process of legal review following the completion of negotiations on the CEPA Agreement, and they expect it to be signed soon. Most of the exchanged products, including seafood and other agricultural products, have been included in the agreement.

Regarding investment in the agricultural sector, Mr. Al Zeyoudi mentioned that the UAE is currently finalizing contracts to import several Vietnamese agricultural products such as rice, nuts, seafood, coffee, and chocolate. Conversely, the UAE is looking for more investment opportunities in Vietnam and aims to build an investment model with the country.

Deputy Minister Tran Thanh Nam emphasized that Vietnam has strengths in agricultural products. Based on the signed agreement, it is necessary to consider the next steps to facilitate the smooth export of Vietnamese agricultural products to the UAE. In 2023, the trade turnover of agricultural, forestry, and fishery products between the two countries reached approximately USD 350 million, and in the first seven months of 2024, it reached USD 250 million. With an integrated mechanism, trade turnover is expected to see significant growth.

The Ministry of Agriculture and Rural Development leaders suggested that both sides increase trade promotion conferences and forums to facilitate regular interactions between businesses.

Regarding investment cooperation models, Deputy Minister Tran Thanh Nam proposed that the two sides could collaborate to build standard raw material areas for export, inviting UAE companies to participate. The Ministry encourages foreign investors, including UAE businesses, to focus on post-harvest processing, especially agricultural logistics.

“UAE investors could focus on agricultural logistics centers to supply the UAE market and other countries, especially investing in processing Halal agricultural products for export to the UAE and other Arab countries,” the Deputy Minister suggested.

Deputy Minister Tran Thanh Nam also mentioned that many Vietnamese companies are interested in exporting Halal-certified chicken to the UAE market but face issues with inspection and verification standards. He requested additional information from the UAE on this matter.

* On the same day, during the Vietnam-UAE Trade Forum (B2B), Director of the International Cooperation Department (Ministry of Agriculture and Rural Development) Nguyen Do Anh Tuan discussed agricultural cooperation opportunities with AlDahra Group.

At the forum, Nguyen Do Anh Tuan from the Ministry of Agriculture and Rural Development engaged in discussions with representatives of AlDahra Group about opportunities for cooperation in agriculture.

The Ministry of Agriculture and Rural Development is actively participating in trade agreements and market promotion between Vietnam and other countries. For the UAE, the Ministry has organized several delegations to participate in various food festivals and exhibitions in the UAE. Vietnam also has a club of Middle Eastern food companies.

Vietnam aims to collaborate in exporting high-value-added products, and processed agricultural goods, with lower carbon emissions and greener operations.

“Vietnam has been selected by the Global Forum on Agricultural Economics as one of the first three countries in the world to pilot a Food Innovation Center. This initiative presents a significant opportunity, especially considering the UAE's strengths in innovation and digital technology. We believe that the partnership between the two sides can foster effective cooperation in the Food Innovation Center and the food sector in general, including startups in this field,” Mr. Tuan suggested.

With three key products currently being negotiated between Vietnam and the UAE under the CEPA Agreement—cashews, pepper, and seafood—the Ministry of Agriculture and Rural Development representatives requested better incentives from the UAE for these items, especially seafood, as these are of global interest.

Additionally, with Vietnam’s abundant raw materials, the Ministry welcomes UAE companies to enhance cooperation and investment in Halal food to be exported to Arab markets, including the UAE.

Important agricultural, forestry, and fishery products from Vietnam will not immediately benefit from 0% tariffs when the CEPA Agreement takes effect. Many products will still require 5 years (such as cashews) or even 10 years (such as pepper) to enjoy preferential 0% import-export tariffs.