Vietnam’s PM visit to Brazil: focus on trade diversification

After reaching a record figure of $6.4 billion in 2022 (an 18% increase compared to the previous year), the trade flow (exports + imports) between Brazil and Vietnam has slowed to a modest 0.9% increase between January and August this year. In this context, the revival of trade flow between the two countries is expected to be one of the main topics during the visit of Vietnamese Prime Minister Pham Minh Chinh to Brasília on Monday (September 25). He will be the first high-ranking official from the Asian country to visit Brazil in 15 years.

In Brasília, President Luiz Inácio Lula da Silva will receive Prime Minister Minh Chinh to address issues like trade and investments, science, technology, innovation, technical and educational cooperation, defense, and renewable energy. The two leaders will also discuss relations between Mercosur and the Association of Southeast Asian Nations (ASEAN).

Last year, trade between Brazil and Vietnam reached a historic record of $6.4 billion, with Brazilian exports totaling $3.419 billion (a 30.5% increase from 2021) and Vietnamese sales amounting to $2.980 billion (7.6% higher than the total exported in the previous year). Brazil had a surplus of $435 million in its trade with the Asian country.

However, this growth rate in trade did not continue into 2023, and from January to August, bilateral trade experienced a slight positive fluctuation of 0.9% to $4.269 billion. Brazilian sales increased by 2.3%, totaling $2.273 billion, while Vietnamese exports fell by 0.7%, reaching $1.996 billion. In the first eight months of the year, Brazil achieved a surplus of $277 million in trade with Vietnam.

Commodities vs. Manufactured Products

During their meetings in Brasília, both President Luiz Inácio Lula da Silva and Vice President and Minister of Development, Industry, and Trade (MDIC) Geraldo Alckmin will advocate for the need not only to increase bilateral trade but also to diversify Brazil’s export portfolio to Vietnam, which is heavily concentrated in low-value-added commodities.

See below the share of Brazil’s most exported goods to Vietnam in the first seven months of 2023. The data is from DataLiner.

Top export goods to Vietnam | 2023 | TEU

Source: DataLiner (click here to request a demo)

In contrast, Vietnam’s export basket to Brazil is almost entirely composed of high-value-added manufactured goods. Among the main products shipped by Vietnamese companies to Brazil are telecommunications equipment ($530 million), thermionic valves and tubes ($319 million), rubber tires ($175 million), footwear ($156 million), and other manufactured products ($98 million).

Source: Comex do Brasil

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