Vietnam’s partnership with Brics aligns the South-east Asian country with peers Indonesia, Malaysia and Thailand in efforts to amplify the voice of developing nations
Vietnam has become the fourth Asean country to gain formal partner-country status within Brics following Malaysia, Indonesia, which is a full member and Thailand. Analysts say this move reflects Hanoi’s strategy to hedge against the rising trade risks from the US and broaden investments and geopolitical footing.
The latest development also underscores the region’s priority in broadening economic relationships to gain deeper trade, investments, people-to-people, and tourism relationships, said Lavanya Venkateswaran, senior Asean economist at OCBC.
“Some of the lower-hanging fruit include bolstering tourism activities amongst Brics member economies through visa incentives as well as encouraging cross-country education opportunities,” she noted.
Over the weekend, spokesperson of Vietnam’s Ministry of Foreign Affairs Pham Thu Hang told reporters that Vietnam’s entry as partner country into the 11-member Brics underscored the country’s desire to enhance the voice and role of developing countries.
This followed Brazil’s announcement last Friday (Jun 13), in its role as rotating Brics chair, on Vietnam’s formal admission into the bloc, which comprises Brazil, Russia, India, China and South Africa - its five original members. The bloc aims to tighten cooperation among emerging economies and amplify the influence of the Global South.
Brazil’s government said Vietnam stands out as a relevant actor in Asia given “its efforts in favor of South-South cooperation and sustainable development”, which “reinforce its convergence with the interests of the group”.
It took about a year from the time Vietnam first expressed interest in collaborating with Brics to its formal confirmation as the bloc’s tenth partner country, amid the group’s ongoing membership expansion.
The prolonged process of establishing the formal relationship occurred as Vietnam faced increasing risks from US President Donald Trump’s tariff blitz, including a significant reciprocal levy of 46 per cent imposed in April.
“Being formally associated with Brics, even as a partner country, can disproportionately increase Vietnam’s risk exposure, relative to any potential benefits of joining Brics,” Le Truong Giang, an analyst at London-headquartered consultancy Control Risks told The Business Times earlier this year.
The potential gains from the partnership with the bloc, however, he added, include diversifying export markets to reduce reliance on the US, which is Vietnam’s largest goods buyer. The South-east Asian nation could also expect to enhance investments for industrialisation and infrastructure development, as well as strengthen its geopolitical leverage in its relationships with major powers.
OCBC’s Venkateswaran noted that Vietnam’s export share to Brics nations – excluding China – remains low, with India at 2.2 per cent, South Africa at 0.2 per cent, and Russia at 0.6 per cent, indicating significant room for growth.
“Vietnam’s broader agenda to diversify trading partners is not mutually exclusive from its ongoing negotiations with the US,” she noted. “Outcomes on discussions regarding transshipments and point of origin issues will be crucial to Vietnam maintaining the US as a key export partner.”
Hanoi is actively seeking a compromise with Washington before a 90-day pause on the tariff plans ends next month.
As the two concluded the third round of trade discussions on Jun 12, Vietnam said on Sunday that it had made progress and was “narrowing the gap” on all fronts, while also seeking online meetings with Washington in the coming days to continue discussions on remaining issues.
US Secretary of Commerce Howard Lutnick said earlier this month that there is still room for talks if Vietnam curtails imports from China and reduces its trade surplus with the US, which amounted to US$123 billion last year – the third largest among US trade partners after China and Mexico.
Source: Business Times
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<p>Time: 2024 By: Ministry of Industry and Trade</p>
