Strengthening economic connectivity: The foundation of the Vietnam-Canada strategic partnership

Vietnamese Prime Minister Pham Minh Chinh holds talks with Prime Minister of Canada Justin Trudeau on October 10 in Vientiane, Laos - photo: VNA

In November 2017, during Canadian Prime Minister Justin Trudeau's visit to Vietnam, the two nations launched the Vietnam-Canada Comprehensive Partnership framework. Both countries are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and have actively cooperated in multilateral platforms such as APEC, Francophonie, the Indo-Pacific Economic Framework (IPEF), and Canada-ASEAN initiatives. The establishment of the Canada-Vietnam Joint Economic Committee has deepened collaboration in specific areas, including energy transition, agricultural development, climate change mitigation, financial cooperation, and statistical research.

Canada has been a significant development partner for Vietnam, contributing to poverty alleviation, institutional capacity-building, and inclusive growth for both people and businesses. Over the past three decades, Canada has implemented nearly 200 development projects in Vietnam, with a total investment of approximately US$1.35 billion. These initiatives have played a critical role in Vietnam's poverty reduction, industrialization, and modernization. Notably, Canadian projects have helped Vietnam enhance its export capacity, meet international quality standards, and integrate into global supply chains.

Canada's development assistance also extends to supporting Vietnamese enterprises through training programs, participation in international trade fairs, and organizing Canadian buyer delegations to Vietnam. These efforts have bolstered Vietnam's agricultural productivity, leading to significant income improvements for rural households. Examples include advancements in rice seed production (e.g., ST25), livestock breeding, and other agricultural sectors.

In the first 11 months of 2024, Canada initiated 20 new investment projects in Vietnam with a total registered capital of US$50 million, averaging US$3 million per project. While the projects are relatively small in scale, their increasing numbers indicate growing interest among Canadian businesses, particularly small and medium-sized enterprises (SMEs). Additionally, three existing projects increased their capital, and 35 others engaged in mergers and acquisitions (M&A), contributing over US$17 million. By November 2024, Canadian investment in Vietnam had reached US$71.4 million, marking a 202% increase from the previous year. Currently, Canada has 277 investment projects in Vietnam, with a total registered capital of nearly US$4.9 billion, making it Vietnam's 14th largest foreign investor.

Vietnam is Canada's largest trading partner within ASEAN and its seventh-largest import source globally. Conversely, Canada is Vietnam's second-largest export market in the Americas. Trade between the two nations has flourished under the CPTPP framework, with bilateral trade more than doubling since 2018, reaching an average of US$10 billion annually from 2022 to 2024. Vietnam's exports to Canada continue to grow, with 2024 expected to surpass the US$10 billion milestone. Similarly, Canadian exports to Vietnam rose by 34.1% year-on-year in 2024, reflecting deepening economic connectivity.

The arrival of large-scale Canadian business delegations in Vietnam in 2024, some comprising over 200 enterprises, has injected fresh momentum into bilateral cooperation. This engagement spans transportation, logistics, e-commerce, high technology, and energy sectors. With its technological and financial strengths, Canada serves as a gateway for Vietnamese businesses to expand globally. Meanwhile, Vietnam's robust free trade agreements, disciplined workforce, and strategic location make it an ideal entry point for Canadian businesses into the ASEAN market.

Canada's energy sector offers vast potential for collaboration. As one of the world's largest energy exporters, Canada produces 5.1 million barrels of crude oil and 0.5 billion cubic meters of natural gas daily, with an energy mix increasingly dominated by renewable sources. Canadian expertise in nuclear technology, particularly the CANDU reactor, presents opportunities for Vietnam to explore clean energy solutions. Additionally, Canada’s significant investments in science, technology, and innovation—averaging CAD15 billion annually—align with Vietnam’s aspirations for technological advancement in fields such as artificial intelligence, renewable energy, and digital automation.

Vietnamese Minister of Industry and Trade Nguyen Hong Dien (second left) and Canadian Minister of Export Promotion, International Trade and Economic Development Mary Ng (middle) at the Vietnam-Canada Business Forum on November 26, in Vancouver, Canada

The visit of Vietnam’s Minister of Industry and Trade, Nguyen Hong Dien, to Canada in November 2024 further underscored the shared vision for enhanced cooperation. Through the Joint Economic Committee and specialized working groups, both nations aim to strengthen partnerships in energy security, future industries, and trans-Pacific connectivity. The Canada-Vietnam Business Forum in Vancouver highlighted mutual interest in pursuing substantive projects in nuclear power, essential minerals, and LNG.

As Vietnam and Canada deepen their commitments in these strategic areas, the foundation is being laid for elevating their relationship to a strategic partnership. This enhanced cooperation will not only foster mutual economic growth but also build strategic trust, ensuring both nations are better prepared to tackle global challenges and seize emerging opportunities./.