Vietnam-Spain Bilateral Relations: Trade and Investment

Vietnam-Spain Diplomatic Relations

Vietnam established diplomatic relations with the European Union (EU) in 1990, with the signing of a Cooperation Agreement under the Spanish EU Council presidency in 1995. The European Parliament ratified this agreement in 1996, showing support for Vietnam’s economic reforms and integration into ASEAN.

Bilateral Trade and Investment

Bilateral trade in goods between Spain and Vietnam in 2022 reached a total of €4.57 billion (US$4.85 billion), surging almost 29 percent year-on-year, according to data from Spain’s Ministry of Economy, Trade and Enterprise (MINECO). Between January and November 2023, bilateral trade reached a total of €4.6 billion (US$4.88 billion), with growth slowing to just 6.4 percent year-on-year during this period. However, this growth was recorded despite overall foreign trade in both Spain and Vietnam plummeting in 2023.

Foreign Direct Investment

Gross Spanish FDI into Vietnam in 2023 reached a total of €3.4 million (US$3.6 million), a decrease of 73.6 percent year-on-year. In 2022, Spain’s FDI flows to Vietnam reached €12.97 million (US$13.77 million), up 5.6 percent from the previous year. Vietnamese FDI flows into Spain remain minimal.

Trade and Investment Treaties

The EU-Vietnam Free Trade Agreement

While Spain and Vietnam have not signed any bilateral trade agreements, being an EU country, Spain is a party to the EU-Vietnam Free Trade Agreement (EVFTA).

The EVFTA was signed along with an Investment Protection Agreement on June 30, 2019. The EVFTA came into force on August 1, 2020, while the Investment Protection Agreement will come into force when it has been ratified by all EU member countries. As of the end of October 2023, 16 EU Member States had ratified the agreement.

The EVFTA aims to promote economic integration, enhance trade relations, and foster economic growth and job creation in both regions.

Spain-Vietnam Bilateral Investment Agreement

Spain and Vietnam signed a bilateral investment agreement (BIT) in 2006, which came into force in 2011.

The Spain-Vietnam BIT establishes an environment conducive to investment, ensuring legal security and protection for investors from both countries and encouraging mutual economic collaboration.

Spain-Vietnam Double Tax Avoidance Agreement

In addition to the BIT, Spain and Vietnam have also signed a double tax avoidance agreement (DTA).

The DTA prevents companies and individuals from being required to pay tax on income in both countries. The Spain-Vietnam DTA applies to income taxes levied by the governments of Spain and Vietnam, “irrespective of the manner in which they are levied”.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

SDG 8: Decent Work and Economic Growth

The article discusses the bilateral trade and investment between Vietnam and Spain, highlighting the growth in imports, exports, and foreign direct investment (FDI) between the two countries. This aligns with SDG 8, which aims to promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.

SDG 9: Industry, Innovation, and Infrastructure

The article mentions that Vietnam has become a prime destination for manufacturing, with companies relocating their operations from China. This reflects the industrialization and infrastructure development in Vietnam, which is a target of SDG 9.

SDG 17: Partnerships for the Goals

The article highlights the bilateral trade and investment agreements between Spain and Vietnam, including the EU-Vietnam Free Trade Agreement (EVFTA) and the Spain-Vietnam bilateral investment agreement. These partnerships contribute to SDG 17, which focuses on strengthening global partnerships for sustainable development.

2. What specific targets under those SDGs can be identified based on the article’s content?

Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries

The article mentions the growth in bilateral trade between Spain and Vietnam, indicating economic growth and development in both countries. However, it does not provide specific data on gross domestic product (GDP) growth rates.

Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries

The article highlights Vietnam’s attractiveness as a manufacturing destination and the relocation of multinational companies to the country. This reflects the promotion of industrialization and the increase in industry’s share of employment and GDP in Vietnam.

Target 17.14: Enhance policy coherence for sustainable development

The article mentions the EU-Vietnam Free Trade Agreement (EVFTA) and the Spain-Vietnam bilateral investment agreement as policy frameworks that promote trade and investment between the two countries. These agreements contribute to enhancing policy coherence for sustainable development.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

No, the article does not provide specific indicators that can be used to measure progress towards the identified targets.

4. SDGs, Targets, and Indicators Table

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Source: vietnam-briefing.com

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