Singapore and Vietnam sign Memorandum of Understanding to strengthen economic and trade cooperation
30 March 2022
On 25 February 2022, the Ministry of Trade and Industry (“MTI”) announced that Singapore and Vietnam had concluded a Memorandum of Understanding (“MOU”) on Economic and Trade Cooperation to strengthen economic and trade cooperation between both countries.
The MOU was signed by Second Minister for Trade and Industry Dr Tan See Leng and Vietnam’s Minister of Industry and Trade Nguyen Hong Dien. It was witnessed by Prime Minister Lee Hsien Loong and President of the Socialist Republic of Vietnam Nguyen Xuan Phuc, who was in Singapore for a State visit.
Background
Minister Tan noted that bilateral trade between Singapore and Vietnam has grown steadily over the past decade, reaching S$26.9 billion in 2021, an 18.7% increase from the year before.
The Minister also noted that more Singapore companies are also choosing to invest in Vietnam, giving the example of the 10 Vietnam-Singapore Industrial Parks situated all over Vietnam, attracting US$15.6 billion in investments and creating over 290,000 jobs. Singapore companies are also expanding in both Hanoi and Ho Chi Minh City, as well as venturing into other regions such as Vinh Phuc and Bac Ninh provinces in the north, and Binh Duong province in the south.
This trend does not appear to be slowing down, despite the challenges brought about by the Covid-19 pandemic. Last year, Singapore’s foreign direct investment into Vietnam amounted to nearly US$10.7 billion, making Singapore the largest investor in Vietnam for that year, accounting for 34.4% of Vietnam’s total foreign capital investments in 2021.
Singapore and Vietnam have also recently affirmed their commitment to explore cooperation in renewable energy, innovation and start-ups, in addition to ongoing collaboration in the infrastructure, industrial, digital, financial, agriculture, services, tourism, transport and education sectors.
Benefits of the MOU
The MOU will strengthen economic cooperation between Singapore and Vietnam, including facilitating business partnerships, exploring collaborations in the digital economy, and supporting regional and global supply chain connectivity.
The MOU will deepen agri-trade cooperation through exploring partnership opportunities and supporting information sharing and training on best practices, certification and standards in the agriculture industry. It also aims to enhance cooperation in the industrial and energy sectors and facilitate greater collaboration between Singapore and Vietnamese SMEs. Additionally, it will explore capacity building activities in economic areas of mutual interest to deepen trade and investment flows between Singapore and Vietnam.
Reference materials
The following materials are available from the MTI website www.mti.gov.sg: