Vietnam's pharmaceutical industry is entering a historic growth phase, aiming for a market size of USD 20 billion by 2026, yet it has attracted only a modest USD 1.8 billion in foreign direct investment (FDI) so far. This significant gap highlights a massive, untapped potential for pharmaceutical manufacturing. Global pharmaceutical giants like AstraZeneca, Sanofi, Roche, […]
As Vietnam and Brazil mark 35 years of diplomatic relations, a new chapter is unfolding—one that may reshape trade and investment between Southeast Asia and South America. In November 2024, the two countries elevated their relationship to a Strategic Partnership, signaling a commitment to deeper cooperation in trade, innovation, and sustainable development.
Central to this momentum is the proposed Free Trade Agreement (FTA) between Vietnam and the Southern Common Market (MERCOSUR), a South American trade bloc in which Brazil plays a leading role. For Brazilian investors, this FTA represents a golden opportunity to tap into one of Asia’s most dynamic economies—and for Vietnam, it’s a strategic move to diversify trade and attract high-quality foreign direct investment (FDI).
Vietnam–Brazil Trade at a Glance
- Diplomatic ties established: 1989
- Strategic Partnership launched: November 2024
- Two-way trade in 2024: Nearly USD 8 billion
- Brazil’s share of Vietnam–Latin America trade: 34.8%
Brazil is already Vietnam’s largest trading partner in Latin America, and the proposed FTA is expected to significantly boost this relationship by reducing tariffs, simplifying customs procedures, and opening new sectors for investment.
Why Vietnam Is an Attractive FDI Destination for Brazil
1. Strategic Location in ASEAN
Vietnam offers Brazilian companies a gateway to the 680-million-strong ASEAN market, with preferential access through existing FTAs such as:
- ASEAN Free Trade Area (AFTA)
- Regional Comprehensive Economic Partnership (RCEP)
- CPTPP and EVFTA
A Vietnam–MERCOSUR FTA would complement these agreements, allowing Brazilian firms to leverage Vietnam as a regional export hub.
2. Stable Growth and Pro-Investment Policies
Vietnam’s GDP growth remains among the highest in Asia, supported by:
- A young, tech-savvy workforce
- Political stability
- Ongoing legal reforms (e.g., Resolutions 57 and 59) to improve transparency and digital governance
The government has prioritized green growth, digital transformation, and innovation, aligning well with Brazil’s strengths in agritech, bioenergy, and fintech.
Sectors Where Brazil Can Benefit Most from Investing in Vietnam
🌾 Agribusiness and Food Processing
- Brazil’s leadership in global agriculture, combined with Vietnam’s cost-effective processing, packaging, and export logistics, creates synergies for joint ventures and fast access to Asian markets.
- Investment in joint ventures or processing plants in Vietnam can help Brazilian firms reach Asian markets faster and more efficiently.
⚡ Renewable Energy and Biofuels
- Vietnam is targeting net-zero emissions by 2050 and is rapidly expanding its solar, wind, and biomass capacity.
- Brazilian expertise in bioethanol and sustainable energy can support Vietnam’s green transition and open doors for energy partnerships.
🧬 Pharmaceuticals and Biotechnology
- Vietnam’s growing middle class is driving demand for healthcare and life sciences.
- Brazilian pharmaceutical firms can benefit from local production incentives and regional export potential.
📦 Logistics and Supply Chain Infrastructure
- Vietnam is investing heavily in ports, highways, and industrial zones.
- Brazilian logistics companies can partner in smart warehousing, cold chain logistics, and e-commerce fulfillment.
💻 Digital Transformation and Fintech
- Vietnam’s digital economy is projected to reach USD 50 billion by 2025.
- Brazilian fintech and IT firms can explore B2B platforms, mobile payments, and blockchain solutions in a fast-growing digital market.
FTA with MERCOSUR: What’s at Stake?
The proposed FTA between Vietnam and MERCOSUR (Brazil, Argentina, Paraguay, Uruguay) is expected to:
- Eliminate or reduce tariffs on key exports
- Facilitate investment flows and joint ventures
- Enhance cooperation in innovation, sustainability, and digital trade
This agreement would mirror the success of Vietnam’s FTAs with the EU and UK, which have significantly boosted exports and FDI inflows.
Strategic Collaboration Beyond Trade
Vietnam and Brazil are also exploring cooperation in:
- Climate change and green development
- Digital transformation and smart governance
- Education, science, and cultural exchange
These areas offer long-term investment opportunities and align with global ESG (Environmental, Social, and Governance) trends.
Conclusion: A Bilateral Relationship with Global Potential
The Vietnam–Brazil Strategic Partnership and the proposed MERCOSUR–Vietnam FTA mark a pivotal milestone in South–South cooperation.
For Brazilian investors, Vietnam presents:
- A politically stable, high-growth economy
- Preferential access to ASEAN and global markets
- Strong synergies in agriculture, clean energy, life sciences, and digital innovation
At Viettonkin Consulting, we are ready to help Brazilian businesses navigate Vietnam’s regulatory landscape, identify investment opportunities, and build lasting partnerships.
