The official entry into force of the EU-Vietnam Free Trade Agreement (EUVFTA) in August 2020 created a huge and important turning point in promoting economic and trade cooperation between Vietnam and the EU in general and Vietnam and Italy in particular. What impressive trade and investment relations between the two countries did the EUVFTA bring about?

Since the EUVFTA came into effect, we have observed an acceleration in Italy-Vietnam trade relations. In 2019, prior to the agreement, bilateral trade amounted to approximately $5.3 billion. Despite the Covid-19 pandemic, that figure held steady in 2020 and quickly rebounded in 2021, with trade reaching over $5.6 billion and then growing to $6.2 billion in 2022.

Bilateral trade climbed further in 2024, to nearly $6.9 billion, for a 13.4 per cent increase year-on-year. Italian exports to Vietnam grew 21 per cent, supported by the gradual elimination of tariffs in key sectors such as machinery, pharmaceuticals, and chemicals. At the same time, Vietnam’s exports to Italy rose by over 10 per cent, with strong performances in electronics, footwear, and agri-food. Beyond the numbers, the EUVFTA has fostered stronger business ties, encouraged high-standard regulatory alignment, and created new space for technological cooperation and investment between our two countries.

Vietnam is Italy’s largest trading partner in ASEAN. What advantages does Vietnam hold, especially compared to other countries in the region?

Vietnam stands out in ASEAN thanks to its stability, integration into global trade networks, an increasingly skilled workforce, and a growing domestic market. The country has cultivated a competitive export capacity while demonstrating a high level of openness to international cooperation.

What further enhances Vietnam’s appeal today is its ability to position itself as a partner for international supply chains. In the current global climate, Vietnam offers an attractive environment for companies that are pursuing diversification and “de-risking” strategies. More specifically, Vietnam can act as a hub for companies looking to serve both the local market and export to neighboring countries.

What are Italy’s priorities in further promoting trade and investment relations between the two countries?

Italy’s priorities with Vietnam are centered on sectors where our know-how and technological expertise can bring added value and respond to Vietnam’s economic goals.

Machinery is already the largest category of Italian exports to Vietnam, with Italian manufacturing equipment increasingly appreciated by Vietnamese partners seeking high productivity and innovation, especially in packaging, textiles, and precision mechanics. In agribusiness and food processing, Italy offers advanced technologies and experience in sustainable and traceable food systems. As a leader in high-quality and sustainable agri-food production, Italy sees great potential in expanding trade in this area.

At the same time, we are actively engaging to ease market access for Italian agri-food products in Vietnam. Health and pharmaceuticals is another sector that continues to expand in terms of export volumes. Luxury and fashion, meanwhile, will present significant opportunities in the near future due to Vietnam’s rapidly-expanding middle class and increasing purchasing power.

What primary challenges or obstacles may hinder the further strengthening of economic and trade relations between Vietnam and Italy?

While Vietnam-Italy economic relations continue to strengthen, certain structural challenges remain. One of the most pressing is the development of infrastructure and energy networks, which are critical pillars supporting industrial competitiveness, trade logistics, and Vietnam’s long-term sustainability objectives. In this regard, Italy intends to actively contribute to the improvement of transport infrastructure and energy systems, and we see opportunities for Italian businesses to integrate into Vietnam’s ambitious modernization plans, particularly in the transportation sector.

At the same time, Italy is closely following Vietnam’s efforts under the National Power Development Plan VIII (PDP8) and the Just Energy Transition Partnership (JETP), and we are committed to accompanying the country’s green transition through concrete involvement in strategic projects such as the Bac Ai pumped storage hydropower plant. These initiatives offer a tangible framework for enhanced bilateral cooperation in renewable energy, smart grids, and sustainable engineering.

International trade is now marked by a host of concerns. How does this affect Vietnam and the trade and investment relations between the two countries?

The international context has not significantly disrupted trade between Italy and Vietnam. One key reason is that Vietnam is not currently subject to country-based trade defense measures in key markets. When it comes to investments, the situation is more complex. The general climate of uncertainty, which is linked to geopolitical tensions, high interest rates, and supply chain volatility, can result in delayed investment decisions. Investors are more cautious, and some projects may be postponed as companies reassess risks.

What suggestions do you have for Vietnam to improve and further promote trade and investment relations between the two countries, especially in creating favorable conditions for businesses to take advantage of opportunities from the EUVFTA?

We commend Vietnam for its progress in improving its business climate and note the government’s growing attention to the concerns raised by the business community. Continued efforts in this direction are key to fully leveraging the EUVFTA. We encourage Vietnam to continue streamlining procedures in key areas such as work visa issuances, customs operations, and investment licensing. These reforms are essential to attract quality FDI and facilitate the operations of international companies. Support for small and medium-sized enterprises (SMEs) and legal certainty in areas like intellectual property are also important steps towards building an even more competitive economic environment.