In an interview recently granted to Vietnam News Agency, Tran Dinh Van, Vietnamese trade counsellor to Chile, said the enforcement of the trade pact will enable Vietnamese commodities to penetrate this market and the larger Latin America.
Immediately, Vietnamese items such as footwear, handicrafts, fertilizers, furniture and household utensils will subject to the zero import tariffs.
The tax cut mechanism will help sharpen the competitive edge of Vietnamese commodities compared to other regional countries of similar strength, said Van.
Chile and other Latin American countries are not as demanding as Japan and the European Union, thus Vietnamese products find it easier to penetrate these markets, he said.
Since 2010 Vietnamese exports to Chile have grown by more than 20% annually, with the 2013 figure estimated at US$250 million.
Once Vietnamese products sell well in Chile, they are likely to penetrate 33 other Latin American markets easily.
Among these markets, Chile, Mexico, Peru and Colombia recently established the Pacific Alliance which makes up half the total trade value of the region.
Van said many Asian countries have applied for informal membership of this organisation. Chile has signed trade agreements with these four markets and other Latin American economies.
In addition, Chile is the biggest Latin American country investing overseas, mostly in its trading centres and supermarket chains.
If Vietnamese commodities gain a firm foothold in Chile, they will be able to enter other markets in the Pacific Alliance and their neighbours, said Van.
Vietnam has established trade ties with all Latin American nations, with two-way trade value hitting US$5 billion in 2011 and estimated US$6.5 billion in 2013.
According to the trade counsellor, with a population of 600 million and an annual GDP per capita income of US$11,500, Latin America offers plenty of opportunity to Vietnamese businesses.
To take advantage of these markets, Van advised Vietnamese businesses to carefully consider factors, including their geographical locations, in order to reduce costs.
Trade promotions should be focused on South American economies as Vietnam has developed fine trade relations with Brazil, Argentina, Peru and others, Van suggested.
If businesses select Central American and Caribbean nations for their trade promotion campaigns, they should choose nations standing close to each other to save time and costs, he said.
Van suggested businesses and craft associations contact Vietnamese trade offices in Latin America to get necessary support for their ambitious promotion plans.
