Vietnam, Pakistan Explore Preferential Trade Agreement to Boost Bilateral Ties
In a move toward closer and more long-term economic cooperation, Vietnam and Pakistan have formally begun negotiations on a bilateral preferential trade agreement (VPPTA).
The Ministry of Industry and Trade said that the action was taken while Minister of Industry and Trade Nguyen Hong Dien was in Pakistan from October 13 to 15.
The Vietnamese minister and Pakistani Commerce Minister Jam Kamal Khan met in Islamabad on Tuesday, October 14, to talk about ways to improve trade and investment ties between the two countries.
Given Pakistan’s advantageous position in the manufacturing-trade network connecting South Asia and the Middle East, Dien stated during the discussions that Vietnam views the country as one of its most promising South Asian partners.
He did, however, note that bilateral trade is still small in comparison to its potential. It increased to roughly 705 million USD in 2023, 850 million USD in 2024, and almost 600 million USD in the first nine months of 2025.
The Vietnamese minister suggested that in order to further advance economic and trade relations, the two nations should eliminate tariffs on each other’s goods, enhance transportation and logistics connectivity, and support business collaborations in industries where the two sides have complementary advantages, including textiles, apparel, leather, footwear, Halal food, agro-processing, mechanical engineering, materials, energy, pharmaceuticals, digital technology, and innovation.
In addition, he called for tariff reductions and more favorable conditions for Vietnamese imports, asking Pakistan to examine the high import taxes and technical requirements that have restricted the entry of Vietnamese goods.
According to Dien, the beginning of the VPPTA talks is an important step that shows how determined both governments are to progressively strengthen their economic ties.
He pointed out that the deal will facilitate the easier entry of their products into each other’s markets in the near future by directly addressing existing tariff and non-tariff bottlenecks. Additionally, businesses will save money, become more competitive, and increase bilateral trade if import tariffs are selectively reduced, customs procedures are streamlined, and rules of origin are relaxed.
Additionally, it will give Vietnam and Pakistan a special preferential mechanism that will keep their products from being at a competitive disadvantage when compared to those of third-world competitors.
The agreement is anticipated to increase both economies’ resilience to global economic volatility, diversify export markets, lessen reliance on important trading partners, and provide more space for the independent and sustainable growth of their companies.
The Pakistani minister, for his part, praised Vietnam’s viewpoints and said he hoped the two nations would strengthen their cooperation in areas such as banking, civil aviation, health care, investment, Halal industry, and trade in services.
He claimed that while Pakistan’s expanding industrial base, strategic location, and new investment opportunities present enormous potential for cooperation, particularly in trade diversification, industry, and technology transfer, Vietnam’s recent robust economic growth and industrial advancements serve as an example for developing nations.
To maximize market opportunities, he recommended strengthening trade promotion, expanding business delegation exchanges, and fostering bilateral cooperation mechanisms.
The two ministers decided to start the VPPTA negotiations right away in order to sign the agreement by the end of 2025. Additionally, they committed to strengthening trade and investment promotion and business ties, particularly in the areas of textiles, the Halal industry, processed agricultural and marine products, building materials, minerals, and logistics.
In the coming years, the VPPTA is anticipated to help the two nations leverage their complementary strengths and boost bilateral trade turnover, which is currently less than $1 billion USD annually, by five to ten times.
Later that day, the two ministers attended the Vietnam-Pakistan Business Forum, which brought together dozens of businesses from both countries, and signed a joint declaration to begin the VPPTA negotiations.
