Leslie Massey
Australia and Vietnam have a strong economic relationship, with both countries recognising the rules-based global trading system as the basis for international trade. They are both members of the World Trade Organization (WTO) and have entered into several free trade agreements (FTAs) together. These include the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership Agreement (RCEP). These agreements aim to reduce tariffs, eliminate certain barriers to trade and investment, and create stronger economic ties between the two countries.
| Characteristics | Values |
|---|---|
| Number of FTAs | 3 |
| Types of FTAs | ASEAN-Australia-New Zealand FTA (AANZFTA), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Regional Comprehensive Economic Partnership (RCEP) |
| AANZFTA entry into force | 1 January 2010 |
| CPTPP entry into force | 30 December 2018 for Australia, 14 January 2019 for Vietnam |
| RCEP entry into force | 1 January 2022 |
| RCEP countries | Australia, Brunei Darussalam, Cambodia, China, Indonesia, Japan, Laos, Malaysia, New Zealand, the Philippines, Republic of Korea, Singapore, Thailand, and Vietnam |
| CPTPP countries | Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam |
| Australia's contribution to Vietnam's clean energy transition | AU$105 million |
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What You'll Learn
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
Australia and Vietnam have multiple free trade agreements (FTAs) in place. One of these is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into force for Australia on 30 December 2018, and for Vietnam on 14 January 2019. The CPTPP is a free trade agreement between 12 countries, including Australia and Vietnam, that aims to enhance trade and economic integration. The CPTPP incorporates most of the provisions of the abandoned Trans-Pacific Partnership (TPP) agreement, which was signed in February 2016 but never entered into force due to the withdrawal of the United States. The CPTPP addresses trade in goods, trade in services, investment, economic and technical cooperation, and creates new rules for electronic commerce, intellectual property, government procurement, competition, and support for small and medium-sized enterprises.
The CPTPP is a separate treaty that references the provisions of the TPP agreement, except for a limited set of suspended provisions. It is a "gold standard" agreement that sets high standards for its members, including a record of complying with international trade commitments and gaining consensus support from other CPTPP members. The CPTPP is particularly relevant to the Indo-Pacific region, which is currently the world's leading region for economic growth, offering significant opportunities for trade and expansion. The CPTPP members have combined economies representing 14.4% of global gross domestic product, or approximately US$15.8 trillion as of 2024, making it one of the world's largest free trade areas by GDP.
The CPTPP includes an e-commerce chapter that mandates signatories to adopt laws to protect consumers and combat fraud and deceptive commercial activities. It also includes a chapter on state-owned enterprises, requiring signatories to share information and address the issue of state intervention in markets. The agreement provides for the most detailed standards for intellectual property protection of any trade agreement, along with protections for corporations operating abroad.
The CPTPP is administered by the CPTPP Commission, which was established when the agreement entered into force. Australia assumed the Chair of the CPTPP Commission in 2025, with a focus on increasing trade, facilitating trade processes, and spreading the benefits of trade to ensure inclusive and sustainable trade practices. The CPTPP is an important agreement for Australia, providing opportunities for economic growth and job creation, as well as boosting trade and investment for Australian businesses.
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Regional Comprehensive Economic Partnership (RCEP)
Australia and Vietnam have multiple free trade agreements (FTAs) in place, including the Regional Comprehensive Economic Partnership (RCEP). RCEP is a regional free trade agreement that came into force on 1 January 2022 for ten original parties: Australia, Brunei Darussalam, Cambodia, China, Japan, Laos, New Zealand, Singapore, Thailand, and Vietnam. For the Republic of Korea, it came into force on 1 February 2022, for Malaysia on 18 March 2022, and for Indonesia on 2 January 2023. The Philippines joined on 2 June 2023.
RCEP negotiations were launched in November 2012 between the Association of Southeast Asian Nations (ASEAN) and ASEAN's free trade agreement partners, which include Australia and Vietnam. RCEP provides Australian businesses with new access and improved rules for growing trade and investment in the Indo-Pacific region. It covers trade in goods, trade in services, investment, economic and technical cooperation, and creates new rules for electronic commerce, intellectual property, government procurement, competition, and small and medium-sized enterprises.
RCEP is not as comprehensive as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), another free trade agreement in the region that includes some of the same countries. RCEP does not establish unified standards on labour and the environment, or commit countries to open services and other vulnerable areas of their economies. However, simulations have shown that RCEP and CPTPP together would more than offset the global negative economic effects of the China-United States trade war, with RCEP being more significant than CPTPP, and offering especially important benefits for China, Japan, and Korea.
Australia and Vietnam are both members of the World Trade Organization (WTO), with Australia joining at its creation in January 1995 and Vietnam in January 2007. They are also parties to the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), which entered into force in January 2010. Australia and Vietnam also work together across APEC's many workstreams, in line with the supportive economic relationship built through AANZFTA, CPTPP, and RCEP.
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ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA)
Australia and Vietnam have a strong economic relationship, with both countries working together to promote free and open trade internationally. This relationship is facilitated by their mutual participation in several free trade agreements (FTAs). FTAs are treaties between two or more countries that aim to reduce or eliminate trade and investment barriers, fostering stronger economic ties.
The ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) is one such FTA that includes both Australia and Vietnam. AANZFTA is an agreement between ASEAN Member States (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam), Australia, and New Zealand. It came into force in January 2010 for Australia and Vietnam, along with six other countries, with Indonesia joining in 2012. AANZFTA provides extensive tariff reduction and greater certainty for service suppliers and investors. It has eliminated tariffs on 96% of Australia's exports to ASEAN nations, compared to only 67% before the agreement.
In addition to AANZFTA, Australia and Vietnam are also party to other FTAs, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP). CPTPP includes Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, and Vietnam. It entered into force on 30 December 2018 for Australia and 14 January 2019 for Vietnam. RCEP, on the other hand, is a more recent agreement that includes ASEAN member countries and their FTA members. It aims to eliminate up to 90% of tariffs within 20 years and streamline trade procedures.
These FTAs have contributed to the development of Vietnam, with successive Australian governments prioritizing this relationship. For example, during a recent visit, the Australian Prime Minister pledged AU$105 million (US$69 million) to support Vietnam's clean energy transition. Australian businesses have also invested US$2 billion across 596 projects in Vietnam, spanning sectors from banking to education to manufacturing.
Overall, the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) is a vital component of the economic relationship between Australia and Vietnam, reducing tariffs and enhancing trade and investment opportunities for both countries.
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Australia's support for Vietnam's WTO membership
Australia and Vietnam have a strong bilateral relationship, with Australia supporting Vietnam's economic growth and development. This includes Australia's active support for Vietnam's accession to the World Trade Organization (WTO), of which both countries are members.
Australia was a strong advocate for Vietnam's accession to the WTO, providing technical assistance to help Vietnam implement its WTO obligations. Vietnam joined the WTO in January 2007, and since then, the two countries have collaborated within the organization. They are both members of the Cairns Group, coordinated by Australia, which advocates for agricultural trade liberalization. In 2017, both countries supported the Buenos Aires Declaration on Women and Trade, which aims to remove barriers and foster women's economic empowerment.
Australia and Vietnam also work together in the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), which came into force for both countries in January 2010. This agreement has led to extensive tariff reductions and greater certainty for services suppliers and investors. Additionally, they are partners in the Regional Comprehensive Economic Partnership Agreement (RCEP), which entered into force in January 2022 and includes ten Indo-Pacific countries.
Australia has welcomed Vietnam's steps towards economic reform and its contribution to agricultural trade liberalization. Australia supports Vietnam's pursuit of its economic integration agenda and its efforts to become a high-income country by 2045. Australia has provided over $3 billion in development assistance to Vietnam, including support for infrastructure, COVID-19 vaccinations, and scholarships.
In summary, Australia has played a significant role in supporting Vietnam's WTO membership and continues to work closely with Vietnam to promote free and open trade, strengthen the regional economy, and support Vietnam's development goals.
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Benefits of FTAs for Australia
Australia has 18 free trade agreements (FTAs) and is working towards increasing this number. FTAs are treaties between two or more countries designed to reduce or eliminate certain barriers to trade and investment, and to facilitate stronger trade and commercial ties between participating countries.
One of the main benefits of FTAs for Australia is increased economic growth and job creation. FTAs deliver new growth opportunities to big and small Australian businesses through greater trade and investment. Australian consumers and businesses also benefit from improved access to a wider range of competitively priced imported goods and services.
Another advantage of FTAs for Australia is that they provide a platform for international trade liberalisation. For example, the Australia-United States FTA (AUSFTA) is a preferential trade agreement that provides increased access to the large American market for Australian producers. Similarly, the ASEAN-Australia-New Zealand FTA (AANZFTA) delivers extensive tariff reduction and greater certainty for service suppliers and investors.
FTAs can also help to strengthen regional support for WTO reform and identify areas of common interest in multilateral negotiations, plurilateral initiatives, and reform. For instance, Australia and Vietnam are both members of APEC, which works to support economic growth and development in the Asia-Pacific region.
Furthermore, FTAs can provide opportunities for Australian businesses to discover new trade opportunities through the Australian Government’s Free Trade Agreement Portal. This portal was launched in December 2020 to help businesses make the most of Vietnam’s network of free trade agreements.
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Frequently asked questions
Yes, Australia and Vietnam have signed three key free trade agreements (FTAs).
The three key FTAs are the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership Agreement (RCEP).
The AANZFTA entered into force on 1 January 2010 for eight countries, including Australia and Vietnam.
The objective of the RCEP is to eliminate close to 90% of tariffs within 20 years, as well as reduce tariffs and simplify trade procedures with unified rules of origin.
