Vietnam and the Czech Republic 75-year diplomatic relationship celebration: A New Chapter in Economic Cooperation

Vietnam’s Prime Minister Pham Minh Chinh has embarked on a landmark official visit to the Czech Republic from January 18~ 20, 2025 at the invitation of Czech Prime Minister Petr Fiala. This was an activity to reinforce the 75-year diplomatic tie between the two countries. The historical relationship between Vietnam and Czechia, established in 1950, has evolved into a robust partnership grounded in mutual trust, respect, and shared interests. The elevation of bilateral relations to a Strategic Partnership on this trip marks a significant milestone, reinforcing a commitment to deepening cooperation across economic, trade, and investment sectors, with positive implications for both nations and broader regional and global stability.

Exploring Synergies in Economic and Investment Cooperation

Economic collaboration is a linchpin of the Vietnam-Czechia partnership, embodying their shared vision for sustainable growth and mutual prosperity. During Prime Minister Pham Minh Chinh’s official visit to Czechia, both countries committed to deepening ties through the Vietnam-Czechia Intergovernmental Committee on Economic Cooperation, which serves as a critical platform for fostering trade and investment.

The discussions highlighted several key sectors, including renewable energy, green technologies, infrastructure, automotive industries, and the exploration and processing of rare earth elements. Vietnam’s dynamic market and Czechia’s industrial expertise offer complementary strengths that pave the way for impactful collaborations. Other focal areas include food processing, mineral exploitation, and advanced manufacturing.

Key Sectors: Automotive, Energy, Education and Training

Vietnam and the Czech Republic have witnessed robust trade growth, with bilateral trade volume reaching $2,046 billion in 2024, an 80% increase from the previous year. The Czech Republic has invested in 41 projects in Vietnam, focusing on areas like automobile manufacturing, energy, and infrastructure. Notable initiatives include the operation of BOT power plants in northern Vietnam and collaborative ventures in clean energy.

From Vietnam’s perspective, Czech firms view the country not only as a high-potential market but also as a gateway to the ASEAN region. The EU-Vietnam Free Trade Agreement (EVFTA) and the Investment Protection Agreement (EVIPA) further strengthen this outlook, creating a conducive environment for foreign investment and trade.

The elevation of bilateral relations to a Strategic Partnership opens a range of promising opportunities for economic, trade, and investment cooperation between the two countries, particularly for Vietnam. Key potential sectors include:

1. Automobile Manufacturing: With Skoda Auto planning to commence production in Vietnam, this development not only creates employment opportunities and attracts investment but also contributes to the growth of Vietnam’s automotive industry.
2. Energy: The focus on renewable and nuclear energy, where the Czech Republic possesses advanced technology and expertise, offers significant potential. Collaboration in this sector can enhance Vietnam’s energy security and promote sustainable development.
3. Education and Training: Agreements such as pilot training and student exchange programs contribute to improving the quality of Vietnam’s workforce, aligning with the demands of both domestic and international labor markets.

Leveraging Trade Agreements to boost Bilateral Trade

The EU-Vietnam Free Trade Agreement (EVFTA) and the pending EU-Vietnam Investment Protection Agreement (EVIPA) form the bedrock of this cooperation. Both nations emphasized their commitment to fully utilize these agreements to create transparent, equitable, and robust investment opportunities.

Vietnam and Czechia are dedicated to increasing bilateral trade through targeted initiatives and enhanced market access:

• Direct Flights and Connectivity: Both countries have agreed to explore the establishment of direct flights between Vietnam and Czechia. This initiative aims to enhance people-to-people exchanges, tourism, and trade, while also serving as a gateway for goods to reach Central and Eastern Europe efficiently.
• Mutual Market Access: Vietnam and Czechia will serve as entry points for each other’s goods into the ASEAN and the EU markets, respectively. The two governments encourage businesses to explore sectors where Czechia holds strengths, such as automotive supporting industries, renewable energy, machinery manufacturing, and chemical processing.
• Tourism and Visa Policies: Vietnam’s decision to exempt Czech nationals from visa requirements starting in 2025 is expected to significantly boost tourism and trade relations.

Agriculture emerged as another vital area for collaboration. Vietnam and Czechia aim to establish resilient supply chains, align technical standards, and adopt innovative, technology-driven agricultural practices. These efforts will not only enhance productivity but also boost export potential in both markets.

The recent elevation of Vietnam and Czechia’s bilateral relations to a strategic partnership signals a new chapter of deepened cooperation with far-reaching implications for both nations. As Vietnam strengthens its role in global trade and investment, this partnership promises to unlock various new opportunities.

Source: Tap Chi Cong San, Vietnam News, VTV Online, Quan Doi Nhan Dan.

By: Elsa Tuyet, C+ Consult.