Vietnam and Mercosur Conclude First Trade Round as Hanoi Diversifies Beyond Washington

Vietnam has opened a second front in its trade diplomacy, and it looks nothing like the one in Washington.

The first round of negotiations for a Preferential Trade Agreement between Vietnam and Mercosur concluded on 28 August after five days in Buenos Aires, according to Vietnam News Agency.

The opening session on 24 August was attended by Ambassador Roberto Alejandro Salafia, Argentina's Undersecretary for International Economic Negotiations and Integration, and Vietnamese Ambassador to Argentina Ngo Minh Nguyet. Both sides reaffirmed their determination to advance the negotiations in a spirit of goodwill, with a view to reaching a balanced agreement. On 26 August the delegations met Argentina's Minister of Foreign Affairs, International Trade and Worship, Pablo Quirno.

Mercosur comprises Argentina, Brazil, Paraguay and Uruguay. The negotiations were launched at the bloc's 67th summit in Foz de Iguazu in December.

Vietnam is the smaller partner here

The trade balance runs the opposite way to Vietnam's relationship with the United States, and that is not incidental.

Two-way trade between Vietnam and Mercosur totalled $11.46 billion in the first eleven months of 2025, roughly flat year on year. Vietnamese exports to the bloc rose 15.9% to $3.59 billion while imports fell 4.8% to $7.87 billion — leaving Vietnam with a deficit of more than $4 billion.

Argentina alone accounted for $4.27 billion in 2025 and is Vietnam's third-largest trading partner in Latin America. Vietnamese exports there surged 68.7% to $876.7 million, while imports from Argentina fell 5.3% to $3.39 billion.

Set that against the United States, where Vietnam posted a $114 billion surplus in the first half of 2026 — the largest of any country — while working to complete a tariff deal with Washington amid US concerns over transshipped goods.

An economy with a trade-to-GDP ratio approaching 170% and its largest surplus concentrated in one increasingly difficult market has obvious reasons to build relationships where the balance runs the other way.

Mercosur is opening up

The timing works because the bloc has been moving in the same direction.

Analysts speaking to Vietnam News Agency in Argentina said the outlook is buoyed by Mercosur's increasingly open stance on international trade, noting it recently concluded a deal with the European Union and earlier signed a free trade agreement with Singapore.

Bilateral relationships within the bloc are developing alongside the group negotiation. The fourth meeting of the Vietnam-Uruguay Joint Committee on Economic, Trade and Investment Cooperation took place in Hanoi on 18 August, with bilateral trade reaching $148.35 million in the first half of 2026, up 21.8%.

What to watch

The negotiating calendar is the first indicator. A preferential trade agreement is narrower than a full FTA, which should make it faster — but Mercosur's EU deal took over two decades.

The second is what Vietnam seeks. With exports to the bloc at $3.59 billion against imports of $7.87 billion, market access for Vietnamese goods is the obvious priority, and agricultural competition with four commodity exporters is the obvious obstacle.

The third is Washington. Every diversification agreement Hanoi signs strengthens its position marginally in the negotiation that actually matters for its economy.