In a significant step toward deepening economic integration, Vietnamese Minister of Industry and Trade Nguyen Hong Dien and Cambodian Minister of Commerce Cham Nimul met on April 28, 2025, to chart a bold path for bilateral trade. The talks, held in Hanoi, underscored a shared vision to elevate trade between the two nations to US$20 billion, a target that reflects both ambition and the growing complementarity of their economies. With recent trade figures showing robust growth, the ministers signed a landmark agreement to promote trade over the 2025-26 period, setting the stage for enhanced cooperation in logistics, border trade, and anti-smuggling efforts.
A Foundation of Friendship and Economic Synergy
The discussions between Dien and Nimul highlighted the long-standing friendship between Vietnam and Cambodia, a relationship that has increasingly translated into economic gains. Both ministers expressed satisfaction with the progress made in recent years, describing economic and trade partnerships as a cornerstone of their bilateral ties. Last year, total trade between the two countries reached $10.1 billion, marking a 17.5% increase from the previous year and reversing a prior downward trend. This recovery, sustained amidst global economic volatility, signals a resilient partnership. 
In the first quarter of 2025, trade revenue climbed to $3.2 billion, a 10.2% year-on-year rise. Vietnam exported $1.3 billion worth of goods to Cambodia while importing $1.9 billion, reflecting a trade balance that favors Cambodia. As Vietnam stands as Cambodia’s third-largest global trading partner—behind China and the United States—and the largest within ASEAN, the relationship holds strategic importance for both nations. Cambodia, in turn, ranks as Vietnam’s fourth-largest trading partner in the regional bloc.
Minister Dien emphasized the evolving nature of this trade, pointing to improvements in quality, the adoption of modern channels like e-commerce, and the role of young entrepreneurs driving innovation. “With a strong friendship, effective cooperation, and complementary trade, Vietnam and Cambodia aim for US$20 billion in bilateral trade” said Dien, highlighting the potential for tech-driven growth and market expansion.
Addressing Challenges in Border Trade
While the ministers celebrated past achievements, they also acknowledged persistent challenges, particularly in border trade. A significant portion of trade between Vietnam and Cambodia occurs through border regions, often informally. Dien called for a shift from unofficial to official trade channels to ensure transparency and sustainability. He stressed the need for professional trade promotion initiatives tailored to business demands, aiming to unlock untapped market potential and foster balanced growth.
Cham Nimul echoed these sentiments, proposing the creation of a Vietnam-Cambodia bilateral trade cooperation committee. Staff from both ministries would collaborate to develop a detailed implementation plan, ensuring that policy translates into actionable results. Additionally, she revealed Cambodia’s intent to explore projects in border economic zones, which could facilitate smoother trade and investment by creating favorable conditions for businesses on both sides.
Logistics infrastructure and distribution networks in border areas emerged as a priority during the talks. Both ministers agreed to accelerate development in these sectors, recognizing that efficient connectivity is critical to achieving their trade targets. They also committed to combating smuggling and trade fraud, issues that undermine legitimate commerce in border regions. Strong coordination and information sharing at the expert level were identified as key mechanisms to minimize disputes and enhance mutual understanding.
A New Trade Agreement for 2025-26
A highlight of the April 28 meeting was the signing of an agreement to promote Vietnam-Cambodia trade for the 2025-26 period. Representing their respective governments, Dien and Nimul inked a deal that offers preferential tariffs on a range of competitive goods from both countries. These tariffs are notably more favorable than those under the ASEAN Trade in Goods Agreement (ATIGA), providing a significant incentive for businesses to deepen cross-border trade.
The agreement also includes provisions for trade promotion programs and business networking events, designed to strengthen ties between Vietnamese and Cambodian enterprises. Technical cooperation at the expert level will further support these efforts, ensuring that both sides are equipped to address trade remedies or disputes proactively. While specific details of the tariff reductions remain undisclosed, the pact is expected to boost sectors where each country holds a comparative advantage, potentially spanning agriculture, manufacturing, and technology.
Broader Implications for Regional Integration
The Vietnam-Cambodia trade talks carry implications beyond their bilateral relationship, contributing to broader ASEAN economic integration. As neighboring countries with shared borders and complementary economies, their commitment to formalizing trade channels and enhancing logistics aligns with regional goals of connectivity and sustainable growth. Vietnam’s role as a manufacturing hub and Cambodia’s growing market for consumer goods and raw materials create a synergy that could serve as a model for other ASEAN partnerships.
Analysts suggest that achieving the US$20 billion trade target will require sustained investment in infrastructure, particularly in border areas where bottlenecks often delay goods. Digital trade platforms, which both ministers referenced as a growth area, could also play a pivotal role. E-commerce has gained traction in both countries, driven by a young, tech-savvy population, and offers a modern avenue to expand trade without the physical constraints of traditional markets.
However, challenges remain. Informal trade, while flexible, often evades regulation, leading to revenue losses for both governments. Smuggling, a persistent issue in border zones, not only undercuts legitimate businesses but also poses security risks. The ministers’ focus on anti-fraud measures signals a recognition of these hurdles, though the effectiveness of their strategies will depend on implementation and cross-border cooperation.
Economic Context and Global Positioning
The trade relationship between Vietnam and Cambodia must be viewed within the context of their positions in the global economy. Vietnam’s rapid industrialization has positioned it as a key player in ASEAN, with a diversified export base that includes electronics, textiles, and agricultural products. Cambodia, meanwhile, has emerged as a destination for low-cost manufacturing and a supplier of raw materials, though it remains heavily reliant on imports for consumer goods.
Vietnam’s trade surplus with many partners contrasts with its deficit with Cambodia, a dynamic that reflects the latter’s role as a source of inputs like timber and agricultural commodities. Balancing this trade will require Cambodia to diversify its export offerings, potentially through value-added processing, while Vietnam could increase investments in Cambodian markets to stimulate demand for its goods.
Globally, both nations face pressures from economic fluctuations and geopolitical tensions. The recovery of their bilateral trade—evident in the 17.5% growth in 2024—demonstrates resilience, but sustained progress will hinge on their ability to shield their economies from external shocks. The emphasis on modern trade channels and young entrepreneurship offers a buffer, as digital economies are often less vulnerable to traditional disruptions like supply chain delays.
Looking Ahead: A Test of Commitment
As Vietnam and Cambodia embark on this ambitious journey toward a US$20 billion trade milestone, the success of their partnership will rest on translating agreements into tangible outcomes. The 2025-26 trade promotion deal provides a framework, but its impact will depend on how effectively both nations address logistical, regulatory, and security challenges in their border regions. With initiatives like the proposed bilateral trade committee and projects in economic zones, there is reason for optimism, though questions linger about the pace of implementation.
For businesses and communities on both sides, the potential benefits are clear: greater market access, lower tariffs, and improved infrastructure could drive economic growth and create jobs. As these reforms unfold, the partnership between Hanoi and Phnom Penh may well become a cornerstone of ASEAN’s economic future, proving that neighborly cooperation can yield dividends even in a complex global landscape.
