Businesses from the EU should rapidly join hands with Vietnamese firms to seize the huge opportunities from the Vietnamese market, given by the EU-Vietnam Free Trade Agreement (EVFTA), experts said.
Vietnam will become a hub for European business in the ASEAN region
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Similarly, Henri-Charles Claude, president of the French Chamber of Commerce and Industry in Vietnam (CCIFV), said that Vietnam’s business climate is getting warmer, and entrepreneurs and investors should not be late.
In fact, more European delegations have come to Vietnam to look for business opportunities since last year and they are waiting for the time to bring their products to Vietnam, as the EVFTA, which is expected to come effective next year, promises greater market openness. Under the deal, many EU commodities, such as cars, machinery and equipment, alcohols, pharmaceuticals and temperate agricultural products, exporting to Vietnam will be exempted from import duties.
According to experts, the EVFTA commitments to a liberal investment and business environment, especially policies on competition and intellectual property protection at a high level, will accelerate investment flows from the EU to Vietnam. Then, Vietnam may become a transit point, linking the EU trade and investment in ASEAN.
European enterprises also believe that in addition to the advantage in investment attraction, Vietnam may also serve as a gateway for them to enter the ASEAN market as a whole.
Valentin Tran, director of Andros, a fruit processing company, described Vietnam as a fast growing economy, with a large population and plentiful raw materials, meeting the investment requirements of his company. From Vietnam, his company’s products can reach out to other markets of over 630 million people in ASEAN.
Vietnam is now also the destination for manufacturers and processors of garments, footwear, electronics, and automobile accessories, possibly signifying a shift of orders from China to Vietnam. This is considered a favorable condition for European suppliers of equipment and accessories.
Rising inflows
Experts said that the flow of investment capital and commodities from Europe into the domestic market is intensifying.
A recent survey released by EuroCham also showed that most of European correspondents forecast Vietnam will become a hub for European business in the ASEAN region and EVFTA will have significant impact on European businesses in Vietnam.
“Our members paint a positive, optimistic picture of the agreement, with 85 percent anticipating a significant or moderate impact on their business and investment plans in the long term,” Nicolas Audier, Co-Chairman of EuroCham.
Some 80 percent of EuroCham members also believe the EVFTA will improve Vietnam’s competitiveness compared to other countries such as China, Japan and South Korea, he added.
According to Audier, Vietnam is open for business as an attractive trade and investment destination as shown in the latest Business Climate Index (BCI). Under the BCI, Vietnam gained 84 points for the second quarter of 2018, up six points from the previous quarter. The sentiment of European businesses is at its strongest in 18 months, and just two points below the all-time high of the third quarter of 2016.
However, EuroCham also suggested that the government should improve the country’s business environment at a faster pace to help step up the reform of legal regulations in a move to reduce costs, time, and administrative procedures for enterprises.
The motivation for business development still heavily depends on the business environment, as well as the enthusiastic support and responsibility of law enforcement agencies, EuroCham noted.
