EuroCham: Productive Dialogue is Key for Vietnamese, European Businesses

President of the European Chamber of Commerce (EuroCham) in Vietnam Dominik Meichle shared in a recent interview that one of the outstanding results of the results of the implementation of the EU-Vietnam Free Trade Agreement (EVFTA) is its contribution to strengthening Vietnam's position as an attractive destination. It creates a "push" to attract FDI capital flows from the EU to Vietnam.
June 15, 2024 | 11:36
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Dominik Meichle assessed the impact of nearly 4 years of implementing the EU-Vietnam Free Trade Agreement (EVFTA) on businesses from both sides. In particular, Vietnam rose to the top and became one of the only two ASEAN countries, along with Singapore, to have a free trade agreement with the EU.

"EVFTA has the biggest impact on Vietnam's exports to Europe. Specifically, Vietnam's export turnover to the EU market increased from about EUR 35 billion in 2019 to more than EUR 48 billion in 2023. Sectors such as electronics, textiles, footwear, agriculture, and fisheries all grew strongly. In contrast, EU exports to Vietnam only increased from EUR 11 billion in 2019 to EUR 11.4 billion in 2023," said Dominik Meichle.

In addition, according to EuroCham's Business Confidence Index, a quarter of EuroCham Vietnam members said they are benefiting from the EVFTA through tax reductions, better market access and increased competitiveness.

Although this is a good start, EuroCham expects that in the coming time, he said, EVFTA will bring a more positive and far-reaching impact, promoting a transparent and predictable business environment in Vietnam. Thereby, creating conditions for win-win results for both the EU and Vietnam.

(Photo: VietnamFinance)
President of the European Chamber of Commerce in Vietnam Dominik Meichle said that EVFTA contributes to strengthening Vietnam's position as an attractive destination for European investment, creating a "push" to attract FDI capital flows from the EU to Vietnam (Photo: VietnamFinance).

"EVFTA contributes to bringing the EU to the 6th position among the largest FDI investors in Vietnam with 2,450 projects, total investment capital of more than EUR 28 billion. In the context of the global FDI trend of decline, EU "eagles" still believe in Vietnam's potential and "poured" more than EUR 800 million into Vietnam from January to September 2023," he said.

Regarding the EVFTA's potential to attract more FDI to Vietnam, EuroCham President believes the EU-Vietnam Investment Protection Agreement (EVIPA) needs to be fully ratified so that Vietnamese and Europrean stakeholders can take advantage of it.

"Currently, EVIPA has been ratified by the European Parliament and 16/27 EU member states. However, EVIPA also needs to receive approval from each European Union member state. This is a complicated and time-consuming process but EuroCham is committed to continuing to actively support the EVIPA ratification process among European stakeholders as this will significantly improve investor confidence and open up opportunities to increase European investment in Vietnam," he affirmed.

Dialogues to promote economic growth and trade for both Vietnam and the EU

EuroCham Vietnam: Dialogues between Vietnamese and European Stakeholders Help Open Business Opportunities
EU is currently placing in the 6th position among the largest FDI investors in Vietnam (Photo: Getty Image),

Chairman Dominik Meichle added that Vietnam will become attractive "in the eyes" of foreign investors as it continues to persist in the process of simplifying customs procedures, developing infrastructure and streamlining approval processes. approval and public investment.

He suggested that Vietnamese Government can apply new solutions to promote the implementation of FTAs, including:

(1) Simplifying customs procedures through digital transformation, including the application of electronic customs data processing systems and certificates of origin of goods, plays a very important role. This is because simplifying customs procedures and facilitating trade not only significantly reduces customs clearance time, costs and errors, but also helps Vietnam become a more competitive competitor in international trade.

"EuroCham recognizes the Vietnamese Government's progress in this area and encourages further digitization initiatives to enhance Vietnam's attractiveness as a trade and investment destination," said Dominik Meichle.

2) Developing reliable infrastructure is the "backbone" of international trade. Progress on major projects such as the North-South Expressway and Long Thanh Airport appears promising even though challenges of stable electricity supply, addressing traffic congestion and the growing need for robust digital infrastructure remain.

Streamlining public investment and approval processes, as well as creating clearer and more favorable frameworks for public-private partnerships, will mitigate these problems and make it easier for companies in Europe to have expertise in infrastructure development that contributes more effectively to Vietnam's growth.

"The European market has great potential for Vietnamese businesses. To open up opportunities, Vietnamese businesses must comply with the sustainability regulations of the EU Green Deal (EGD)," he said.

Dominik Meichle added that regulations related to the areas of carbon emissions, deforestation and appraisal, require significant investments in skilled labor, technology and resources. However, instead of viewing these requirements as barriers to entry, Vietnamese businesses should view them as incentives to make strategic investments in their workforce and operations. By equipping employees with knowledge and skills in sustainable practices, compliance and green technology, businesses can stimulate innovation and drive long-term growth.

Also, Vietnamese businesses should consider adopting green technologies and practices—such as energy-efficient appliances, renewable energy sources, water recycling, and waste reduction techniques. It not only helps meet EU standards but also significantly reduces costs and increases operational efficiency, turning compliance into a competitive advantage.

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