A fruit processing line for exports at An Giang Fruits-Vegetables and Foodstuff Join Stock Company (Source: VNA) Thestatement was made by Michael Behrens, Chairman of the European Chamber ofCommerce in Vietnam (EuroCham), at a conference on the 2017 Whitebook in Hanoion March 2.
TheWhitebook, annually published by EuroCham, provides a concise view of keyconcerns affecting European businesses in Vietnam in regards to trade,investment, growth and employment. This is the 9th edition of EuroCham’s annualadvocacy publication on trade and investment.
Partsof this year’s Whitebook were dedicated to the EVFTA, its implementation andits impact on business. Behrens said the first estimates of EVFTA’s impact showclear gains for Vietnam’s growth and welfare, as well as for overall tradebetween the EU and Vietnam.
Thecountry will be the bridge linking more than 500 million people in SoutheastAsia and more than 500 million Europeans - "a fantastic prospect",Behrens said.
Attendingthe event, Deputy Minister of Industry and Trade Hoang Quoc Vuong said theWhitebook was an effective tool for the Ministry of Industry and Trade (MoIT)to review policies and devise better solutions to improve the efficiency ofmanagement systems.
Vuongsaid the European Union is one of Vietnam’s most important trading partners,adding that in 2016, the EU was Vietnam’s second largest exporter with a totalexport turnover of nearly US$34 billion, accounting for over 19 percent of thecountry’s total export turnover.
Inthe context of the upcoming bilateral trade treaty, expected to be implementedin 2018, MoIT will endeavor to enhance internal resources and improve thebusiness environment, meeting the legitimate needs of local and European firmsoperating in Vietnam.
AttractiveFDI destination
Accordingto the Whitebook, with the expansion of market access for foreign investors, Vietnamis expected to witness a strong wave of foreign direct investment (FDI).
Inaddition to the numerous legal changes it has made in accordance with thetreaty, Vietnam has fundamental elements that contribute to its continuedgrowth.
Vietnamis in a demographic golden age, with 25 percent of its 90 million populationbetween 10 and 24 years old. GDP per capita is increasing dramatically and Vietnamhas the fastest-growing middle class in Southeast Asia (12.9 percent per annumover the period 2012-2020).
Withits high literacy rate and education levels, comparatively low wages,connectivity and a central location within ASEAN, more and more foreigninvestors are choosing Vietnam as their hub to service the Mekong region andbeyond, the book said.
Vietnam’sattractive profile is reflected in its welcoming approach to foreign directinvestment (FDI) in manufacturing activities. The gradual opening of mostservice sectors under Vietnam’s World Trade Organisation (WTO) commitmentsschedule that began in 2007 was completed in 2015.
Domesticlaw has expanded market access in some sectors beyond those included in Vietnam’sWTO commitments. For example, foreign shareholding in public companies waspreviously capped at 49 percent but is now generally open for up to 100 percentforeign ownership.
Vietnamalso grants investment incentives, including tax breaks, in areas such ashigh-tech, environmental technology, and agriculture, where European businessesare global leaders.
Vietnam’sdevelopment and its strong appeal to foreign investors are undeniable, the booksaid, but noted that the licensing process for foreign investment projects issometimes unclear.
Manyforeign investors also still face significant challenges when dealing with Vietnam’sbureaucracy. Tax filling, customs clearance, business registration andlicencing and other administrative procedures are often delayed. Businessesfind themselves spending resources on administration that they would prefer toinvest to expand their core activities.-VNA
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