EU has invested 28 billion Euros in Vietnam
The Vietnam-European Union Free Trade Agreement (EVFTA) is one of Vietnam’s first new-generation Free Trade Agreements (FTAs). It is also the first new-generation agreement that the EU has signed with a developing country in the Asia-Pacific region.
According to the Ministry of Industry and Trade, after 4 years of implementation, Vietnam's import and export turnover to the EU increased by nearly 50%. In the opposite direction, goods exported from the EU to Vietnam increased by more than 40%.
Mr. Luong Hoang Thai - Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade) said that if in 2019 when the Agreement began to be implemented, Vietnam's exports to the EU were only over 35 billion USD, up to now, exports to the EU have reached over 51 billion USD in 2023. This result shows that, through the implementation phase of the Agreement, Vietnam has become the 17th largest trading partner of the EU and the largest trading partner of the EU in the ASEAN region.
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| Not only does it promote exports and expand export markets for Vietnam's key products, the EVFTA also increases Vietnam's attractiveness to EU investors. Illustrative photo |
Not only does it promote exports and expand export markets for Vietnam's key products, the EVFTA also increases Vietnam's attractiveness to EU investors. According to statistics from the European Chamber of Commerce in Vietnam (EuroCham), the EU is currently the 6th largest foreign direct investor in Vietnam, with 28 billion Euros in 2,450 projects nationwide. In 2023, despite the global FDI decline, in the first nine months of the year, EU "eagles" added 800 million Euros to the Vietnamese market.
Mr. Trinh Minh Anh - Chief of Office of the Steering Committee for International Economic Integration, Ministry of Industry and Trade also assessed that the EVFTA Agreement contributes to improving the business environment, facilitating investment and promoting direct investment from the EU and other countries in Vietnam. Investment in Vietnam is increasing due to taking advantage of the advantages created by the EVFTA, attracting more and more investment capital into high-tech manufacturing sectors, attracting large capital flows into high-quality service sectors such as finance, banking, insurance, energy, telecommunications, transportation, etc.
“ As of May 20, 2024, the total FDI of the EU in Vietnam reached 29.88 billion USD (excluding investment through a third party). The EU ranked 5th out of 140 countries and territories with capital invested in Vietnam” - Mr. Trinh Minh Anh informed and added that the EU is one of the five largest foreign direct investors in Vietnam (along with Korea, Japan, Singapore and Taiwan (China). The investment trend of the EU is still mainly focused on high-tech industries, recently there has been a tendency to develop more focused on service industries (post and telecommunications, finance, office for rent, retail...).
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| European investors have technological advantages, so they have actively contributed to technology transfer, creating a number of new industries and new jobs... Illustrative photo |
European investors have advantages in technology, so they have actively contributed to technology transfer, creating a number of new industries, occupations and new products with high technology content, creating more new jobs... A number of large EU corporations are operating effectively in Vietnam, such as BP (UK), Shell Group (Netherlands), Total Elf Fina (France, Belgium), Daimler Chrysler (Germany), Siemen, Alcatel Comvik (Sweden)...
Thus, the EU has brought in a large source of foreign currency, contributing to promoting Vietnam's development and international economic integration, helping Vietnam participate in the global value chain and diversify economic relations with other partners.
Promoting investment attraction, creating momentum for Vietnamese enterprises
According to the Director of the Multilateral Trade Policy Department, in fact, the EU has always been Vietnam's most important market. Currently, Vietnam's exports to the EU account for about 12-15% of the country's total export turnover. More importantly, this is a market with a very large scale and capacity, and with great potential in science and technology and management. However, in recent times, the world context has had many unfavorable developments for the implementation of the Agreement.
EuroCham's Business Confidence Index (BCI) survey also highlighted a number of obstacles that European businesses face in making the most of the EVFTA, such as issues related to legal requirements, recognition of international standards, awareness of the agreement, customs clearance procedures, technical barriers especially in the field of product certification and testing...
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| EuroCham Vietnam Chairman Dominik Meichle |
“ Despite the challenges, we remain optimistic about the potential of the EVFTA. Going forward, EuroCham is committed to working with the Vietnamese Government to address these challenges and ensure that the EVFTA delivers its full potential for both sides,” EuroCham Vietnam Chairman Dominik Meichle pledged, recommending that investment in EVFTA training programs will help businesses understand the terms of the Agreement. In addition, businesses on both sides should prioritize innovation and adaptation to meet the evolving standards of both markets.
Meanwhile, proposing solutions to help domestic enterprises take advantage of incentives from EVFTA as well as attract investment from the EU to Vietnam, Director of the Department Luong Hoang Thai said that if Vietnam can attract investment capital from the EU more strongly in the coming time, this will be a very good basis to establish a new supply chain, participating in the global network with high standards.
Director Luong Hoang Thai analyzed that in the context of Vietnam strongly promoting global trends, such as green transformation, digital transformation and actively participating in the global supply chain and emerging as a place considered by international investors as the world's factory, Vietnam is trying to be in a position to participate in this new supply chain.
Therefore, EVFTA is a very good mechanism for Vietnam and the EU to promote participation in building the new frameworks mentioned above, and this is also a driving force for Vietnam to develop sustainable exports in fields with higher standards, not in simple industries that only do assembly as before.
“From that perspective, Vietnam not only needs to promote exports to the EU but also needs to promote imports from the EU, promote investment attraction from the EU to be able to harmoniously intertwine the interests of both sides” - Director of the Department Luong Hoang Thai commented and said that Vietnam is currently having a huge trade surplus with the EU, but the EU is the place with source technology that Vietnam really needs to import, therefore, if Vietnam can attract investment capital from the EU more strongly in the coming time, this will also be a very good basis for Vietnam to establish a new supply chain and participate in the global supply network with high standards, with the new trends that Vietnam is pursuing.
Source: https://congthuong.vn/hiep-dinh-evfta-thu-hut-dau-tu-tao-suc-bat-cho-doanh-nghiep-tham-gia-chuoi-cung-ung-toan-cau-336244.html
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