09:01 | 06/03/2019 Cooperation
(VEN) - Italian firms are considering shifting their business from China to Vietnam in light of a soon-to-be-signed trade deal with Europe and the fallout from the US-China trade friction, says Pham Hoang Hai, Executive Director of the Italian Chamber of Commerce (ICham) in Vietnam.
Moving outsourcing and production facilities to Vietnam or setting up new regional operations there would serve those firms as a gateway to Southeast Asian markets, he adds.
Italy is Vietnam’s fourth biggest European economic partner and ranks 31st among 126 foreign investors in the country with US$389 million. Bilateral trade reached US$5.2 billion in the first 11 months of 2018.
In addition to the EU-Vietnam Free Trade Agreement (EVFTA) expected to be signed soon, and the US-China trade war, the Chinese market has come to a saturation point over the past decade and businesses have encountered many problems related to copyrights and other legal framework, according to Hai.
ICham has also expressed appreciation for the Vietnamese government’s support and incentives for foreign enterprises in general and Italian businesses in particular regarding taxation, land rent and employment.
Along with its low labor costs, Vietnam is taking measures to create other competitive advantages in areas such as high technology, renewable energy, and science and technology-related fields. However, Italian some investors are still hesitant about operating in Vietnam given the problems of its support industries, Hai said.
The EVFTA, soon to be approved by the European Parliament, would greatly benefit Italian business once it goes into effect, reducing tariffs on machinery, wood products, fabrics, garment and pharmaceuticals exported to Vietnam. Italy is the fourth largest European pharmaceutical exporter, while Vietnam ranks 13th in the world in terms of pharmaceutical industry growth, according to ICham. Over the past 10 years, Vietnam imported pharmaceuticals worth almost US$18.1 billion. Leading Italian pharmaceutical corporations have rated Vietnam in particular and Asia in general as key growth markets.
In June 2019, ICham Vietnam and the Vietnam Chamber of Commerce and Industry (VCCI) will hold a major trade
promotion event with the participation of more than 100 leading Italian enterprises to promote bilateral trade and