09:37 | 12/08/2019 Economy
(VEN) - The EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA) are expected to considerably increase European investment in Vietnam.
Over the years, Vietnam has attracted 2,244 EU investment projects totaling US$24.67 billion in registered capital, excluding some major projects implemented in Vietnam through a third country. The Netherlands, France and Germany are the biggest EU investors in Vietnam with large, high technology projects of leading corporations such as Ericsson, ABB and Bosch. Most EU projects are located in big cities and localities with developed infrastructure, including Hanoi - the capital, the northeastern province of Quang Ninh, Ho Chi Minh City and the Southern Key Economic Zone.
According to the Ministry of Planning and Investment, EVIPA is expected to promote EU investment and increase the level of its liberalization in the country, especially in the fields of technical services, financial services, telecommunications, transportation and distribution. The agreement is also expected to help improve the quality of foreign direct investment (FDI) in Vietnam and help the country attract more investors to some industries in which the EU has potential, such as high-technology processing and manufacturing, clean and renewable energy, and financial and banking services.
According to European Chamber of Commerce (EuroCham) Vietnam Chairman Nicolas Audier, EVFTA will help open the market, strengthen trade and help Vietnam become an attractive investment environment for European companies in Southeast Asia. Vietnam is showing positive signs of becoming an investment and trade center in the region, with a favorable location to attract FDI from Europe, he said.
Institutional reform and competitiveness improvement
Michele D’Ercole, Chairman of Italian Chamber of Commerce in Vietnam said Vietnam has to train human resources and simplify administrative procedures to attract high-tech EU investors. The government should inform provincial authorities and businesses throughout Vietnam of the agreement and its terms to attract investment from the EU.
EVFTA and EVIPA are driving forces for Vietnamese reforms, improvement of the investment environment and restructuring the economy. Vietnam needs to further improve its investment laws and policies, issue lists of projects needing investment, and prepare infrastructure including electricity, water, human resources and industrial parks to welcome and serve EU investors.
Vietnam has signed more than 60 investment protection agreements with different countries, but the EVIPA is the most advanced with a two-level dispute settlement mechanism that is different from arbitration proceeding of previous agreements and provides EU investors with greater confidence.
According to EuroCham’s latest quarterly business environment index, more than 1,000 member enterprises have
reaffirmed their positive expectations for Vietnam’s economic and trade growth.