14:27 | 04/05/2015 Trade
A new wave of Taiwanese investments is expecting to hit Vietnam off the back of the country’s Free Trade Agreements (FTAs).
Berton BC Chiuvisit, a counsellor for Regional Economic Integration Projects at Taiwan’s Ministry of Economic Affairs’ Bureau of Foreign Trade told VIR that a bigger wave of Taiwanese would come to Vietnam to invest in, as they saw enormous investment and trade benefits from the country’s multilateral and bilateral FTAs.
He said Taiwanese businesses strategically wanted to use Vietnam as a base and set up partnerships with the Vietnamese in order to put regional economic integration and supply chain efficiency to good use. They wished to invest largely in Vietnam’s agriculture, textile, ICT and car/motorcycle component sectors.
Jack Lin, associate director of the general manager office of Taiwan’s I-Mei Foods Co, Ltd said “Vietnam’s economic situation is strongly recovering and the country has had many FTAs with great tax reductions. This will offer a good opportunity for us to expand production here. We may increase our investment in Vietnam. Currently, I-Mei operates a factory in Hanoi making rice biscuits.
Sara Huang, representative from ceramic-maker Taiwan’s Franz Collection Inc. also told VIR that this company was finding Vietnamese distributors to sell its products in Vietnam as imported tax rates for ceramic products under the FTAs would be significantly reduced.
“Vietnam’s demand for products like ours is on the rise, thanks to economic recovery. After we establish a strong partner network in Vietnam, we may consider other investment-related steps in Vietnam,” she said.
Referring to the textile sector, Chiuvisit underlined that Vietnam had signed FTAs with many important trading partners and could sign the Trans Pacific Partnership Agreement (TPP) in the near future, thus allowing it to enjoy preferential tariffs. Taiwan’s textile sector, however was facing pressure from regional economic integration trends.
Chiuvisit also stressed that Vietnam’s automobile and motorcycle parts industry was a magnet to Taiwanese investors. After Vietnam joined the World Trade Organisation (WTO), the tariffs on parts have gradually been decreased. Also based on ASEAN’s Common Effective Preferential Tariff (CEPT), starting on January 1, 2014, Vietnam has begun lowering tariffs on automobile and motorcycles to below 50% and by 2018 these will be reduced to 0%.
During 1988-2014, Taiwanese businesses invested US$28.41 billion in 2,368 investment projects in Vietnam, making Taiwan Vietnam’s fourth largest source of FDI.
Vietnam has had six multilateral FTAs with ASEAN, and their partners including India, Australia/New Zealand, the Republic of Korea, Japan and China. It also has two bilateral FTAs with Japan and Chile. Vietnam is also negotiating seven FTAs including Regional Comprehensive Economic Partnership Agreement (RCEP), ASEAN-EU FTA, and TPP etc.
Furthermore, Vietnam is also considering negotiations of the ASEAN-Canada FTA.