09:10 | 09/10/2019 Economy
(VEN) - The EU-Vietnam Free Trade Agreement (EVFTA), signed in June and expected to take effect in 2020, will make Vietnam more competitive than other countries in the region in attracting foreign direct investment (FDI) to potential industries.
The EVFTA and associated EU-Vietnam Investment Protection Agreement (EVIPA) are already helping Vietnam attract FDI. The Viet Dragon Securities Corporation’s (VDSC) latest report shows that FDI projects are mainly found in labor-intensive industries (textile/garment, leather and footwear, and wooden furniture), processed goods and trade sectors (food, paper, plastics and rubber, metal products, and construction materials) and global innovation fields (computers, phones and electronic components manufacturing).
Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS) said new FTAs have been helping Vietnam attract foreign investors. A series of large enterprises from Europe and the US have invested in fleece wool production projects in Da Lat City of the Central Highlands province of Lam Dong, and textile projects in Binh Dinh and Nam Dinh provinces, he said. Many investors from Russia and the Middle East have come to Vietnam to invest in raw material, textile and dyeing projects worth up to hundreds of millions of US dollars, Giang said.
New FTAs with attractive tax reduction commitments associated with major import markets are also helping Vietnam attract a series of foreign investment projects in the leather and footwear industry.
Piotr Harasimowicz, Chief Representative Officer of the Polish Investment and Trade Agency in Ho Chi Minh City said Vietnam and Poland are major producers and exporters in the field of agriculture and farm produce - the two main fields of their bilateral trade. Vietnamese businesses need modern machinery and technology, as they are focusing on farm produce and foodstuff processing development, while provision of modern machinery and technology in this field is a strength of Polish enterprises in particular and EU businesses in general.
Mayte Pernas, Director of the EU-Vietnam Business Network said that with the EVFTA taking effect, the trade in goods between Vietnam and the EU will surely increase sharply, as many tariff lines are reduced to zero (0) percent. This will encourage businesses operating in Vietnam to import many more quality machinery products at a tax rate of 0 percent, increase investment to improve production capacity and product quality, and then export their products to the EU while benefiting from preferential tariffs.
The EU-Vietnam Free Trade Agreement (EVFTA) is expected to boost trade between the EU and Vietnam, and
increase EU investment in Vietnam and vice versa.