Mr. Nguyen Anh Duong, representative of the Central Institute for Economic Management.
Once the EVFTA agreement comes into force, 85.6% of the customs lines between Vietnam and the EU will be lifted immediately. Many industries in Vietnam have competitive advantages thanks to the reduction in the cost of importing raw materials for production.
At the seminar “Reaping benefits from EU imports and investments in EVFTA”, Mr. Nguyen Anh Duong, Head of General Research Department of the Central Institute of Economic Management, assessed that EVFTA helps Vietnam to strengthen investments, not only in terms of total capital but also on average size of the projects (currently approx. 12 million USD).
According to Mr Duong, EU investors tend to gravitate to Southeast Asian countries, including Vietnam. “Markets with free trade agreements with the EU will be a plus for EU investors to consider to take advantage of tax incentives and rules of origin,” he said.
There are advantages to attracting capital, but Vietnam faces many challenges, said department head Nguyen Anh Duong. From many years of working experience with the EU, he said: Playing with the EU is not only a story of low costs, but also associated with standards and the feeling of contributing to sustainable development.
One of the most interesting stories related to the EU at the end of 2022 was the working session with the EC inspection delegation on the lifting of the IUU yellow card. And this is just a group of issues that worry EU investors when investing money. They believe that in addition to supporting the transfer of skills, the Vietnamese partners must also adjust their behavior in a more compatible and modern direction.
“The EU doesn’t give too much importance to the story of cheap or low-tech, but is more interested in the ability to meet demands,” Duong said.
Taking advantage of the EVFTA agreement, domestic companies have increased imports of modern machinery and equipment from the EU.
In 2021, Vietnam’s goods export turnover to EU countries will reach more than USD 57 billion, an increase of more than 14% compared to 2020. In the first 10 months of 2022, Vietnam’s turnover will reach over USD 52 billion, an increase of more than 14% in the same period, of which exports increased by more than 23%.
Vietnam’s export markets to the EU are expanding more and more, in addition to traditional countries such as Germany, France, the Netherlands, small markets, niche markets such as Northern Europe, Southern Europe or the Eastern region, Europe is also represented with Vietnamese goods.
In terms of imports, Vietnam has grown strongly in the group of machinery, equipment, electronic components and raw materials from the EU. This product group accounted for 24% of total import sales in the first 10 months of the year. In addition, more than 18% was accounted for by the machine and plant group; Group of raw materials for production over 10%.
Mr. Do Huu Hung, representative of the Europe-US market department of the Ministry of Industry and Trade, commented, “Companies have taken advantage of the EVFTA agreement to import equipment, machinery and raw materials from many companies have created value-added products and export sales for the whole country increased.”
However, like Mr. Nguyen Anh Duong’s recommendation, Mr. Hung suggested that domestic companies should pay more attention to the EU’s environmental and social technical standards. From his experience as a Vietnamese trade office in France, Mr. Hung said that European consumers are now more interested in green products, environmental protection products and organic products.
“We must take advantage of European investments, use their machines, raw materials and technologies to change production methods, produce better quality goods, protect the environment and meet consumer trends. We should make products that the market needs,” he stressed.
Ms. Dao Thu Trang, Head of Market Development Strategy Consulting Division, German Chamber of Industry and Commerce in Vietnam, shares the same opinion that German companies are particularly interested in investing in high-tech sectors. , green energy, renewable energy, medicine and healthcare.
“The German side always evaluates Vietnam as a potential investment environment with its strategic geographic location and developed economy, along with a stable political society, young, inquisitive and dynamic population,” Ms. Trang said.
Ms. Trang expressed her desire to cooperate, share technologies and combine staff training, saying the German side wants to increase the localization rate in products made in Vietnam to 30% instead of the current 4-5%.