AsemconnectVietnam - Despite difficulties in doing business in Vietnam, many European businesses are still optimistic about the domestic economy, particularly in the context that the EU-Vietnam Free Trade Agreement will take effect in 2018.

At that time, Vietnam will be a gateway for EU enterprises to enter the Asean market with more than 600 million consumers, said an EU official in Hanoi yesterday.

Michael Behrens, chair of the European Chamber of Commerce (EuroCham) in Vietnam, told the launching ceremony of the White Book 2017 yesterday that the trade agreement would certainly change the landscape of business cooperation between the two sides.

“EuroCham played an important part in the negotiations and the mapping out of the EVFTA. Our position is clear: its entry into force in 2018 will definitely change Europe-Vietnam relations, especially after the Trans Pacific Partnership (TPP) has been called off,” said Behrens.

He furthered that EVFTA makes Vietnam the most promising business destination for European companies in Southeast Asia. This is not only because of its undeniable own potential, but also as a future hub for businesses in Asean, a bloc with more than 600 million consumers.

Behrens noted the White Book 2017 provides an insight into trade, investment and recommendations from EuroCham. The new edition is different from the previous ones when adding one charter describing specifically about the EU-Vietnam Free Trade Agreement (EVFTA), its implementation and impact on business.

Attending the ceremony, Ambassador Bruno Angelet, Head of Delegation of the European Union to Vietnam, said EVFTA is the key milestone in the bilateral commercial, economic and investment links between Vietnam and the EU.

Vietnam is the second Asean country to negotiate an FTA with the EU after Singapore. With the conclusion of such an ambitious trade deal with the EU, Vietnam has become a benchmark for other developing countries willing to engage with the EU, Angelet said.

Since 2015, Vietnam has been the EU’s second biggest trade partner among the ten Asean member countries (after Singapore) and, among them, the largest exporter of goods to the EU. The bilateral trade flows have been increasing steadily over the last ten years, growing by up to 10 percent and $34 billion in 2016.

Yet, potentials remain untapped at their full extent. In order to further deepen the trade relations with the EU and to attract high-quality investment from the EU, Vietnam needs to accelerate its restructuring efforts and better prepare its human resources, Angelet added.

In terms of foreign direct investment (FDI), according to the EuroCham legal sector committee, EU investors consider Vietnam a promising destination, especially owing to the gradual opening of most service sectors under Vietnam’s World Trade Organisation (WTO) commitments schedule that began in 2007 and has been completed in 2015.

Domestic law has expanded market access in some sectors beyond those included in Vietnam’s WTO commitments. For example, foreign shareholding in public companies was previously capped at 49 percent but it now, apart from some exceptions, is generally open for up to 100 percent foreign ownership.

Among foreign investors, the EU is an increasingly important source of FDI of Vietnam as the EU had injected a total of $23.2 billion in committed FDI into more than 1,700 projects in the 25 years to end-2015.

Source: Intellasia.net