The country's great achievement of containing the spread of COVID-19, plus the EVFTA (EU-Vietnam Free Trade Agreement), will help Vietnam attract more FDI.
Despite Covid-19, Vietnam saw $13.8 billion worth of newly registered FDI capital in the first five months of the year, while implemented capital totalled $6.7 billion.
Phan Huu Thang, former director of the Foreign Investment Agency (FIA), said that the success in containing the spread of Covid-19 gave an advantage to Vietnam in the competition to attract FDI and helped win foreign investors’ confidence.
Foreign investors understand that Vietnam has been pursuing a policy in treating foreign investment capital as an important component of the economy.
|Phan Huu Thang, former director of the Foreign Investment Agency (FIA), said that the success in containing the spread of Covid-19 gave an advantage to Vietnam in the competition to attract FDI and helped win foreign investors’ confidence.|
This, plus EVFTA, has brought a ‘golden opportunity’ to Vietnam to lure FDI as global supply chains have been disrupted and foreign capital flow is on the decline.
Thang urged the government to ‘accelerate investment promotion on the spot’.
“There is still $154 billion worth of undisbursed FDI capital. While it is difficult to lure investment at this time, it would be better to help licensed investors to accelerate their project implementation,” he said.
“We need to promote investment on the spot. It is necessary to survey the current situation of licensed investors to find out the problems they have and help them settle them,” Thang said.
Bui Ha Linh from the Vietnam Institute for Economic and Policy Research (VEPR) said that international trade is experiencing many upheavals because of US-China tensions and global supply chain disruption during Covid-19. In such conditions, EVFTA will strengthen Vietnam’s position in the international market.
Andreas Stoffers from Friedrich Naumann Foundation for Freedom said many European companies are still doing well in Vietnam. A firmer connection between Europe and Vietnam and EVFTA will attract more high-quality investment from the EU to support Vietnam's digital economy.
To take full advantage of EVFTA, he believes that EU and Vietnam enterprises need to study the laws and preferences offered by partners and the
tariff cuts. Vietnam’s enterprises should improve their competitiveness, working conditions, intellectual property protection, and geographical indication for products.
Nguyen Thuong Lang from the School of Trade and International Economics commented that of the 10 FTAs of which Vietnam is a member, EVFTA has had the shortest preparation time, if noting that it was ratified by the National Assembly in early June 2020 and will take effect in early August.
Never-before-seen activities in Vietnam’s aviation sphere are expected to come to EU businesses soon on the back of the landmark EU-Vietnam Free Trade Agreement.
The EVFTA will abolish 65 per cent of the duties on EU exports to its developing partner, with the remainder phased out over a 10-year period.