Many more European companies will come to do business in HCMC and other parts of the nation to capitalize on opportunities from a free trade agreement (FTA) between the European Union (EU) and Vietnam, according to the outgoing ambassador and head of the EU Delegation to Vietnam.

Franz Jessen at a meeting with reporters in HCMC on Tuesday.

Franz Jessen told reporters in HCMC on Tuesday before ending his four-year tenure in Vietnam that EU-Vietnam trade is faring well and the FTA is expected to further promote trade and investment ties between the two sides.

Jessen hoped more investments from the EU would flow into Vietnam when the FTA takes effect.

According to Jessen, Vietnam’s growing market will attract more EU investors in not only in the consumer goods sector but also the sectors they are strong in like services. They turn out products for export and supply for local consumers. 

European investors have come to Vietnam to take advantage of a low-cost yet skilled workforce. Therefore, though labor cost might rise, European businesses would continue opting for Vietnam.

Regarding Vietnam’s exports, he said Vietnamese companies should focus more on product quality instead of quantity.

The FTA includes commitments concerning geographical indications (GIs). As a result, once the quality of Vietnamese products is ensured, GIs will be an effective tool protecting high-quality products of Vietnam.

According to the Ministry of Industry and Trade’s Multilateral Trade Policy Department, when the FTA comes into force, the EU will protect Vietnam’s 39 GIs relating to farm produce and food. This will help Vietnamese farm produce brands be recognized on the EU market. 

As for investment, Vietnam pledges to create a favorable investment environment to facilitate business operations of both sides.

Jessen has served as ambassador and head of the EU Delegation to Vietnam since 2011. He played an important role in promoting the FTA negotiation process and the EU’s new aid package worth 400 million euros for Vietnam last year.

He also contributed to accelerating the signing of the EU-Vietnam Partnership and Cooperation Agreement (PCA) in June 2012 and PCA ratification. Twenty-three EU member states have ratified the EU-Vietnam PCA so far.