FDI capital from the EU into Vietnam will increase significantly

Oct 18, 2021

The flow of direct investment (FDI) from the EU into Vietnam in the medium and long term will increase significantly with many high-value quality projects, that is the forecast stated in the report on the implementation of the Trade Agreement. Free trade between Vietnam and the European Union (EVFTA) has just been sent to the National Assembly by the Government.

After one year of implementing the EVFTA, trade and investment exchanges between Vietnam and the European Union (EU) have achieved positive results, despite many difficulties and obstacles caused by the Covid-19 pandemic. The government stated the general results.

As a result, the total import and export turnover between Vietnam and the EU reached 54.6 billion USD, up 11.9% over the same period, of which the export turnover from Vietnam to the EU reached 38.5 billion USD. , up 11.3% over the same period, while Vietnam's import turnover from the EU reached US$16.2 billion, up 12.4% over the same period.

Regarding the results of attracting investment from the EU, the report stated, as of September 2021, the EU has 2,242 projects (an increase of 164 projects over the same period in 2020) from 26/27 EU countries still valid in Vietnam with registered investment capital reached 22.24 billion USD (up 483 million USD compared to the same period in 2020), accounting for 5.58% of the total registered investment capital of countries and territories into Vietnam and accounting for 6.57% of projects.

The Netherlands ranked first with 382 projects and 10.36 billion USD, accounting for 46.5% of the total EU investment capital in Vietnam; France ranked second with 632 projects and 3.62 billion USD, accounting for 16.25% of the total investment capital of the EU in Vietnam; Germany ranked third with 405 projects and 2.25 billion USD, accounting for 10.13% of the total investment capital of the EU in Vietnam.

Some large EU corporations are operating effectively in Vietnam such as Shell Group (Netherlands), Total Elf Fina (France - Belgium), Daimler Chrysler (Germany), Siemens, Alcatel Comvik (Sweden).... EU's investment trend is still mainly focused on high-tech industries, however, recently, there has been a tendency to develop more focus on service industries (post and telecommunications, finance, offices for leasing, retail), clean energy, supporting industries, food processing, high-tech agriculture, pharmaceuticals...

It is forecast that FDI inflows from the EU into Vietnam in the medium and long term will increase significantly with many high-quality projects of high value, the Government said.

Besides the positive results, the report also highlights some difficulties. As a part of "enterprises", Vietnam has actively studied and met the regulations and requirements of the EU and member countries to effectively take advantage of opportunities from EVFTA. However, some key export products of Vietnam to EU countries such as textiles and garments, coffee, iron and steel products, etc., recorded a relatively modest rate of granting C/O EVFTA samples (the first 7 months of the year). In 2021, the C/O rate for textiles will be about 15.7%, for coffee and iron about 9%).

In addition, only 38/63 provinces and cities have import-export activities with EU countries, many provinces and cities currently still focus on traditional markets, not promoting to EU markets. There are localities with very large export turnover, but the proportion of export value to EU countries is still relatively modest.

Regarding legal and institutional development, the difficulty is that the submission of the revised Law on Trade Unions to the National Assembly has been slower than originally planned. The amendment of the Trade Union Law has an important meaning, ensuring synchronization with the provisions of the 2013 Constitution, the Labor Code 2019, in accordance with the Resolution No. 02-NQ/TW dated June 12, 2021 of the Ministry of Government. value on organizational reform of Vietnamese trade union activities in the new situation.

This is one of the issues that receive the EU's attention during the implementation of labor commitments in the EVFTA Agreement. The Vietnam General Confederation of Labor is the agency in charge of drafting this legal document.

In addition, up to now, almost all the guiding documents of the revised Labor Code have been issued, only the Decree stipulating the representative organization of employees while this is the Decree on recognition of the Labor Code. received great attention from the EU.

Source: Dau tu Newspaper