According to the EuroCham Business Confidence Index (BCI) survey conducted by Decision Lab, released as the EVFTA approaches the fourth anniversary of its entry into force on 1 August 2024, the E.U., already a major investor in the country, has poured 28 billion EUR (nearly 30.3 billion USD) into 2,450 projects, underscoring its continued confidence in Vietnam's potential.
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At a garment and textile company in Vietnam |
Notably, E.U. investors have added 800 million EUR in foreign direct investment between January and September 2023, bucking the global trend of declining FDI.
The EVFTA has also significantly boosted Vietnam’s exports to Europe, surging from 35 billion EUR in 2019 to over 48 billion EUR in 2023, with growth particularly being pronounced in sectors such as electronics, textiles, footwear, agriculture, and seafood, the survey said.
However, it noted that the increase in E.U. exports to Vietnam has been far more modest, rising from 11 billion EUR to only 11.4 billion EUR over the same period, adding to a substantial trade imbalance.
The BCI survey said that the EVFTA has undoubtedly opened doors for European businesses, but challenges remain. However, it also pointed out a number of obstacles that European businesses face in fully leveraging the EVFTA, including complex regulatory requirements and a lack of recognition for international standards by local authorities.
Additionally, a lack of understanding of the agreement among the stakeholders, combined with customs valuation issues and opaque clearance procedures, complicate trade, technical barriers, particularly in the areas of certification and product testing, also remain a significant hurdle, it said.
According to Chairman of EuroCham Vietnam Dominik Meichle, the survey shows that while progress has been made, challenges remain. He stressed the importance to continue working on simplifying procedures, aligning standards, and ensuring everyone understands how the EVFTA works.
EuroCham is committed to cooperating with relevant stakeholders to streamline regulatory compliance, advocate for greater recognition of international standards, and develop comprehensive education and awareness programs on the EVFTA, EuroCham Vice Chairman Jean-Jacques Bouflet said.
It will also continue to push for solutions to technical barriers to trade, particularly in certification and testing, and advocate for further tariff reductions and streamlined customs procedures, he added.
EuroCham Vietnam is actively championing the full ratification of the E.U.-Vietnam Investment Protection Agreement (EVIPA) as a critical step in unlocking the full potential of the EVFTA for attracting foreign direct investment. Meanwhile, E.U. institutions have already given their approval, the EVIPA still requires individual ratification from all 27 E.U. member states, therefore EuroCham Vietnam is working tirelessly with European stakeholders to encourage the remaining states to follow suit.
Thue Quist Thomasen, CEO of Decision Lab, stated the findings highlight that while the EVFTA is a powerful tool for economic growth, its success hinges on continued efforts to address regulatory complexities, technical barriers, and awareness gaps. He stressed that a targeted approach to support businesses, particularly SMEs, in navigating these challenges is crucial.
Source: VNA