Netherlands - Vietnam Elevating Relationship to New Height

At present, Vietnam’s trade turnover with the Netherlands is quite big in comparison with other European partners. The two-way trade revenue expanded 22 percent a year on average in the 2006-2012 period. Especially, Vietnam’s exports to the Netherlands increased over 25 percent a year on average in the reporting period. As a distribution centre in Europe, a considerable proportion of Vietnam’s exports to Europe have been transshipped through the Netherlands.

 

Structurally, footwear currently accounts for 17 percent of Vietnam’s total exports to the Netherlands, followed by computers, electronic devices and parts (13 percent); garments and textiles (11 percent), cashew nuts (10 percent), phones and parts (9 percent), and seafood (7 percent). Meanwhile, machinery, equipment and tools make up 22 percent of Vietnam’s total imports from the Netherlands, followed by automobiles and parts (21 percent); and milk and dairy products (17 percent). In addition, Vietnam has increased the importation of chemicals, pharmaceuticals, iron and steel products from the Netherlands.

 

The Netherlands has become a multifaceted industrial cooperation partner of Vietnam. Presently, this European nation has over 177 projects worth over US$5.9 billion in Vietnam, ranking 11^th out of 98 countries and territories investing in Vietnam. Notably, in the power industry, the Netherlands has invested massively in an electric telecom cable system infrastructure development project, Phu My 3 Power Plant and Mong Duong Power Plant. In oil and gas industry, some big Dutch firms like Royal Dutch Shell, ABB, Royal Haskoning and Van Oord Dredging are important partners of key projects in Vietnam, including oil exploration and production, petrochemical refining, seaport and seawalls projects.

 

In light industry and consumer industry, Dutch projects are more familiar to Vietnamese consumers, including Unilever cosmetic products, Heineken beer and Philips electronics products. The Netherlands is also a major partner of Vietnam in the fight against climate change and in water management. The two nations established the Intergovernmental Committee and signed the Strategic Partnership Agreement on these fields at the end of 2010.

 

However, according to experts, the two-way trade and investment relations remain modest in comparison with the potential and aspirations of the two countries.

Mr Joop Scheffers, Ambassador of the Netherlands to Vietnam, said the reasons [for below-expectation investments] are that Dutch companies are still unclear about Vietnam’s investment environment and encouragement policies or its land, people and market potential. To boost trade and investment relations, the two countries should create conditions for both business communities to exchange and contact to boost trade and investment ties, coordinate to carry out investment promotion programmes to learn more about investment environments and investment attraction policies of each country, he added. Vietnam should also increase efforts to draw investment capital from the Netherlands for the areas it needs and the Netherlands has advantages in, like construction, chemical, oil and gas, machine manufacturing, micro-electronics, agro-processing, food, fishing, marine services, port services and river transportation. Importantly, Vietnam should create the most favourable conditions for Dutch projects as they will help introduce Vietnam to other investors in the Netherlands.

 

To boost trade and investment ties with the EU, including the Netherlands, Vietnam and the EU are negotiating a Free Trade Agreement (FTA), expected to be concluded in 2014, and when the blueprint FTA comes into effect, Vietnamese and Dutch firms will have more favourable conditions to expand bilateral ties. Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, confirmed that, as mutual gateways to ASEAN and the EU, Vietnam and the Netherlands will be able to bring their economic, trade and investment relations to a new high.