The “Strategic Partnership for Peace and Prosperity in Asia” reached in 2014 has been key in leveraging Vietnam - Japan relations to new highs. In Vietnam’s foreign policy, Japan is always among top countries with cooperation in economy, investment, trade, people-to-people, culture, education and many other fields.
This was confirmed by Deputy Prime Minister Hoang Trung Hai at the Vietnam Japan Economic Forum (VJEF) 2015, themed “Strengthening Vietnam - Japan Cooperation” held by the Vietnam Chamber of Commerce and Industry (VCCI) in cooperation with the Japan External Trade Organisation (JETRO) held recently in Hanoi. The forum drew over 300 delegates, who were government officials, organisations and businesses of Vietnam.
Strengthened cooperation
The forum was held in the context of traditional close relations between Vietnam and intimate Japan increasingly improved. The mid-September Japan visit by Party General Secretary Nguyen Phu Trong opened a new vision for developing the extensive strategic partnership for peace and prosperity in Asia. The two sides issued a Joint Vision Statement on the Vietnam-Japan, which represented a new positive and solid stage of development of the Vietnam and Japan.
Deputy PM Hai said, after more than 40 years of enriching the diplomatic relations, cooperation ties between Vietnam and Japan produced good results in all fields. In investment, Japan is one of the largest investors in Vietnam, with more than US$37.7 billion of registered capital for 2,661 effective projects across all key economic fields and contributed to promoting economic growth and structural change such as manufacturing and processing industry, real estate business and construction. Vietnam-Japan trade turnover grossed US$27.6 billion in 2014 and US$19 billion in the first eight months of 2015.
Deputy PM Hai said the two governments issued the Industrialisation Strategy in the framework of Vietnam - Japan Cooperation towards 2020, with a vision to 2030, and the Action Plan for six industries (including electronics; agricultural machinery, agricultural and fishery product processing, shipbuilding, environment and energy saving, and automobile).
“The Government of Vietnam hopes that the Japanese business community will continue to interest and expand investment in Vietnam, especially in six 6 above industries as well as other sectors such as agriculture, education, transportation infrastructure, environment, healthcare, industrial processing manufacturing, supporting industry, PPP investment form and other forms,” he added.
Deputy PM Hai confirmed that the Government of Vietnam pledged to continue boost cooperation with the Government and enterprises of Japan to improve the business environment, and enhance competitiveness to Vietnam continues to be the destination attractive investment for the business domestic and international community in the future. The Deputy Prime Minister hoped he will hear frank remarks and recommendations from Japanese government officials and businesses, to help Vietnam strengthen internal economic forces and enhance economic cooperation with Japan for mutual benefit.
TPP and untapped benefits
At the forum, Professor Kenichi Kawasaki from the Japan Institute of International Affairs (JIIA) and the National Graduate Institute for Policy Studies (GRIPS), said that Vietnam - Japan ties are yet to be fully tapped although there is progress.
He said after signing international cooperation agreements, governments should propagate and disseminate such agreements.
In fact, Japanese companies have invested a lot into Vietnam and they will invest more and more. The key drives to investment decisions are not trade agreements or cooperation programmes of the two nations but political stability, large market size and low investment costs.
"Therefore, with the TPP, the Japanese Government is hoped to have policies to facilitate domestic businesses to expand cooperation with Vietnam and the world," said Kenichi Kawasaki.
Mr Katsuro Nagai, Ambassador of Japan to Vietnam, said that when any country reforms its economy for integration, the Government and its people need to have clear mandates for priorities. For Vietnam, it gives priority to garment and textile, seafood and agriculture. The Government has shaped priority fields for development. However, after the TPP, the availability of imported livestock and agricultural products in Vietnam will be greater, hence resulting in tougher competition. The Government should increase itself domestic resources to strengthen competitiveness.
Dr Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), said although a lot of Japanese biggest groups have made presence in Vietnam, Vietnam is yet to see Vietnam - Japan value chains as a majority of input materials and spare parts is imported from other countries.
Thus, once the TPP takes effect, will this change? The answer lies in the future. But, a survey by launched by JETRO showed that the TPP will likely not produce expected results like other bilateral agreements signed by the two nations earlier.
Mr Nguyen Cam Tu, Deputy Minister of Industry and Trade
Like many Vietnamese companies, the information about the conclusion of TPP negotiations has provided a lot of momentums for Japanese companies when they look to the Vietnamese market. However, the TPP is just one element in Vietnam - Japan relations. Apart from the Industrialisation Strategy and the Action Plan for six industries, the two countries signed Vietnam - Japan economic partnership agreement, and joined ASEAN+1 and ASEAN+3 free trade agreements. Furthermore, the Vietnam - Japan Joint Initiative has been carried out by the two countries to remove business barriers for Japanese businesses in Vietnam.
Both sides have signed a lot of agreements and cooperation programmes but results are still below expectations. Hence, Vietnam and Japan should base on current agreements and cooperation programmes to boost economic relations rather than waste and rely on the TPP whose effective date remains unknown.
Mr Nguyen Hoang, Chairman of the Hanoi Association of Supporting Industries
To make EPA and TPP really effective and to promote supporting industries of Vietnam as well as the Vietnam Industrialisation and Modernisation Strategy, to develop a value chain between Vietnamese and Japanese businesses, the Governments and businesses of both sides need to provide adequate information for small and medium firms in Japan about Vietnam’s market demands for imported parts, about Vietnamese companies in search of cooperation with Japan, investment and business incentives for them in Vietnam.
So, to make EPA and TPP really effective and promote supporting industries of Vietnam and the Vietnam Industrialisation and Modernisation Strategy, the Governments and businesses of the two countries need to support each other more strongly. Specifically, it is necessary to provide sufficient information for Japanese SMEs about Vietnam’s demands for imported parts, Vietnamese partners capable of forming cooperation with them, and investment and business incentives for them in Vietnam. As for Vietnamese SMEs, they need information about ODA allocation and Japan’s trade preferences.
The two Governments define supporting businesses in general and SMEs in particularly as priority of development and cooperation. They will take into consideration every specific case (e.g. Toyota and other groups doing business in Vietnam) to accelerate the formation of supply and production value chains between Vietnamese and Japanese companies in Vietnam, thus enabling Vietnam to participate more deeply into production and supply chains of the TPP and the world.
Anh Mai
Vietnamese
