Placing Businesses as Core for Building Trade, Investment Promotion Mechanism

10:57:24 AM | 22/5/2019

“Businesses are the main driving force to strengthen trade and investment relations between Vietnam and other countries in the world. The government can only provide an environment and orient some areas that lead the trade and investment promotion process,” Dr. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), said at the "Conference on Promoting Trade & Investment between Vietnam and Strategic Partners: Perspectives from Businesses” held recently by VCCI.

Vietnam currently has 16 strategic partners and an important partner, the United States. These strategic partners and the U.S., a comprehensive partner of Vietnam, have invested nearly US$230 billion in Vietnam, while also contributing 50% of the nation’s total trade revenue.

In the current context of integration and economic development, in addition to further strengthening cooperation with other countries in the world, Vietnam wishes to catch the wave of “new-generation” high-valued investment flows, typical of environmental friendliness and sustainable development, he added. Therefore, partners such as Japan, South Korea, the United States and the European Union (EU) will play a particularly important role.

VCCI has been assigned by the Prime Minister to lead the Project “Promoting trade and investment cooperation between Vietnam and strategic and important partners”. To carry out this task, the agency has decided to establish the Vietnam National Investment and Trade Promotion Network (VITPN), which is considered a premise for investment promotion agencies to join this network and connect and coordinate with each other for higher investment results.

Speaking at the conference, Ms. Virginia B. Foote, Vice Chair of the American Chamber of Commerce in Vietnam (AmCham), expressed that Vietnam is attracting great interest from U.S. businesses. However, most businesses express concern about tax policies and audits because of inconsistent tax policies and tax collection in Vietnam. She also expressed her wish that Vietnam's public management system will improve integrity as this is one of important criteria of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Vietnam is a member.

At the meeting, representatives from some provinces such as Lam Dong and Quang Ninh, associations and enterprises also shared about difficulties and obstacles when exporting goods to important and strategic markets and recommended solutions to support businesses to promote trade and investment cooperation.

More than 70% of Japanese businesses want to expand their investment in Vietnam

Mr. Hiromitsu SHO, Director of Hanoi Office, the Japan External Trade Organization (JETRO)

Previously, in order to attract investment, Japan also faced numerous difficulties. The Japanese Government also had to build many trade promotion programs to entice foreign investors. Particularly, we were eager to invest in research and development (R&D). This was considered leverage for Japan to make economic breakthroughs and become a big economy of the world.

To date, 3,200 Japanese companies have invested in Vietnam. The Government of Japan, through JETRO, has organized many trade promotion events and introduced development potential and opportunities to attract Japanese investors to Vietnam. In addition to cooperating with the Government of Vietnam and VCCI, JETRO has strengthened direct cooperation with provinces and cities of both sides to unlock their potential and strengths for economic development. According to a survey by JETRO, more than 70% of the surveyed enterprises want to expand their investment in Vietnam.

Besides, Japanese companies still face hardships when they invest in Vietnam such as complicated administrative procedures, instable tax policies and rising labor costs.

Vietnamese businesses have a great opportunity to earn profits

Mr. Bjoern Koslowski, Deputy Chief Representative of the German Chamber of Commerce and Industry in Vietnam

Currently, we are actively looking for suppliers that can meet German businesses. This is mainly a plan to shift/diversify their supply sources from China to Vietnam. German businesses are looking for suitable alternatives here because labor costs are rising; vendors decline in China; and they want to diversify supply exits from China. Most of our current requirements/projects are involved in industry, metal processing, garment and textile and electronics. In general, German businesses are very pleased with Vietnam and its development when they set foot here,

Nevertheless, we are facing a number of challenges in Vietnam, but in general, we see huge potential for Vietnamese businesses to make gains from evolution in China. Vietnam can develop a strong and innovative SME manufacturing industry.

India and Vietnam need to consider signing FTAs

Mr. Vaibhav Saxena, General Secretary of the Indian Chamber of Commerce in Vietnam (InCham Hanoi)

India and Vietnam need to consider the possibility of signing FTAs ​​with appropriate policies on trade and investment support because cooperation has not yet reached its potential. The two countries do not have comprehensive FTAs ​​and the Comprehensive Economic Cooperation Agreement; thus, they do not have tax benefits for some key industries.

Vietnam and India should work closely with financial institutions and consider developing a better lending policy to support their mutual investment.

Vietnam needs to build FDI Control Tower System

Mr. Kim Ki Joon, President of Korea Trade-Investment Promotion Agency (KOTRA), Southeast Asia and Oceania

Difficulties faced by South Korean companies in investing in Vietnam include unexpected changes from policymakers and planners. They do not keep preference policies as originally committed. Therefore, I propose promoting consistent FDI business support policies with the FDI Control Tower system to prevent the above cases.

Vietnam needs to build the FDI Control Tower System managed by the Prime Minister's Office. To stabilize the investment environment, a prerequisite is policy consistency. Therefore, it is necessary to build a new system that can adjust and gather opinions of all agencies and departments directly/indirectly related to the FDI business community such as the Ministry of Finance, the Ministry of Industry and Trade, the Ministry of Science and Technology and the Ministry of Natural Resources and Environment.

Luong Tuan