Vietnam – Netherlands Increasingly Beefing Up Multifaceted Relations

In the 50 years since Vietnam and the Netherlands officially established diplomatic relations, the two countries have increasingly consolidated and strengthened the multifaceted relations. “We have partnerships in agriculture, water, and climate, and business is thriving. I think that is really seeing two countries growing and two countries working on a diplomatic relationship for 50 years. And I think that's worth a lot of opportunities,” said Dutch Ambassador to Vietnam Kees van Baar when asked about the achievements during 50 years of diplomatic relations.

Vietnam and the Netherlands are going to celebrate the 50th anniversary of diplomatic relations. Can you share your feelings about this milestone?

Well, I think it's wonderful. Because these 50 years started at a completely different time. Now, when Vietnam was at a different point of development, the Netherlands, we started having relations with Vietnam. I would say we didn't come in when Vietnam was high and booming like it is now. But we did come in when Vietnam was poor. And still, we were interested in Vietnam. When I was a kid, I saw the banners in the street, like a medical committee, Netherlands, Vietnam, and they set up an eye clinic over here in Vietnam, and we paid for that in the Netherlands.

And the same as the people in Amsterdam, we also supported a school in Hanoi which is now the Hanoi Amsterdam School and is still over here. And I think that's remarkable because that is where we started. We started when we saw the similarities in our countries, both delta countries, both dealing with a lot of water and agriculture. We were a deeply agricultural country, and Vietnam was as well, and agriculture was for us, an important business. And that's what we worked on. And then what you see in those 50 years, we developed, we get a lot of Vietnamese coming to the Netherlands to study in the Netherlands, but also a lot of people from the Netherlands, like in my studies, people were studying water management, went to Vietnam to learn water management as well in Vietnam, in the Mekong Delta.

And what you see now, of course, is a lot of companies that we have over here and working here in Vietnam, investing in Vietnam, and also producing for the Vietnamese market. And we have partnerships in agriculture, water and climate, and business is thriving. I think that is really seeing two countries growing and two countries working on a diplomatic relationship for 50 years. And I think that's worth a lot of opportunities.

Vietnamese Prime Minister Pham Minh Chinh holds talks with his Dutch counterpart Mark Rutte during his official visit to the Netherlands, December 2022

Can you say more about some of the great achievements?

I think an achievement that you already started in those 50 years, and you set up a corporation in Water and Agriculture, and you know, like this eye clinic where I was referring to and the Hanoi Amsterdam school. And now we also work on the Mekong Delta. And we have this Mekong Delta plan in 2013. And we worked on it till, and last year we also supported the Vietnamese authorities in its Mekong regional master plan.

I think that it's a good example. But the milestones do not only come from the government. It also comes from the companies. Heineken, with six breweries over here, DeHeus produces feed for animals, and feed for aqua agriculture as well. We have Friesland Campina, you know, in the dairy sector, of course, the famous Dutch Lady.

And then we have Damen shipyards producing boats, and ships for Vietnam, but also the region. And the Fruit Republic, developing fruits in the Mekong Delta, and exporting them to the Netherlands, to Europe, as such. I think a lot is going on. And also in the water sector, what you see is consultants sharing their knowledge, like Royal Haskoning, and they share their knowledge on water management and wastewater treatment.

And that is what we will need as well, as the Netherlands and Vietnam. And I think these are highlights. And regarding diplomatic highlights, it's the visits of our Prime Minister to Vietnam and the visits of your Prime Ministers to the Netherlands well before COVID-19, and Prime Minister Chinh last December. So, these are very important milestones.

Thanks to EVFTA, what achievements have the two countries obtained?

We are the second biggest trading partner in Europe for Vietnam. That is an achievement. We are the biggest European investor in Vietnam with almost €14 billion, and it is growing. We see a lot of potential as well as exports from Vietnam to the EU, but also from the Netherlands to Vietnam.

And I think, depends on the development of the business climate in Vietnam for businesses to act, to be able to set up companies here, and be able to export to Europe. I think what is important, what we should realize is the FTA makes it very attractive for companies to come to Vietnam to set up factories and then to export to the EU. Because there is an FTA and there are not many countries in the region that have that. And that is an advantage. You should realize that we have carbon regulation that comes in, and it's about the carbon footprint of products. And the higher your carbon footprint, the higher your input duty will be.

And what is very important is, of course, the way goods are being produced. Is it done in an environmentally friendly way? Does it take into account the environmental, international environmental treaties, international labor agreements, and international human rights? Because you don't, and of course, certainly not Vietnam, you don't want your workers here to be exploited.

And then they work a lot, but they hardly can pay for their food or their children's education. So, the well-being of the workers should be taken into account, and not only in your factory but also in your value chain. And that is an important one. And that might not always be easy. I mean, in the Netherlands, you see as well the people over there, they have to get training. We do it as well for Vietnamese companies.

We give them a lot of training on these upcoming regulations so that they are prepared and that they know what they have to do. And we have a whole program for it. And we finance that. It's called the Ready to export program. And I think this also shows that we are very much thinking about Vietnam, how Vietnam can position itself in the export market, and how it can continue to be a good trading partner for the EU as such.

Prime Minister Pham Minh Chinh and Dutch Prime Minister Mark Rutte witness the signing ceremony of the Joint Action Plan on Water Management between the Ministry of Natural Resources and Environment of Vietnam and the Ministry of Infrastructure and Water Management of the Netherlands

What is your evaluation of Vietnam's investment environment?

I think Vietnam still is attractive. People who come in, and I think the government does a lot of work to attract foreign investors. But what I see is that once investors have invested and they have a factory, there are still a lot of things that need to be done. And I can only refer to the speech of Gabor Fluit, the chairman of EuroCham.

He's also the head of DeHeus Company here in Vietnam. And he emphasizes that Vietnam should do more on what makes companies here to be able to produce more sustainably, in a green way. An important example is the DPPA, the direct power purchase agreement. So, it should be possible for companies to put solar on their roofs, and the energy produced then, they can use that energy.

Now it's not regulated. It's not possible, which puts these companies in a very odd position because they want to produce green, but the government doesn't allow them, because otherwise, the government doesn't have enough renewable energy. So, this should be done much more in renewable energy, and therefore also the Power development plan number eight should be signed off, which makes it possible also to make much more use of wind power, of solar energy. Because there's a lot of potential in Vietnam, but now it's laying idle while Vietnam needs to do something. And because companies can only produce in a green way if the energy is there. And if the power cannot be produced and transported via EVN, then at least they should be able to make their own energy, because otherwise, they have difficulties in their home markets.

And also in production, because in the Netherlands, not only the Netherlands itself is bounded by targets to produce in a greener way. Targets set by the EU, set internationally - but also companies have their targets. And there's also an agreement with the government, and they should get their targets, but Vietnam is making it difficult for them to do that. So, these are things that Vietnam really should work on.

Which area are Dutch businesses more interested in Vietnam?

The Dutch businesses in hightech and where they can produce the machines. The other part is in agriculture, definitely water and wastewater treatment, and waste to energy. They're very interested in that one. I shouldn't forget, of course, seed development. The Netherlands is one of the top countries when it comes to the development of seeds for agriculture, floriculture, flowers, and others.

They have invested in Vietnam as well, for new varieties such as technology, renewable energy, and others. I think electric vehicles are also interesting. And I love that VinFast is opening a showroom in Amsterdam. I drove a VinFast. I love the electric car, VF8, and the VinFast Klara as well. So, we would practice what we preach, I should say.

With respect to climate change adaptation and sustainable agriculture, what experience can the Netherlands recommend to Vietnam as it is making great efforts to promote the circular economy?

I think that is a waste of the treatment they could do much better and be very much receptive. Make sure what you are using, and what material you use. Can you recycle it? And water. You should reuse water much more than is being done now. And if you get rid of your water, make sure it is clean before it comes back to the river. That is very important.

I think also make more use of nature-based solutions. Coastal erosion in the Mekong delta is a very good example. If you want to protect the coast, then you should cut back on what you took away. And these are the mangrove forests, you should get the shore, and the forest should get back.  And you could also use that forest for agriculture and shrimp farming. It is also a matter of not cutting the sand out of the river, if you need the sand for construction, get it out of the coast and in a place where you know it doesn't make the erosion of the beach worse. And we have a nature-based solution for that one. We have a sand machine where you get the sand out of the sea and then you, more or less, put it on there at the coast and the sand, then automatically, naturally, the sand comes back and is taken away by the natural stream. And all along the Netherlands you’ll see them, the coastal erosion being mitigated that way.

 Thank you very much!

By Bui Lien - Nguyen Mai, Vietnam Business Forum