Vietnam entices Canadian interest

Canadian Prime Minister Justin Trudeau visited the Ho Chi Minh City Stock Exchange in November 2017 Photo: Le Toan

Former Canadian Ambassador to Vietnam Ping Kitnikone told VIR that she expects more Canadian investment to reach Vietnam ­following the expected entry- into-force of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on ­December 31, 2018.

The CPTPP is a free trade agreement (FTA) involving 11 countries in the Asia-Pacific region, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

“The CPTPP will bring in more opportunities for Canadian companies to introduce more of our products to the Vietnamese market,” said Kitnikone, who helped connect Canadian investments to Vietnam during her 2006-2018 term in the country. “Canadians are looking at development with interest in many sectors like ICT, agriculture, and hi-tech.”

Atul Bali, chief executive officer from Canada’s Competitive Green Technologies, plans to visit Vietnam in search of business opportunities after his first trip here a year ago.

“We have a patented formulation in the use of bio-carbons and are looking for supply partners that can form part of a mutually rewarding value chain wherein we could license technology and establish some commercial relationship to mutual benefit,” Bali said.

In another case, Michael Loh, director of Business Development from Canada’s London Agricultural Commodities, Inc., is also seeking partners in Vietnam. “We are experienced exporters of food-grade soybeans and dried grains with solubles to Asian markets and we are presently exporting to 16 countries. Vietnam is quickly becoming an emerging market for our products and we plan to seek partnerships,” Loh said.

According to Kitnikone, the CPTPP is an important platform with high standards of trade in the Asia-Pacific region. This is important to Canadian investors, because they will feel more reassured that they will not face many obstacles and will be treated in a fair and transparent manner. Beyond the CPTPP, Canadian companies are also looking forward to an advanced ASEAN-Canada Free Trade Agreement in which Vietnam will play an important part.

“I think the prospects of Canadian investment into Vietnam will be very good with the building blocks that we have already mentioned. The merchandise trade is already there and I think with the CPTPP and hopefully with the ASEAN-Canada FTA advancing quickly, we will provide more reassurance to Canadians.”

According to the Ministry of Planning and Investment (MPI), as of November 20, Canada had 176 valid investment projects in Vietnam, registered at $5.1 billion. In the first 11 months of this year, Vietnam attracted 13 Canadian projects registered at $4.27 million. If stake acquisitions were included, total new investment capital from Canada reached $83.42 million.

At the recent Vietnam-Canada Business Forum in Canada, Vietnamese Prime Minister Nguyen Xuan Phuc said the CPTPP and Vietnam’s improved business climate “will lead to a new wave and even a boom of Canadian ­investment in Vietnam.”

“The CPTPP will allow Canadian companies to invest with greater confidence in Vietnam, offering them protection from unfair and discriminatory treatment as well as greater predictability and transparency,” said a Canadian government document on how the CPTPP will impact Canadian-Vietnamese trade ties. “Vietnam’s commitments on financial services go beyond what it has offered in previous FTAs, creating new opportunities for Canadian service providers.”

According to pan-Asia consulting firm Dezan Shira & Associates, the CPTPP will give opportunities for Canadian funders in Vietnam. “Investors that target sectors that align with Vietnam’s development goals, such as the recent shift towards sustainability, are the most viable long-term projects. For example, PM Phuc publicly requested Canadian support in solar energy to develop clean technology, where investment from Canada remains quite low, despite its competitiveness in the sector,” said the firm in a recently-released bulletin on the CPTPP’s impact on Vietnamese-Canadian ties.

Notably, ICT has become the foundation of Vietnam’s modern development: the 4G network was established in 2017, leading to the growth of Big Data and analytics, as well as finance technology. Meanwhile, development continues to create opportunities for Canadian companies in infrastructure, planning, materials, construction, operations, and project management.

“Canadian businesses will obtain a competitive advantage once the CPTPP is ratified. While Vietnam holds a prominent place among other ASEAN countries in relation to Canada, exploring the opportunities that already exist is worthwhile given progress already made,” the bulletin said.

However, the former Canadian Ambassador to Vietnam also noted that to attract more Canadian investment, Vietnam needs to have a business climate that allows companies to expand. “There should be a level playing field. Treating investors differently would not be very conducive. Improvements in the regulatory environment, competitiveness, and transparency are very important for investors to consider ­investment in Vietnam,” ­Kitnikone stressed.