France to play part in acceptance of EVIPA

France to play part in acceptance of EVIPA

Vietnam and France last week agreed that they will further increase bilateral and trade cooperation backed by the EU-Vietnam Free Trade Agreement (EVFTA) and the upcoming EU-Vietnam Investment Protection Agreement, which has already been adopted by the European Parliament. The commitment was made during the official visit to France by Party General Secretary, President To Lam. Vietnam has asked the European nation to soon ratify the latter in a bid to facilitate reciprocal investment flows. So far, 18 out of 27 EU member states have passed the agreement.

“Not only French companies but also foreign investors have the same sentiment that the Vietnamese market is attractive to them as Vietnam is a dynamic economy with high growth, political stability, and a wealth in labour,” French Ambassador to Vietnam Olivier Brochet told VIR.

“Additionally, many French businesses are now applying a policy of diversifying investment markets to shun risks caused by a single market where they used to depend on. Reality showed that during the health crisis, the businesses faced difficulties in a big market next to Vietnam, and then they had to decide on diversifying their overseas investment markets,” he added.

According to the ambassador, the EVFTA is critical for boosting the trade and investment cooperation between France and Vietnam. “Many businesses exporting goods from Vietnam to France and the wider European market can benefit, such as Decathelon making sports-related products. They have benefited greatly from tariff reduction and removal under the EVFTA commitments,” he said.

Statistics from the Ministry of Planning and Investment showed that cumulatively as of August 31, French companies invested into almost 700 projects registered at $3.94 billion. This has made France the third-largest European investor in Vietnam, after the Netherlands ($14.6 billion) and the UK ($4.45 billion).

In the first eight months of this year, total newly registered and newly added capital and stake acquisition and capital contributions from French investors in Vietnam hit $26 million, up 43 per cent on-year.

French investment focuses mainly on the areas of information and communication, transport, processing, manufacturing; and production and distribution of electricity, gas, and air conditioning. Their investors are found in 36 provinces and cities of Vietnam, led by Ba Ria-Vung Tau (seven projects worth more than $1 billion), Ho Chi Minh City (188 projects for $995 million), and Hanoi (96 projects valued at $450.1 million). The average scale of a project is $5.72 million, lower than the national average of $11.8 million.

Some major projects include one between Vietnam Posts and Telecommunications Group and FCR Vietnam, a branch of France Telecom, licensed in 1997 with a value of $615 million; Cai Mep Port, licensed in 2008, by France’s Terminal Link and costing $520 million; Phu My 2 Power Plant, licensed in 2001, by Électricité de France in association with Japan, at a cost of $480 million; and Nhon-Hanoi Railway Station, which cost $1.45 billion.

Meanwhile, Vietnamese enterprises have invested in 17 projects in France with a total investment of $38 million.

Bilateral trade has grown strongly over past years (see table). Vietnam’s main exports to France include footwear, garments and textiles, agro-forestry-fishery products, machinery and equipment, and electronics and spare parts.

The main products imported by Vietnam from France consist of aviation equipment, industrial machinery, pharmaceuticals, agricultural products, foodstuffs, chemicals, and cosmetics.

At present, France has provided concessional loans worth €3 billion ($3.31 billion) as official development assistance for Vietnam, which annually receives $220.7 million focused on three priority areas of response to climate change, energy transition, and green growth.

European Union urged to pass EVIPA Vietnam is actively seeking more approval from EU member states of its bilateral investment protection deal with this bloc, in a bid to attract more funding.

French influence increases as Vietnam calls for EVIPA payoff Vietnam is working with France on new plans to expand bilateral investment cooperation, with the latter to soon adopt the EU-Vietnam Investment Protection Agreement, which will help facilitate investment flows.

EVIPA requires methodical approach The European Commission is set to urge EU member states to expedite the ratification of the EU-Vietnam Investment Protection Agreement to enhance investment flows.