Refinements will help boost ties with France

April 15, 2024 | 14:35
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Vietnam and France are set to boost their trade and investment ties. French Ambassador to Vietnam Olivier Brochet spoke to VIR’s Thanh Tung in an exclusive interview about the cooperation drive, with Vietnam becoming an increasingly attractive market for French investors.

What is your take on the trade and investment relationship between the two economies?

Refinements will help boost ties with France
French Ambassador to Vietnam
Olivier Brochet

The France-Vietnam relationship is in its heyday now, with a cooperation framework set out at October 2023 talks between Vietnamese Party General Secretary Nguyen Phu Trong and French President Emmanuel Macron. The framework is focused on cooperation in national sovereignty protection, dealing with global challenge, and promotion of innovation.

Within this framework, both nations’ trade and investment have been flourishing, and bilateral trade reached $8 billion in 2023. Last year saw Vietnam face numerous challenges in external trade, meaning that this figure remained quite optimistic, and could have been bigger if France’s exports to Vietnam via third markets such as Singapore and Hong Kong were taken into account.

Regarding investment, France is now the second-largest European investor in Vietnam, with over 700 valid projects registered at $3.8 billion. Vietnam is now home to over 300 French companies registered at about $3 billion, employing 50,000 local workers.

How can you envision the outlook of France-Vietnam trade and investment cooperation moving forward?

In May or June, there will be a high-level economic dialogue in Paris, co-hosted by France’s Ministry of Commerce and Vietnam’s Ministry of Planning and Investment. This is a significant event where both sides will review all economic, trade, and investment cooperation achievements, and determine obstructions needed to be removed, as well as set out new cooperation orientations in line with the cooperation framework.

What is more, in 2025, it is expected that President Macron will pay a state visit to Vietnam, creating a new milestone in bilateral ties focused not only trade and investment, but also in politics and other sectors.

I cannot make any specific forecast about how trade and investment will increase, but I do believe that the increase will be bigger because Vietnam is now in more need for French products such as aircraft in the transportation sector, and foodstuffs in the agricultural sector.

Additionally, we hope that iconic French projects in Vietnam will be put into operation in the coming time. For example, in July the third metro line in Hanoi, implemented and funded by the French, will become operational. At present, nearly all of the work has been completed, and the remaining tiny percentage involving safety certification is being solved, and depends on authorised agencies in Vietnam.

In another case, in autumn this year, French-backed Sagemcom’s project in the northern city of Haiphong producing electronics products is about to be completed. It considers Vietnam its global manufacturing base. Last year, French-invested Synergy CAD’s project making electronics items in the northern province of Bac Giang was also put into operation.

Also, the French-invested Son My 1 power plant, run by natural gas, is expected to be completed by 2030, contributing to Vietnam’s efforts in energy transition and green growth.

What are the key drivers of French investments into Vietnam, and how important is the EU-Vietnam Free Trade Agreement (EVFTA) to the trade and investment ties between both economies?

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

Besides that, 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 pandemic, the businesses faced difficulties in a big market next to Vietnam, and then they had to decide on diversifying their overseas investment markets.

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 are foreign invested, such as Decathlon making sports-related products. They have benefited greatly from tariff reduction and removal under the EVFTA commitments.

What challenges will need to be removed to further cement these trade and investment ties?

Vietnam and France have organised many forums and dialogues to help businesses out of difficulties. We see that further refinements need to be made in Vietnam. Investors want a more transparent and clearer business and investment climate in the country, so that their projects can operate smoothly.

Other improvements would need to be seen in the sectors of intellectual property right protection, energy-oriented infrastructure, and transportation. However, we also see that Vietnam is making major efforts in solving these impediments.

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By Thanh Tung

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