The solutions for stronger Canadian moves in Vietnam

November 30, 2022 | 08:00
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Vietnam and Canada are going through a heyday in bilateral ties, and currently celebrating a 5-year comprehensive partnership. Canadian Ambassador to Vietnam Shawn Perry Steil talked to VIR’s Thanh Tung about how the cooperation will continue to flourish.

Canada’s registered investment in Vietnam is about $4.8 billion over 242 projects, making Canada the country’s 14th biggest foreign investor. Do you think this is low, considering the potential of both nations?

The solutions for stronger Canadian moves in Vietnam
Canadian Ambassador to Vietnam Shawn Perry Steil

Vietnam offers great potential for Canadian investments, and the existing figure mentioned is kind of low, but I’m not worried about the growth rate yet. Statistics on our trading relationship show that Canada is the 10th largest market for Vietnam but only around the 14th highest investor.

In 2021, the value of bilateral merchandise trade reached $10.5 billion, which was an increase of 17.8 per cent on-year despite the economic downturn. Experience suggests that investment will follow trade. So once trade grows, funding will grow accordingly, and this partnership starts to identify itself, and people start to look for where they can pour their money. I believe that both nations’ trade expansion will lead to a rise in Canadian investment in Vietnam.

Canadian investors, for the most part, are taking advantage of low-cost, high-quality manufacturing in Vietnam, but they are also increasingly looking at not only export markets but manufacturing in the market.

So once we see that shift happening, the outlook will change and more opportunities in the Vietnamese market will come.

What are the key sectors or fields that interest Canadian investors here in Vietnam?

We see Vietnam having great potential for Canadian investors and expect they will continue to look more at the country. Many Canadian investors are exploring opportunities in various sectors, such as infrastructure, resorts, and insurance.

Further proof of Canadian attraction into Vietnam is the insurance industry. Canadian insurance companies such as Manulife and Sun Life are leading investors and service providers in the industry here. We have a small basis of investment here in Vietnam, and we’re at the bottom of the curve where we should see a rebound in the years to come as long as the business environment is stable, consistent, and transparent. I believe that the Canadian investment landscape in this country will improve.

​Canadian investors pour much more into regional nations like Singapore or Thailand. What should happen to make the Vietnamese investment climate more attractive?

I would say that there’s work that needs to be done. But we’ve seen improvements since 2019 and Vietnam acceded to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP provides a roadmap for Vietnam to enhance its investment climate. But when the nation acceded to the deal, it was assumed it would take time to meet some provisions and standards. Canada is looking at ways to further support Vietnam to meet those standards.

European and North American markets and investors are increasingly looking to environmental sustainability and labour standards, and Vietnam is still working towards meeting those standards. That’s an enormous opportunity. The country can become a reliable partner in maintaining critical supply chains in an era where supply chains are fragile.

Vietnam has also opened its economic borders and many Canadian companies are planning to come here. I do believe the country will continue doing a good job in removing obstructions in favour of enterprises and investors to attract more foreign funding.

Vietnam has impressed the international community by committing to achieve net-zero emissions by 2050. How will Canada cooperate with this country to realise this pledge?

Vietnam is now starting to implement an energy transition, a key cooperation area between both countries. Canada has supported pilot projects demonstrating Vietnam’s solar power and offshore wind energy potential. Canada has a great deal of experience in transitioning away from coal.

Transitioning away from coal is complicated. It involves not just alternative energy production but also retraining and supporting the development of sectors and businesses that depend on coal. It also means raising awareness of those using coal-fired power – they should gradually shift away from using renewable energy.

As a member of the G7, Canada is optimistic that Vietnam’s partnership with the Just Energy Transition partnership will open new doors for more Canadian, G7, and international assistance and financing to help that transition here.

And finally, Canada has a comprehensive approach to supporting Vietnam’s efforts to respond to climate change and mitigate its economic impact.

What will be the main focus of the two countries’ comprehensive partnership in the coming year?

A comprehensive partnership means we’re committed to doing more in all areas. But in terms of where the greatest potential is over the next five years, then the trade and investment relationship is just beginning to blossom. Canada has been committed and continues to be committed to the long-term development and reform of Vietnam, and the next five years, I believe, will be a crucial period for the country’s development.

Vietnam’s remarkable economic recovery is happening right now, with very high growth rates and an enormous amount of international attention, so it represents a strategic opportunity. Canada enjoys a long-standing and multifaceted bilateral partnership with Vietnam, and we greatly value the strong ties between our countries, which include political and diplomatic ties, trade and investment, development cooperation, defence and security, cultural and academic exchange, and sci-tech and innovation.

While turbulence continues to define the global landscape, Canada and Vietnam are interested in strengthening the rules-based international order and multilateral institutions. We value constructive engagement in multilateral forums such as the UN, World Trade Organization, APEC, and ASEAN, with which Canada is a dialogue partner.

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