In the roadmap to promote relations with the European Union (EU) and its member states, Vietnamese National Assembly President Vuong Dinh Hue is to lead a high-level delegation of the National Assembly of Vietnam, taking in the 5th World Congress of Speakers of Parliaments (WCSP5) in the Republic of Austria, working visit with the European Parliament (EP), the Kingdom of Belgium and an official visit to the Republic of Finland from 05-11th of September.
This is the first foreign trip undertaken by Mr. Hue, after taking office as National Assembly Chairman, and it takes place after the EU – Vietnam Free Trade Agreement (EVFTA) officially came into effect after one year, and more than two years since his predecessor’s visit in April 2019.
During his visit to EU and the Belgian civic and political institutions, Mr Hue will take part in a working session with the President of the European Parliament, David Sassoli, as well as the Leader of the Belgian Parliament, who directly chaired the Vietnam – Belgium Business Forum.
Notably, the Forum is not only an opportunity for Belgian businesses who wish to engage with Vietnam and to do business directly, but also to help Belgian businesses to engage directly with Vietnam.
Prior to the visit, in an interview with media, Belgian Federal Senator Andries Gryffroy stated that: “The visit will not only be an opportunity to celebrate the first anniversary of the EU – Vietnam Free Trade Agreement (EVFTA) but also to lay the foundation for new economic cooperation between Vietnam and Belgium as well as European countries, after the Covid-19 pandemic is under control.”
Background:
The relationship between the EU and Vietnam has become a model of EU cooperation with Asian countries. Both sides have focused on promoting the implementation of the Comprehensive Partnership and Cooperation Agreement (PCA) which was signed in 2012 , and which took effect on October 1st 2016, marking an important step forward in the Vietnam-EU relationship, thus creating a legal basis for bringing the bilateral relationship to a new stage of development with a large scope and deeper levels.
Vietnam has also at the same time positioned itself as a bridge between the EU and the Southeast Asian (ASEAN) countries.
The EU, on its part, continues to support Vietnam in promoting relations with the ASEAN countries, other major powers, and international organisations while it also continues to support Vietnam in sustainable energy development, governance, rule of law, and legislation.
In particular, after a decade of relentless efforts, the Vietnam-EU Free Trade Agreement (EVFTA) and the Vietnam-EU Investment Protection Agreement (EVIPA) were signed on June 30th, 2019.
The EVFTA officially took effect from August 1st, 2020, thus opening a brighter and newer chapter in this bilateral cooperation relationship.
These agreements are expected to bring “golden” opportunities for the two sides to effectively exploit the potential of cooperation, promote trade, investment, sustainable development and contribute to promoting economic linkages. Eurasian inter-regional economy.
EVFTA – after one year comes into force:
The EVFTA drives Vietnam, the EU’s largest trading partner in ASEAN, with an export-import turnover in the first six months of 2021 of about €28 billion (an increase by 18 % compared to the same period of 2020), according to statistics of Vietnam’s Ministry of Industry and Trade.
With the prospects brought by the EVFTA Agreement, the two sides realistically expect Vietnam’s export turnover to the EU to increase by about 42.7% in 2025 and 44.37% in 2030, focusing on a number of industries, such as: agricultural products (rice, sugar, pork, forest products, beverages…), processing and manufacturing industries (textiles, leather, footwear), service industries (water transport, freight transport) as well as finance and insurance.
At the same time, imports from the EU are also expected to increase by about 33.06% in 2025 and 36.7% in 2030, focusing on a few items, such as vehicles and transport equipment, machinery and equipment, telephone and electronic components, pharmaceuticals.
In addition, the EVFTA and EVIPA agreements will also create great opportunities for Vietnam to attract more investors from the EU, especially in areas such as manufacturing and processing industry. using high technology, clean energy, renewable energy, services…The EU has currently more than 2,200 projects from all EU member countries in Vietnam, and registered investment capital reached more than 22 billion USD.
Whilst investments have yet live up to the expectations, and account for only 7% of total foreign direct investments in Vietnam, the National Assembly of Vietnam approved already last year the EU-Vietnam Investment Protection Agreement (EVIPA) with an overwhelming majority.
Leading European enterprises are now looking to EU partners to follow suit and to ratify the agreement. Once again, the ball is in the court of the Europeans, as both partners look forward to the early removal of the yellow card under IUU regulations on illegal, unreported and unregulated fishing to benefit all parties in the European and ASEAN market.
Recent changes to the scale and depth of the economic relationship between the EU and Vietnam must be seen in light of the drastic transformation of Vietnam in the last 30 years as it emerged from poverty and isolation into a buoyant lower middle income nation that is quickly catching up with its Asian neighbours.
Such an impressive economic track record can best be grasped by the simple fact that the country has been catching up rapidly measured on the real GDP growth rate. Vietnam’s growth rate has been remarkable in the 2000-2019 period – averaging 6.4% per year.
In 2020, Vietnam’s growth rate remained positive despite the complicated global epidemic which adversely affected even the strongest economies.
The EU is Vietnam’s fifth largest trading partner and its third largest export market (after the United States and China).
For the EU, Vietnam is the 17th largest trading partner in the world, the 8th among its partners in Asia and the second largest in ASEAN.
According to statistics verified by Vietnam’s Ministry of Industry and Trade, the two-way trade turnover between Vietnam and the EU has increased rapidly, from 4.1 billion USD in 2000, to 17.75 billion USD in 2010 and to 55.8 billion USD in 2018. In 2019, the total import-export turnover between Vietnam and EU members (28 countries, including the UK) reached 56.39 billion USD, accounting for nearly 11% of the country’s total import and export turnover.
Vietnam remains an increasingly attractive destination for EU investors:
As of October 2020, no less than 25 EU countries have invested in Vietnam, with 2,214 projects, combining a total registered capital of 22.14 billion USD.
Investors from EU countries have been present in most of Vietnam’s provinces and cities with projects focusing on the processing, manufacturing, production and distribution of electricity, information and communication industries.
“These are industries with high technology, clean products, taking advantage of science and technology, high grey matter content, high competitiveness in the international market and very necessary for Vietnam,” Mr. Van Thao NGUYEN, the Vietnamese Ambassador to the Kingdom of Belgium and the European Union stated.
Potential cooperation:
According to data supplied by the European Commission, Team Europe initiative is mobilising more than €40 billion in support for partner countries.
The EU together with its partners has set up the Access to COVID-19 Tools Accelerator initiative and the COVAX Facility, a global initiative bringing together governments and manufacturers to ensure COVID-19 vaccines reach those most in need. Team Europe is investing close to 3 billion to help secure 1.8 billion doses of vaccines for 92 low and middle-income countries by the end 2021.
Through the COVAX, EU has already donated 2.4 million doses to Vietnam. Recently, High leaders of Vietnam sent a letter to the Presidents of the European Council and the European Commission to call for more support and the sharing of vaccines with Vietnam.
The timely shipments of medical aid from the EU in the current epidemic situation in Vietnam have confirmed the good bilateral relations and the practical implementation of the agreements with Vietnam in the management of the covid-19.
Europe meets all the conditions, and has the ability to promote even stronger cooperation with Vietnam in tourism, education, logistics, agriculture, and high technology.
The EU is also positioned to promote the required Green Technology Transfer to Vietnam in the treatment of waste, water sources, management of seawater intrusion, and sea-level rise to enhance people’s lives in areas affected by climate changes such as the Central region and the Mekong Delta.
The EU can also be a valuable partner in supporting Vietnam in sustainable energy development, governance, rule of law, and legislation. Vietnam is also still in need of development assistance for projects on developing green energy and improving the environment in a sustainable way in rural and mountainous areas.
New Belgium-Vietnam relations:
Starting from joint activities in the francophone community, Belgium – Vietnam relations have been developing well. Vietnam is Belgium’s 14th largest trading partner while Belgium ranks 5th out of 27 EU countries investing in Vietnam.
Since 2018, Belgium is also a strategic partner in the agricultural sector.Senior officials of the two countries regularly, and increasingly, visit each other.
Since the establishment of full Diplomat relations, the two sides have exchanged many high-level visits.
The upcoming visit of the President of National Assembly of Vietnam, Vuong Dinh Hue, will be the 20th high-level Vietnamese delegation to visit Belgium.
Attractive investment fields in Vietnam are industrial zones, food and beverage, processing and manufacturing, pharmaceuticals, and renewable energy, Mr Paul JANSEN, Belgium ambassador to Hanoi said. On July 31, 2021, Vietnam officially licensed investments in the wind power project in Binh Thuan (worth 3.1 billion USD) for Belgian enterprises.
Mr. Macr Stordiau, CEO of Belgium International Port Engineering & Investment (IPEI) confirmed:
“In the field of logistics, many companies operating in the field of construction and operation of seaports such as IPEI does expect to expand investment in Vietnam, including Cai Mep Ha Logistics Center, Ba Ria-Vung Tau Province. This opens a new freight transport route from Vietnam to Europe in the context that international sea transport continues to face difficulties.”
Over the coming years, the two sides intend to continue to cooperate closely at international and regional multilateral forums, such as the United Nations Security Council and the Human Rights Council, to strengthen cooperation to contribute to ensuring security, safety, and freedom of navigation in the region.
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