Vietnam is considered by European investors as a potential market, a promising center of the ASEAN region, especially when the country draws international attention to its net-zero emissions commitment by 2050.
In an interview with Tuoi Tre News, Ambassador Giorgio Aliberti, head of the European Union Delegation to Vietnam, emphasized the importance of Vietnamese Prime Minister Pham Minh Chinh’s visit to Europe for the EU-ASEAN commemorative summit from December 9 to 15.
The PM also visited Luxembourg, the Netherlands, and Belgium during the trip, representing a special occasion for high-level leaders to engage in direct dialogue and strengthen their relations.
As you said before, investment cooperation between the EU and Vietnam will be a major focus, especially in the fields of technology, energy transition, as well as green and sustainable growth. Do you think the Vietnamese prime minister's trip to Europe this time will further promote those cooperation relations?
You probably are aware that a few days ago, there was a big exhibition here, the Green Economy Forum Exhibition in Ho Chi Minh City, where a high number of global CEOs from Europe came to join because they are very interested in the green market.
So I think a lot of investors from Europe are looking at Vietnam as a potential market. It is obvious that there is a need from the Vietnamese side while the European side also seeks to come. So I think it is a perfect match.
And about investment, we need a proper environment, a proper agreement between the public and the private sector, and a right price. If you have bankable contracts that can be presented to banks, loans will be provided.
There are huge sums in the financial markets that are ready to invest in green energy and green transition, really huge. It is up to Vietnam to decide because Indonesia has already made the choice by signing the Just Energy Transition Partnership (JETP).
International investors, also those from Europe, are looking around for markets. If they see Indonesia go ahead and Vietnam step back, they will go to Indonesia very easily. If they see that Vietnam will do the same, they will come here as well.
It is also a matter of vision. And we are very encouraged by the prime minister because he has a lot of determination. I think he was very brave in Glasgow, at the COP26 [the 2021 United Nations Climate Change Conference]. He decided to go along the line. So we expect Vietnam to continue this process.
Vietnam can be the example for 12 countries in the region, and can be bold enough to say, “We are going down the line because we see the future is there." That is the distinction. Of course, if looking at the past and just at the challenges, nobody probably would say “let's go ahead," but rather “okay, maybe we wait and see what the others do." But if you want to be at the forefront, you need to act now. That is what I am saying.
The EU - Vietnam Free Trade Agreement (EVFTA) has helped Vietnam's exports to the EU grow. However, Vietnam still occupies a modest market share in the EU, while Vietnamese businesses' green products still have limitations in meeting European standards. What do you think about these issues?
Since the effectiveness of the EVFTA in August 2020, we have seen an increase both in exports and imports from both sides.
So far, I think the free trade deal has showed its usefulness, particularly during the COVID-19 pandemic, which was a very difficult time. We managed to keep the traditional relation and we even managed to increase exports and imports on both sides.
We have to say that Vietnam is not doing so badly. You make the comparison with the wider market share in Europe, which is huge. You have China, the U.S., and even intra-European businesses there. So of course, it is not very easy to get an important market share in Europe.
But if you look at the growth in the last 20 years, it is astonishing. Vietnam’s export value to Europe in 2021 was about 38 billion euros, versus 10 billion euros' worth of exports from Europe.
It is true that Vietnamese businesses’ standards need to be increased. The EU is among the markets with the highest standards in the world.
And this process needs time. We need to have more information sharing. So we do our best to inform companies here what they have to do to get a better standard in order to enter the EU market.
There has been quite an important improvement in a few sectors, in the agricultural food and fisheries industries. Some companies managed to get this done and some others have not yet. So I think it is a process which will develop in the near term and the long term.
The Investment Protection Agreement (IPA) is expected to be ratified soon by EU member states, what do you think about this prospect?
The IPA has been already signed. It has been ratified by the European Parliament, by 12 member states in the EU, and by the National Assembly of Vietnam. So we are just waiting for the last 15 member states in Europe to finalize the procedures. And usually they are long procedures, but then they will end up there. So it is a matter of time. I would not see this as a really big problem in terms of investment inflow. If investors decide to come, they will come even without the IPA ratified.
This, of course, could be another further step in terms of protection and it may help some other investors make up their mind. It will give more complete coverage and it will be a further incentive.
But as I said before, let's not think that this is the silver bullet that would change the parameters. It would change the landscape which is already good.
It depends on the Vietnamese government’s decisions in terms of the regulatory framework. We know that Vietnam is very interested in getting some more investment from Europe. And we always say it is important that Vietnam create the perfect conditions for investment to come.