The 2014 mid-term Vietnam Business Forum opened in Hanoi on June 5. Photo credit: TBKTSG
Representatives from foreign business associations have asked Vietnam’s government to speed up its negotiations on several pending free trade agreements, saying that they will benefit its economy.
The representatives made their remarks during a meeting with Prime Minister Nguyen Tan Dung and many government officials at the Vietnam Business Forum opened in Hanoi on Thursday.
Marc Townsend, of the American Chamber of Commerce in Vietnam (Amcham Vietnam), said that joining the 12-nation Trans-Pacific Partnership (TPP) would help raise Vietnam's GDP by 35.7 percent by 2025.
The trade value between Vietnam and the US hit US$29.7 billion last year, a year-on-year increase of 20 percent, he noted, adding that bilateral trade jumped 14 percent during the first three months this year alone.
According to Townsend, if this momentum is maintained, bilateral trade could hit $60.2 billion in 2020--but added that number would be closer to $70 billion with the help of the TPP.
Amcham Vietnam anticipates that the TPP and other trade agreements will support Vietnam’s development strategies and help the country create new standards for regulations on labor rights, environmental protections and intellectual property rights.
Tomaso Andreatta, vice chairman of the European Chamber of Commerce in Vietnam (EuroCham), meanwhile, expressed hopes that a Free Trade Agreement will be signed between the EU and Vietnam this year.
Andreatta estimated that the agreement will raise Vietnam’s GDP by 15 percent .
The FTA is also expected to increase local worker salaries by 12-13 percent and the country’s exports by nearly 35 percent, according to Andreatta.
The EU is currently one of the biggest investors in Vietnam with 1,810 Foreign Direct Investment projects that share a registered capital of $34.28 billion.
Fixing the business environment
At the meeting, the representatives also urged the Vietnamese government to continue removing barriers to improve the local business environment.
Townsend said Vietnam needs to make more efforts to fight corruption which continues to hurt the economy and the society.
Meanwhile, according to the EuroCham, Vietnam needs to work on problems like licensing foreign retailers, removing restrictions on foreign investors’ shares (especially in banks) and procedures for settling disputes between businesses and the government.
Yoshihisa Maruta, chairman of the Japan Business Association in Vietnam, quoted a survey as saying that 70 percent of the Japanese companies that invested in Vietnam last year consider the country an important market and plan to expand this year--a rate much higher than many other countries.
However, the respondents also expressed their increasing dissatisfaction with the local business environment, he noted.
More than 60 percent of the respondents reported numerous obstacles to conducting business, like rapidly increasing labor costs, complicated administrative procedures, unclear policies, cumbersome tax procedures, and a lack of transparency in law enforcement.
The survey concluded that Vietnam’s business environment was less positive than those of other ASEAN countries--a situation which, left unresolved, will increasingly affect investors and FDI activities in the long-term.
In response, the Vietnamese PM pledged that Vietnam will continue enhancing its business environment, increase transparency and competitiveness, and move toward a market economy that follows international norms.
Vietnam’s economy is still growing, and its macroeconony has stabilized over the past two years with low inflation, he said.
This year the government will keep inflation at 5 percent and expects economic growth to hit 5.8 percent, the PM said.
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