Connect with us


The ‘bridge’ between EU and Vietnam: EVFTA



The EU-Vietnam Free Trade Agreement (EVFTA) and the Investment Protection Agreement (IPA) are the most ambitious agreements in terms of market access, rules and values that the EU has ever signed with a developing country like Vietnam.

The ‘bridge’ between EU and Vietnam: EVFTA

Since August 2020, the EU has for the first time enjoyed preferential access to a vibrant economy of nearly 100 million people, with the fastest-growing middle class in ASEAN and a young and energetic workforce. Up to 48.5% of tariff lines or nearly 65% of EU exports to Vietnam have enjoyed a 0% tax rate since the trade agreement took effect.

The EVFTA has placed EU exporters and investors at least on par with other countries and regions that have signed FTAs with Vietnam such as ASEAN, Australia, New Zealand, Chile, China, India, Japan, Korea and 11 member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

For Vietnamese traders, the benefits after one year of implementation of this agreement are even higher. In terms of markets, the EVFTA allows Vietnamese exporters to access more than 450 million European consumers.

Since the EVFTA took effect, about 85.6% of the total tariff lines have been eliminated for Vietnamese goods. This figure accounts for 70.3% of Vietnam’s total export turnover to the EU. The gradual elimination of import taxes explains the 20% growth over the same period last year for Vietnam’s exports to the EU.

For the services and investment sectors, the agreement provides the best market access opportunity Vietnam has ever offered to a trading partner. The level of liberalization of the service sector offered by Vietnam has actually exceeded its commitments in the World Trade Organization (WTO).

Important service industries opened under the EVFTA include services in the areas of business administration, computer services, postal services, social services, higher education, environmental services, distribution, financial services, shipping, air transport and telecommunications.

For example, EU investors are allowed to transfer financial information and process financial data across borders, as well as to provide advisory intermediary services and other supplementary financial services.

Regarding insurance, it is now possible to cede reinsurance across borders. EU investors can also set up their branches in Vietnam to provide health insurance services and reinsurance services.

Another example of deep commitments is in the shipping sector. Vietnam has liberalized the transport of passengers and goods across borders, and created better conditions for EU investors to set up companies in Vietnam to provide services.

In the field of telecommunications services, EU investors can set up wholly foreign-owned companies to provide Internet services and value-added services such as email, online information and data processing.

Such market access, coupled with important regulatory requirements, helps to ensure that the role of an independent regulator is strengthened, and that EU investors operate on an equal foundation receive equal treatment compared to domestic suppliers.

Friendly investment environment

The ‘bridge’ between EU and Vietnam: EVFTA

The EVFTA and IPA not only create new opportunities for growth and development, but also promote sustainable development for both sides. These agreements include strong commitments to protect people’s core rights in the workplace and in the living environment. We have seen positive changes in this area when Vietnam enacted a new Labor Code in January 2021.

Vietnam has also joined a number of core international labor conventions such as the International Labor Organization’s Convention on the Abolition of Forced Labor 1957 and the Convention on the Right to Organize and Collective Bargaining. All these changes in labor standards not only create more jobs, but more importantly help create a better working environment and improve income for Vietnamese people.

The FTA and IPA were negotiated together as a package of commitments on investment and trade. They complement each other. The FTA includes ambitious commitments to market opening and liberalization of foreign direct investment.

This will give EU investors an important advantage in accessing the Vietnamese market and vice versa, as well as help create a level playing field for their activities in fair, predictable and non-discriminatory conditions.

The IPA will protect the assets of EU investors in Vietnam and of Vietnamese investors in the EU. Together these agreements create a friendly investment environment between the EU and Vietnam.

The IPA sets standards for investment protection, which are fundamental guarantees that governments must respect some basic principles of treatment that foreign investors can rely on when making investment decisions.

These guarantees include: non-discrimination; right of possession allowed only with prompt and satisfactory compensation; ability to transfer and repatriate funds associated with an investment portfolio; guarantee of fair and equal treatment and material security;

It also includes commitment that governments will honor their written and legally binding contractual obligations to investors, and compensate for damage in certain cases related to war or armed conflict.

The new structure of EU international agreements, in particular the separation into FTA and IPA, allows trade and investment liberalization commitments under the FTA to come into force rapidly, while the IPA will come into force immediately after ratification by all 27 member states.

Meanwhile, protection for EU investors under bilateral investment agreements of 21 member states will still be maintained. As of January 2022, the IPA has been ratified by the Czech Republic, Denmark, Estonia, Greece, Croatia, Latvia, Lithuania, Hungary, Romania and Sweden.

It is important that the IPA is built on the core values of the EU: the United Nations Charter and the Universal Declaration of Human Rights, sustainable development and transparency agreed in the EVFTA; and protection only for investments made in accordance with domestic law, including obligations related to environmental and labor protection as well as respect for human rights;

And, promotion of responsible business behavior through the tools such as the Organization for Economic Cooperation and Development’s Guidelines for Multinational Enterprises, the United Nations Global Compact and the Tripartite Declaration of the International Labor Organization for Sovereign Rights aims to regulate and protect the interests of citizens.

The IPA offers a high level of investment protection while protecting the EU and Vietnam’s right to regulate and pursue legitimate public policy objectives.

Under the agreement, the host country can impose regulatory obligations on investors, based on the level of public interest protection it deems appropriate. For their part, investors must comply with all domestic laws of the country where they invest in order to benefit from investment protection.

An important new element of the agreement is the inclusion of a modern and reformed investment protection framework, including the Investment Court System (ICS) for the settlement of investment disputes, eliminating controversial parts of the old-style investor-state dispute settlement (ISDS) mechanism.

Vietnam needs to exert more effort

The ‘bridge’ between EU and Vietnam: EVFTA

In contrast to the investment treaties in force between Vietnam and EU member states, all procedures under EVIPA will be completely transparent, and hearings will be open to the public and interested third parties. For example, non-governmental civil society organizations will be allowed to submit comments. This ensures that all aspects of human rights and sustainable development are effectively adjudicated by the Investment Court.

Crucially, the IPA pinpoints when governments are in breach of their fair and equal treatment obligations and eliminates the scope of arbitrary interpretation. Investment agreements are also tight enough to prevent “fake investments”. The agreement does not protect so-called “shell” or “ghost” companies. To be eligible to become an investor, companies must run actual business operations in the EU or in Vietnam.

Accurate and unique understanding and enforcement of EVFTA and IPA remains a challenge. Although the text of the agreements is quite clear, there are differences in the interpretation of the commitments. This requires Vietnam to make more efforts to improve internal coordination, and possibly to deal with forces that are resisting the country’s international economic integration efforts.

At the highest political level, this strong spirit of cooperation with the EU in the implementation of the agreements is evident. However, it seems that not all public agencies have the same level of understanding and commitment.

The opportunity in the IPA is huge. The EU’s total current investment in Vietnam is estimated at 22.2 billion USD, far below the potential. The IPA is expected to usher in a new investment era for Vietnam, in which EU and non-EU investors will come to Vietnam to reap the benefits of EVFTA and IPA.

The vision for Vietnam to become a regional manufacturing hub for the whole of ASEAN is not out of reach, but exploiting those opportunities is highly dependent on the real desire of the government agencies that are responsible for implementing these agreements, as well as the initiative of domestic enterprises in seeking and working seriously with European investment partners.

Lan Anh



Shell to deliver first LNG shipment for PV Gas



Petrovietnam Gas JSC (PV GAS) has confirmed a purchase with Shell PLC, facilitating the world’s leading LNG supplier to transport its first LNG shipment to Vietnam.

Shell to deliver first LNG shipment for PV Gas hinh anh 1The logo of Shell at the Contech Vietnam Fair in 2023. (Photo: VNA)

Hanoi Petrovietnam Gas JSC (PV GAS) has confirmed
a purchase with Shell PLC, facilitating the world’s leading LNG supplier
to transport its first LNG shipment to Vietnam.

PV GAS issued a tender on April 27 to import LNG for the trial run
and commercial operation of Thi Vai LNG warehouse.

And Shell was selected as the supplier for the first imported LNG
shipment to the warehouse.

The signing confirmation is a milestone for developing PV GAS and Vietnam’s
gas industry. The Thi Vai LNG Warehouse is the largest scale in Vietnam
with a capacity of phase 1 of 1 million tonnes per year, then expanding to
3-6 million tonnes. 

It can receive LNG vessels of up to 100,000 tonnes of LNG ships,
with the main phase 1 facility including LNG storage tanks with a capacity
of 180,000 m3 and technological equipment designed according to Vietnamese and
international standards and regulations.

The system will supply about 1.4 billion m3 of gas to Nhon Trach 3
and 4 power plants, industrial customers, and a part of Vietnam’s gas shortage
after 2023./.


Continue Reading


Vietnam sees steep decline in hiring of foreigners, overseas Vietnamese



The Vietnamese job market saw a plunge in recruitment demand in January-April, with hiring of foreigners and overseas Vietnamese tumbling 39 percent compared to the pre-pandemic level due to the global economic downturn, according to a report recently issued by Navigos Group, one of the leading recruitment companies in Vietnam.

In addition, there was a significant drop of 63 percent in demand for hiring seasonal workers and individuals on short-term contracts. 

Similarly, the demand for recruiting new graduates also experienced a substantial decrease of 49 percent.

Following the prevailing market fluctuations and economic downturn, there was a noticeable decline in labor recruitment demand for various positions including foreigners, overseas Vietnamese, seasonal workers, short-term contracts, new graduates, and mid-level and senior professionals, according to the Navigos Group report.

Overall downtrend

Navigos Group conducted the analysis using job posting data from its platforms, VietnamWorks and Navigos Search, comparing the first four months of 2019, or the pre-COVID period, with the first four months of 2022, or post-pandemic, and January-April this year.

The findings showed that on average, the recruitment demand for various industries during the first four months of 2023 shrank 18 percent compared to the pre-pandemic period and reduced 16 percent compared to the post-pandemic recovery phase in 2022.

Notably, the textile, garment, and footwear industries experienced a persistent 39-percent fall in labor demand, primarily influenced by the global economic recession, inflation impacting purchasing power, and reduced orders.

The recruitment demand in the construction and real estate industry contracted by up to 34 percent in January-April and the procurement, materials, and logistics sectors faced a 25-percent decrease compared to 2019.

The import-export sector dwindled by 18 percent, while the transportation and logistics sector recorded a decline of 22 percent.

The tourism, restaurant, and hotel sectors, which were significantly impacted by the COVID-19 pandemic, saw the recruitment demand dive by 55 percent in the first four months of 2022 compared to the pre-pandemic level.

However, there was a slight increase in staffing requests within these sectors in January-April, with the decline reducing from 55 percent in 2022 to 43 percent when compared to the pre-pandemic level.

The legal and administrative fields also encountered a substantial decline of 31 percent in the demand for recruitment.

The recruitment demand for marketing professionals dropped by 28 percent compared to the pre-pandemic period.


Bucking the downtrend, the banking and financial services sector, along with the consumer goods industry, experienced a growth rate of 10 percent in the first four months of 2023 compared to the equivalent period prior to the pandemic.

The recruitment demand in the healthcare, retail, and wholesale sectors remains stable, with little to no significant changes.

Navigos Group forecasts that businesses will continue to adopt cost-cutting measures to retain their workforce or may even tighten their belts further until the global economy hits its lowest point and begins to recover.

Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!


Continue Reading


Hanoi urged to bolster economic growth drivers



Permanent Government members have asked Hanoi to bolster its economic growth drivers, namely investment, export, and consumption, during a recent meeting with the Standing Board of the municipal Party Committee.

Hanoi urged to bolster economic growth drivers hinh anh 1Part of Hanoi capital city (Photo: VNA)

Hanoi – Permanent Government members have asked Hanoi to bolster its economic growth drivers, namely investment, export, and consumption, during a recent meeting with the Standing Board of the municipal Party Committee.

They highly valued efforts and achievements by the Hanoi Party organisation, administration, and people which have joined the entire country in stablising the macro-economy, controlling inflation, boosting growth, guaranteeing major balances, developing culture, maintaining political stability and social order and safety, consolidating defence – security, and promoting external relations and integration into the world, according to the Government Office’s announcement of the permanent Government members’ conclusions made at the meeting.

However, there remains certain shortcomings, difficulties, and challenges to be addressed, they pointed out, elaborating that Hanoi hasn’t made any considerable breakthroughs in economic development, especially sustainable and substantive development; the growth pace is slower than expected; while environmental pollution, traffic congestion, and infrastructure overload have yet to be improved remarkably.

They requested that the city should be further aware of its role, position, potential, and importance to national development; identify difficulties, challenges, and weaknesses; strongly bring into play self-reliance, solidarity, and the spirit of thinking big and acting bold so that it can develop comprehensively, fast, and sustainably and deserve its status as the national political – administrative headquarters and a big centre in terms of economy, culture, education – training, science – technology, and international integration of the whole country.

Hanoi should actively grasp the situation; stay ready to respond to any circumstances; improve the capacity of forecasting possible impacts on local economic development; make flexible, timely, and effective policy response; and bolster economic growth drivers (investment, export, consumption). Besides, it needs to seriously implement the Government and the Prime Minister’s resolutions and directions on dealing with problems in the monetary, credit, real estate, stock, and corporate bond markets.

The capital needs to improve the management, use, and disbursement of public investment, along with funding for the socio-economic recovery and development programme and the three national target programmes. It should strive to complete the tasks and overfulfill the targets for 2023 so as to create a solid stepping stone for the following years. It is also necessary to mobilise every resource for development, promote public – private partnership, and apply new governance, investment, and management models.

Permanent Government members demanded Hanoi push ahead with administrative reforms; build a system of administrative agencies with strong solidarity, high unanimity, integrity, and democracy that work efficiently and centre on people and enterprises; and develop a contingent of professional, civilised, modern, incorruptible, and devoted cadres and civil servants who work for the sake of the people.

They underlined the importance of quickly devising the Hanoi Capital Planning for 2021 – 2030, with a vision to 2050; and adjusting the general planning for building the city by 2045, with a vision to 2065 that features a reformed mindset and a breakthrough, strategic and long-term vision, capitalises on every distinctive potential, outstanding opportunities and competitive edges, and addresses outstanding problems and weaknesses.

The city was also told to step up the implementation of national digital transformation measures and increase the provision of online public services on the National Public Service Portal.

In addition, Hanoi needs to boost socio-economic development in tandem with preserving and bringing into play traditional cultural values and protecting the environment. Social issues, social welfare policies, job creation, and educational and manpower quality should also be given due attention.

The officials required Hanoi further to guarantee political security as well as social order and safety, step up substantive diplomacy and international integration, enhance disease prevention and public health care, and augment the fight against corruption and other negative phenomena.

Local authorities were also asked to boost the Party and political system building; create a lean, efficient, and effective apparatus; and develop a contingent of moral and capable personnel, especially leaders of agencies, according to the announcement./.


Continue Reading