If the ratification of a free trade agreement between Vietnam and the European Union (Vietnam-EU FTA) is delayed, European firms’ confidence in Vietnam’s economic prospects would weaken, leading their investments to fall.
Michael Behrens, chair of the European Chamber of Commerce in Vietnam (EuroCham Vietnam), told reporters in HCM City last week that he expects the Vietnam-EU FTA could go into force at the end of next year as planned.
Britain’s exit from the EU would not affect the FTA, he said and dismissed the possibility of re-negotiating the trade pact. He said the re-negotiation process would take much time and that the Vietnamese government would not let this happen.
“European businesses are confident about Vietnam’s market, buoyed by expectations that the FTA will take effect in the near future. If the ratification of the FTA is delayed, their confidence will be damaged and their investments will shrink. But we think this will not happen,” Behrens said.
He added Vietnam’s exports to the EU are forecast to rise by 50 percent thanks to the FTA and the EU will gain the same growth in its exports to Vietnam.
He said many more European corporations would enter Vietnam for investment and transfer modern technology to local partners.
EuroCham Vietnam currently has 900 member firms. It has offices in Hanoi and HCM City and plans to set up a new office in Danang to support European businesses in the central part of the nation.
According to the EuroCham Business Climate Index (BCI) survey released on Tuesday, nearly 72 percent of 200 European firms participating in the survey describe their current business situation as “excellent” and “good”.
Meanwhile, around 52 percent declared their intention to add staff, of which about 16 percent said they are willing to hire significantly in the near future.
Besides, most respondents plan to maintain their level of investment in the country, with this group representing nearly 41 percent of the total.
However, those intending to increase their investment are not far away from the latter number with 39 percent willing to invest more, and 17 percent planning to invest significantly.
Divesting businesses were marginal, with less than 1 percent saying they plan to do so, a sharp fall from 7 percent last quarter.
Source: http://english.thesaigontimes.vn
Key words: EU, investments, to fall, Vietnam-EU FTA, delayed
