EuroCham releases 2024 Whitebook

Chairman of EuroCham in Việt Nam Gabor Fluit said the Southeast Asian country has worked diligently to develop its economy, generating new jobs, developing new industries and improving livelihoods nationwide.

The European Chamber of Commerce in Việt Nam (EuroCham) released its 2024 Whitebook on Tuesday in Hà Nội. According to EuroCham, the release aims to bring together key stakeholders to bridge commerce and policy, while offering insights from the European business community on Việt Nam's business policy.

Speaking at the event, Chairman of EuroCham in Việt Nam Gabor Fluit said the Southeast Asian country has worked diligently to develop its economy, generating new jobs, developing new industries and improving livelihoods nationwide.

He highlighted the importance of the EU-Vietnam Free Trade Agreement (EVFTA), which has played a crucial role in boosting bilateral trade between Việt Nam and the EU, bringing total trade volume from US$57.81 billion in 2019 to $66.78 billion in 2022, a 15 per cent increase.

Investors from European companies are also more confident now about doing business in Việt Nam. According to the EuroCham Business Confidence Index, 31 per cent of EuroCham members now rank Việt Nam among their top three global investment destinations.

“Throughout the years, Việt Nam has been an important partner of the EU when it comes to economic issues, digital transformation and the green transition, in addition to regional security and stability. However challenging the future may be, the EU is and will remain one of Việt Nam's closest partners,” Fluit said.

“EuroCham is dedicated to open dialogue among all stakeholders. We strongly believe in Việt Nam's capacity to guide its growth and development and are here to support and collaborate on this journey. Let's work together towards these shared goals, harnessing the power of collaboration and innovation,” he added.

H.E. Julien Guerrier, Ambassador of the European Union to Việt Nam, said that to boost trade and economic growth, openness and transparency should be continuously improved, and public administration should be modernised.

The EVFTA plays a crucial role in this process and contributes to the country's success in overcoming economic challenges arising from supply chain disruptions, rising fuel prices and food insecurity.

“By carefully considering the recommendations in this Whitebook, listening to each other's opinions, and actively engaging in the implementation of the EU-Vietnam Free Trade Agreement and other EU-Vietnam initiatives, we can contribute to the growth and prosperity of our economies,” he said.

According to EuroCham's 2024 Whitebook, though the Southeast Asian economy's Q3 GDP grew a promising 5.3 per cent year-on-year, companies remain cautious. Expectations regarding increased revenue or orders remained stable, with no change from the previous quarter. Just 22 per cent of companies planned to expand their teams in Q4 with only 16 per cent expecting an increase in investments.

The country's global investment, however, appeals strongly as 63 per cent of surveyed businesses positioned Việt Nam among their top 10 FDI destinations, with 31 per cent ranking Việt Nam among their top three, while an impressive 16 per cent hailed it as their foremost investment destination, with over half of those surveyed planning to increase their foreign direct investment in Việt Nam by the end of the year.

Meanwhile, hurdles persist. Fifty nine per cent cited administrative difficulties as their main challenge when operating in Việt Nam. Challenges such as uncertainties in rules and regulations, hurdles in permit acquisition, and strict visa and work permit requirements for foreign workers also stood out as prominent barriers.

To improve the nation’s FDI attraction, 58 per cent of respondents said streamlining bureaucracy is key, 48 per cent advocated for enhancing the regulatory environment, one-third called for upgrading transport infrastructure, and 22 per cent emphasised easing visa and work permit requirements for foreign experts.

The book highlighted sustainability as a priority for European companies in Việt Nam, with 80 per cent citing ESG alignment as highly or moderately important. However, major obstacles remain when translating priorities into practice. Regulatory uncertainty, infrastructure gaps and insufficient government support were cited as hindrances to implementing sustainability measures locally.

Additionally, only 20 per cent of firms are proactively preparing for impending EU green regulations, such as the Carbon Border Adjustment Mechanism (CBAM). Meanwhile, 38 per cent currently have no plans for alignment. This distinct lack of preparedness not only poses challenges domestically, but can hinder international competitiveness, especially in the crucial EU market.

The Whitebook is a collaborative compendium of recommendations for stimulating investment and trade priorities for Việt Nam's growth. It provides Vietnamese and European policymakers, businesses, academics and other stakeholders with practical perspectives on key economic issues. The analysis and recommended policy updates seek to support bilateral dialogue on trends, challenges and opportunities in areas like sustainability, digitalisation, finance and infrastructure. By informing discussions among diverse interest groups, the Whitebook plays an important role in shaping future initiatives and investment strategies between Việt Nam and Europe.