Italian Investment in Vietnam to Increase Sharply in 2019

Friday, January 25, 2019  16:06

“Italian enterprises will have many opportunities to cooperate with Vietnam in areas where Italy has advantages, once EVFTA Agreement is ratified and valid,” said Mr. Michele D’ercole, Chairman of the Italian Chamber of Commerce in Vietnam, when asked about trade and investment prospects between the two countries. “In 2019, Italian investment in Vietnam will increase sharply,” he affirmed. Le Hien reports.

Could you please tell us about bilateral trade between Vietnam and Italy in the recent time?

Bilateral trade between Italy and Vietnam has been developing rapidly over in the last three years. The total export turnover between the two countries in 2018 was about €4 billion, of which €1.3 billion was exported from Italy to Vietnam and more than €2.7 billion was exported from Vietnam to Italy. As you know, Italy is one of the world's leading countries in manufacturing industrial machinery sector, famous for its leather goods, textile materials and Europe's leading pharmaceutical products. These are the key products exported to Vietnam in 2018. On the other hand, Vietnam exported to Italy many telecommunications applications such as telephones, computer equipment, textile products, and leather shoes, and agricultural products such as tea, coffee, shrimp, fish, seafood and others.
Last year, Icham hosted Lifestyle Furniture, more than 20 Italian companies attended the program, and they met 60 local distributors. We will host this event next year in Hanoi, connecting potential Italian suppliers with local companies. Because as I said, machinery production is a key area of Italy. And Vietnam has become a big market for these products. The 2019 bilateral trade relations between the two countries may continue to grow as well as the presence of increasing Italian companies in Vietnam and this will help bilateral trade grow.
How would you evaluate the advantages FTAs bring to Vietnam’s economy?
The Italian side is really interested in the EVFTA Agreement, which will come into effect in the near future, hopefully around the beginning of 2019. Italian enterprises will have many opportunities to cooperate with Vietnam in areas where Italy has advantages once EVFTA Agreement is ratified and valid. However, in order to penetrate the European market, Vietnam's export products need to have CE certified products, and Vietnamese companies must implement production processes according to European standards such as: environmental protection and wastewater treatment. Price is not enough, to ensure proper production process, not only the final product. So they need to learn to do the right thing so that the product can be exported to Europe and Italy.
We have just celebrated Icham's 10th anniversary, we are happy to receive the support of local businesses, because our major customers are Italian businesses who contact us about selling their products in the Vietnam market.
Along with the advantages that the Free Trade Agreement brings, we need to improve the cooperation between Icham and VCCI, which is very important to help Vietnamese SMEs expand their export markets, to Italy in particular and Europe in general.

What are opportunities for Italian investment and trade in the Vietnam market in the coming time?

Currently, Italian investment in Vietnam is only about €300 million. I am very confident that in 2019, thanks to the Free Trade Agreement, as well as Italian businesses knowing more about the Vietnam market, investment opportunities will be increased; however, trade investment may also be subject to effects due to the China -American trade war. We have also received a number of requests from Italian companies, they are very interested because Vietnam is a potential market and they are planning to set up factories here. In my opinion Vietnam, with its favorable location, government policies, and regional connectivity, will continue to be a priority for Italian businesses in the region, as it serves as a strategic gateway for Southeast Asia although infrastructure is still a weakness. To attract investment capital, the Vietnamese government needs to invest heavily in reforming administrative procedures, and simplify procedures to encourage foreign investors. In particular, the tax rate being brought to 0% (when EVFTA takes effect) will facilitate import and export activities between the two countries. I am quite sure that, in 2019, Italian investment in Vietnam will increase sharply.
Thank you very much!

Le Hien reports