Several new trade pacts such as the one with EU and Trans-Pacific Partnership are expected boost Vietnam’s economy as many foreign investors are already showing keen interest in making investments in the country. These pacts will also let Vietnam take advantage of low tariffs, which will benefit its exports to top markets like the EU, the US, Japan and Australia.
The newly-signed FTA with the EU, for instance, will remove more than 99 per cent of tariffs on goods traded between the two economies over a period of seven years. And the TPP is expected to boost shipments within the bloc of 12 Pacific-rim nations, which accounts for 40 per cent of the global economy. Negotiations on the deal have been recently completed and it is now pending the approval of the countries' legislatures.
With manufacturing in China becoming expensive due to high labour costs and government policies, US investors' interest in Vietnam is on the rise, which was proved after more than 30 business executives seeking investment opportunities in construction visited the country. Also many leading US companies like Nike and Mast Industries are contemplating building their manufacturing activities in Vietnam.
New FDI pledges between January and November rose 1.1 per cent to $13.55 billion from the same period last year, while the additional funds for existing projects were estimated at $6.67 billion in the period, according to the General Statistics Office.
However, experts are of the opinion that while Vietnam is emerging as the next hot investment destination, its government must resolve issues around customs and tax procedures and introduce investor friendly policies.