A successful EVFTA to benefit Belgium-Vietnam relationship

Nov 18th at 12:00

18-11-2020 12:00:39+07:00

As the Second Indochina War came to an end, Belgium was one of the first nations to support the rebuilding of Vietnam. Since then, both nations have been continuously raising bilateral collaboration in multiple areas and are now looking forward to a long-term, mutually beneficial partnership.

Education is just one area, along with logistics, agriculture, and more, in which Belgium is contributing

Belgium and Vietnam, which have been maintaining bilateral relations since 1973, are now aiming to continue to foster the solid relationship that has already born multiple partnerships in trade, investment, and academics.

In an interview with VIR last month, Belgian Ambassador to Vietnam Paul Jansen described the historical phases of the Belgian-Vietnamese relations. In more than 40 years of cooperation, which has adapted itself to the rapid evolution and dynamism of Vietnam, the partnership has diversified into a variety of areas involving larger financial support in logistics, import-export, agriculture, and education.

The Belgian development cooperation in Vietnam previously focused on water management and sanitation, as well as capacity development and good governance, and official bilateral development assistance to Vietnam amounted to €60 million ($70 million) for the 2011-2015 period. The Prince Leopold Institute of Tropical Medicine in Antwerp (ITM-Antwerp) also worked with local institutes to nearly eradicate malaria in Vietnam over the past few decades.

That development assistance was concluded last year. “There’s no more bilateral development cooperation programme. Instead, there is a mutual partnership in academics, especially in the medical sector, agriculture and climate change and investments in the private sector and business by the Belgian investment bank for developing nations (www.bio-invest.be),” Ambassador Jansen added.

More recently, Vietnam and Belgium have been cooperating in the fight against the current health crisis. In May, the ambassador received 35,000 medical face masks worth VND180 million ($7800) from the Vietnam-Belgium Friendship Association, which were collected by the association along with the Vietnamese Alumni Association in Belgium and affiliated sub-groups.

Ambassador Jansen said, “When the first wave of the pandemic erupted, I received a visit from a Vietnamese gentleman who appeared to have been a doctor in a hospital in Brussels for around 30 years. He came to offer masks for his colleagues who are still in Belgium today. His gesture was a truly personal one as he said he wanted to do something for his old colleagues.”

Continuous relationship

Apart from this spontaneous support amid difficult times, Vietnam and Belgium have also been working on long-term visions to improve human resources training and academic expertise in the country. Since ties have been established between Vietnamese and Belgian scientific institutions, thousands of Vietnamese students have benefited from scholarships, allowing them to gain master’s degrees and doctorates in Belgium.

For instance, more than 2,000 Vietnamese students have finished the Solvay Vietnam Master programmes of the Solvay Brussels School of Economics and Management, which actively promotes student exchanges in both directions with currently three master’s programmes in cooperation with the Open University in Ho Chi Minh City.

The aforementioned success in fighting malaria is based on a close collaboration between ITM-Antwerp and the Vietnamese National Institute of Malariology, Parasitology, and Entomology, which started in 1995 and is still ongoing today with, amongst others, a bilateral project on malaria control in Hoa Binh province in northern Vietnam.

Meanwhile in bilateral trade, both countries have continuously been intensifying their relations. Despite the heavy impact of the pandemic, in the first seven months of 2020, Vietnam exported goods worth around €1.2 billion ($1.4 billion), down 17.7 per cent on-year. Concurrently, the country imported goods from Belgium worth €391 million ($459 million), up 11.9 per cent on-year. Last year, exports to Belgium amounted to €2.5 billion ($2.9 billion), up 8.8 per cent from 2018, while imports increased by 6.5 per cent to €595 million ($698 million).

Within the EU, Belgium was the seventh-largest exporter to Vietnam in 2019, and sixth-largest in 2018. In the last three years, the main Belgian goods exported to Vietnam were chemicals, machinery and equipment, and gems and precious metals. Meanwhile, Vietnam exported mainly textiles, footwear and headgear, and base metals to Belgium.

However, there are also less prominent goods that may see a rise with the recently effective EU-Vietnam Free Trade Agreement (EVFTA). As such, the ambassador sees the agreement as beneficial for both sides and hopes for a “very fruitful partnership with Vietnamese companies to import local goods like seafood, jeans, and T-shirts, as well as an increase in Belgian exports such as medicine and chocolate.”

Bart Verheyen, who is the chairman of the Belgian – Luxembourg Chamber of Commerce in Vietnam (BeluxCham) , also sees opportunities in sectors like “waste management, water sanitation, and medical equipment and applications.” Verheyen added, “Besides goods and services, this agreement also includes important provisions on the protection of intellectual property rights, legal framework, investment liberalisation, and simplified access to public procurement. In other words, the EVFTA provides a predictable, stable, and business-friendly trade and investment environment for Belgian companies.”

In investment, the two focal points of Belgian businesses in Vietnam are the medical and the logistics sector, industries that are among the strongest in Belgium. As such, prominent pharma corporations like Pfizer, Sanofi, and GlaxoSmithKline – all of which have bases in Belgium – are currently aiming to receive permission for selling drugs and other medical substances in Vietnam.

In logistics, meanwhile, DEEP C Industrial Zones in the northern city of Haiphong is one of the biggest projects, which is adjacent to the new and first deep seaport of the city and is offering its tenants industrial land and ready-built warehouses and workshops, all integrated with reliable utilities and supporting services.

Together with the EVFTA, the EU-Vietnam Investment Protection Agreement will pave the way for not only increased trade but also investment activities. One example that combines both areas is the ambition of Belgian cold chain enterprise Ice-Loft, which plans to build a smart cold chain logistics system in Vietnam that would complete logistics services and redirect the nation’s main fruit exports to Europe and the Middle East, both of which are showing great demand for tropical fruit varieties.

Regulatory alignment

Although most Belgian companies are small- and medium-sized, Andries Gryffroy, president of the Belgium Vietnamese Alliance (BVA) believed that the EVFTA will provide more opportunities to expand business, in particular for the logistics and distribution centres in Vietnam. The Belgian Corporation for International Investment will also play a major role in investments and certainly support Belgian companies, he said.

However, Gryffroy added that doing business in Vietnam currently “requires a lot of patience and endurance” from foreign investors. “The country still has to prepare itself to provide investors with attractive propositions that are backed up and supported by business enablers, relevant local knowledge, and robust operations such as traceability and quality control,” he explained.

BeluxCham’s Verheyen added that Vietnam needs to ensure its legal framework “is consistent with the provisions of the EVFTA and that no new barriers are set up which prevent the EVFTA from being fully implemented.”

As the BVA was created to enhance cooperation between Belgium and Vietnam in economic, cultural, and social fields, the organisation tries to maintain good contacts with its members and is planning a roadshow to inform Belgian companies about the different opportunities Vietnam has to offer, as well as the benefits and advantages that come with the EVFTA, Gryffroy added.

Similarly, BeluxCham is also supporting the implementation of the historic agreement, which Verheyen, said “requires all those involved in the EVFTA – governments, local authorities, as well as domestic and international business communities – to work together to raise awareness of the EVFTA and its provisions. Beluxcham, together with the BVA, have and will continue to organise seminars for Belgian enterprises. We are also their first point of contact to assist them in overcoming any potential obstacles and work closely with EuroCham and the Belgian Embassy to Vietnam.”

He added, “A successful EVFTA is in the interest of both Belgium and Vietnam.”