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$22bn in deals signed during PM's Japan visit

Released at: 11:33, 06/06/2017

$22bn in deals signed during PM's Japan visit

Photo: VGP

Deals signed in urban development, transport, and infrastructure at business promotion conference on June 5.

by Quang Huy

Enterprises and localities from Japan and Vietnam signed agreements worth a combined $22 billion at the Conference on Business Promotion into Vietnam held on June 5 during Prime Minister Nguyen Xuan Phuc’s five-day visit to Japan.

Deals were signed in urban development, transport, and infrastructure at the conference, attended by 1,400 Japanese and 200 Vietnamese businesses.

Among the deals, low-cost carrier Vietjet Air signed a strategic agreement worth $348 million with Mitsubishi UFJ Lease & Finance Co. to finance three aircraft purchases.

The Vietnamese Government did not provide further details on the other agreements.

“When talking about investing outside of Japan, we immediately think of Vietnam,” said Mr. Yutaka Watanabe, President of Towa Industry Vietnam.

But Japanese investors also note that Vietnam needs a more skilled workforce, in particular managers who speak Japanese, as well as more relaxed policies on the importation of equipment and in the car industry.

PM Phuc pledged to carefully consider all proposals while continuing to reform Vietnam’s economy to boost competitiveness.

“Everyone present today, in this conference hall, is considered a close friend of Vietnam,” he told the gathering, describing the conference, attended by a record number of Japanese and Vietnamese businesses, as “historic”.

Japanese Prime Minister Shinzo Abe told the conference that the two countries will continue to cooperate to promote free trade.

Vietnam-Japan relations have thrived under the government of Prime Minister Abe, who has been seeking to increase multifaceted cooperation with the Southeast Asian country.

When elected Prime Minister for the first time in 2012, Mr. Abe visited Vietnam, accompanied by a delegation of 130 businesses. After his election for a second term, his first overseas trip was to Vietnam, where he was hosted by then-Prime Minister Nguyen Tan Dung.

“This is the fifth time Prime Minister Phuc and I have meet and I believe that under his leadership, economic ties between Vietnam and Japan will further grow,” Mr. Abe said.

PM Phuc hopes for a fresh investment wave from Japan into Vietnam, especially in support industries, infrastructure development, high-quality services, tourism, renewable energy, and agriculture.

The two countries have limitless potential for cooperation, he added, and he hopes Japanese businesses will make long-term investments in Vietnam. He pledged to handle recommendations put forward by Japanese companies in order to improve Vietnam’s investment climate.

Japan is Vietnam’s largest source of official development assistance (ODA), as well as the country’s second-largest foreign investor, third-largest tourism partner, and fourth-largest trade partner. As at the end of 2016, Japan had more than 3,200 investment projects in Vietnam with total registered capital of more than $42 billion.

TPP renegotiations

On the same day, PM Phuc told the Nikkei Asian Review in an interview that Vietnam is mulling over which sections of the TPP trade deal can be renegotiated after US President Donald Trump withdrew the country from the deal.

“Vietnam has assigned the minister in charge of trade to discuss with other members of the TPP on the options for the way forward” in order to find “a way to balance and harmonize the interests of the signatories,” PM Phuc said on the sidelines of the annual Future of Asia conference in Tokyo.

He said his trade minister will “discuss with TPP peers the best options for mutual benefit,” and that the minister will report back to him on the discussions, suggesting the talks will influence Vietnam’s decision on whether to push for renegotiation.

In the interview, the Prime Minister did not explicitly say the eleven remaining members ought to renegotiate the TPP. But when asked what elements Vietnam might want to change, he said the matter was still under consideration.

Prior to his visit to Tokyo, PM Phuc told media outlets in Hanoi that Vietnam will work with Japan and other governments to put the TPP into effect. He called the trade deal crucial to connecting and developing the economies in the Asia-Pacific region.

Remaining countries such as Japan and New Zealand are keen to proceed with the so-called “TPP 11”.

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