Hanoi forum hears that agreement provides an avenue for greater ties between the two countries.
Deputy Prime Minister Hoang Trung Hai told the Vietnam Japan Economic Forum (VJEF 2015) on October 14 that the TPP is expected to help the two countries leverage the advantages each holds to promote socio-economic development, especially in regard to the agriculture, support, and high-tech industries.
The forum was held by the Vietnam Chamber of Commerce and Industry (VCCI) and the Japan External Trade Organization (JETRO) in Hanoi to strengthen cooperation between Japanese and Vietnamese enterprises. More than 300 delegates, primarily government officials, economists, business leaders, and media agencies from the two countries were in attendance.
Addressing the forum, Deputy Prime Minister Hai spoke highly of the cooperation and support received from Japan and stressed it was an important partner of Vietnam. “There are currently about 1,500 Japanese enterprises in Vietnam with total investment of $37.7 billion in 2,661 projects,” Mr. Hai said.
Together with improvements in its investment environment, Vietnam aims to attract large projects from multinational corporations in high technology and infrastructure development to restructure the national economy.
A number of representatives from Japanese enterprises at the forum said they remain hesitant to invest in Vietnam due to a lack of information, complex administrative procedures, opaque policies, and a shortage of mid-level human resources.
VJEF 2015 reviewed the existing situation and proposed solutions to strengthen investment and trade relations between Vietnam and Japan and focused discussions on three main areas: Vietnam - Japan economic cooperation in the context of international economic integration, especially after the successful negotiation of economic partnership agreements (EPAs) and the TPP, Vietnam - Japan agricultural cooperation, and investment opportunities for Japanese companies during Vietnam’s restructuring process.
The forum was a platform for Japanese and Vietnamese businesses to meet and seek investment opportunities and provided a venue for businesses from both countries to speak face-to-face with government officials at all levels.
Deputy Prime Minister Hoang Trung Hai
Along with improving the investment environment and enhancing competitiveness to create the best conditions for investment in the country, Vietnam has focused on attracting large foreign corporations to invest in major projects in high technology and infrastructure to bolster economic restructuring. Over the last 40 years the relationship between Vietnam and Japan has become a strategic partnership, which is an important lever for the two countries to move to the next level.
The Vietnamese Government hopes Japanese firms will expand their investment in six key industries in the future: electronics, agricultural machinery, agricultural and fishery products processing, shipbuilding, the environment and energy efficiency, and the production of automotive parts and accessories, and promotes investment in other sectors such as healthcare and education.
Mr. Nagai Katsuro, Economic Envoy at the Embassy of Japan in Vietnam
The TPP will provide a chance for Vietnam to improve its competitiveness. However, joining the TPP is not only an opportunity to perfect its trade mechanisms but also to perfect its institutions. Vietnam’s market economy is about 20 years behind the economies of the other countries in the TPP. To compensate, it should invest resources in restructuring.
The government should also have a clear direction in priority areas. Textile, fisheries, and agriculture are expected to grow in Vietnam after the TPP but the government has yet to identify the fields that should be prioritized. After the TPP, imports of agricultural livestock into Vietnam will face many challenges. The government should therefore increase investment in water resources to improve competitiveness.
Mr. Shimon Tokuyama, Chairman of the Japan Business Association in Vietnam
Many Japanese companies intend to expand their investment in Vietnam but there are obstacles. Japanese businesses experience difficulties when investing in Vietnam from complicated administrative procedures and unclear policies in the development of the automotive industry and support industries. Meanwhile, the quality of human resources does not meet the requirements of Japanese enterprises. The Vietnamese Government needs to increase the minimum wage at a reasonable level and must develop infrastructure to reassure foreign businesses investing in Vietnam.