1. How does TPP drive FDI inflow into Vietnam ?
Commitments by TPP members on trade in goods and services will have a positive impact on improving the investment environment and attracting more foreign investment in Vietnam. Participating in the TPP will offer Vietnam the chance to continue creating institutions — like market economy, support for reform of Vietnam’s economic growth model and economic restructure. Vietnam, as being part of the TPP game, must also follow its strict principles, including transparency and regulatory coherence, to improve the business environment in a way to make it transparent and more predictable. Vietnam’s commitments on other fields such as intellectual property, environment, labor, government procurement, etc., will also create an attractive environment in Vietnam.
2. Besides textile and garment sectors, in your opinion, what are the sectors that Vietnam could boost FDI inflow thanks to the TPP?
Footwear and seafood are sectors that also receive many benefits. These products have been largely exported to the U.S, Japan and Canada. With reduction and elimination of import tariffs in these countries as a result of the TPP, exports value will gain breakthroughs and contribute to an increase in the national export value.
3. What will TPP mean for Vietnam’s FDI inflow in the long term?
There would be a diversion of FDI from China to Vietnam as companies move factories to the low-wage country and low labor costs. FDI from other countries to Vietnam would increase to take advantage of TPP preferential treatment. In the long term, a new trend of FDI would be formed in Vietnam as a result of the TPP. How the trend would be needs detailed analysis on the content of the agreement and how it works in practice.
4. What has been driving the growth of FDI inflow into Vietnam? Will they last?
Transparency, predictability and stability of the investment environment, the strengthening of protection for intellectual property rights, improved quality of the workforce, clearer and better investment legal framework are among factors that boost FDI growth in the upcoming time.
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Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.