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Japanese news publication Nikkei Asian Review released an article detailing the EU’s desire for Vietnam to resume international flights once the European Union - Vietnam Free Trade Agreement (EVFTA) comes into force.
EU is keen for Vietnam to restart flights as EVFTA takes effect
Nicolas Audier, chairman of the European Chamber of Commerce in Vietnam (Eurocham), also called on Hanoi to authorise and issue visas to allow foreigners to enter the country when he spoke with Nikkei Asian Review in Ho Chi Minh City recently.
At present, foreigners are permitted to leave the country and are allowed to take commercial planes which are made up of passengers keen to return to Europe. But standard Europe-to-Vietnam flights are not expected to be authorised until 2021.
The Vietnam National Assembly in Hanoi recently granted their approval to the free trade deal with the EU, making Vietnam the second Southeast Asian nation endorse such a treaty with the European bloc after Singapore, with the EVFTA set to come into effect as early as August.
"EU companies will consider Vietnam as an investment target, now more than ever because of the EVFTA," Giorgio Aliberti, EU Ambassador to Vietnam told Nikkei in another interview given in Hanoi soon after the free trade agreement was approved.
The agreement comes amid increasing trade tensions between the United States and China. Once the deal takes effect, 71% of Vietnamese exports to the EU will become duty-free, as will 65% of shipments going the other way. Moreover, Hanoi will move to phase out up to 99% of the remaining tariffs over the course of 10 years, while Brussels will do likewise over a seven-year period.
The impact of the COVID-19 will serve as one of many factors to push people to persify as they try to not place too much focus on China, Ambassador Aliberti said, adding that although it remains a challenge, the EVFTA is also an opportunity for the country to create a positive business environment that can attract additional foreign investment.
Nikkei also gives quotes from the Eurocham’s Chairman as saying that many companies will begin to export goods to the US through another country, with Vietnam representing one of the best places to invest in.
He pointed out that all air routes connecting the Vietnam with EU states ceased operations on April 1 as the COVID-19 spread globally, serving to damage European economies in the process.
The EU trade official emphasised that European firms have been able to organise work via videoconferences with Vietnamese partners, although many business experts and investors are keen to come to the nation physically for a few days, as they had done previously.
The EuroCham representative cited both the EVFTA and the EU - Vietnam Investment Protection Agreement, which also won approval on June 8, and said the country is considered a gateway into Southeast Asia for European enterprises.
According to Nikkei, Vietnam has become one of the most highly sought-after destination for international flights in Asia due to an anticipated economic recovery following the COVID-19. Businesses in the region are also working to persify supply chains which rely heavily on China, due to tensions with the US posing risks to their operations.
With plenty of calls from the Republic of Korea, Japan, Thailand, and Australia to resume flights to the nation, this could pave the way for a gradual expansion of trade and tourism.
Despite this, Vietnam remains cautious about fully reopening airports to foreign cities as the country braces itself for a possible second wave of the pandemic.