ADVOCACY UPDATE (16 June 2019 – 11 July 2019)

I. EVENTS 

1. EuroCham Attended a Conference on Northern Economic Development in Hung Yen Province | 25 June 2019 | Hung Yen Province

On the 25th of June 2019, Vice-Chairman Ywert Visser represented EuroCham at the Conference on Northern Economic Development in Hung Yen province. The conference was chaired by Prime Minister Nguyen Xuan Phuc and Deputy Prime Ministers Truong Hoa Binh, Vu Duc Dam, and Trinh Dinh Dung. The conference was attended by various Ministers including Minister Mai Tien Dung of the Office of Government, as well as the Ministers of Industry and Trade, Planning & Investment, Transport, Information & Communication, Sport, Culture and Tourism, etc. along with high level Governmental officers.
The Prime Minister pointed out that regional development, linking provinces and cities in the region into a unified system, is organic. It is necessary to make a mechanism strong enough – not constrained or divided by administrative boundaries – to coordinate the operation of the region. The conference discussed and evaluated the region's socio-economic situation: the issues of the investment environment; business and urban infrastructure; transport, logistics development; high-quality human resources; promoting science, technology and innovation and creation; and improving tourism services in the region.
Mr. Ywert Visser had the chance to briefly discuss with PM Nguyen Xuan Phuc, OOG Minister Mai Tien Dung and Minister of Industry and Trade Tran Tuan Anh the signing of the EVFTA on Sunday, 30th June 2019.
 

2. EuroCham attended the Mid-term Vietnam Business Forum (VBF) | 26 June 2019 | Hanoi

EuroCham attended the Mid-term Vietnam Business Forum (VBF) organised by the Ministry of Planning and Investment, the World Bank and IFC at the Lotte Hotel in Hanoi. The theme of the VBF was: “Roles of Business Community in Rapid and Sustainable Development”. Deputy Prime Minister Trinh Dinh Dung attended and delivered a key-note speech while Minister of Planning and Investment Nguyen Chi Dung chaired the conference.

EuroCham Vice-Chairman, Mr. Tomaso Andreatta, singled out the environment and sustainability as pressing themes for the long-term success of Vietnam. EuroCham welcomes all the positive changes in the regulations of Vietnam but emphasised that further actions are still strongly recommended to ensure that the legal framework is completed and can facilitate businesses in various industries. EuroCham expects that unclear and unnecessary business conditions will be eliminated or simplified in a timely manner.

EuroCham Executive Committee members, as representatives of the leading European companies which have many years of experience in Vietnam, also gave various interviews with the press in which they shared their points of view on the latest updates of the EVFTA as well as the next moves in which their companies could make the most of the unprecedented benefits from the agreement.

More details of the event can be found here.

3. Vietnam and EU on the Cusp of Historic New Chapter with EVFTA Signing | 30 June 2019 | Hanoi 

EuroCham joined the Prime Minister of Vietnam, H.E. Nguyen Xuan Phuc, EU Trade Commissioner Cecilia Malmstrom, and Romanian Minister for Business, Trade and Entrepreneurship, Ștefan-Radu Oprea, at the official signing of the EU-Vietnam Free Trade Agreement (EVFTA) and Investment Protection Agreement (EVIPA) in Hanoi. This historic event moves the EVFTA one step closer to ratification, ahead of a crucial vote in the European Parliament. Once the agreement enters into force, it will set in train a gradual elimination of almost all tariffs on goods traded between the EU and Vietnam, opening up new opportunities for investors and consumers on both sides.

EuroCham has been a strong supporter and an integral part of the EVFTA ever since negotiations first began, providing detailed insights and recommendations throughout 14 rounds of negotiations. Once the agreement was concluded in December 2015, ensuring its swift ratification and implementation has been at the heart of the Chamber’s activities. EuroCham has led three Missions to Europe, bringing business leaders to Brussels to highlight the importance of the EVFTA and sharing the positive changes Vietnam continues to make to its trade environment and legal framework. This included meeting with EU Commissioners, Members of the European Parliament (MEPs), and senior EU officials, as well as speaking at the European Parliament’s International Trade (INTA) Committee on several occasions, most recently in October 2018.

More details of the event can be found here.

4. “The EVFTA-What happens next” Conferences in Hanoi and HCMC

1 July 2019 | Hanoi

Kicking off immediate actions following the official signing of EVFTA, EuroCham organised a conference in coordination with the Vietnam Chamber of Commerce and Industry (VCCI) and with the participation of 100 members of both chambers to bring all the latest updates from the EU and Vietnamese Government about the EVFTA and next steps to utilitise benefits of the agreement. At the conference, the Chairmen of the two chambers, Mr. Nicolas Audier and Dr. Vu Tien Loc, announced the establishment of EU–Vietnam Business Council and discussed specific activities to further strengthen EU–Vietnam trade relations. A fundamental objective of this partnership is ensuring the ratification and implementation of EVFTA.
 
The official signing of the EVFTA and Investment Protection Agreement (EVIPA) on the 30th of June 2019 will have tremendous, positive benefits for the business communities of both sides. These agreements will contribute to perfecting the legal framework and business environment and mark a leap forward in the cooperation between Vietnam and EU, building a foundation for sustainable development.
 

5 July 2019 | HCMC

Following the success of the briefing in Hanoi, EuroCham organised a breakfast briefing for over 140 of its members, Business Associations, Sector Committees and journalists, updating on the progress of the EVFTA with the momentum of the signing in Hanoi.

EuroCham Chairman Mr. Nicolas Audier briefed members on the EVFTA and its importance for 3 reasons: it is the most ambitious FTA the EU has ever concluded with a developing country; it improves not only trade and investment but also the environment and social and labour rights to ensure free and fair trade; and it sets the blueprint for a region-region EU-ASEAN FTA which was initiated earlier. He also applauded Vietnam for the positive steps taken by ratifying ILO Convention 98 on right to organise and collective bargaining and the upcoming ratification of the remaining two conventions: Convention 105 on forced labour by 2020 and Convention 87 on freedom of association by 2023.

Mr. Audier summarised key EuroCham activities backing up the EVFTA since day 1, including engagement in the negotiation process completed in 2015, a roadmap exercise conducted by EuroCham’s 16 Sector Committees who worked with EuroCham to raise their recommendations to EU institutions and the Vietnamese Government. It is important that the EVFTA will be consistently implemented at both central and local levels. The Chamber has also made efforts to also ensure that Vietnamese businesses and citizens see the benefits of the EVFTA. The next steps to be taken will be by Vietnam’s National Assembly which will have its next session in October 2019 while the newly-elected European Parliament will need to put the FTA as the priority on its next Agenda in September 2019.

In the second part of the Briefing, EuroCham Vice-Chairman Jean Jacques Bouflet briefed in detail on the benefits of the EVFTA: the elimination of tariffs for EU exports, the removal of technical barriers to trade, services and licenses for many sectors and investment trends coming with the EVFTA and new waver EU capital. The other benefits that the EVFTA will bring are: a more predictable and reliable framework and greater transparency.

The EVFTA will enhance the global value of exports, increase Vietnam’s GDP by 2-3%, and mean that Vietnam is now considered as a 2nd business partner of the EU. He also briefed on tariff reduction and schedules for many specific EU exports including machinery, cars, wines & spirits, food & dairy, pharmaceuticals, as well as Vietnamese exports such as coffee, fresh fruits and vegetables, rice and seafood. Mr. Bouflet also raised the importance of removal of non-tariff barriers, especially for agricultural products, as this will enable them to capitalise on EU brand recognition. For the Mobility sector, it is important that the certificate of conformity will be accepted (no further testing will be required) but only 5 years after the agreement’s entry into force. He also presented the investment trends which will come with the EVFTA and the issues/recommendations for the market access, of which improvements can already be seen.

Like Mr. Audier, Mr. Bouflet also shared that the EU Vietnam Investment Protection Agreement will provide better protection for investors, IPRs, etc. however, it will require double ratification by the EU Parliament and each individual EU Member State.

II. SECTOR COMMITTEE UPDATES

1. Transportation & Logistics Sector Committee | ​18 June 2019 | Meetings with Customs Authorities

On the 18th of June, EuroCham and TLSC met with Hai Phong Customs authority and General Department of Customs.
The meetings were successful when various topics related to customs procedures in the Whitebook 2019 were responded to by the authorities. The meetings also served as a good foundation for future collaboration between EuroCham TLSC and the customs authority. In light of the upcoming EVFTA, customs procedures is one of the aspects that receives much interest from the business community, particularly in terms of rules of origin and tariff for export–import. Therefore, EuroCham TLSC expects that with the good partnership with Vietnamese customs authority, the Chamber could represent the voice of European businesses for positive policy developments which will facilitate the trading activities in Vietnam. In the upcoming time, EuroCham TLSC will continue to leverage the relationship with the customs authorities via various joint activities such as dialogues/training sessions/conferences for the business community.

2. Tax & Transfer Pricing Sector Committee (Tax&TP SC) | June 2019 | Tax & Customs Survey

In June 2019, Tax & TP SC conducted the Tax & Customs survey to collect feedback from all EuroCham members, focusing on tax and tax-related customs issues. The survey aimed to collect recent tax and customs issues that restrict EuroCham members' business operations and manufacturing activities in Vietnam. With this survey, Tax & TP SC aimed firstly to understand common concerns of EuroCham members, then to combine and reflect those issues to the Government and relevant authorities through various channels, such as at EuroCham’s dialogue with the Prime Minister’s Advisory Council for Administrative Procedure Reforms (“ACAPR”). The survey received 84 issues and topics of interest, such as corporate income tax, foreign contractor tax, import/export tax and tax-related customs, personal income tax, transfer pricing, value-added tax, and so on. Tax & TP SC will work on the tax part to figure out the most effective way to address such issues, while customs-related parts will be shared with the Transport and Logistics Sector Committee for coordination.  
For more details of the Tax & Customs Survey, please contact EuroCham Sector Committee Secretariat at sec.comms@eurochamvn.org.

3. Eurocham and Mobility Sector Committee

22 June 2019 | Meeting with EU Commission- Director General for Transport, Dr. Henrik Hololei and Delegation

On the 22nd of June, EuroCham board members, Mobility Sector Committee and members joined Mr. Henrik Hololei, Director General, Directorate General for Transport and Mobility of EU Commission and its delegation.
The discussion included a debrief on the outcome of the EU-ASEAN Transport Dialogue which took place on the 21st of June in Da Nang, and shared an overview of the latest transport policy developments which may be relevant for ASEAN. EuroCham Mobility Sector Committee members also updated on the market and business environment in Vietnam, as well as the opportunities and challenges and potential cooperation in the sector. Other members in the field of metro construction, engineering and aviation also contributed their ideas and recommendations.
 

23 June 2019 | Meeting between DG Transport and Eurocham, Ho Chi Minh City Department of Transport

EuroCham also arranged a meeting between the Director General and the delegation to meet with Mr. Tran Quang Lam, Director of Ho Chi Minh City Department of Transport, where both sides exchanged ideas and suggestions for the upcoming cooperation on topics such as: Smart City and the engagement of EU stakeholders to share solutions, road safety and addressing key challenges in HCMC, promotion of European Mobility Week, the importance of urban planning, etc. Dr. Hololei also kindly asked HCMC leadership and Department of Transport for continuous support for projected invested by the European Investment Bank.

4. Legal Sector Committee (Legal SC) | June 2019 | Interview for VIR on mergers and acquisitions trend among EuroCham members

In late June 2019, Mr. Stefano Pellegrino and Mr. Kent Wong from Legal SC contributed inputs to the Vietnam Investment Review (VIR)’s special edition on occasion of the Mergers and Acquisitions (M&A) Forum on the 6th of August 2019. With the theme “Going for Breakthrough”, M&A Forum, organised under the auspices of the Ministry of Planning and Investment, will assess the M&A trends in the next few years, analyse new capital flows, as well as opportunities and driving forces for M&A in Vietnam.
The Legal SC’s input covered movements in M&A activities among EuroCham’s members in Vietnam in recent years, interested sectors for M&A deals among EuroCham members, M&A trend among EuroCham members in the coming time, as well as the potential of the M&A market in Vietnam following the EVFTA’s signature on the 30th of June 2019.
The full article will be updated on EuroCham’s website in the coming time.  
 

5. Information and Communication Technology Sector Committee (ICT SC) | 28 June | ICT SC kick-off meeting

Considering the exponential pace of technological development, ICT SC on the 28th of June held a re-engagement meeting with EuroCham members who are interested in IT topics, to have discussions with IT departments and IT companies on how the ICT SC could become a better forum for them to exchange IT-related concerns and address those issues to the authorities.
The meeting welcomed participants from IT companies and IT departments from various business sectors such as, education, chemicals, manufacturing, tourism, and so on. Participants actively shared IT-related issues affecting their business activities, and discussed actions that can be taken to effectively address those issues.
ICT SC enthusiastically wants to learn more about issues that IT departments and companies are facing with and discuss feasible solutions for issues of common interest. Should you want to discuss your IT-related issues with ICT SC, please contact EuroCham Sector Committee Secretariat at sec.comms@eurochamvn.org.
 

6. Human Resources & Training Sector Committee (HR&TR SC) | 10 July | Conference organised by Ministry of Justice to collect comments on draft Labour Code (Draft 5)

On the 12th of July, Ms. Sarah Galeski, Co-Chairwoman of HR & Training Sector Committee, contributed a dissertation and spoke at the conference on the topic “Vietnamese Labour Working for Foreign Enterprises in Vietnam”. The conference was organised by the Ministry of Justice (MOJ) in Ho Chi Minh City and invited organisations included MOJ Departments, Ho Chi Minh City Department of Justice, EuroCham, Trade Labour Union, the Department of Labour, Invalids and Social Affairs, Ho Chi Minh City Bar Association and SME Business Association, and HCMC Law University.

Ms. Galeski, among the other topics, addressed positive changes in the newest draft of the Labour Code, which includes more protection for women against discrimination at workplace (“maternity” and “family responsibilities”) and also sexual harassment. In respect to Vietnamese workers within foreign enterprises, many of these companies already have a Global Code of Conduct prohibiting sexual harassment, but under the current legislation, have difficulty legally enforcing some of these policies. The changes in the new Labour Code allowing dismissal in the case of sexual harassment will assist in making these global policies more enforceable.

In the context of the EVFTA which was signed on the 30th of June 2019 in Hanoi, the Sector Committee also applauds Vietnam for having ratified ILO Convention No. 98 on collective bargaining and encouraged to proceed with ratification of 2 other conventions: Convention 105 on freedom of association and Convention 87 on elimination of forced labour. The draft of Labour Code also reflects these changes, and particularly gives stronger collective bargaining rights and compels the parties to reach an agreement. If a party refuses to bargain, and three months have passed since the collective bargaining session began or before three months has passed one of the parties declares that a resolution cannot be reached, the parties have the right to force a resolution through labour dispute mechanisms.

Ms. Galeski was also positive about the new draft allowing employees to choose between many trade unions, which may motivate each trade union to better represent employees’ interests. Under the present system, trade unions are often dominated by members of management so do not always properly represent the views of the employees. Under the new system, management would be barred from joining an independent workers’ representative organisation, suggesting these unions would better embrace employee interests.

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