Dutch, Vietnam PMs Talk Trade and Investment in Hanoi
Outgoing Dutch Prime Minister, Mark Rutte was in Hanoi last week talking up trade and investment between the Netherlands and Vietnam. Here’s what was achieved in his two-day stopover and how trade and investment are shaping up between these two nations.
The Prime Minister of the Netherlands, Mark Rutte, was in Vietnam last week for high-level meetings with the Vietnamese leadership amid a wave of investment from Dutch firms.
The Dutch prime minister also took the opportunity to attend the Green Energy Forum (GEF) organized by the European Chamber of Commerce in Vietnam. The GEF is an annual event organized by the chamber aimed at opening up green investment and trade between the bloc and Vietnam.
During his visit, the Dutch prime minister not only oversaw the signing of four cooperation agreements between Dutch firms and various government departments and ministries but also took a bicycle ride through Hanoi with Vietnam’s prime minister.
This was more than a mere photo op showcasing the cultural similarities between the two countries, such as their shared preference for two-wheel transportation. It also highlighted the topographical similarities that have made this mode of transportation popular in both nations. Specifically, both countries feature relatively flat and low-lying terrain, making them susceptible to flooding. This underscores the significant opportunities for investment, given their shared experience in infrastructure and engineering related to water management.
A relatively packed two-day trip, Rutte’s visit to Vietnam also marked 50 years of diplomatic relations. We look at how Vietnam-Netherlands trade and investment has grown since, with data presented for 2023.
Trade rules and regulations: Vietnam and the Netherlands
With the Netherlands part of the European Union, trade between the country and Vietnam is governed by trade agreements negotiated and implemented by the EU as a whole. These include:
EU-Vietnam Free Trade Agreement (EVFTA)
The EVFTA is an ambitious pact set to eliminate almost 99 percent of customs duties between the EU and Vietnam. This agreement is expected to increase Vietnam’s GDP by 4.6 percent and its exports to the EU by 42.7 percent by 2025, according to the Ministry of Planning and Investment (MPI). The European Commission also forecast the EU’s GDP to increase by US$29.5 billion as a result of the agreement.
EU-Vietnam Investment Protection Agreement (EVIPA)
Currently in the works is the EVIPA. This agreement would help to protect European enterprises investing in Vietnam and vice-versa. However, the agreement still needs to be ratified by several European nations, including the Netherlands.
Netherlands FDI projects in Vietnam
The Netherlands is one of the biggest European investors in Vietnam. The country has been active in the Southeast Asian nation for decades with projects ranging from consumer sanitary goods to dairy products and beer.
In fact, at the end of 2022, firms from the Netherlands had invested more than US$13.7 billion across 410 projects in Vietnam. Several well-known Dutch brands with operations in Vietnam include:
One of the world’s biggest makers of self-care products, Unilever has made a huge investment in Vietnam since it first entered the market in 1995. This culminated last year, in turnover of over €1 billion (US$1.07 billion). According to Unilever, 35 million of its products are used in Vietnam every day with the company employing 1,400 Vietnamese.
World famous beer brewer, Heineken, has reportedly invested over US$1 billion in developing its business in Vietnam. It also committed earlier this year to invest an additional US$500 million over the next decade. The company currently boasts 3,000 employees and an additional 150,000 indirect employees.
Dutch dairy producer, FrieslandCampina, has been operating in Vietnam since 1995. The company is well known for its Dutch Lady brand, which is stocked by most major retailers around the country. The company has two dairies in Vietnam, one in Binh Duong and one in Ha Nam.
Netherlands exports to Vietnam
The Netherlands’ biggest exports to Vietnam in 2022 were: other products; machines, equipment, tools, and instruments; and chemical products. Collectively these three categories of goods accounted for US$333.4 million worth of exports from the Netherlands to Vietnam.
Netherlands exports to Vietnam, 2022
|Machine, equipment, tools, and instruments||104,983,845|
|Milk and milk products||40,720,712|
|Parts and accessories of motor vehicle auxiliaries||40,088,641|
|Other edible food preparations||37,084,417|
|Other means of transportation, parts and||23,555,327|
|Animal fodders and animal fodder materials||20,682,002|
|Iron and steel products||16,177,785|
|Ferrous waste and scrap||14,374,949|
|Computers, electrical products, spare parts, and components thereof||9,693,976|
|Iron and steel||3,990,968|
|Pastrycooks, sweets, and cereal products||3,595,495|
|Textile, leather, and foot-wear materials and accessories thereof||2,239,216|
|Glass and glassware||1,822,929|
|Insulated wires and cables||920,231|
Vietnam’s exports to the Netherlands
In 2022, Vietnam exported over US$10 billion worth of goods to the Netherlands. Chief among those exports were: computers, electrical products, spare parts and components thereof; machines, equipment, tools, and instruments; and footwear. Between these three categories of goods, Vietnam earned US$5.6 billion—about half of the total value of its exports to the Netherlands.
Vietnam’s exports to the Netherlands, 2022
|Computers, electrical products, spare parts, and components thereof||2,496,678,843|
|Machine, equipment, tools, and instruments||2,027,219,317|
|Textiles and garments||1,032,197,613|
|Telephones, mobile phones, and parts thereof||808,828,400|
|Other means of transportation, parts, and components thereof||328,079,334|
|Handbags, purses, suit-cases, headgear, and accessories thereof||269,143,103|
|Toys and sports requisites; parts and accessories||249,651,561|
|Iron and steel products||180,373,309|
|Fruits and vegetables||116,937,501|
|Wood and wooden products||86,533,711|
|Still images, video cameras, and parts thereof||81,208,712|
|Pastries, sweets, and cereal products||52,901,460|
|Other base metals and other base metal products||24,996,853|
|Textile, leather, and foot-wear materials and auxiliaries||23,220,729|
|Bamboo and rattan products||23,008,171|
The future of trade between Vietnam and the Netherlands
In 2022, two-way trade between Vietnam and the Netherlands reached US$11.1 billion. It was not, however, evenly distributed, with Vietnam recording a trade surplus of US$9.8 billion. That said, it is in line with several Dutch multinationals setting up in Vietnam as their export base.
Looking ahead, following Prime Minister Rutte’s visit to Hanoi, it is anticipated that trade and investment between these two nations will continue to strengthen. In light of this, Dutch companies seeking assistance in entering the Vietnamese market are encouraged to reach out to the business advisory professionals at Dezan Shira and Associates.
Vietnam Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Eurasia, including ASEAN, China, India, Indonesia, Russia & the Silk Road. For editorial matters please contact us here and for a complimentary subscription to our products, please click here.
Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh City, as well as throughout China, South-East Asia, India, and Russia. For assistance with investments into Vietnam please contact us at email@example.com or visit us at www.dezshira.com
- Previous Article Vietnam Q3 Labor Market Update: Increase in Workers, Employment
- Next Article Danang Development Plan to 2030 Approved