Japan, Vietnam lay out action plan to boost FDI
Japan, Vietnam lay out action plan to boost FDI
Agence France-Presse
Hanoi, Vietnam
Japan and Vietnam signed into force on Thursday a bilateral
action plan aimed at boosting flagging Japanese investment in the
communist nation.
The Japan-Vietnam Joint Initiative was sanctioned in April
this year during talks in Tokyo between Japanese Prime Minister
Junichiro Koizumi and his Vietnamese counterpart Phan Van Khai.
"This Joint Initiative shows that mutual co-operation in the
economic field between Vietnam and Japan is developing on a daily
basis," Vietnamese Minister of Planning and Investment Vo Hong
Phuc told reporters.
The action plan focuses on 44 topics, including improving tax
incentives, waiving short-stay visas for Japanese nationals,
enforcing intellectual property rights, and increasing government
transparency.
The two countries, however, have yet to agree on measures to
tackle Japanese concerns over Hanoi's attempts to protect its
domestic car and motorcycle industries.
"Compared with other ASEAN countries, the amount of Japanese
FDI (foreign direct investment) in Vietnam is still very low,"
the drafters of the joint action plan said in a report, adding
Vietnam was losing potential Japanese FDI to its neighbours.
The report's finding echoed comments made in July by Yoshihiko
Sumi, head of the trade policy department at Japan's Ministry of
Trade and Economy, who said Hanoi needed to make substantial
improvements to its investment environment.
"There was a time when Japan's investment into Vietnam reached
more than US$1 billion in a year. However, last year, Japanese
investors only invested around $100 million in Vietnam," he said.
Japan, which is Vietnam's biggest aid donor, is also the third
largest investor in the country, with cumulative pledged
investment of $4.47 billion, $3.89 billion of which has been
disbursed.
Last month the two countries signed a bilateral investment
protection agreement guaranteeing Japanese investors most-
favored-nation status and access to Vietnam's tightly controlled
markets.
Negotiations between Tokyo and Hanoi on the reciprocal pact
began in May 2002 but were knocked off course after Vietnam
slashed import quotas for motorcycle parts four months later in
September that year.
This sudden policy announcement triggered a heated two-month
dispute and forced Japanese manufacturers Honda and Yamaha to
temporarily suspend their Vietnam operations.
Alarm bells were set off again in Tokyo earlier this year
after Hanoi announced a series of planned tax hikes aimed at
encouraging Vietnam-based foreign-invested vehicle manufacturers
to increase their local content ratios.