IPRs protection remains challenging for European businesses as EVFTA looms for ratification

By Ngoc Anh - May 28, 2018 | 09:30 AM GMT+7

TheLEADERThere remains a big challenge of intellectual property ahead to be resolved although brilliant sides of to-be-ratified EU Vietnam free trade agreement are miracle growth of mutual ex-import revenue and rising number of foreign companies in due to removal of hurdles.

TheLEADER had an interview with Almut Roessner, Executive Director of EuroCham about this matter.

What are breaking outcomes to be attained after two parties sign the EU-Vietnam bilateral trade agreement (EVFTA) by the end of this year?

Almut Roessner: Once the agreement is signed, Vietnam’s economy anticipates to be improved tremendously.

In particular, according to the 2016 report from MUTRAP - European Trade Policy and Investment Support Project, Vietnam’s growth is forecasted to be around seven percent to eight percent by 2025, real wages are estimated to improve by around three percent.

Additionally, Vietnam will also be expected a welfare gains of $2.2 billion in 2020 to $4.1 billion in 2025.

The EVFTA is also important in the context of the ASEAN region because it is one key building block for a region to a region FTA that both leaderships of EU as well as leaders in the ASEAN region are aiming for.

So from a Vietnamese perspective we believe that the EVFTA will open up a lot of new opportunities for businesses, both in trade as well as in investment.

Although the ties are already strong, Vietnam can even further improve on customs reduction, barriers to trade elimination and also, stronger investors protection to make it more accessible for European company, particularly small and medium-sized enterprises (SMEs), to explore the market opportunity here in Vietnam.

Almut Roessner, Executive Director of EuroCham

Is it a hope of big flow of European investors to come to Vietnam and trade encroachment of Vietnamese firms into EU after the pact signed?

Almut Roessner: Every company has its own internationalisation strategies but we believe the EVFTA will be significant especially for EU SMEs with state-of-the-art products and services as it will enable them and Vietnamese SMEs to cut costs and administrative burden when accessing another market.

This will make looking towards markets which are geographically and culturally far apart a more natural consideration for businessmen and women on both sides.

The exports to the EU are estimated to increase by around 50 percent by 2020 and the imports from the EU are predicted to increase around 43 percent, also in 2020, which are significant.

Overall, the vast majority of respondents to EuroCham’s EVFTA survey stated that the EVFTA will influence their mid-term and long-term investments plans. It becomes much easier for foreign companies to enter Vietnam market now that the entry hurdle are lower.

How would you assess the commitment of Vietnam to EU and vice versa? 

Almut Roessner: I think the commitment is there. With the rising protectionism and negatives voices about free trade around the world, we see that European leaderships really want to expand and push the global trade agenda even further and so do the Vietnamese leaderships, with all these 15 FTA that are either already in place or are in preparation.

There is also a good partnership because as both Vietnam and the EU share the same understanding that is to grow business and to also improve the welfare of people.

However, as we have highlighted in our speech provided by our Co-chairman Nicolas Audier, there is certain element where the EU leaderships will want to see more tangible progress.

This is particular in area of corporate social responsibility, compliance in respect to the international labour organisation convention but also in elements that are important for food safety notably for sanitary and phytosanitary measures.

Free trade in a sustainable and responsible way is very important and can help to achieve goal, not just for the economy but also for people in both region countries. 

How impactful will the current status of intellectual property (IP) rights infringement if not being settled on investment and trade activities?

Almut Roessner: Although, Vietnam’s IP legislation is now relatively comprehensive, covering most aspects of protection of IP in accordance with international standards required by Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) and its relevant implementing regulation, the enforcement mechanism still needs to be strengthened, fines must be increased for it to truly become an effective deterrent.

In addition, awareness of the importance of protecting IPR among the Vietnamese consumers needs to be raised. Thus, in this respects, IPR protection remains challenging for European businesses while doing business in Vietnam.

Intellectual property is very important for many European companies. For instance, in the fashion industry or wine and spirits etc. where the protection of the trade mark is significant not only for the company but also for the consumer because these companies are investing a lot in research and development ensuring the quality of their product.

Not complying with IP enforcement damages Vietnam’s investor confidence and investors in IPR-dependent added value sectors may look at other economies to bet on.