Vietnam and Finland are determined to reach their potential in bilateral trade and investment by a number of means.
Leading Finnish enterprises and research organisations have begun to look at Vietnam as a potential market for improved trade, investment, and science and technology cooperation. Activities promoting bilateral trade between the two countries, meanwhile, are being strengthened all the time.
Vietnam and Finland are two highly interactive markets. The main export items from Vietnam to Finland are coffee, rubber, garments and textiles, accessories, footwear, and wood and handicraft products.
“Most of them are products now being made in fewer quantities in Finland, while demand is rising,” said Mr Dang Vu Hai, Head of the European Market Department at the Ministry of Industry and Trade (MoIT). Finnish exports to Vietnam include equipment, materials for clothing and shoe manufacture, and plastics and accessories equipment.
According to MoIT, although bilateral trade turnover is low, average growth has been 7 per cent and stable. In 2008 bilateral turnover was $240 million, increasing 40 per cent compared to 2007, with Vietnam exporting $134.4 million, higher by 45 per cent, and importing $105.3 million, higher by 34 per cent. In 2009, two-way trade turnover was $228.7 million, including $79.5 million in exports from Vietnam and $149.2 million in imports.
Although Vietnam has had trade deficit, MoIT said it was narrowing. In 2009 the bilateral trade deficit increased by $50 million due to the difficult economic situation in Finland, with consumers spending less.
Interestingly, trade figures from the two countries are different, according to Mr Hai. Finnish figures put two-way trade turnover at higher than the Vietnamese figures, with a lower trade deficit. “Some Vietnamese products are exported to Finland via a third country,” he said.
Regarding Vietnam’s exports to Finland, turnover did not show strong growth because key products represent a low percentage of Finland’s total imports.
In relationships with Finnish partners, Vietnamese enterprises face certain difficulties. For instance, Finland applies high-tech standards, higher than those of the European Union (EU), especially as regards environmental protection and social responsibility.
Other obstacles include geographical distance and differences in customs and consumption. Enterprises must therefore give sufficient attention to identifying market demand and implementing consistent strategies.
“Finnish enterprises and its people are very open-minded and straight in their trade negotiations,” Mr Harri Jaskari, a member of the Finnish Parliament, told VET.
“Compared to ten years ago, Finland has adapted to the new circumstances and is more internationally-minded than before.”
Many Finnish companies have started to look outside and find business and investment opportunities. By strengthening cooperation, Finnish companies will start to consider Vietnam as an entry point to the Southeast Asian market. Conversely, Mr Jaskari said, Vietnamese enterprises can view Finland as an entry point for stepping into the EU market.
In recent high-ranking visits between the two countries, Vietnam has committed to creating advantages for Finnish enterprises investing in telecommunications, electronics, paper production, wooden products, clean water supply, rural development cooperation and shipbuilding, among others. Finland will also create advantages for Vietnamese enterprises exporting to Finland as well as to North European and EU markets.
There will be prospects for bilateral cooperation in the future. Mr Jaskari said that although the administration system is different, improvements in the economic and trade relationship between the two countries will be launched along with the agreement of two countries’ parliaments. “The important thing is that we need to work closely to know more about each other,” he said.
In the opening months of this year, with Finland’s economy recovering, there were growth signs in two-way trade turnover between Finland and Vietnam. According to figures from Finnish Customs, Vietnam’s export turnover in January to Finland stood at $10.13 million, an increase of 66.8 per cent over December and accounting for 0.2 per cent of all Finnish imports. Vietnam’s imports from Finland were $8.47 million, a fall of 30 per cent compared to December and accounting for 0.2 per cent of all Finnish exports.
Mr Hai said that improving and strengthening the bilateral trade relationship is the target of the two countries. “In particular, Vietnamese enterprises should promote the export of machinery and equipment, including computers and components, which Vietnam is exporting strongly,” he said.
“Labour exports to Finland would also have potential.”
There have been many trade support and promotional programs launched by the two countries’ governments that enterprises can access. These include national trade promotion in Vietnam, trade aid from Finland to Vietnam through non-government organisations, bilateral cooperation such as The Finnish Partnership Program, The Finland Support Fund, The Energy and Environment Partnership for the Mekong Region Program and The Innovation Partnership Program (funded by Finland and Vietnam).
Along with Vietnam becoming a member of the WTO, its rapid economic growth makes it an attractive potential trade and investment partner of Finland. Two-way trade is expected to grow by 10 per cent in 2010 and be $1 billion in the future, Mr Matti Vanhenen, Prime Minister of Finland, and Mr Nguyen Tan Dung, Prime Minister of Vietnam, determined in November 2009.
During the official visit by State President Mr Nguyen Minh Triet to Finland two months ago, Ms Tarja Halonen, President of Finland, told VET that, “We are trying to take effective steps in developing the cooperative relationship between Finland and Vietnam. I’m glad that the two countries are determined to reach a higher target in bilateral trade and investment.”