Vietnam-Japan investment pact likely in Nov
HANOI - An investment protection agreement between Vietnam and Japan is expected to be signed in November, after the
settlement of contentious policies by Hanoi that foreign automakers say place unsustainable costs on the sector.
"This agreement has been fully prepared. I will sign it in November," Minister of Planning and Investment Vo Hong Phuc said at an
American Chamber of meeting in Hanoi. The powerful ministry oversees all foreign investment in the communist country. It came
under fire earlier this year after Hanoi approved increases in sales taxes, imported auto parts tariffs and registration fees on locally
assembled cars.
Vietnam has said the cost increases are in part to goad foreign assemblers to use more locally made parts. Japan's Toyota Motor
Corp was among the 11 foreign automakers that protested the moves. It has the biggest market share of all the foreign assemblers,
which also include Ford Motor Co and General Motors's Daewoo.
Asked if the auto clash had been a sticking point in signing the agreement, Phuc said: "We have addressed this issue and it has
been solved." He did not elaborate. Toyota may have won some points by recently announcing it would begin construction of a
factory that will make auto parts domestically. Initially, the parts will be exported to neighbouring countries. Asked if that helped to
ease the way for the pact, Phuc said: "We apply the same policy to all investors."
Japan has more than $3 billion invested in Vietnam and is its biggest trading partner. It is also the biggest single provider of
development assistance to the Southeast Asian country.
Reuters - October 23, 2003
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