Vietnam-US Trade Ties: Spectacular Growth Over Two Decades
|Vietnam-US trade ties have enjoyed impressive growth (Source: laodong.com.vn)|
Twenty-five years after the establishment of bilateral relations in 1995, the United States and Vietnam are trusted partners with a friendship grounded in mutual respect. U.S.-Vietnam relations have become increasingly cooperative and comprehensive, evolving into a flourishing partnership that spans political, economic, security, and people-to-people ties.
The Comprehensive Partnership underscores the enduring U.S. commitment to the Indo-Pacific and provides a mechanism to facilitate cooperation in areas including political and diplomatic relations, trade and economic ties, defense and security, science and technology, education and training, environment and health, humanitarian assistance/disaster relief, war legacy issues, protection and promotion of human rights, people-to-people ties, and culture, sports, and tourism, cited from the website of the U.S. Department of State.
Looking back over the past two decades of international trade, there is no relationship which has enjoyed such a fast growth rate like that of the Vietnam-US relationship, said Nguyen Xuan Thanh, senior lecturer at Fulbright School of Public Policy and Management in Vietnam.
Prof. David Dapice, a leading expert on development economics in Southeast Asia, Harvard Kennedy School at Harvard University, used the word “spectacular” to describe the development of economic co-operation between both sides.
Total Vietnamese export turnover to the US rose from US$1 billion in 2000 rose to US$10 billion in 2007, mainly due to a bilateral trade agreement taking effect in 2001. Following 2007, Vietnamese exports continued to increase, partly due to the shift in the global supply chain, along with foreign investors entering the country in order to take advantage of cheap labour, Prof. Dapice stated, according to the VOV.
Over the last five years, Vietnamese export value to the US has expanded by 230%, while exports from the US market have jumped by 175%. In doing so, the US has become the largest Vietnamese importer, while the latter has become the former’s 10th largest trading partner.
Deputy Foreign Minister Nguyen Quoc Dung emphasised that mutual ties have made significant strides since 1995, with the most salient aspect being through economic co-operation. With a comprehensive partnership, trade and investment flows from the US have paved the way for the nation to further boost its international economic integration and gradually boost growth, thereby moving away from the status of a less developed to a middle-income country.
With regard to US businesses, the fast-growing Vietnamese market of 100 million people boasts a young and industrious workforce which seems to be highly promising. The country’s increasing demands for development and its location being situated in one of the most dynamically growing areas of the world also offer great opportunities.
Meanwhile, the US, as the largest global importer with abundant capital and technology, represents a potential destination for Vietnamese exporters.
What is more important is that the governments and business communities of both countries are keen to augment economic and trade co-operation moving forward.
Vietnam, US eye sustainably equal trade ties
Since the normalisation of bilateral relations in 1995, economic and trade ties between Vietnam and the US have seen great progress, with two-way trade hitting an all-time high of 90.8 billion USD in 2020, up 19.8 percent year-on-year, despite serious impacts of the COVID-19 pandemic.
US Vice President Kamala Harris’s ongoing visit to Vietnam is expected to open up new business and investment opportunities for the two countries’ enterprises.
|US Vice President Kamala Harris (left) waves beside Vietnam's Vice President Vo Thi Anh Xuan at the Presidential Palace in Hanoi. Photo: AP|
According to the Vietnamese Ministry of Industry and Trade (MoIT), since the Vietnam - US Bilateral Trade Agreement (BTA) took effect in December 2001, two-way trade has continuously increased.
Bilateral trade was maintained in the first seven months of 2021 as the US continued to be Vietnam's largest importer with a turnover of 53.7 billion USD, up 37.7 percent year-on-year, reported the vietnamplus.
Vietnam mainly shipped machinery, equipment, tools and spare parts to the US. Therefore, despite being affected by the pandemic, the country's revenue from exporting these items to the US still reached 12.2 billion USD last year, up 141.5 percent compared to 2019. In the 2016-2020 period, exports of these products to this market enjoyed an annual average growth rate of 54.8 percent.
According to insiders, this confirms that Vietnam has become an important link in the supply chains of many products to many markets, including the US.
Deputy Minister of Industry and Trade Do Thang Hai said that the Vietnamese and US economies are complementary. In the coming time, Vietnam will continue speeding up its economic reform and international integration, and strengthen mutually-beneficial economic, trade and investment cooperation with the US.
According to the Deputy Minister, the value of imports from the US in the coming time will increase through the improvement of Vietnam’s business environment, thereby attracting more enterprises to Vietnam.
The US’s becoming Vietnam's largest export market is considered a positive signal. However, the Vietnam Trade Office in the US recommended Vietnam to be careful about anti-fraud and trade protection issues.
|US surpasses China to become largest importer of Vietnam's agricultural products|
Phan Mai Quynh from the MoIT's Vietnam Trade Remedies Authority said that in order to avoid risks, businesses should actively answer questions from the investigation agency, and fully prepare documents as required, and build an advanced governance system.
To support businesses in boosting exports to this market, Vietnam will continue cooperating with US partners to comprehensively address the US's concerns.
The MoIT is working on big projects to enhance the competitiveness of export products, Hai said, adding that businesses must actively develop their markets to improve their domestic production capacity and integrate deeper into the global supply chains.
Vietnam-US relations during the Covid-19 pandemic
The Covid-19 pandemic has affected the implementation of plans between Vietnam and the US, but the two sides have maintained the momentum of cooperation and even expanded cooperation in some new areas such as disease prevention.
ooperation has been expanded in some new areas such as disease prevention and medical equipment supply, forming a stable and efficient supply chain.
In late July, three million doses of Moderna vaccine were sent to Vietnam by the US through the COVAX Facility. It arrived at Noi Bai airport in Hanoi, to the joy of the representatives of the US Embassy and the Vietnamese Ministry of Health. Immediately, half of the vaccines were transported to Ho Chi Minh City and half to Hanoi. This shipment of vaccines followed two million doses of Moderna vaccine the US gave to Vietnam through COVAX on July 10, reported the vietnamnet.
U.S. Ambassador to Vietnam Kritenbrink said: "It is said that in difficulty, we will know who our true friends are. We are very touched that during the time when the United States was fighting the Covid-19 pandemic, Vietnam donated millions of masks and other medical protective equipment. In these difficult times, masks and protective clothing donated by Vietnam helped to save many American lives."
Vietnam – an important link of US supply chain
Under US President Joe Biden’s administration, the US and Vietnam have cooperated to improve Vietnam's capacity in responding to the Covid-19 pandemic, based on the long-term relationship between the two countries and the US support worth more than 1 billion USD in the past years to help Vietnam develop its healthcare infrastructure.
|Vietnam is now the second largest supplier of apparel, footwear, and travel goods to the US market (Photo: baodautu.vn)|
Recently, 90 CEOs of leading US companies have urged President Joe Biden to accelerate the donation of vaccines to Vietnam as it battles its most serious COVID-19 outbreak, Dau tu (Investment) online newspaprer reported.
In a letter sent to the US President, the CEOs of companies like Adidas, Coach, Gap, Hanesbrands, Nike, VF and Under Amour have emphasized that Vietnam is an important economic and supply chain partner of the US.
Vietnam “is now the second largest supplier of apparel, footwear, and travel goods to the US market. Further, Vietnam has become a major supplier of crucial inputs for America’s small but important footwear manufacturing industry,” the letter said, adding about 3 million US workers are connected - through the value chains - to many millions more in Vietnam.
“The health of our industry is directly dependent on the health of Vietnam’s industry,” the CEOs wrote.
The CEOs have asked President Biden to accelerate the donation of vaccines and other materials to help keep Vietnam on a strong footing so it can quickly recover, noting that the crisis of their employees in Vietnam is also their crisis, said the vietnamplus.
Twenty-six years after the normalisation of bilateral relations, economic and trade ties between Vietnam and the US have seen great progress, with two-way trade hitting an all-time high of 90.8 billion USD in 2020, up 19.8 percent year-on-year, despite serious impacts of the COVID-19 pandemic.
Since the Vietnam - US Bilateral Trade Agreement (BTA) took effect in December 2001, two-way trade has continuously increased.
Bilateral trade was maintained in the first seven months of 2021 as the US continued to be Vietnam's largest importer with a turnover of 53.7 billion USD, up 37.7 percent year-on-year.
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