Since the normalisation of relations 20 years ago, economic relations between Viet Nam and the US have developed strongly in many sectors, and are expected to grow even further in the future, especially after the Trans-Pacific Partnership (TPP) is signed. The Vietnam News Agency talked to several experts about this issue.
|Hoang Anh Tuan.
Hoang Anh Tuan, Director of the Institute for Foreign Policy and Strategic Studies, the Ministry of Foreign Affairs
Over the last 20 years, relations between Viet Nam and the US have grown rapidly in many areas. The ties between the two countries were normalized in 1995, but at that time, it was initially in the diplomatic arena. Ties in other fields had not yet developed.
However, the picture is different now. US officials have said that they have not seen economic ties with any country in the world develop as fast as they have with Viet Nam in the last 15 years since they signed the bilateral trade agreement (BTA).
Trade value between the two countries has increased from US$850 million in 2000 to $40 billion in 2014. The US is the seventh largest investor in Viet Nam.
The US economy impacts other countries in the world, so when US investors go to any country, it means that that country is a safe and attractive place for investors from other countries.
But there is still greater potential for economic ties to grow, especially after the TPP agreement is signed.
The TPP is expected to get done by this year end and have positive impacts on trade and investment activities. Viet Nam will have conditions to expand its export markets and attract more investment from TPP member countries, as also other countries in the world.
|Nguyen Dinh Luong.
Nguyen Dinh Luong, former head of the negotiating team on the Viet Nam-US Bilateral Trade Agreement
After the normalisation of relations between Viet Nam and the US, economic ties have grown well, prompting the Vietnamese economy to develop further, partly due to growth in exports to the US. The local economy has been restructured to suit the world economy and develop new economic sectors, especially the service sector, including telecom, finance, banking, land and air transport services.
Viet Nam has built a modern legal system to regulate the market economy at home for integrating into the world economy.
Viet Nam-US trade and investment ties have developed especially strongly after they signed the BTA. Viet Nam has exported many products to the US, including garments, footwear, wood products and electronic items.
Adam Sitkoff, executive director of American Chamber of Commerce Vietnam
If you look back to 20 years ago, there was almost no trade and investment between US and Viet Nam. Under President Bill Clinton, the trade embargo was lifted, the relations were established, and the business started to grow, but it was still very small. The US and Viet Nam signed the bilateral trade agreement in 2001, that's when business, trade and investment really took off.
So I think what we've seen in the past two decades is explosive growth, and now in many ways, Viet Nam is one of the largest exporters to the US, including clothing, and shoes and some food products and furniture and the opportunities are really there to do so much more.
And so, if you were an American person walking around shopping before the end of 2001, you never saw anything that said "made in Vietnam." But now, I was just back in the US a week ago, and everywhere you go, there's Made in Vietnam, so the BTA has been a catalyst. 20 years ago or prior to the BTA, trade was only around half of billion dollars a year, and new we are assuming it'll be around $40 billion dollars.
I think a lot of American companies are really excited about the opportunities that exist in Viet Nam. There are 91 million people here, and all the families want greater choice, higher quality, better pricing, they want better and more services, newer, more modern things, so a lot of American companies can provide that, and as American companies look to invest, look to do business in Viet Nam, they see opportunities but they also see some of the challenges.
At Amcham, on behalf of our companies, we are constantly working with our partners in the Government to produce a business environment where decisions are made faster, where the laws are more evenly enforced, and where people play by a better set of rules, so that people feel more comfortable to do business here.
The American economy is very large and its business community is very diverse. We see a lot of opportunities in Viet Nam. Some of the most exciting things are in what we consider to be the new economy. So, as an example, Vietnam Airlines just got a few new airplanes. An American company called Gogo Air put in wifi on those planes, so passengers can text messages to friends on trips. We have companies like Uber that are changing how Vietnamese get around town. We have lots of companies that are interested in technology or agriculture.
The Trans Pacific Partnership (TPP) is very important for both the US and Viet Nam. It is a trade agreement among 12 different countries so it is very hard to sit down and figure out all the rules. Now we are in the fifth year of talking about it. We expect the TPP to get done quickly, and we expect Viet Nam to benefit more than any country. But Viet Nam can get the most benefits only if it plays the right type of game. It needs to take action now on some of the reforms that are needed, to change some of the law, to clean up some of the systems, to make State-owned enterprises behave like private enterprises. Some of the things can be down now, because Vietnamese people do not want sit around and wait for trade agreements to make their lives better. They want action now to create the kind of wealth opportunities to let them live better.
TPP is going to open up a lot of opportunities for a lot of people. It is going to show the rest of the world that Viet Nam is playing by a much higher standard than some of the neighbouring countries. — VNS