|National carrier Vietnam Airlines has bought its first Boeing 787-9 Dreamliner from the US plane maker as part of its expansion plans. — Photo Hoang Ha
HCM CITY (VNS) — It took less than 20 years for Viet Nam, which had been saddled with an embargo by the US, to turn that country into a leading economic partner.
In the period since diplomatic ties were normalised in 1995, trade between them has risen consistently and rapidly, especially after a Bilateral Trade Agreement was signed in 2001.
Just two years after the BTA, the US became Viet Nam's top export market and the status continues, according to Minister of Planning and Investment Bui Quang Vinh.
Viet Nam has also become the biggest ASEAN member in terms of exports to the US, overtaking powerhouses Thailand and Malaysia.
In 1995 bilateral trade was worth US$450 million. It reached $36 billion last year, with Viet Nam's exports being worth $25 billion.
The US is ranked seventh out of 101 countries and territories investing to Viet Nam. It has invested $11 billion in 735 projects, though the actual figure may be higher since many US companies like Intel, Coca Cola, Procter & Gamble, and Chevron invest in Viet Nam through their subsidiaries in third countries.
US FDI has contributed to Viet Nam's social and economic development, enhancing the effectiveness of domestic resources, Vinh said.
Peter Ryder, general director of Indochina Capital, was quoted by Vietnam Economics Times as saying that FDI flows from the US to Viet Nam are set to soar, especially after the country becomes part of the Trans Pacific Partnership.
Since 1995 Viet Nam enjoyed dramatic economic growth, and the impact of trade with and investment by the US was a catalyst, he said.
The US's development aid to Viet Nam has increased every year since 1995, reaching $120 million recently. The assistance focuses on the economy, education, health, including $89 million for HIV/AIDS prevention programmes, combating climate change, and tackling the consequences of the war.
The US has also launched a $72 million programme to clean Da Nang Airport of Agent Orange.
The TPP involving 10 other countries apart from Viet Nam and the US is a great opportunity for further cementing economic ties between the two countries.
Of the 10 ASEAN economies, Viet Nam is thought to be fourth or fifth most important for US companies, but the success of the TPP negotiations could change that, creating a new structure for trade and investment between them.
Exports are likely to rise in both directions while US companies will be easily able to invest in new areas in Viet Nam.
There are a number of new industries that will grow much faster in Viet Nam if the TPP is signed. For instance, the government is trying to encourage the manufacture of medical devices, and the trade deal would help attract investment in this area. The TPP will also promote investment in agricultural processing. — VNS