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Vietnam-US trade relations progress rapidly; TPP conclusion in sight

Tuesday, January 27, 2015, 21:03 GMT+7

Bilateral relations between Vietnam and the U.S. have grown quickly in recent years, particularly in the field of trade and investment, experts said Monday at a conference to mark the 20th anniversary of the normalization of the two countries’ diplomatic ties.

>> An audio version of the story is available here

Merchandise exports from Vietnam to the United States have helped the poor in the Southeast Asian country very much because the process of making those goods used local laborers and created jobs, said Dr. Cu Chi Loi, director of the Institute of American Studies under the Vietnam Academy of Social Sciences.

Dr. Loi also called for the U.S. to recognize Vietnam's market economy status at the discussion session on "Economic Relations: Existing Situation and Future Direction,” a part of the "Vietnam-U.S. Relationship: For 20 More Successful Years" conference in Hanoi.

In 2014, the U.S. overtook the EU to become Vietnam’s biggest export market, a position the European bloc had held since 2012, according to the General Statistics Office of Vietnam (GSO).

Vietnam raked in $28.5 billion from exports to the U.S. last year, up 19.6 percent compared with 2013, the GSO said in a report published on December 31 on its website.

The fastest growth rate was seen in such groups as textiles and garments (13.9 percent), footwear (26.1 percent), wood and wooden products (12.8 percent), and electronics, computers and components (45 percent).

Vietnam earned $27.9 billion from shipments to the EU last year, sending the market down to the second spot, even though that figure was 14.7 percent higher year on year.

Ginny Foote, president and chief executive of Bay Global Strategies specializing in economic management consultation, said U.S. companies are now interested in developing infrastructure in Vietnam.

Foote added that she was quite surprised when landing at the newly opened T2 terminal at Noi Bai International Airport, because the facility is a “modern and beautiful station."

TPP conclusion within reach

On the Trans-Pacific Partnership (TPP), Foote said she is optimistic that the negotiating countries will overcome existing obstacles and the pact will be concluded this year.

The TPP is a proposed regional free-trade agreement that is currently being negotiated by the twelve countries throughout the Asia-Pacific region, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S., and Vietnam.

The 12 TPP countries contribute almost half of global output and over 40 percent of world trade, according to the Office of the United States Trade Representative.

Foote told Tuoi Tre (Youth) newspaper on the sidelines of the conference that she predicts the trade agreement will be signed within the next six months.

The 12 member countries are attending a senior TPP negotiation session in New York, she said.

These countries are solving one problem at a time and their high-level negotiation this time is centered on narrowing the remaining disagreements, she added.

“I really hope that the TPP will be signed in six months,” she said.

“But it is difficult to predict because there are 12 member countries participating in the TPP, and each country has a different political background and different difficulties. The important thing now is that we should be ready for it," Foote told Tuoi Tre.

U.S. Ambassador to Vietnam Ted Osius also told Tuoi Tre that he hopes the trade pact will be finalized in 2015.

The TPP is a very common goal that is achievable as Vietnam and the U.S. consider it a strategic agreement, he said, adding that both Washington and Hanoi have the political will to conclude this pact.

“I am optimistic that we can reach agreement this year and this is one of many important achievements for the 20th anniversary of the normalization of our relations,” Ambassador Osius.

On July 11, 1995, after much diplomatic effort from both sides, then-U.S. President Bill Clinton and then-Vietnamese Prime Minister Vo Van Kiet announced the normalization of relations between the two countries.  

Dr. Vo Tri Thanh, deputy director of the Central Institute for Economic Management, said the TPP will help increase Vietnam’s exports, and its apparel and footwear industries will benefit the most.

The trade pact will also create jobs for people and boost Vietnam’s attraction of foreign direct investment, Dr. Thanh said.

The deputy director added that the Southeast Asian country has been under enormous pressure to reform and perfect its legal system when joining the TPP.

"It's positive pressure. Vietnam has recently adjusted a number of investment rules to both meet the needs of reform and to satisfy the requirements of the TPP," Thanh told Tuoi Tre.

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