TPP to help promote Vietnam-US trade ties
The US is keen to boost trade and investment cooperation with Vietnam by concluding negotiations on the Trans-Pacific Partnership Agreement (TPP) between the two countries and other partners as soon as possible.
Trade relations between Vietnam and the US have made the great strides since their Bilateral Trade Agreement (BTA) was signed in 2000 and the agreement to conclude Vietnam-US negotiation on Vietnam’s entry to the World Trade Organization (WTO) was reached in 2006.
The US is now one of Vietnam’s biggest potential export markets.
According to the Vietnam General Department of Customs, total two-way trade turnover between Vietnam and the US reached more than US$18 billion in 2010, up 19.5 percent over the previous year.
Vietnam ranks 27th among exporters to the US, with export-import turnover rising to US$21.45 billion in 2011 and Vietnam enjoying an export surplus of US$12 billion.
By the end of July this year, bilateral trade turnover had increased to nearly US$14 billion with Vietnamese exports to the US reaching approximately US$11.14 billion.
Vietnam exports mainly traditional products to the US market such as garments and textiles, interior decor, wood furniture, footwear, machinery, equipment, spare parts and seafood.
However, these products are facing tough competition from the same type of goods produced by other countries.
High added value industrial products like machinery, equipment and spare parts are considered highly competitive exports for Vietnam in the future.
The low end of the import spectrum includes screens and projectors (0.001 percent), electrical circuits (0.003 percent), and automobile and motorbike spare parts (0.16 percent).
Economic experts say the US economy has recently shown signs of bouncing back, which could offer a good opportunity for Vietnam to boost exports.
However, Vietnamese businesses are still finding it difficult to achieve greater penetration into the US market due to its slow economic recovery, high unemployment rate, and fiercer competition from US domestic producers and exporters.
The US also continues to enforce strong measures and trade barriers, aiming to protect its domestic production. The US Farm Bill, Lacey Act and national export initiatives have prevented Vietnam from bringing its key export products to the lucrative market.
In a recent reception for US Trade Representative Ronald Kirk, State President Truong Tan Sang said both sides need to fully tap their great potential for trade cooperation and asked the US to recognize Vietnam’s full market economy status and grant the country the Generalized System of Preferences (GSP).
The two sides should continue coordinating closely in cooperation mechanisms for multilateral economic links, Mr Sang noted.
The Overseas Investment Department under the Ministry of Planning and Investment says the US was the biggest investor in Vietnam in 2009 with total registered capital of US$9.8 billion. Capital from US companies accounted for 45.6 percent of total foreign direct investment in Vietnam, making it the leader in FDI projects for tourism resorts and major hotels.
The US ranking for FDI has gradually fallen in recent years but it is still listed among the top ten biggest investors in Vietnam.
As of July this year, the US ranked eighth among 92 nations and territories with valid investment projects in Vietnam, recording 629 projects worth a total of US$10.46 billion.
According to the American Chamber of Commerce (AmCham) in Vietnam, US investment in the country is now entering the third stage, in which US businesses will pay more attention to the global market, especially after Vietnam joined the WTO and is accelerating its TPP negotiations with partners.