Socialist Republic of Vietnam

WASHINGTON — Bilateral trade between Viet Nam and the United States grew last year but still did not meet potential, after a drop in Vietnamese exports to the US in the last half of 2003.

This was a conclusion from the third session of the Joint Viet Nam-US Committee for Economic and Commercial Development, which ended in Washington on Saturday.

Reviewing the bilateral trade agreement (BTA) over 2003, the two delegations recognised that joint efforts implementing the agreement helped increase two-way trade value to US$4.6 billion from $1.05 billion in 2001.

Vietnamese delegates asked the US to accelerate the process of bilateral negotiations to help Viet Nam become a World Trade Organisation member as soon as possible, and readjust the reduction of the quotas for Viet Nam’s garment exports to the US.

The US affirmed its support for Viet Nam’s entry into the WTO and promised to create favourable conditions for Vietnamese businesses to open a representative office in the US.

The three-day session was co-chaired by Vietnamese deputy trade minister Luong Van Tu and US deputy trade representative Josette Shiner.

They agreed to hold the fourth session in Ha Noi next year to revise the first three-years of the BTA.

While in the US, the Vietnamese delegation held working sessions with the US Department of Commerce, the Department of State, the US Agency for International Development and Congress.

Bilateral trade ‘booms’

At a seminar in Ha Noi on Friday, Support for Trade Acceleration (STAR) project director Steve Parker noted Vietnamese exports to the US had increased more than fourfold over just two years.

He said bilateral trade had boomed.

"Growth in manufactured exports, particularly growth in clothing exports, dominated this trend," Parker said.

"Exports to the US contribute to more than half of Viet Nam’s overall export growth over the past two years."

Parker said over this period, the US became the largest market for Vietnamese exports, and exports of labour-intensive manufactured goods soared, in line with Viet Nam’s comparative advantage.

"Most of the growth in Vietnamese exports to the US resulted from export creation, that is, exports that can be associated with increases in production and employment, rather than exports to the US resulting from a diversion away from exports to other countries," he said.

"This and the labour-intensive nature of most exports to the US imply that the rapid expansion of exports to the US over the last two years can be associated with a substantial increase in job opportunities in Viet Nam."

According to a just-released report on bilateral trade between Viet Nam and the US in the last six months of 2003, Viet Nam’s rapid increase in exports to the US reversed abruptly, falling from a peak monthly level of $514 million last July to $304 million in December.

The decline can be mainly be attributed to a rapid reduction in clothing exports after the implementation of the US-Viet Nam Textile Agreement, which placed import quotas on most Vietnamese clothing exports to the US.

Although the quota was formally signed on July 17, 2003, it applied retrospectively to exports from May 1, 2003.

"Quota levels available in 2003 were used up quickly over the first several months, forcing a major decline in clothing exports over the last six months of 2003, falling from a peak level of $337 million in July 2003 to $109 million in December 2003," the report said.

The report forecast in 2004, Viet Nam’s exports to the US would grow at a more moderate and stable rate than in 2002 or 2003, as clothing producers plan more effectively with regard to the textile quotas and as non-clothing exports continue to expand steadily.

"Given the structure of the import quota, it should be expected that Vietnamese exports of clothing in 2004 will increase in the 10-20 per cent range," it said.

In 2002 and 2003, Vietnamese exports of furniture, travel goods, footwear and other manufactured goods to the US grew strongly, but from relatively low initial levels.

According to the report, to continue the swift increase in Vietnamese exports to the US in 2004, growth in these sectors must remain robust and a further diversification in exports involving new, fast-growing export sectors will need to emerge.

On the other hand, US exports to Viet Nam have also surged since the implementation of the BTA, nearly tripling from $461 million in 2001 to $1.32 billion in 2003.

Viet Nam represents one of most rapidly expanding markets for the US. US exports to Viet Nam were dominated by a surge in exports of transport equipment, specifically aircraft.

"If transport equipment is excluded, then US exports to Viet Nam have grown more or less on trend at between 20-26 per cent for a number of years," the report said.

At the seminar, Le Dang Doanh, economic advisor to planning and investment minister, asked the STAR project and Viet Nam’s Central Institute of Economic Management (CIEM) to point out what Vietnamese companies should do to strengthen their export products to the US market.

Pham Chi Lan, an expert from the Prime Minister’s Research Department, said CIEM and STAR, "should suggest which products have potential for Vietnamese companies to penetrate into the US market and how we can better implement the BTA."

The seminar was organised by the STAR Viet Nam project, which is sponsored by the US Agency for International Development (USAid), and CIEM. — VNS

Quality, price important for exports

WASHINGTON — Vietnamese exporters should regulate export volumes of staple goods to avoid unhealthy competition and anti-dumping lawsuits, said the deputy trade minister.

Luong Van Tu told the Viet Nam News Agency’s Washington correspondent that Vietnamese businesses should pay attention to the pricing of exports and meeting US standards.

He called on Vietnamese companies to devise a long-term strategy for access to the US market to maintain consistent export levels.

Tu, who led the Vietnamese delegation to the third session of the Joint Viet Nam-US Committee for Economic and Commercial Development, said the US side paid a lot of attention to the clarification of Viet Nam’s policies, the implementation of the intellectual property rights and the creation of a favourable environment for US businesses in Viet Nam.

The Vietnamese delegation asked the US to create more favourable conditions for Vietnamese entrepreneurs to get entry visas to the US.

Regarding the US shrimp farmers’ anti-dumping lawsuit, Tu said the Ministry of Trade called on the US Department of Commerce to hand down a just verdict.

Tu said Viet Nam also asked the US to extend the period when it will deliver its preliminary finding, given that Viet Nam is a developing country and the lawsuit had proceeded slowly. He said the US side had promised to consider the proposal. —VNS