Socialist Republic of Vietnam

"We are pleased to see progress on important legislation, including the Unified Enterprise Law and the Common Investment Law. These laws, when enacted, represent an excellent opportunity for Viet Nam to demonstrate that it is taking practical and significant steps to meet its obligations under international bilateral trade agreements and its commitments under the WTO entry process."
In an interview with Vietnam News Agency, Adam Sitkoff, executive director of the American Chamber of Commerce in Ha Noi (AmCham Ha Noi), discussed the upcoming visit of Viet Nam’s Prime Minister Phan Van Khai to the US, and the 10th anniversary of diplomatic ties between the two countries.

Trade between Viet Nam and the US has increased rapidly. What have been the most important factors in the increases?

This summer marks the 10th anniversary of diplomatic relations between the US and Viet Nam, and the fifth anniversary of the signing of the US-Viet Nam Bilateral Trade Agreement (BTA). AmCham is pleased to participate in the historic visit by Prime Minister Khai to the United States this month, and we anticipate a number of agreements important to the business community will be concluded during this visit. We are confident that the Prime Minister will use this unique opportunity to establish a new and productive relationship with the US government, the American people, US business and financial communities, and will seek to re-introduce Viet Nam as a stable, peaceful, and vibrant member of the global economy.

The BTA is now in its fourth year of action and the outlook for American business here has consistently improved. Bilateral trade last year was more than four times higher than in 2001, led by tremendous growth in Vietnamese exports to the US, growing from US$800 million in 2001 to $5 billion last year.

As Viet Nam continues its work towards the full implementation of the BTA, accession to the WTO remains on the horizon. The BTA serves as a road map for WTO negotiations and many countries are watching the effectiveness of Viet Nam’s BTA implementation to gauge how implementation of WTO obligations might proceed.

AmCham strongly supports Viet Nam’s accession to the WTO at the earliest possible date. Effective implementation of the BTA will show the world that Viet Nam is ready for WTO membership and AmCham expects to see a final WTO agreement that provides benefits, not only for Americans, but also for the 83 million Vietnamese people who will benefit from lower prices, higher quality and better service, more choice, and a set of trade rules that will benefit everyone.
WTO accession will help raise standards in key areas of foreign investment criteria, including greater transparency, the security of intellectual property rights, and the allowance of private and foreign investment into various sectors of the economy. Most importantly, WTO accession will complete the process of international economic integration and will allow Viet Nam to compete globally on an equal footing with its neighbours.

Tell us a bit about prospects for bilateral trade in coming years, particularly after Viet Nam joins the WTO. Which products are American businesses most interested in their trade activities with Viet Nam?

Economically, the United States is a key trading partner and investor in Viet Nam. The US is not only Viet Nam’s single largest export market, but also one of the largest foreign investors. This growth trend will accelerate once Viet Nam joins the WTO, but only if Viet Nam abides by the commitments set out, including timely market access and real action on the protection of intellectual property rights.

There are already many American companies doing business in Viet Nam, and AmCham is working to help Americans discover the opportunities for business here. Many of your readers know that Viet Nam has been successful and competitive in export industries like garments, furniture, seafood, shoes, handicrafts and agricultural products. However, we also want Americans to see opportunities to sell goods and services to Viet Nam, and I expect WTO accession will provide more market access for foreign companies, which will allow Vietnamese consumers to make better purchasing choices.
During Prime Minister Khai’s visit to the US, some AmCham members will share their success stories to help spread the message that, not only is Viet Nam open-for-business, but the rules have changed to such an extent that foreign companies can actually turn a profit.

Regarding the US’ business investment in Viet Nam, what areas have drawn the most interest?

There are many economic sectors that interest American investors – everything from manufacturing and land development, to providing financial services and telecommunications infrastructure.

The key is for Viet Nam to create the type of business and economic climate that American investors can feel comfortable in. Viet Nam has made progress on legislation that will provide a more level playing field for foreign companies, however, a great amount of work is still needed to make Viet Nam a truly competitive destination for foreign resources.

I am pleased to see the continued expansion of private sector activity, and the willingness of government officials to seek a more stable legal environment and open economy. However, there remain problems that require work, such as poor infrastructure, market access and licensing delays, corruption, and irregular tax structures.

Do you have any ideas on how to strengthen trade between the two countries?

There is no doubt that Viet Nam is benefiting from trade with the United States. However, trade ties will grow as Viet Nam changes its laws and creates a stable climate for American investment.
There will also be trade disputes. As your readers know, many countries use anti-dumping laws to shield their domestic manufacturers. This is not just about catfish and shrimp. The EU slapped anti-dumping taxes on a wide range of imports from Viet Nam, including stainless-steel fasteners, fluorescent lamps, and bicycles, etc.

Many countries use these laws to their advantage. The United States is the single largest market for Vietnamese goods, so I don’t think your readers can argue that Viet Nam is disappointed with its market access in America. All of these anti-dumping cases demonstrate the importance of having many export markets and not growing complacent by relying on one large economic sector. As trade grows, I think the recent anti-dumping cases have been a valuable learning experience for Vietnamese business people and will ultimately make the country more competitive.

Obviously, things have changed significantly over the past 10 years, and the bilateral relationship has grown remarkably. Co-operation now exists on many levels that were difficult to imagine just a few years ago, including a growing law enforcement and military relationship. I hope this positive trend continues in the future because people from both countries are well served by having a warm and close relationship.

Viet Nam News, June 16, 2005