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Sep 09, 2023 / 17:28

Biden's trip to Vietnam to boost bilateral economic ties

Twenty-eight years after establishing their relations and a decade of comprehensive partnership, Vietnam and the US have achieved all-round development in numerous pillars.

Among them, economic and trade ties stand out and will be further boosted by the upcoming visit of US President Joe Biden to Vietnam, according to observers and businesses interviewed by The Hanoi Times.

Important timing

Joe Biden is the fifth US President in a row to visit Vietnam, reaffirming the US commitment to a strong, prosperous, resilient, and independent Vietnam, according to Adam Sitkoff, Executive Director of the American Chamber of Commerce (AmCham) in Hanoi.

"Today, the US and Vietnam are friends - something that was once unimaginable," he said.

 Cargill was one of the first US companies to enter Vietnam. Photo: Cargill

In 1995, when the two countries normalized relations, Cargill was one of the first US companies to enter Vietnam and has been part of the development of Vietnam's agricultural industry for nearly three decades.

"We have seen many breakthroughs in the bilateral relationship as a result of high-level visits by leaders from both countries," said Nguyen Ba Luan, Country President of Cargill in Vietnam, adding that he believes this visit by President Biden will bring a focus on technology and innovation to the bilateral relationship. 

"With many rapid developments in sectors such as animal husbandry and agriculture and food, it's time to further strengthen cooperation," he stressed, revealing that after President Biden's visit, one of Cargill's largest investments in the country will be inaugurated this month with a new plant in the southern province of Dong Nai with superior technological capabilities.

Many large American companies have chosen Vietnam as their next production base in Southeast Asia in their investment and production expansion plans. Apple has set up 11 factories to produce audio-visual components and equipment in Vietnam; Intel has also invested in the expansion of phase 2 of its chip factory in Ho Chi Minh City, with a total capital of $4 billion. Recently, Boeing, Google and Walmart have explored Vietnam's business environment to expand their supplier networks.

Sitkoff said US investments are focused on quality infrastructure, manufacturing and supply of consumer goods, services, agriculture and industry, contributing significantly to Vietnam's quality job creation and economic development.

Economic cooperation high on the agenda

Since 1995, bilateral trade between Vietnam and the US has increased more than 300-fold, from $450 million to $138 billion in 2022. Vietnam remains an attractive hub for US investors in many sectors, from traditional to emerging.

In March, the country welcomed the largest-ever US business mission to Vietnam, with 52 companies from various sectors, including Apple, Coca-Cola, PepsiCo, SpaceX, and Pfizer.

In agriculture as a single example, according to the Cargill leader, trade has increased year by year and now accounts for a large portion of the total annual trade between the two countries.

 The prospects for further enhancing bilateral economic ties between Vietnam and the US are promising.

"Many Vietnamese products such as seafood, furniture, nuts, coffee, spices, and fruits have access to US markets. Major US products exported to Vietnam include cotton, timber, soybeans, dairy products and fresh fruits," Luan said.

Explaining Vietnam's attractiveness, Baker McKenzie Senior Advisor Fred Burke said that one of Vietnam's strategic advantages is the depth and breadth of its economic portfolio.  In short, it does business in many areas, from export manufacturing in an increasingly high-tech global economy to high-volume agricultural commodities and even digital services. 

"Hanoi - the capital city's particular attraction is its proximity to newly built industrial zones and its highly educated digital workforce," added a specialist who has lived in Vietnam for 30 years.

Meanwhile, Adam Sitkoff of AmCham said that the most important factor for a favorable investment climate is a fair, predictable and streamlined regulatory environment that values innovation, not only to attract new investment but also to retain and grow the investment already here.

"There is no doubt that existing investors expanding their operations is the best advertisement for attracting new investment," Adam said.

Meanwhile, Michael Nguyen, Country Managing Director of Boeing Vietnam, highlighted Vietnam is an important partner for Boeing due to its growing economy with an expanding aviation industry, an emerging role in global supply chains, and a commitment to achieving net-zero carbon emissions as the answer to why Vietnam is attractive to US companies.

"We are excited to deepen our presence here," he underlined.

According to Larry Berman, Professor Emeritus, UC Davis, the US president’s visit timing is important because it signals that the United States is committed to assisting Vietnam in various economic areas. The trip will strengthen economic and regulatory ties and also encourage business investment in Vietnam, he said.

Broader expectations from the state visit

As President Biden's visit approaches, the prospects for further enhancing bilateral economic ties between Vietnam and the US are promising. The visit will not only strengthen existing cooperation but also pave the way for future collaboration between the two nations.

Having been here since 1995, Cargill has a longer-term view than the decade-long Comprehensive Partnership. It was a watershed moment in the relationship between the two nations and helped break down some lingering economic barriers, according to Nguyen Ba Luan, Country President of Cargill in Vietnam. 

"The two nations have so much to offer each other," Luan said.

 US President Joe Biden. Photo: VNA

The country president of Cargill in Vietnam reiterated his belief that stronger ties between the US and Vietnam would bring more investment and business opportunities for companies and more financial and technical assistance for development projects.

And the story would continue after the state visit. 

The huge figures in exports, imports, and investments, not to mention know-how and people-to-people ties, are highly satisfying for those involved in building bilateral trade and investment relations between Vietnam and the US over the past nearly 30 years, Fred Burke said.

"It sets a positive example of how two former adversaries can become full and even strategic partners," he stressed.