US economic recovery offers opportunities for Vietnam businesses

The shortage of goods due to the disruption of the global supply chains and growing demands from major economies on recovery, especially the US, is offering opportunities for Vietnamese businesses to further penetrate the world’s largest market.

Vice Minister of Industry and Trade Do Thang Hai. Photos: Hai Yen

Counselor of the Vietnam Trade Office in the US Bui Huy Son shared the view at the Vietnam-US Trade Forum 2021 held today [December 7].

“As Vietnam makes up only 3.6% of US total imports, there remains huge potential in economic cooperation for both countries,” Son noted.

Sharing the view, Vice Minister of Industry and Trade Do Thang Hai said the US remains one of Vietnam’s key partners in all spheres, noting cooperation in trade and economy between the two is the pillar in the bilateral comprehensive partnership.

Following the establishment of diplomatic relations in 1995, the Vietnam-US trade turnover rose exponentially from US$450 million that year to $90.8 billion in 2020.

As of October 2021, bilateral trade turnover stood at $89.6 billion, of which Vietnam’s exports reached $76.7 billion, up 22.9% year-on-year or 28.4% of total exports, and imports goods worth  $13 billion, representing an increase of 13.2%.

While the US remains Vietnam’s largest export market, Vietnam has also become the US’s ninth-largest trading partner, climbing five places from 2020, Hai informed, adding there is a high chance for bilateral trade turnover to surpass the $100-billion mark in 2021.

“From a macro perspective, the complementary nature of Vietnamese and US economies is the key point for Vietnam to shape its economic policies with the US towards sustainability and harmonization, but still ensure national interests,” Hai said.

Hai highlighted such achievements are attributable to the strong efforts from both Governments and business communities in joining hands to address issues of mutual concern, from opening up markets for farm produce, industrial goods, services, to facilitating a favorable business environment and the signing of large-scale economic contracts.

In addition, foreign direct investment from the US has also contributed to the development of Vietnam and solidified the country’s stance in the global supply chains, Hai continued.

Charge d’Affaires for US Mission in Vietnam Marie C.Damour.

So far, the US ranked 11^th out of 138 countries and territories having investment capital in Vietnam with $9.72 billion in 1,134 ongoing projects, including those from US largest corporations of Exxon Mobil, Murphy Oil, Chevron, Boeing, Ford, Intel, Nike, or Amazon.

Hai, however, noted the unpredictable global trade environment and risks of disruption from the Covid-19 pandemic are putting pressure on businesses to form new supply chains with greater sustainability and resilience.

The Vietnamese economy with a high level of openness and deep integration into global supply chains sees the future of its 100 million people closely linked with the future of the region and the stability in the relationship with major economies in the world, including the US, Hai asserted.

“Digital economy, technologies, energy, and infrastructure are huge potential fields that could soon become the pillars in bilateral economic-trade cooperation,” he added.

Overview of the event.

Charge d’Affaires for US Mission in Vietnam Marie C.Damour shared her delight for the “extraordinary journey” of the economic relations that both countries have enjoyed for the past 26 years since the normalization of diplomatic ties.

In addition to trade products, Damour added Vietnam is US’s sixth-largest education market, expecting the two to bolster cooperation in this regard for better mutual understanding.

She mentioned the recent investment of $200 million from Vinfast in the US and the establishment of a direct flight route between Ho Chi Minh City and San Francisco as the highlights of the cooperation amid the pandemic.

Echoing suggestions from Vice Minister Hai, Damour called for the two countries to boost cooperation in energy, healthcare, and digital trade.

“US businesses stand ready to support Vietnam address challenges from climate change and promote a dynamic economy going forward,” she added.

Taking a long-term view on Vietnam’s economic prospects, AmCham Chairwoman Virginia Foote suggested the priority is to complete the vaccination roll-out.

While pushing for greater trade facilitation is among key priorities, Foote noted the necessity for both countries to narrow differences in tax policies.

Simplified administrative procedures not only benefit US firms but also puts Vietnamese companies in a better position to do business with their foreign partners, Foote added.