Econ
Vietnam, US relations on path towards greater integration
Vietnam and the US have made great strides in their strategic partnership over recent years and there have been many positive developments that lead to the broader promise of deeper cooperation in trade and investment for years to come.
Party Chief Nguyen Phu Trong, Minister of Public Security Tran Dai Quang, and Vice-Chair of the National Assembly Nguyen Thi Kim Ngan— have all visited the US within the past year seeking higher levels of cooperation on a number of fronts.
Notably, Party Chief Trong’s last year visit was seen by the US congress as a positive move advancing the Trans-Pacific Partnership (TPP), an American-led trade agreement among a dozen Pacific Rim nations that excludes China.
The US congress also agreed during that visit to a new, more integrated approach to relations with Vietnam, one that is plainly more desirous of advancing the Southeast Asian nation’s drive for international economic integration and national defence.
These developments are clearly good omens for future Vietnam, US relations and signify that the overall trajectory is on a path to more prosperous relations and that the two countries agree on the importance of advancing cooperation between them in areas of mutual interest.
Vietnam’s labour and legal reforms in accordance with the TPP can be expected to proceed as planned. Under the deal, Vietnam has five years to allow independent local, factory-level unions to affiliate with each other and/or form sector-specific unions.
Additionally, the agreement provides that Vietnam has an additional two years during which the US can, at its option, assess whether the Southeast Asian nation has complied with the labour requirements of the trade accord.
The TPP stipulates that should the US be less than satisfied after this transition period, it can initiate talks with Vietnam and, in a worst-case scenario, unilaterally suspend tariff phase-outs (for clothing and footwear) that have not yet been given effect.
Vietnam has also agreed to modify its laws to improve worker rights as part of joining the TPP as well as commit to carry out the complicated and difficult task of privatizing state-owned enterprises (SOEs).
Although the TPP does not provide any detailed and specific plan for SOE reform, it falls on the Vietnam government to layout its own roadmap and implement its divesture reform program according to its own timetable.
Along this vein, the Vietnam government in January of 2016 announced plans to divest its ownership stake in a large number of specifically identified SOEs in the textile/garment, telecommunications, and dairy industries.
The Vietnam government’s economic reform agenda remains the same— to achieve an average of 6.5-7% gross domestic product growth per annum and reach a per capita income of US$3,200-3,500 (from the current US$2,170) by the year 2020.
The economy is currently forecast to expand by 6.7-6.8% in 2016, making Vietnam this year— the world’s second-fastest growing economy, trailing India.
Notably, Party Chief Trong’s last year visit was seen by the US congress as a positive move advancing the Trans-Pacific Partnership (TPP), an American-led trade agreement among a dozen Pacific Rim nations that excludes China.
The US congress also agreed during that visit to a new, more integrated approach to relations with Vietnam, one that is plainly more desirous of advancing the Southeast Asian nation’s drive for international economic integration and national defence.
These developments are clearly good omens for future Vietnam, US relations and signify that the overall trajectory is on a path to more prosperous relations and that the two countries agree on the importance of advancing cooperation between them in areas of mutual interest.
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Additionally, the agreement provides that Vietnam has an additional two years during which the US can, at its option, assess whether the Southeast Asian nation has complied with the labour requirements of the trade accord.
The TPP stipulates that should the US be less than satisfied after this transition period, it can initiate talks with Vietnam and, in a worst-case scenario, unilaterally suspend tariff phase-outs (for clothing and footwear) that have not yet been given effect.
Vietnam has also agreed to modify its laws to improve worker rights as part of joining the TPP as well as commit to carry out the complicated and difficult task of privatizing state-owned enterprises (SOEs).
Although the TPP does not provide any detailed and specific plan for SOE reform, it falls on the Vietnam government to layout its own roadmap and implement its divesture reform program according to its own timetable.
Along this vein, the Vietnam government in January of 2016 announced plans to divest its ownership stake in a large number of specifically identified SOEs in the textile/garment, telecommunications, and dairy industries.
The Vietnam government’s economic reform agenda remains the same— to achieve an average of 6.5-7% gross domestic product growth per annum and reach a per capita income of US$3,200-3,500 (from the current US$2,170) by the year 2020.
The economy is currently forecast to expand by 6.7-6.8% in 2016, making Vietnam this year— the world’s second-fastest growing economy, trailing India.
