Bright prospects for trade and investment between the US and Vietnam

Friday - 19/08/2016 16:36
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More than two decades since the normalization of the relationship, bilateral trade and investment between the US and Vietnam have seen significant development and the prospect is bright, given the signing of Trans-Pacific Partnership (TPP).

The trade deal, which was officially signed by 12 member countries including the US and Vietnam in early February, coupled with a recent three-day visit of US President Barack Obama to Vietnam, are important leverage to the bilateral trade, especially exports of Vietnam to the US.

Aftert 16 years since Vietnam and the US signed the bilateral trade agreement in 2000 which went into force in 2001, bilateral trade jumped from US$1.5 billion to more than US$45 billion last year.

Vietnam’export turnover to the US in 2015 reached US$38 billion, making the US one of the most important trade partners of Vietnam, statistics of the Ministry of Industry and Trade showed. Vietnam’s export to the US is anticipated to reach $57 billion by 2020.

To date, Vietnam exports 38 categories of products to the US and has become one of the largest sources for US imports.

Statistics of the ministry’s America Market Department, in the first four months of this year, the US is the second largest trade partner of Vietnam (coming after China) with the export value to the US reaching US$13.92 billion, making up 13.3% of Vietnam’s total exports and rising by 13.5 per cent over the same period last year.

Vietnam ran a trade surplus of US$8.98 billion with the US in the first four months of this year.

According to Director of the America Market Department Nguyen Duy Khien, the two-way trade would be leveraged to new heights thanks to a series of measures reached by the two Governments on promoting trade and investment.

Especially, when the TPP comes into force, the trade deal will bring a lot of opportunities to Vietnam’s exports to the US.

With the available competitive advantages, Vietnam is focusing on seven major export products to the US which see revenues from US$1 billion, including garment and textile, footwear, wood and wooden products, computers, electronics and components, fisheries products, agricultural products, phones and components.

 

However, to be able to grasp opportunities arising from TPP, Vietnam needs to hasten the engagement into the global supply chain to gradually improve added values of its export products, according to experts.

 

Vietnam’s export value to the US could increase by 20 per cent when TPP comes into force.

H.E. Mr. Tran Tuan Anh, Minister of Industry and Trade said that firms must restructure their production and enhance product quality to expand exports to the US.

According to Mr. Pham Tat Thang from the Institute for Trade under the Ministry of Industry and Trade, the US will remain a significant export market of Vietnam in the future. The US imports around US$2 trillion each year, in which Vietnam just accounts for 1.7%. Thus, there is a room to improve exports to the US, especially with TPP.

Investment

Update figures of the Ministry of Planning and Investment’s Foreign Investment Agency showed that the US poured US$11.73 billion investment in more than 800 existing projects in Vietnam as of April 20.

The US ranked eight among 114 countries and territories with investments in Vietnam.

The US investors have poured money in 17 out of 18 economic sectors of Vietnam, especially on restaurant and catering services, manufacturing and processing industries and property business.

Ba Ria – Vung Tau, Hanoi, HCM City, Hai Phong, Binh Duong and Dong Nai are major destinations for the US investments.

Experts said that Vietnam should speed up administrative reform and improve business climate while get well-prepared for the global economic integration in order to attract more investment.

Source: Vietrade

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