Milestones in US-Vietnam economic relations

10:10 | 27/05/2016 Cooperation

(VEN) - Historic visits, decisive policies, and significant agreements have created quantum leaps in US-Vietnam economic relations. The US has become Vietnam’s number-one export market and maintained this position over recent years.

Milestones in US-Vietnam economic relations

US President Barack Obama received General Secretary of the Communist Party of Vietnam Nguyen Phu Trong at the White House in Washington D.C on July 7, 2015 - Photo: VNA

Historic visits

On November 16, 2000, US President Bill Clinton paid a four-day official visit to Vietnam. This was the first visit to Vietnam by a US President since the end of the war in 1975.

During this visit, President Clinton said, “We are honored to join you in writing a new chapter in the relationship between the United States and Vietnam, and grateful that this chapter has a happy beginning. Yes, the history we leave behind is painful and hard. We must not forget it, but we must not be controlled by it. The past is only what precedes the future, not what determines it.”

On June 20, 2005, Vietnamese Prime Minister Phan Van Khai led a delegation of government officials to visit the US at the invitation of US President George Bush. He said that Vietnam and the US had common concerns and interests in a range of fields, and hoped that the visit would open new prospects for the cooperation between the two countries to increase in terms of quantity and quality for the benefit of both sides.

In November 2006, US President W. Bush visited Vietnam and signed a bill granting permanent normal trade relations with Vietnam.

In June 2007, Vietnamese President Nguyen Minh Triet visited the US and affirmed that Vietnam was in the process of deepening its integration into the World Trade Organization (WTO) and implementing its rules in order to create a truly attractive investment environment.

In June 2008, Vietnamese Prime Minister Nguyen Tan Dung paid a high-level visit to Washington. The two sides agreed to organize strategic security dialogues at a deputy minister level. As a result of the visit, the first US-Vietnam political, security, and defense dialogue was held in Washington in October 2008.

In July 2013, Vietnamese President Truong Tan Sang paid an official visit to the US. The two sides launched the US-Vietnam comprehensive partnership.

In July 2015, Vietnam Communist Party General Secretary Nguyen Phu Trong visited the US. This was the first visit to the US by a Vietnam Communist Party leader. He had a historic talk with US President Barack Obama.

In May 2016, President Obama visited Vietnam and joined discussions focusing on measures to enhance the US-Vietnam partnership, US investment in young Vietnamese generations through education cooperation programs, bilateral cooperation in coping with regional and global challenges, dealing with post-war issues, human rights, and legal reforms in Vietnam.

Through these historic visits, decisive policies had been proposed to promote the relationship between the two countries.

Significant agreements

On July 11, 1995, US President Bill Clinton and Vietnamese Prime Minister Vo Van Kiet announced the decision to normalize the US-Vietnam diplomatic relations. Five years later, in July 2000, the two sides officially signed the US-Vietnam Bilateral Trade Agreement (BTA) which took effect on December 11, 2001 following the exchange of ratification letters between Vietnamese Minister of Trade Vu Khoan and US Trade Representative Robert B. Zoellick in Washington. Under the BTA, all kinds of Vietnamese exports to the US would be unconditionally subject to Normal Trade Relations tariff rates, much lower compared with the rates applied before that.

Just two years after the BTA took effect, the US became Vietnam’s number-one export market and has maintained this position until today. Statistics from the Vietnamese Ministry of Industry and Trade show that Vietnamese exports to the US have grown about 20 percent annually in recent years.

Vietnamese exports to the US doubled within just one year from US$1.51 billion in 2001 to US$2.89 billion in 2002. With trade between the two countries reaching US$36.3 billion in 2014, a 24-fold increase compared with 2001, Vietnam became the largest ASEAN exporter to the US and the 15th largest exporter to this market worldwide. Notably, Vietnam has continuously maintained a trade surplus with the US, with the surplus reaching US$2.45 billion in 2002, US$5.93 billion in 2005, US$14.24 billion in 2010, US$36.2 billion in 2014, and US$45 billion in 2015.

After six years reaping successful results from the BTA, Vietnam became the 150th member of the WTO. This significant event had a strong positive impact on foreign investment flows into Vietnam. The US currently ranks seventh among the 101 countries and territories having investment projects in Vietnam, with more than 700 ongoing projects with total registered capital of over US$11 billion.

The Trans-Pacific Partnership (TPP) with Vietnam being a negotiator is a new-generation trade agreement addressing a wide range of fields which had never been mentioned in previous agreements, such as government purchases, labor, and environment. Deputy Minister of Industry and Trade Tran Quoc Khanh, Head of the Vietnamese negotiation delegation, said the TPP would open big opportunities for Vietnamese goods. The American Chamber of Commerce in Vietnam (AmCham) predicted Vietnamese exports to the US would reach US$57 billion by 2020.

According to the Vietnamese trade office in the US, this country spends about US$2.2 trillion on imports and exports about US$1.3 trillion worth of products annually. With high import demand and a stable consumer market, the US is a potential export market for Vietnamese businesses. Major Vietnamese exports that have carved a niche in the US market include textiles and garments, leather and footwear, wood products, agricultural products, and seafood.

As the number-one economy worldwide with annual gross domestic product reaching more than US$15 trillion, the US is a large export market for Vietnamese businesses.

 

Thu Hang

Theo ven.vn