New impulse for US-Vietnam economic relations

08:20 | 12/06/2016 Cooperation

(VEN) - US President Barack Obama’s official visit to Vietnam from May 23-25 and a number of agreements and contracts signed on this occasion created a new impulse for economic relations between the two countries.

New impulse for US-Vietnam economic relations

Vietnam recorded a trade surplus of US$25.6 billion with the US last year, making the US the country’s largest export market with bilateral trade in 2015 reaching US$45 billion. The US is also the seventh largest foreign investor in Vietnam with more than 700 projects valued at over US$11 billion. Bilateral ties are expected to continue growing strongly after President Obama’s visit and especially after the Trans-Pacific Partnership (TPP) takes effect.

Important contracts

During the visit, businesses of the two countries signed contracts and cooperation agreements in high technology, clean energy, climate change prevention, and environmental protection.

These included a purchase agreement under which Vietjet Air ordered 100 airplanes worth US$11.3 billion from the Boeing Company. This is the largest trade deal in the history of US-Vietnam relations so far, contributing to increasing bilateral trade. It will be implemented from 2019 until 2023.

Vietjet Air also signed with Pratt & Whitney, a subsidiary of the United Technologies Corporation, a contract worth US$3.04 billion to buy its PurePower Geared Turbofan aircraft engines and fleet maintenance and repair services.

The General Electric Company (GE) signed a memorandum of understanding (MoU) with the Vietnamese Ministry of Industry and Trade calling for collaboration in accelerating the development of renewable energy in Vietnam. The ultimate purpose of both parties is to develop a minimum of 1,000MW of new wind farms by 2025. This represents enough energy to power the equivalent of approximately 1.8 million Vietnamese households. Under the MoU, GE will utilize its global wind development expertise and work with local developers to identify potential projects. Furthermore, the company will support the implementation of Vietnam’s National Target Program through local manufacturing of wind turbine equipment and components at GE’s Hai Phong facility, plus collaboration with other local suppliers.

Also in the field of energy, the Thien Tan Investment and Construction Company signed a cooperation agreement to buy US$35 million of First Solar’s solar panels to equip its solar power plant with construction beginning in mid-2015.

At a meeting between several hundred businesses of the two countries, the Vietnam National Oil and Gas Group (PetroVietnam) signed MoUs with Honeywell Performance Materials and Technologies, and Murphy Oil Corporation. Under the MoU PetroVietnam signed with Honeywell, the two sides will cooperate in the fields of oil and gas, oil refining, petrochemicals, and related areas including gas measurement, erosion control, advanced software solutions, and network security.

The Grand Ho Tram Strip’s investor signed an MoU with the Cotec Construction Joint Stock Company (CotecCons) on pouring an additional US$75 million into this project. ContecCons will build the second hotel tower with 559 rooms at The Grand Ho Tram Strip, raising the total number of hotel rooms at the resort to 1,100. With actual investment totaling US$1 billion, this is the largest tourism complex project in Vietnam so far.

Optimistic about TPP

The two countries expect the TPP would be ratified and take effect in the near future because this agreement is good for the US, good for Vietnam, and good for the world as a whole.

President Obama highly appreciated Vietnam’s dynamic development in the Asia-Pacific region. He said this was the fastest growing part of the world and an enormous market for the US, and all countries wanted to export to this region.

“I have not yet seen a credible argument that once we get TPP in place we’re going to be worse off. We are demonstrably better off,” he told the press.

According to President Obama, the TPP would help ensure worker interests and good working conditions. It will create a framework that does not allow member countries to depreciate their currencies just for their own benefits. The TPP could help promote economic growth in Vietnam and the entire Asia-Pacific region. Therefore, member countries should not worry about the trade deal because it will surely bring in greater benefits. The US, Vietnam, and other TPP members are accelerating the ratification process and pledged to seriously follow its regulations.

Vietnamese President Tran Dai Quang said the TPP would be submitted to the first National Assembly session of the new cabinet this mid-July. A month prior to that, the government will request the National Assembly to add the agreement to the agenda of the session.

US President Barack Obama and his Vietnamese counterpart Tran Dai Quang agreed that in the coming period the two countries would take measures aimed at deepening bilateral cooperation, putting emphasis on trust building and priorities in development cooperation, including economics, trade, investment, science and technology, human resource training, and coping with climate change.


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