09:25 | 07/06/2019 Economy
(VEN) - The US government is prioritizing trade promotion and investment in Vietnam, which has become one of the fastest growing markets for US goods and expertise.
Increasing trade and investment
In the 25 years since the normalization of relations, two-way trade turnover between Vietnam and the US has increased strongly, reaching about US$59 billion in 2018. The US is one of Vietnam’s major export markets. In the first four months of this year, two-way trade turnover reached US$17.8 billion, an increase of 28.4 percent compared to a year ago. Specifically, exports of phones and components to the US more than doubled at 104.9 percent, followed by footwear (up 9.4 percent), and garments and textiles (up 8.5 percent).
In terms of investment, US companies have poured more than US$9 billion into Vietnam, ranking 11th among the countries and territories investing in the country. Large US companies such as Facebook, Google and Amazon have been making significant contributions to Vietnam’s development. In particular, US companies have paid attention to investment in clean and renewable energy in Vietnam.
They have also been interested in aviation and high-tech, with projects such as the Key Tronic EMS Group’s US$70-million electronic equipment manufacturing and assembling project, and the Alton Industry’s US$87-million air compressor and vacuum cleaner production project. In addition, US-based Universal Alloy Corporation Asia Pte. Ltd. (UAC) has decided to invest US$170 million in a new factory to manufacture aircraft components and parts in the central coastal city of Da Nang.
Alexander Feldman, chair of the US-ASEAN Business Council, said cooperation between the two countries has yielded important results. Economic growth and business opportunities have made Vietnam a more attractive destination for US investors, Feldman said.
US companies interested in Vietnam
US Ambassador to Vietnam Daniel J. Kritenbrink said Vietnam is one of America’s fastest growing markets worldwide and his country is therefore prioritizing trade promotion and investment with Vietnam. US companies are also willing to cooperate with Vietnamese businesses in order to help them participate in global value chains.
Economic growth and business opportunities have made Vietnam a more attractive destination for US investors. They are not only interested in the fields of consumer goods production but also in oil and gas, financial services, health, technology, and aviation.
US Consul General in Ho Chi Minh City Mary Tarnowka said Vietnam has many advantages in investment attraction thanks to its favorable location, which is well connected to many markets in the region and the world. In addition, the country is promoting its integration into the global economy through participation in numerous free trade agreements. In particular, the Vietnamese business and investment environment has been improved significantly.
Vietnam currently targets foreign investment attraction in high-tech, services and value-added industries, which are entirely appropriate for US investors.
However, some problems need to be overcome. Amanda Rasmussen, chair of the American Chamber of Commerce in Ho Chi Minh City, said frequent and retroactive changes of laws and regulations, including tax rates and policies, are significant risks for foreign investors, as they affect investment and business plans of licensed projects.
AmCham is urging the Vietnamese government to consider investment protection to prevent negative and retroactive impact of new laws and regulations on current projects.