08:26 | 25/07/2015 Cooperation
(VEN) - Over the last two decades since Vietnam and the US normalized diplomatic relations, especially since the two countries signed a Bilateral Trade Agreement (BTA) in 2000, trade relations between the two countries have grown. The US has been a leading export market for Vietnam over the last many years.
Vietnamese exports to the US increased by nearly 36 times from about US$800 million in 2000 to US$29.4 billion in 2014. Vietnam currently ranks 10th among 234 countries and territories having trade relations with the US. It has surpassed Thailand, Malaysia, and Indonesia to become ASEAN’s largest exporter to the US. Vietnamese goods account for 22 percent of the total value of ASEAN’s exports to the US.
Statistics from the Vietnamese Ministry of Industry and Trade show that in the first four months of this year, the US continued to be the number-one export market for Vietnam, accounting for 19.7 percent of Vietnam’s total export value. Seven of 20 Vietnamese products with annual export value of US$1 billion are exports to the US, mostly textiles and garments, footwear, wood products, and seafood. With a market capacity of about US$1.8 trillion, the US is believed to remain the number-one market for Vietnam in the coming time.
If the Trans-Pacific Partnership (TPP) agreement between Vietnam and 11 Pacific Rim countries, including the US, is signed, it will open new prospects for Vietnamese exports to the US. The tariff rates applied to many kinds of goods will be reduced to zero percent. Vietnamese exports to the US will have competitive and comparative advantages over exports from rival countries such as China, India, and Bangladesh. For example, the US currently imposes an import tax rate of 35 percent on canned seafood. After the TPP is signed, however, the import tax rate applied to these products will be zero percent.
According to the American Chamber of Commerce , Vietnam will become an increasingly important Southeast Asian trading partner for the US with bilateral trade predicted to reach US$57 billion by 2020, and an attractive investment destination for US businesses if Vietnam joins the TPP. Notably, Vietnamese textile and garment exports to the US are forecast to reach US$22 billion by 2020. Vietnamese clothing and footwear exports to the US are predicted to grow 45.9 percent by 2025.
Marybeth Turner, Economic Officer at the US Embassy in Vietnam, said the TPP was expected to help Vietnamese businesses boost the export of products such as textiles and garments, seafood, footwear, and wood products to the US, and facilitate market access for new products such as automobile spare parts, and processed seafood, while at the same time promoting investment from the US and other countries into Vietnam.
Therefore, Vietnamese businesses need to take the initiative in learning about the TPP’s market opening regulations so that they can work out suitable investment, production and business plans as well as export orientations.