Many new areas of cooperation between Vietnam and the United States are expected to achieve a breakthrough

Enterprises seizing opportunities from the comprehensive strategic partnership between Vietnam and the United States (US)

Trade relations between Vietnam and the United States are expected to continue to develop rapidly in the coming time. Photo: TL.

Opening up many new opportunities

Speaking online at the Vietnam-US Trade Forum on November 21, Ms. Barbara Weisel, International Trade Law Expert, Managing Director at Rock Creek Global Advisors, former Assistant Trade Representative The US Chamber of Commerce assesses that currently is an interesting time in Vietnam - US relations. The upgrade of the relationship between the two countries to a comprehensive strategic partnership reflects the continued strong and growing relationship since the normalization of relations twenty eight years ago and the great value that both sides place on. its partnership. This shows that both sides see this as a dynamic and growing relationship with many promises of further cooperation and opportunities in the future.

According to Ms. Barbara, in recent years, with a strong and stable market, a young and educated workforce, an entrepreneurial spirit and a free trade network, Vietnam has become a major beneficiary starting from the interest of many countries and companies in diversifying supply chains to ensure greater economic security and resilience. Thanks to this supply chain shift, along with other factors, Vietnam achieved the largest increase in market share in the United States of any country and the United States became Vietnam's largest export market, accounting for nearly 1/3 of Vietnam's export turnover.

In recent years, Vietnam and the United States have also had many cooperation memorandums such as: Vietnam Airlines and Boeing signed memorandums of understanding on the sale of fifty 737 Max narrow-body aircraft worth US $ ten billion; Vietjet Airlines signed an aircraft sponsorship agreement worth more than half a billion USD with Carlyle Financial Group; The US international Development Finance Corporation (DFC) signed bilateral loan commitments worth US $ 300 million and US $ 100 million to strengthen the capital foundation and promote sustainable finance. In addition, FPT Group also announced a comprehensive strategic cooperation with Landing AI - a company in the field of machine vision and artificial intelligence in Silicon Valley. HDBank also recently signed a counterpart fund worth US $ 20 million to support Fulbright University Vietnam in building facilities and developing scientific research...

In the coming time, Ms. Barbara believes that there will continue to be new initiatives that can promote the Vietnam - United States partnership. For example, regarding semiconductors, last September, the US State Department announced that it is working with Vietnam to find ways to develop and diversify the global semiconductor ecosystem under the Innovation and Security Fund. International Technology created by the US CHIPS Act of 2022 - a five-year, $100 million fund to accelerate the development and adoption of secure and reliable telecommunications networks, while ensuring security and diversification of the semiconductor supply chain.

The US State Department said this work will begin with a review of Vietnam's current semiconductor ecosystem, regulatory framework and workforce and infrastructure needs. The results of this assessment will open up potential future cooperation on the development of this important area.

In September, Vietnam and the United States announced a bilateral Memorandum of Understanding to enhance technical cooperation to support Vietnam's efforts to quantify rare earth elements, resources and economic potential, attract investment and meet high environmental and social governance standards.

“With seemingly limitless demand for critical minerals, these various bilateral and multilateral initiatives must be carefully coordinated and further developed to ensure they help mobilize the necessary financing for Developing safe supply and creating necessary conditions to ensure safe demand" - Ms. Barbara said.

Promising new growth

According to experts, the United States is a fastidious and high demanding market, but this has created a lot of space and room for export for Vietnamese businesses, especially in industries such as agricultural products, textiles and garments, footwear and wooden furniture are areas which Vietnam has strengths.

On the contrary, Vietnam also needs to attract quality investors from the United States to shift FDI attraction from labor-intensive industries to technology-intensive industries - this is the US’s strength. Thus, high-tech fields and projects, electronics, semiconductors, innovation, renewable energy, clean energy, financial centers, infrastructure construction and research and Development are priority areas that Vietnam really wants to invite the international investor community in general, especially US investors to invest in Vietnam.

Mr. Do Thien Anh Tuan, senior expert at Fulbright University Vietnam, said that with the comprehensive strategic partnership between Vietnam and the United States being opened, it is important that relevant agencies of two countries must concretize the content of this comprehensive strategic partnership to make economic, trade and investment cooperation more substantive, more meaningful and create new wonders.

According to Mr. Anh Tuan, there are many new and groundbreaking areas of cooperation that have not yet been fully exploited and promoted between the two economies. Besides, Vietnamese and US businesses will also have many opportunities from the complementarities of the two economies. The United States may be strong in capital, capable of exporting capital to Vietnam and investing in Vietnam. On the contrary, Vietnam has a lot of labor surplus and is upgrading the quality of human resources, able to meet the needs of the international investment community, especially fastidious investors from the United States.

In addition, Vietnam is a dynamic market with rapidly increasing people's income and the rise of the emerging middle class, so it is also an attractive market to increase exports of US businesses to Vietnam aims to rebalance relations and trade balance between the two countries. In particular, the supply chain diversification strategy of US businesses will create opportunities for Vietnamese businesses to participate more deeply in the global supply chain in trade and investment cooperation relationships between businesses of the two countries. Specifically, large US corporations such as Intel, Apple, Google, Boeing, Walmart... are researching and investing in expanding supply chains in Vietnam.

However, besides the opportunities, there are many challenges coming from the fact that the United States has not yet recognized Vietnam as having a full market economy; The United States has not applied the GSP universal preferential tariff mechanism for Vietnam like other strategic partners. According to Mr. Do Thien Anh Tuan, it is expected that the United States will consider this after the two countries have upgraded their relationship to a comprehensive strategic partnership.

In addition, some US trade policies may limit market access and increase costs for Vietnamese businesses. The frequency of trade defense investigations against Vietnamese goods is increasing and can weaken the trust in economic and trade cooperation between the two countries, which in turn can affect the cooperative relationship more deeply in the spirit of peace, cooperation and sustainable development.

Mr. Do Thien Anh Tuan said that the US currency manipulation monitoring report on Vietnam does not accurately reflect the actual situation in operating exchange rate policy as well as macroeconomic policy management tissue of Vietnam. This may partly cause concern for the community and the spirit of economic, trade and investment cooperation between businesses of the two countries.

“US businesses that have been doing business in Vietnam certainly understand the business environment in Vietnam, understand how the Vietnamese Government uses macroeconomic tools, monetary policy, in That includes exchange rate policy in achieving macroeconomic stability goals in the context of Vietnam's frequent instability. Vietnam is never inclined to use those tools as a mechanism to create a competitive commercial advantage" - Mr. Anh Tuan affirmed.