Hanoi (VNA) – Since Vietnam and the US normalised their ties and set up diplomatic relations on July 12, 1995, the two countries have gone from former foes into friends and become comprehensive partners, from politics-diplomacy, economy, education and science-technology to defence-security.
Apart from sound political links, economic and trade relations are also considered one of the most successful fields of bilateral cooperation and becoming a driving force for the overall relationship between the two countries.
Twenty-five years since the normalisation of their ties, the US is currently the third-largest among more than 100 trade partners of Vietnam around the globe.
In return, the Southeast Asian country ranks 16th among trade partners of the North American nation. Bilateral trade has grown by 20 percent annually, with Vietnam continually recording surplus with the US.
Trade between the two countries has surged by almost 120 times, from 451 million USD in 1995 to 7.8 billion USD in 2005, 45.1 billion USD in 2015, 47.15 billion USD in 2016, 50.8 billion USD in 2017 and 60.3 billion USD in 2018.
In 2017 alone, Vietnam’s exports to the US accounted for over 20 percent of its total overseas shipments. Vietnam is also the biggest Southeast Asian exporter to the US.
Their trade turnover reached 77.5 billion USD in 2019, which was forecast to hit 80 billion USD this year by the American Chamber of Commerce (AmCham).
According to the General Department of Vietnam Customs, two-way trade stood at 31.11 billion USD in the first five months of 2020.
Out of this, Vietnam shipped 25.11 billion USD worth of goods to the US, up 10.6 percent year on year. The main export items include textile-garment products; mobile phones and components; computers, electronic products and components; machinery, equipment, tools and spare parts; footwear; and wood products, with a revenue of at least 1 billion USD for each commodity.
Meanwhile, the US earned 6 billion USD from shipments to Vietnam during the period, up 5.4 percent from a year earlier, with computers, electronic products and components sold the most, worth 1.92 billion USD, up 8.2 percent year on year.
The US has also continually recorded growth in the export of many items to the Southeast Asian nation, including timber, wood products, animal feed and materials, aquatic products, fruit and vegetables. Regarding agricultural products, it is posting a trade surplus of 400 million USD per year with Vietnam in terms of soya beans, meat, milk and fruit.
Besides trade in goods, the two countries have also enjoyed vibrant trade links in the aviation sector with a host of contracts to buy Boeing planes from Vietnamese carriers like Vietnam Airlines, Vietjet Air and Bamboo Airways.
In terms of investment, by the end of 2019, the US ranked 11th among 130 countries and territories directly investing in Vietnam, with nearly 1,000 valid projects worth approximately 10 billion USD at present.
The US has yet to rank among the top foreign investors in Vietnam, but it is assessed as a high-quality investor. Running many valuable projects, US businesses have been actively cooperating with and assisting their local partners to develop while contributing considerably to social activities.
The North American country is also an investment recipient of Vietnamese enterprises. It stood at second place among overseas destinations of Vietnamese investment between January and May this year, with 21.72 million USD or nearly 12 percent of the latter’s total overseas investment.
Additionally, the US has always kept official development assistance (ODA) for Vietnam at a stable level of more than 100 million USD every year.
With regard to tourism, it has also continually been among the top five sources of foreign visitors to Vietnam. The number of American travellers grew by 11.55 percent on average between 2014 and 2018.
In 2018, 687,200 tourists from the US came to Vietnam, increasing 11.9 percent from the previous year and making up 4.4 percent of total foreign arrivals here. They accounted for about 11 percent of total American visitors to Asia.
In February 2019, the second summit between the US and the Democratic People’s Republic of Korea took place in Hanoi. This meeting demonstrated Vietnam’s stature in the international community and its role in maintaining peace and holding world-level political events.
Successes reaped thanks to important agreements and policies
On July 13, 2000, Minister of Trade Vu Khoan and US Trade Representative Charlene Barshefsky signed the Vietnam-US Bilateral Trade Agreement (BTA) at the Office of the US Trade Representative in Washington DC. Later, President Bill Clinton announced this agreement during an event at the White House Rose Garden.
The BTA officially came into force on December 11, 2001, when Vietnamese Minister of Trade Vu Khoan and US Trade Representative Robert B. Zoellick exchanged letters ratifying the deal in Washington DC.
According to the agreement, all Vietnamese goods exported to the US would be entitled to tariff rates under the unconditional normal trade relations status, much lower than previous rates.
Two years after the BTA was effective, the US became the top importer of Vietnamese goods and retained this position until now.
Experience gained during the BTA talks proved useful for Vietnam during the negotiation on its entry into the World Trade Organisation (WTO) with the US, a major partner in the WTO, paving the way for Vietnam to become the 150th member of this organisation in January 11, 2007.
On July 17, 2003, the Vietnam-US Textile Agreement was signed by Minister of Trade Truong Dinh Tuyen and US Ambassador Raymond Burghardt in Hanoi. Later the same year, on December 4, the two countries inked the Bilateral Air Transport Agreement.
On December 8-9, 2016, the US House of Representatives and the Senate approved the status of permanent normal trade relations (PNTR) for Vietnam. US President George W. Bush signed the statement granting the PNTR to the country.
The two countries signed the Bilateral Maritime Agreement on March 15, 2007 and the Trade and Investment Framework Agreement (TIFA) on June 21 the same year.
On March 27-28, 2017, they reactivated the technical meeting of the TIFA Council, holding dialogue in the spirit of ensuring mutual benefits and seeking new cooperation fields.
Talking about the rapid growth in Vietnam-US trade ties, US Assistant Secretary of State David Stilwell considered it the result of the industry and vision of many people from both sides who believe in the prospect of peace.
At the ceremony debuting the logo of the 25th anniversary of bilateral diplomatic relations in late December 2019, Stilwell affirmed that US businesses are investing more and more in Vietnam while Vietnamese manufacturers are also bringing more goods to American consumers.
For his part, Vietnamese Deputy Prime Minister Trinh Dinh Dung said the Vietnamese and US economies are increasingly complementary. While his country has many strong products shipped to the US like seafood, cashew nut, apparel and footwear, the US has also been supplying Vietnam with high-tech products such as energy investment projects and aircraft purchase contracts.
Opening the 2019 US-Vietnam Business Summit, he stressed that investment and business opportunities of US firms in Vietnam have been playing an increasingly important role in local development, helping the host country join global supply chains, improve local workers’ skills and income, and bring about prosperity to the Vietnamese people./.