Thriving trade setting up high-level visit from US

Over the past few weeks, Vietnam and the US have been making preparations for talks between Party General Secretary Nguyen Phu Trong and US President Joe Biden, and then an upcoming visit by the latter to the Southeast Asian nation.

During US Vice President Kamala Harris' November 18 meeting with Vietnamese State President Nguyen Xuan Phuc on the margins of the APEC Leaders Meeting in Bangkok, the Vietnamese leader reaffirmed the desire to boost both nations' relationship towards a more practical and stable manner.

US Vice President Kamala Harris speaks at the press conference (Photo: VNA)

"Via Vice President Harris, President Phuc honourably invites US President Joe Biden to soon pay a visit to Vietnam. He acclaims President Joe Biden's proposal to have talks on the phone with Party General Secretary Nguyen Phu Trong, and he suggested that both sides make thorough preparations for the talks," said a release from Vietnam's Ministry of Foreign Affairs (MoFA).

Meanwhile, the White House also said that during the meeting between Vice President Harris and President Phuc, "The vice president recalled her August 2021 trip to Hanoi and reaffirmed our commitment to deepen the US-Vietnam partnership. They discussed our work together to promote a free and open Indo-Pacific and stand up for international rules and norms. They also discussed strengthening economic ties between the United States and Vietnam as the US prepares to host APEC in 2023."

On November 12 at the 40th and 41st ASEAN Summit and related meetings in Cambodia, PM Chinh met with President Biden, with both discussing measures to promote bilateral relations. They said Vietnam and the US will strengthen exchanges and dialogue at all levels as well as carry out high-level visits as conditions permit.

PM Chinh conveyed greetings from Party chief Trong and President Phuc and also invited the US president to Vietnam. Biden accepted the invitations and promised to arrange a visit at an appropriate time.

Promoting ties

Next year, both countries will celebrate 10 years of a comprehensive partnership. The occasion will provide a window of opportunity to elevate the existing comprehensive partnership to a strategic one which, if realised, will contribute to helping further improve their trade and investment cooperation.

The act of upgrading the US-Vietnam comprehensive partnership to a strategic partnership would most likely be marked by a joint statement signed by the two heads of state.

Currently, Vietnam has tried to elevate its status by strengthening relations with all five permanent members of the United Nations Security Council. So far, Vietnam has a comprehensive strategic cooperative partnership with China, a comprehensive strategic partnership with Russia, and strategic partnerships with the United Kingdom and France, but only a comprehensive partnership with the United States.

While speaking with PM Chinh, Biden suggested the two countries continue to promote strong cooperation in order to strengthen bilateral relations, especially in areas of mutual benefit and make positive contributions to peace, stability, cooperation, and development in the region and beyond.

"Both leaders reaffirmed that great importance and high priority that they attached to the comprehensive partnership between the two countries, and Vietnam and the US will strengthen exchanges and dialogues at all levels, especially those by top leaders, via many flexible forms," said the MoFA.

In its latest move, on November 10, the US Department of Treasury issued a report on macroeconomic and foreign exchange policies of major US trading partners. Accordingly, the US has removed Vietnam from the monitoring list for currency manipulation.

The report continued to examine the currency manipulation capabilities of the main trading partners based on the bilateral trade surplus with the US, current account surplus, and prolonged one-way foreign exchange market intervention.

"Vietnam has been removed from the monitoring list, having only met one of the three criteria over the four quarters through June 2022 as it had in the June 2022 Report for the four quarters through December 2021," read the report.

According to Vietnam's Ministry of Industry and Trade, Vietnam and the US are expected to continue witnessing trade cooperation flourish. In the first 10 months of this year, the US was Vietnam's largest export market, with total turnover of $93.4 billion, up 22.3 per cent on-year.

Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, expects US-Vietnam trade and investment ties to further flourish on the back of a new cooperation framework like strategic partnership.

"Vietnam and the United States have developed a healthy commercial relationship that has created jobs, tax revenue, and opportunities for the citizens of both countries," Sitkoff said. "The US is Vietnam's largest export market. Vietnam also receives billions of US dollars of foreign investment from US companies each year – much of it to build integrated supply chains that benefit American consumers. At the same time, Vietnam has become one of America's fastest growing export markets."

In an example, Bank of America is seeking permission to establish a $50 million branch in Ho Chi Minh City. The second-largest lender in the US boasts 450 world-leading investors in its investment portfolio.

It is expected that Madhu Kannan, executive vice chair of global corporate and investment banking, will come to the city for further discussion on the issue in the near future.

New initiatives

During PM Chinh's visit to the US in May, enterprises from both nations exchanged many cooperation deals and trade contracts worth over $30 billion.

"US companies and investors bring high-quality products and state-of-the-art technologies, services, and business practices to Vietnam. We partner with Vietnam to develop high-tech, innovative industries," Sitkoff said.

"The US business community is optimistic about Vietnam's prospects for continued strong economic growth in 2022 and beyond, despite global headwinds. Vietnam has been doing an extremely effective job at managing global challenges – from the pandemic, sharp downturn in the global economy, and inflation in key inputs."

Statistics from Vietnam's Ministry of Planning and Investment showed that as of October 20, US investors registered $11.45 billion in Vietnam in over 1,200 valid projects, making the US the 11th largest foreign investor in the Southeast Asian nation.

In the January-October 20 period, newly registered capital, stake acquisition, and capital contributions from US investors in Vietnam were all worth $702.68 million, with 72 newly licensed projects.

"The sectors that US businesses hope to invest in and cooperate with Vietnam include high technology, energy, agriculture, healthcare/pharmaceuticals, finance, aviation, and tourism," said Nguyen Quoc Dung, Vietnamese Ambassador to the United States.

To grasp opportunities of economic cooperation with the US, Dung recommended that Vietnam should maintain high-level relations with the US to promote their partnership momentum, develop the key exports to the US, create more favourable conditions for its products to enter Vietnam, soon sign a double taxation avoidance agreement, and approve common principles on auditing to facilitate investment in Vietnam.

"Moreover, it is necessary to make use of US assistance for the realisation of the COP26 commitments while maintaining dialogue and paying attention to US business proposals," Dung said.