Vietnam-US Trade: BTA-boosted Growth

 

According to the report on the impact assessment of five-year implementation of BTA on trade, investment and economic structure of Vietnam conducted by the Ministry of Planning and Investment and BTA Implementation Technical Assistance Project, the US has become the largest export market of Vietnam and has been one of major investment capital provider to Vietnam while Vietnam has become one of the fastest-growing importer of US goods.

The statistics report showed that Vietnam’s exports to the US surged immediately after the BTA took effect because the US cut import taxes on a variety of goods. In the first year of implementation in 2002, Vietnam’s exports to the US soared

128 per cent on year and the increase was 90 per cent in 2003. After 2003, the export growth rate was lower and stable at over 20 per cent as a consequence of the imposition of apparel quotas.

 

After five years of the BTA implementation, the export of Vietnamese goods to the US increased eight folds. The US has become the largest importer of Vietnamese goods and made up over 20 per cent of Vietnam’s total export value.

 

The export of US goods to Vietnam also nearly doubled after five years. The US exports were mainly machinery, manufactured and preliminarily processed products. Apparently, the US enjoyed benefits from the development of Vietnam. However, it was not as high as the growth of shipment of Vietnamese goods to the US.

During the five years, the US imposed restriction measures such as technical barriers, antidumping cases and supervision. The restriction impositions on tra and basa catfish and apparel were typical examples.

 

However, according to experts from the Star Vietnam Project, the growth rate of export of Vietnamese goods to the US was a popularly normal trend in the export of labour-intensive products of underdeveloped nations. Moreover, according to statistics by experts from Star Vietnam Project, the size of the Vietnamese economy was too small in comparison with the US one and the Vietnamese exports into the US had only a minor impact on the world largest economy in the future.

 

Furthermore, the export value of Vietnam was very tiny in the US trade. In fact, the goods made in this country consisting of certain proportions of contributions from the other country are absolutely normal. Thus, Vietnam’s import of goods from other countries also contained of the US value. As a result, Vietnam imported more from the US than the already-known figures.

 

According to the report, the BTA played an important role in the restructure of the Vietnamese export-oriented economy and proportion of labour-intensive goods export. Besides, BTA also made changes to investment and ownership structure.

 

The report proved that, after the implementation of the BTA, Vietnam has become a stronger exporting economy with high and stable annual growth. Besides, it also showed the significant rise of labour-intensive product export proportion.

 

According to many experts, it is a good trade agreement when the Vietnamese economy made strong growth in export and attraction of investment capital but it is problematic when it has impacts on the structure. It seemed Vietnam did not take the full advantage of opportunities to make stronger growth in the increasingly fierce competition.

 

Arguably, Vietnam did not make good preparations and sound policies to grasp the opportunities from the BTA. The BTA has generated huge opportunities for Vietnam and will generate similar opportunities and even bigger such as the WTO entry. However, the lessons drawn from the BTA showed that the internal reforms always played decisive roles. The BTA itself as well as integration process have opened up many opportunities but Vietnam will miss if it lacks good preparations.