Vietnam-US Economic Cooperation Enhanced

Economic cooperation between the United States and Vietnam is at an all-time high. I am delighted that Secretary Gutierrez is coming to Vietnam to see for himself how this country has transformed itself into one of the fastest growing markets in the world, through its implementation of market-opening economic reforms. With a delegation of 23 American firms, this trade mission demonstrates that the U.S. private sector is eager to do more business in this vibrant economy. Last year, Vietnam exported about US$8.5 billion in goods to the United States, its largest export market. The United States, however, exported about US$1billion in goods to Vietnam. I am confident that this visit will lead to more commercial deals between U.S. and Vietnamese firms and, in particular, help increase U.S. exports to Vietnam. Now that the United States and Vietnam enjoy Permanent Normal Trade Relations (PNTR) and Vietnam is a member of the World Trade Organization (WTO), there are more opportunities for trade with Vietnam. Vietnam is reducing tariffs and opening up many parts of its services sector to foreign participation. These market opening measures combined with Vietnam's robust economic growth are reason for optimism. As the people of Vietnam become more open and richer, they will buy and use many more of our excellent products and take advantage of our excellent services.

 

Economic liberalization has unleashed the entrepreneurial sprit, drive and ambition of the Vietnamese people to take more control of their lives and improve their living standards. Economic reforms are allowing them to realize their potential to become more prosperous.   American investors are attracted to investing in Vietnam because it has such a hard working and productive labour force. Moreover, as shown in the Bilateral Trade Agreement with the United States as well as in its accession to the WTO, Vietnam has committed itself to become a market-oriented economy. There is no turning back. At the same time, there are many obstacles in the way that slow investment. Investors often find it difficult to do business because of the red tape involved in getting licenses and permits. It takes too long. They have concerns about the rule of law and whether they can get a fair hearing in local courts in legal disputes. They worry about transparency and high levels of corruption. They question the protection offered for their intellectual property rights. Investors also see the challenges presented by health issues, labour standards, traffic congestion, growing inflation and increasing rents for office space. Nevertheless, based on Vietnam's demonstrated economic performance, American investors are confident that Vietnam will continue to move forward. I am too.

As stated by Vietnam’s own leaders, the nation needs to invest more in people, infrastructure and institutions. Training and education needs to improve across the board so that the Vietnamese people can attain the proficiency levels needed to compete in the 21^st century. In addition to looking for skilled employees, investors look for the services they need to make their plants and businesses successful. They demand a reliable electricity supply, and fast and efficient telecommunications networks. Vietnam needs to build the capacity and improve the efficiency and transparency of its bureaucracy at all levels of government. It needs to improve and expand its transportation network across the board, including its sea ports, airports, railroads and highways, to keep pace with the growth in international trade. Otherwise, transport bottlenecks will constrain growth. Vietnam needs to implement its WTO commitments on time. It needs to protect intellectual property rights. Expediting the approval of investment projects and ensuring timely and transparent processing of required permits is essential. Administrative reforms and proper regulatory frameworks for financial, legal and accounting services will bolster the confidence of investors looking to Vietnam. The United States has embraced competition as the lynchpin of our economic development. Fighting corruption and providing a level playing field for foreign investors will ensure Vietnam also reaps the benefits of competition. The good news is that America stands ready to help Vietnam tackle all these challenges. I am working hard to help increase technical assistance and expand our educational ties. Vietnam has to make these changes itself, but you have a very strong and willing partner in the United States!

 

Through partnership, I am confident that the United States and Vietnam will continue to expand our economic cooperation. Both countries have benefited from the success of our Bilateral Trade Agreement (BTA) that took effect at the end of 2001 and we stand to gain even more as Vietnam implements its WTO commitments. Already this year the United States and Vietnam have signed a bilateral maritime agreement, held a BTA review and signed a Trade and Investment Framework Agreement (TIFA). The United States has assisted Vietnam through several programs of development assistance, including the Support for Trade Acceleration (STAR) project, the Vietnam Competitiveness Initiative (VNCI), the Sustainable Cocoa Extension for Smallholders (SUCCESS) Alliance project in the Mekong Delta and the Last Mile Initiative. The Department of the Treasury has provided technical assistance to the Ministry of Finance. The U.S. Patent and Trademark Office has helped train Vietnamese government officials on intellectual property rights protection. We are actively exploring other avenues of economic cooperation. Vietnam successfully hosted the Asia-Pacific Economic Cooperation forum in 2006 and continues to engage actively in APEC events. The United States is pleased to be a partner with Vietnam as it continues to demonstrate to the world how market reforms are the key to economic development.