On the occasion of the 235th anniversary of the Independence Day of the United States of America, the 16th anniversary of the establishment of diplomatic relations between Vietnam and the US, and the VCCI business mission for survey, trade and investment promotion in the US (July 8-18, 2011), reporter Quynh Chi interviewed VCCI Vice President Doan Duy Khuong on Vietnam-US business cooperation.
Vietnam-US relations have marked important developments in recent years, especially between the two business communities. Would you please tell us about the VCCI contribution to these developments?
In recent years, an important success for VCCI in promoting business connectivity between Vietnam and the US has been establishing the Vietnam-US Business Forum, with nearly 200 founding members.
In addition to serving as a bridge between the two business communities and sponsoring trade and investment promotion activities, the Forum is the formal channel for business community members to submit recommendations to the two governments regarding improving the business and investment environment. The establishment of the Forum has indeed increased efficiency and improved bilateral trade and investment.
Since its establishment, the Forum has edited and published a handbook on its members, launched the Vietnam-US e-commerce portal, sponsored a presentation by Professor Tom Cannon on “Developing strategy in the global crisis and sustainable future for Vietnamese businesses,” sponsored a seminar on export promotion in the American market, sent a business missionto survey the American market, and received American business delegations visiting Vietnam seeking business and investment opportunities.
How do you evaluate economic, trade and investment relations between Vietnam and the US in recent years?
Since the establishment of diplomatic relations between the two countries, especially after the signing of the Trade and Investment Frame Agreement (TIFA), bilateral trade has developed vigorously. Both Vietnam and the US have recognized the important achievements in bilateral trade, investment, intellectual property, information technology, service and agriculture, and the settlement of trade disputes.
Bilateral trade value in 2010 was US$18 billion, 13 times that of 2001 when the Bilateral Trade Agreement (BTA) was signed. The US has become the most important market for Vietnam, and the biggest market for Vietnam’s main exports. There are currently some 13,000 Vietnamese students and researchers studying in the US. The US has committed investment of US$16 billion, ranking 6th among 92 countries and territories investing in Vietnam.
Cooperation in the TIFA framework is highly efficient; however, the two sides should increase cooperation within the TIFA Secretariat to ensure timely settlement of difficulties, including the early warning mechanism. The two sides have set forth targets to increase annual turnover by 20-25 percent and ensure a reasonable bilateral trade balance.
Through TIFA cooperation, the two sides are negotiating a Bilateral Investment Treaty (BIT) and Trans Pacific Partnership (TPP).
What are the biggest difficulties for American businesses operating in the Vietnamese market, and how are these problems addressed?
American businesses have certain complaints about the business environment in Vietnam. They include poor infrastructure and slow implementation of key projects, especially inter-provincial roads, bridges, ports and power supply.
Furthermore, as cheap labour is no longer an advantage, American businesses believe the Vietnamese government must upgrade the workforce with a modern education and training system.
At the last Vietnam Business Forum, American businesses focused on transparency and State management efficiency, as well as waste at infrastructure projects. They also recommended that the government apply best international practice on accounting and taxation to overcome corruption.
And what should Vietnamese businesses do to be successful in the American market?
To be successful in the American market, Vietnamese businesses should establish sister companies in the US. According to American law, a parent company in Vietnam is not obligated to pay debt for a loss-making sister company in the US. Meanwhile, a sister company can help supervise Vietnamese exports, without trademark loss or payment difficulties. It also helps develop the value chain of products.
The formalities are very simple for the establishment of JSCs and Co., Ltd entities in the US. The establishment cost is very low (US$100-1,000) and requires no Statute capital. It takes only one day for the establishment of a JSC and 1-2 months for a Co.,Ltd. VCCI is also planning to establish some Trade Promotion Centres in the US to assist Vietnamese businesses in this field.
Thank you very much
Vietnamese
