Trade Cooperation: Driving Force for Vietnam-U.S. Relations

2:30:37 PM | 6/27/2023

Vietnam-U.S. economic, trade and investment cooperation is a pillar and a strong driving force in their relationship and has huge potential and room for development. After 10 years of comprehensive partnership, Vietnam-U.S. trade values have more than tripled.

The U.S. is the leading export market of Vietnamese seafood

Since 1995, the bilateral relationship between Vietnam and the United States has developed very quickly and produced many optimistic outcomes in various fields. The bilateral trade value increased more than 274 times from US$450 million in 1995 - the year of normalization - to US$123.7 billion in 2022.

The United States is currently Vietnam's second-largest trading partner and largest export market. Meanwhile, Vietnam is the 7th largest trading partner of the U.S.. Its key exports match consumer tastes in the U.S., including electronic equipment, recorders, camcorders, steel, apparel, footwear, fish and wooden furniture.

In 2022, other machinery, equipment, tools and spare parts were the largest exports mounting up to US$21 billion. The runner-up was apparel with US$17.3 billion, followed by computers, electronic devices and components with US$15.9 billion.

Other major exports to the U.S. included apparel, telephone, computer, machinery, wooden furniture and footwear. The U.S. was also an important export market for many key agricultural commodities, including seafood, cashew nut, and coffee.

The room for trade development with the U.S. remains huge because the trade growth has continuously increased by 17-19% annually in the past decade. Besides, the two economies are interactive and complementary and have great growth potential. Vietnamese goods have increasingly met difficult requirements to access the U.S. market.

Regarding imports, many large Vietnamese companies such as Bamboo, Vietnam Airlines, and Vietjet signed multi-billion-dollar contracts to import Boeing aircraft, aviation equipment and engines to balance Vietnam-U.S. trade relations. Vietnam also imports many agricultural products from the U.S. such as cotton, maize and dairy products.

In particular, the bilateral relationship has made important economic progress with the signing of the Bilateral Trade Agreement (in 2000), the Framework Agreement on Trade and Investment (2007), the Comprehensive Partnership (in 2013) and the Action Plan toward a harmonious and sustainable trade balance in 2019.

Currently, Vietnam and the U.S. are actively carrying out the Action Plan toward a harmonious and sustainable trade balance. Vietnam, the U.S. and some other countries are negotiating the Indo-Pacific Economic Framework, which currently includes 14 countries and some ASEAN countries. This initiative, despite not being a free trade agreement yet, if successful, will have great significance and provide a framework for the economic connectivity of participating countries, including Vietnam. The Vietnam-U.S. relationship will also be strengthened as a result.

In 2023, there are many meaningful activities to deepen trade cooperation toward the 10th anniversary of the Vietnam-U.S. Comprehensive Partnership. In particular, the value of two-way trade is likely to exceed US$100 billion for the third time this year.

By Huong Ly, Vietnam Business Forum