U.S.-Vietnam economic relations - Joan E. Spero, Under Sec. for Economics, Business, and Agricultural Affairs - Transcript

US Department of State Dispatch, Oct 23, 1995

U.S.-Vietnam Economic Relations

In fact, since the lifting of the embargo, our trade and commercial ties with Vietnam have expanded quickly as,' U.S. firms have rushed to catch up with their Asian and European rivals. For its part, Vietnam has much to gain from expanded economic relations with the U.S., including access to our goods and financial markets, our excellent products, our world-class managerial skills, and our technology.

Hundreds of U.S. firms have now opened offices or established sales presence in Vietnam, including some of the biggest and best-known U.S. corporations. They have invested more than $600 million in Vietnam, making the U.S. the country's eighth-largest foreign investor. Our bilateral trade has also grown steadily over the same period, with U.S. exports to Vietnam expected to top $230 million in 1995 and Vietnam's exports to the U.S. reaching $50 million. A well-organized American Chamber of Commerce is up and running as a voice for U.S. business in Vietnam. U.S. firms will clearly play an increasingly important role in Vietnam's economic future.

Emerging U.S. Economic

Strategy in Vietnam

After a 20-year pause, the United States and Vietnam clearly have a lot to offer each other. As we make a fresh start on our economic and political relations, how should we structure our efforts in order to maximize the opportunities available?

The Vietnamese Government has understandably been very interested in U.S. economic policy toward Vietnam. We began exchanging ideas during Secretary Christopher's visit and have had more discussions this week with Foreign Minister Cam and Trade Minister Triet. We expect to hold our first intensive, experts-level discussions on economic issues in Hanoi, probably in November.

There are three basic elements to our emerging economic strategy with Vietnam.

First, as Secretary Christopher stated in Hanoi, we will shortly begin negotiations with Vietnam on a comprehensive bilateral trade agreement. Negotiating a trade agreement is critically important for several reasons. In the broadest sense, a trade agreement will lay the basis for U.S.-Vietnam economic relations. Once approved by Congress, an agreement would pave the way for MFN access to our $6 trillion market. In exchange for this access, we will insist that Vietnam open its markets in accordance with the principles of the World Trade Organization - WTO.

A comprehensive trade agreement will accelerate Vietnam's integration into the world market. As I mentioned before, Vietnam's ASEAN neighbors are among the most dynamic economies in the world, with annual economic growth averaging nearly 6% over the past five years. But Vietnam has so far been unable to keep pace with trade liberalization in ASEAN, largely because of its web of outmoded trade and investment restrictions. The changes that Vietnam makes during negotiations on a trade agreement will pave the way for its full participation in ASEAN's economic success.

Vietnam is also seeking to join the World Trade Organization, and a working party on Vietnam's accession is expected to visit Vietnam by the end of this year. As we have learned in the case of China, protracted negotiations over accession are to no one's liking - not the WTO's, not those of prospective traders and investors, and certainly not those of the acceeding country. All of the changes we will request from Vietnam during trade agreement negotiations will be consistent with WTO principles and will accordingly speed its accession to the organization.