During his meeting with US President Joe Biden on Monday, Prime Minister Pham Minh Chinh said he views the economy, trade and investment as the “perpetual drivers” of a bilateral agreement.
According to Ambassador Pham Quang Vinh, the establishment of the Comprehensive Strategic Partnership between Vietnam and the United States “strengthens trust and understanding between nations, which will surely become a motivating factor for long-term economic cooperation” .
Facing a disrupted supply chain, numerous changes and competition among major nations, he said the United States would need places where it could trust the production process.
As experts observed, the importance of the close ties between Vietnam and the United States lies in the ability to establish strategic trust, which provides the basis for companies to invest in the long term.
Dr Nguyen Khac Giang, a visiting scholar at the ISEAS-Yusof Ishak Institute in Singapore, said the Biden administration is emphasizing strategies – reducing risks, shifting the supply chain to mutual partners and relocation between friends – which were improved after Vietnam and the United States. improved their relationships.
“Conditions are ripe for the two sides to form a political bond and guarantees for businesses to operate and develop,” said Nguyen Quang Dong, director of the Institute for Policy Studies and Media Development.
The principle is the beneficial and mutually beneficial relationship between Vietnamese and American businesses over the past decades.
The United States briefed Vietnam on its friendly country support strategy in July, during Treasury Secretary Janet Yellen’s visit to the country.
She said the United States wants to expand its trade relationships and diversify the supply chain between trusted partners such as Vietnam.
The aim is to reduce global uncertainties and geopolitical risks. Since 2021, the United States has encouraged efforts to restructure the global supply chain, particularly for semiconductors which contain many critical technologies.
The first opportunity for Vietnam is to reorient its economy towards modernization and join the supply chain of advanced technologies.
In a joint statement, the United States pledged to support Vietnam in training and developing a high-tech workforce, as well as promoting the rapid growth of the semi-industrial ecosystem. -drivers of the country.
Many American semiconductor companies have increased their investments in Vietnam.
Amkor Technology (based in Arizona) plans to complete its $1.6 billion semiconductor factory in Bac Ninh in September, with test production in late October.
Amkor declared this factory to be the largest in the world. In mid-May, Marvell Technology, Inc. announced the establishment of a world-class semiconductor design center in Ho Chi Minh City, which is on par with its facilities in the United States, in India and Israel.
Vietnam is expected to make big trade gains, especially as slowing growth in the global economy reduces exports.
A joint statement between General Secretary of the Communist Party of Vietnam Nguyen Phu Trong and President Biden said Vietnam and the United States will create beneficial conditions, expand access to each other’s countries’ goods and services, support trade policies and economic and would overcome trade-related obstacles. access markets through the Trade and Investment Framework Agreement.
“Exported goods that are traditional and have the upper hand, such as textiles, furniture, footwear and electronics, will see a recovery with a positive growth rate,” said the Minister of Industry and Trade , Nguyen Hong Dien.
Vietnamese agricultural products will also benefit from increased access to US markets. In August, shelled coconut was the eighth fruit product exported via official quota to the United States.
As official statistics show, trade between Vietnam and the United States reached $124 billion last year, a 275-fold increase in 27 years.
For Vietnam, the United States is the largest export market and second largest trading partner. Conversely, for the United States, Vietnam is the world’s seventh largest trading partner and the largest in the ASEAN bloc.
That said, experts say Vietnam still has a lot of work to do.
Specifically, when participating in the advanced technology supply chain, said Nguyen Quang Dong, it was necessary to reflect on the failures of supporting industries in recent decades.
The ecosystem of supporting industries remains weak in number and strength, incentivizing Vietnamese companies to be only manufacturers, the lowest level.
The advanced technology supply chain will have more stringent requirements and demands.
“We need to carefully analyze where we can fit into this new supply chain, and from there, invest in local businesses methodically and strategically. We need to refrain from thinking we can participate immediately,” said Dong.
This is to avoid a repeat of the supply chain following the failure of FDI companies in the past.
“Vietnam must redouble its efforts to seize new opportunities,” added Ambassador Pham Quang Vinh.
He said the government and the United States must come together to develop major decisions focused on policy frameworks, infrastructure and human resources.
Minister Nguyen Hong Dien stressed that the United States is an extremely large and ultra-competitive import market, worth $3.277 billion, a detail that requires companies to adapt quickly.
Companies must clearly establish their product strategy, partners and distribution channels; gain clarity regarding export requirements and their potential relevance for trade remedies; ensure that raw materials have clear origins; and seek ways to modernize production facilities based on “environmentally friendly production standards”.
They must also implement strategies to diversify their customer base and reach niche markets to reduce risks.
Dr. Nguyen Khac Giang also said that at this stage, the most important thing is to create conditions for local businesses to exploit this opportunity and become an essential part of the global flow of goods and services.
“When the ‘favorable window’ passes, the Vietnamese economy should have enough strength to rise to a higher international rank on its own,” he said.
