Vietnam should open up to more US goods and services: AmCham

Home / Economy

Minh Tuan 10:34, 2019/07/03

At G20 summit in Japan, President Trump hailed the Vietnamese government’s resolve to crack down on trade fraud and goods illegally labeled as “made in Vietnam."

Vietnam should open up its market to more US goods and services, in order to balance the trade relationship between the two countries, said Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, after President Trump hinted that the Southeast Asian country might be next in line to be hit with tariffs.

In an interview with Fox Business Network on June 26 Washington time before flying to Japan for the G20 summit, President Trump said “a lot of companies are moving to Vietnam, but Vietnam takes advantage of us even worse than China.”

AmCham believes that the US and Vietnam have developed a healthy trade and investment relationship that has not only created jobs and tax revenues for both countries, but has also enhanced regional security, Mr. Sitkoff told Hanoitimes in an emailed interview.

Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi

Bilateral trade has topped US$60 billion today, a big jump from some US$220 million 25 years ago. The US is Vietnam’s largest export market, and Vietnam is one of America’s fastest growing markets worldwide.

Vietnam’s trade surplus with the US widened to US$39.5 billion in 2018, according to the Office of the US Trade Representative.

That figure makes Vietnam rank after only four other countries namely China, Mexico, Japan and Germany that have the largest trade surplus with the US, and those are much larger trading partners. “This is a problem, especially given President Trump’s commitment to pursuing fair and reciprocal trade,” said Mr. Sitkoff.

American companies want to sell more to Vietnam and the Vietnamese government needs to help make that happen, he said.

He pointed out that inconsistent regulatory interpretation, irregular enforcement, and unclear laws remain significant challenges for many US companies here.

He suggested the best way to help balance the US-Vietnam trade relationship is to improve the business environment in Vietnam and reduce the risks and burdens that American companies face here. “By opening up its market to more US goods and services, Vietnam can help to rectify the growing trade deficit between the two countries in a manner that benefits both countries.”

“AmCham believes that this “win-win” approach is much better than tariffs and other protectionist barriers,” he noted, pledging that AmCham will continue to work with Vietnamese partners on lowering barriers.

During his visit to Vietnam for the second US-North Korea summit with Kim Jong Un in February, President Trump witnessed a number of commercial trade deals worth more than US$20 billion between the two nations’ airline companies.

Rowing back concerns

Spokesperson Le Thi Thu Hang of the Vietnamese Ministry of Foreign Affairs last on Friday reiterated the country’s commitment to "fostering economic, trade, and investment relations with the US in the direction of freedom and fairness, on the basis of mutual benefits” given the two country’s economic complementariness.

Amid concerns that foreign companies, especially those in China, are rerouting goods to Vietnam for re-export to the US, the foreign ministry said the government has taken many measures to fight against companies attempting to export foreign goods passing through Vietnam for a whitewash in order to dodge US tariffs.

The Ministry of Industry and Trade last month said it would impose temporary anti-dumping tax of 2.46% to 35.58% on several Chinese aluminum products for 120 days.

Vietnam has imposed temporary anti-dumping tax of 2.46% to 35.58% on several Chinese aluminum products for 120 days,

Vietnam last month imposed temporary anti-dumping tax of 2.46% to 35.58% on several Chinese aluminum products for 120 days,

SSI Research, the research arm of the largest brokerage house in the country, called Vietnam’s newly-imposed tariffs “a very bold move for Vietnam.” It also praised the anti-dumping tariffs as an “efficient” answer from the Vietnamese side to US tariffs to be placed on aluminum products exported from Vietnam but manufactured in China.

On the sidelines of the G20 summit on June 28, Prime Minister Nguyen Xuan Phuc and President Donald Trump had “open and constructive” talks on trade and energy cooperation. President Trump hailed the Vietnamese government’s resolve to crack down on trade fraud and goods illegally labeled as “made in Vietnam.”

Vietnam plans to import large amounts of liquefied natural gas (LNG) from the US in the future, part of a long-term energy cooperation agreement to be inked between the two countries, according to the Vietnamese government portal.

Assistant Secretary of State for Energy Resources Francis R. Fannon in mid-June paid a working trip to Vietnam to materialize Vietnam’s plan to import LNG from the US and catalyze US companies’ investment in the country’s energy sector. He and the head of the state-owned energy giant PetroVietnam also celebrated the first shipment of US sourced crude oil.

During his meetings with Vietnamese government officials, the US and Vietnam had positive discussions on possible collaboration on activities under the Asia EDGE (Enhancing Development and Growth through Energy) initiative to support the implementation of sound electricity and natural gas resources, including LNG, renewable energy, and energy efficient technologies.

Tougher measures needed to deter whitewash

Regarding the “transshipment” of Chinese goods via Vietnam for US-bound export, David Brown, a Vietnam expert, said as what Vietnamese officials couldn’t do was prevent the bilateral trade imbalance from swelling further. One thing Vietnam could have done was to deter Chinese companies from rebranding billions of dollars’ worth of Chinese-origin goods as “made in Vietnam.”

Transshipment is the sort of shady practice that Hanoi needs to stop in order to gain a secure place in the world-trading club. “Vietnam earns a lot of ill will and almost no profit when Chinese or other foreign goods pass through its factories and ports just to get a new label,” Brown said in a publication on the World Politics Review.

The expert recommended that Vietnam can slap a healthy export tax on any goods that do not embody at least 5% value-added in the country. Alternatively, it could simply ban the export of such goods.

According to local media reports, the General Department of Vietnam Customs has stepped up efforts to deal with trade fraud and prevent foreign goods from forging Vietnam’s origin and later being exported to a third country.

Comments

Other news

21:35, 2024/12/21

Regulatory efforts underway to strengthen e-commerce in Vietnam

By 2025, Vietnam's e-commerce is expected to reach 10% of retail sales and contribute to the digital economy which is estimated to account for 20% of GDP.