Vietnam and the United States are seeking ways to increase their investment and trade ties, with the latter pledging to support the latter in education, training, and the energy transition.
During her visit to Vietnam last week, Emily Blanchard, chief economist of the US Department of State, said that American companies want to invest in Vietnam to create products with value.
“These are the tools that meet the demand of firms for what they want to be confident when they choose to invest in Vietnam. So again, Vietnam is critically important to US investors,” Blanchard said.
At her meeting with the assistant to the Vietnamese minister of foreign affairs Nguyen Minh Hang, both agreed that Vietnam and the US will work together to discuss bilateral and multilateral mechanisms that can help boost bilateral ties in trade and investment.
“The US Department of State will closely combine with Vietnam to seek more opportunities to expand trade and investment cooperation, with a focus laid on sustainably maintaining production chains, infrastructure development, the energy transition, and digital economy,” Blanchard said.
Vietnam and the US have also vowed to expand their relationship in agriculture and foodstuffs.
The US Department of Agriculture (USDA) is cooperating with Thailand’s MM Mega Market to promote over 140 agricultural and foodstuff products at MM Thang Long in Hanoi and MM An Phu in Ho Chi Minh City. The products include assorted vegetables, fruit, beef, chicken, sauces, wine, and other drinks produced by big brand names such as Coca-Cola, Anchor, Budweiser, Heinz, and Kelloggs.
The USDA said that Vietnam’s demand for US products is increasing, and this will help improve trade between both nations.
Fostering trade and investment
According to the American Chamber of Commerce (AmCham) in Hanoi, Vietnam is now on the radar of many US exporters and investors thanks to its big potential including growing demands.
Madhu Kannan, executive vice chair of global corporate and investment banking at Bank of America, told Phan Van Mai, Chairman of Ho Chi Minh City People’s Committee, that the second-largest lender in the US is seeking permission to establish a $50 million branch in Ho Chi Minh City.
Kannan said the bank has 450 world-leading investors in its investment portfolio, and if the branch in Ho Chi Minh City is set up, many of these investors will find it easier in investing in the city. It is expected that Kannan will come to the city for further discussion in the near future.
According to the Ministry of Foreign Affairs, it is expected that from now until the year’s end, authorities from both Vietnam and the US will meet to discuss new mechanisms to increase investment and trade cooperation, which is now witnessing big interest from American investors in the Southeast Asian market.
During Prime Minister Pham Minh Chinh’s visit to the US in May, enterprises from both nations exchanged many cooperation deals and trade contracts worth over $30 billion.
“US companies and investors bring high-quality products and state-of-the-art technologies, services, and business practices to Vietnam,” said AmCham Hanoi’s executive director Adam Sitkoff. “The US business community is optimistic about Vietnam’s prospects for continued strong economic growth in 2022 and beyond, despite global headwinds.
According to Sitkoff, Vietnam’s comprehensive, consistent vaccine rollout and pragmatic reopening positioned Vietnam for a resilient recovery. Its timely adjustment to petroleum prices and pauses on new taxes and fees have helped tamp down inflationary concerns.
According to Vietnam’s General Statistics Office, in the first eight months of 2022, the US was Vietnam’s largest export market, with an estimated turnover of $77.7 billion, up 25.6 per cent as compared to the same period last year.
Accumulatively as of August 20, total US registered investment capital in Vietnam reached over $11 billion for nearly 1,200 valid projects, making the US the 11th biggest foreign investor in Vietnam. From January-August 20, the US’ newly-registered capital in Vietnam was $37.8 million or 9.6 per cent of the latter’s total newly-registered investment.
Vietnam’s potential role as a robust partner was recently made clear by the eye-popping commitment by Vietnamese carmaker VinFast to construct a $4 billion electric vehicle manufacturing campus in North Carolina.
The company plans to employ 7,500 American workers by the year 2027.
Advancing education and energy
Besides cementing trade and investment ties, Vietnam and the US are also working to beef up their education and training and energy cooperation.
Over a week ago, the United States Agency for International Development (USAID) announced that it has signed its first-ever MoU with Vietnam’s Ministry of Education and Training (MoET) to improve the quality of Vietnamese higher education.
“This first-ever MoU between the two marks our ongoing commitment to collaborate on a wide range of higher education partnership programmes that will directly support the MoET’s ambitious higher education reform goals,” said USAID Vietnam mission director Aler Grubbs.
With the fresh move, the USAID will support the MoET with a brand new initiative that will provide direct technical assistance to review and improve higher education policies. Improving policies will advance university autonomy, quality assurance, digital transformation, and innovations in key sectors that are critical to Vietnam’s continued economic growth and development.
The USAID supports Vietnam’s efforts to modernise its higher education system. In partnership with US higher education institutions and the private sector, the USAID is helping Vietnamese universities to improve academic quality and enhance institutional governance to serve as modern models of higher education and drive Vietnam’s socioeconomic development. Many of these programs have connected Vietnamese universities with leading US higher education institutions and private sector companies to develop innovations in teaching and learning, accreditation, curriculum reform, research, and university and industry linkages.
Meanwhile, during his visit to Vietnam two weeks ago, US climate envoy John Kerry and PM Chinh resolved to launch the US-Vietnam Climate Change Working Group by COP27. “The United States is committed to working with G7 countries and others to support an ambitious and just energy transition and climate change adaptation in Vietnam,” Kerry said, adding the US welcomed the efforts of Vietnam’s National Steering Committee for implementing Vietnam’s commitments at COP26, including those to further facilitate more private investment in renewable energy and also transmission.
Kerry shared with PM Chinh the desire of the United States to elevate the bilateral relationship, with cooperation on combating the climate crisis as a pillar of that relationship.
The US also wants to catalyse global support for Vietnam’s energy transition, through technical assistance, and efforts to mobilise public and private investment, including grants and concessional loans. Kerry welcomed Vietnam’s intention to facilitate the connection of complete and nearly-complete renewable energy installations to the country’s grid.
PM Chinh said climate change is a global issue, so a global approach is required. As this issue affects every person, an inclusive approach is necessary.
“Vietnam calls for justice and fairness in the fight against climate change. Vietnam is committed to rapid implementation of the 2050 net-zero emissions pledge through speeding progress toward renewable energy growth and to working closely with international partners including the United States in doing so,” PM Chinh stated.
“Vietnam also calls for concrete international support in wind and solar potential assessment, technology development and transfer, renewable energy and supporting industries development, concessional financing, human resources development, management skills, and enhancing the resilience of vulnerable communities in Vietnam, including the Mekong Delta.”
US chief economist Blanchard also stressed, “The bilateral economic relationship is incredibly important to both Vietnam and the Vietnamese people, and especially to the American people. We are building a global economy where there is greater prosperity, shared by all, greater security and diversity in our supply chains, and increasingly, more sustainable production. As we shift to the energy transition, Vietnam is a vital partner in this work to build a greener economic future.”
Vietnam Investment Review