Vietnamese Ambassador Pham Quang Vinh is visiting California in an effort to boost trade with California. One of his stops included a visit to the California Chamber of Commerce yesterday where he discussed future hopes for California and Vietnam’s economic relationship as well as Vietnam’s support for the Trans-Pacific Partnership.
“America and Vietnam are on the threshold of a stronger, broader and more rewarding relationship. It is 20 years after lifting the trade embargo and establishing diplomatic relations, 14 years after our bilateral trade agreement and eight years after the U.S. granted Vietnam permanent normal trade relations as part of our membership in the World Trade Organization, “Ambassador Vinh wrote in The Sacramento Bee before his meeting with CalChamber.
In addition to the TPP, specific topics of discussion centered around agriculture, technology and education.
Vietnam and the United States are partners in the ongoing CalChamber-supported Trans-Pacific Partnership (TPP) negotiations.
In this negotiation, the United States is seeking to develop a high-standard, 21st-century regional trade agreement that will support the creation and retention of jobs in the United States and promote economic growth. In addition to the United States and Vietnam, the TPP negotiating partners include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore. Starting with a group of like-minded countries, the goal is to expand the agreement to include countries across the Asia Pacific, which together represent more than half of global output and over 40 percent of world trade.
The 12 economies of the Trans-Pacific Partnership (TPP) concluded their wide-ranging trade/investment negotiations on October 5. The CalChamber supports the TPP trade agreement process as an important vehicle for economic integration throughout the Pacific.
In a recent op-ed in The Sacramento Bee Ambassador Vinh wrote, “Our economic ties would be strengthened by the adoption of the Trans-Pacific Partnership, a historic trade agreement linking the U.S., Vietnam and 10 other countries with 40 percent of the world’s economic activity and one-third of international commerce.”
U.S.-Vietnam Comprehensive Partnership
In July 2013, U.S. President Barack Obama and Vietnam President Truong Tan Sang launched the U.S.-Vietnam Comprehensive Partnership, an overarching framework for advancing the bilateral relationship. The new partnership advances key initiatives to bolster U.S.-Vietnam relations and underscores the enduring U.S. commitment to the Asia-Pacific rebalance.
This partnership has been strengthened by Obama and General Secretary Nguyen Phu Trong, who made a historic visit to Washington, D.C., in July, the Ambassador wrote in The Bee.
During that July 2015 visit, the United States and Vietnam recognized the positive and substantive developments in many areas of cooperation over the past 20 years since the establishment of diplomatic relations, particularly the growth in economic and trade cooperation, cooperation in addressing war legacy issues as well as in science and technology, education, healthcare, environment, response to climate change, defense, security, human rights, and increasing regional and international cooperation on issues of mutual concern.
Trade Relations with Vietnam
On July 13, 2000, the United States and Vietnam signed a historic trade agreement. The agreement was approved by the House on September 6, 2001 and by the Senate on October 3, 2001, and was signed by President George W. Bush. On November 28, 2001, the Vietnam National Assembly voted 278-85 to approve the agreement.
The trade embargo against Hanoi was lifted in 1994. In 1995, the United States and Vietnam established diplomatic relations. The U.S. Embassy in Hanoi was reopened in 1996. Since 1998, the President was granted the annual “Jackson-Vanik” waiter for Vietnam, allowing U.S companies to operated in Vietnam with access to the federal trade-facilitation agencies, including the Export-Import (Ex-Im) Bank of the United States, which helps finance U.S. exports; the Overseas Private Investment Corporation (OPIC), which insures U.S. investors against political risks; and the Trade Development Agency (TDA), which promotes U.S private sector participation in overseas infrastructure and industrial projects.
In November 2000, President Bill Clinton was the first U.S. president to visit a unified Vietnam.
The U.S. Vietnam Trade Agreement has benefited U.S. businesses, sharply reduced tariffs on U.S goods and services, protected intellectual property and improved investment relations between the two counties. Vietnam was granted access to the U.S market under the same system of law tariffs accorded almost every other nation in the world, following Congress’ approval of normal trade relations (NTR) status on an annual basis.
Vietnamese exports ebonite by tariff rates, averaging 40 percent, being cut to below 3 percent.
The agreement covered five major areas: market access for industrial and agricultural goods, intellectual property rights, market access for services, investment provisions and transparency provisions.
World Trade Organization Membership
Vietnam’s bid for membership in the World Trade Organization (WTO) was approved on November 7, 2006. This follows nearly a decade of negotiations between Vietnam and WTO members and economic preparation on the part of the Vietnamese government. “Vietnam has shown how anchoring domestic reforms in the WTO can yield dramatic results,” commented Director General Lamy. The U.S. Congress passed measures (H.R. 6111 in the Senate and H.R. 6406 in the House of Representatives) granting Vietnam Permanent Normal Trade Relations Status (PNTR) on December 8-9, 2006. Both California senators and 19 California representatives voted for PNTR. This means that the U.S. benefits from the trading concessions Vietnam has made as part of its WTO membership.
Two-way trade between the United States and Vietnam was approximately $36.3 billion in 2014. The United States exported over $5.7 billion to Vietnam, with top categories being electronic machinery, seeds and grain products, nuclear reactors, machinery, cotton products, fruit and nuts. According to the U.S. Department of Commerce, of the $30.6 billion imported from Vietnam, top categories included apparel articles, electronic machinery, footwear, and furniture.
Vietnam is a nation of 90.7 million people, the 13th most populated country in the world. With a GDP of $186.2 billion, the economy is growing and the volume of foreign trade has been increasing. Vietnam is a member of the World Bank, the International Monetary Fund, Asian Development Bank, World Trade Association, Association of Southeast Asian Nations (ASEAN), and the Asia-Pacific Economic Cooperation (APEC).
According to the most recent census, the United States is the home of more than 1.6 million people of Vietnamese origin, with 40% residing in California. Outside Vietnam, Orange County has the largest Vietnamese community, with more than 180,000 people of Vietnamese descent.
Vietnam–California Trade Relations
In 2014, California was the top state exporter to Vietnam with over $1.2 billion, making up 21% of all U.S. exports in goods. California exports to Vietnam have more than doubled since 2007 and have increased by 9% from 2013 to 2014. Vietnam is California’s 26th largest export destination. Computer and electronic products were credited with 19.7 percent of the total, with $237.7 million exports. Agricultural products held 19.2 percent with $231.7 million. Food manufactures held 17.4 percent with $210.3 million. Chemicals held 7.3 percent with $88.7 million.
According to the California Wine Institute, Vietnam is the ninth largest export destination for California wines, consuming $19.7 million in 2014, up 54.6% from the previous year.
In fact, Ambassador Vihn remarked that wine is only one among countless U.S. exports to Vietnam, valued at $5.5 billion last year. West Coast states, particularly California, are leading the way in reaching out to out fast-growing markets.
Ambassador Vihn is very positive that more trade with Vietnam will be beneficial for American workers, businesses and consumers.
“More trade with Vietnam brings great and growing benefits,” he wrote. “With bilateral trade totaling almost $35 billion in 2014, Vietnam is already America’s 27th largest goods trading partner.”
For more information about Vietnam, visit the Vietnam Trading Partner Portal.
Staff Contact: Susanne T. Stirling