Vietnam and the United States in 2015 celebrated the 20th anniversary of diplomatic relations, which have witnessed some of the most dramatic warming trends in the world in recent years. Later this month, these bilateral ties are expected to get another boost when President Barack Obama visits Vietnam, the first visit by a U.S. head of state in 10 years.
Economic relations will be to be one of the top priorities during Obama’s visit. Not many countries in the world have increased their trade and investment relations more quickly than Vietnam and the United States. Last year, Vietnam’s exports to the United States hit $38 billion, up 24 percent over 2014, according to U.S. figures. United States’ exports reached $7.1 billion in 2015, an increase of 23 percent over the previous year. U.S. foreign investment stock totaled $1.5 billion by the end of 2014, up 10.7 percent from a year earlier.
Vietnam-U.S. economic relations have benefited immensely from the increased bilateral trade and investment. Vietnam has been experiencing rapid economic growth rates averaging about 6 percent per year since 2000, significantly boosting the country’s economic development. This is a strong foundation to promote Vietnam’s economic cooperation with the United States. To further expand bilateral economic relations, Vietnam and the United States should consider focusing on three key issues.
First, Vietnam and the United States should develop a medium-term cooperation strategy for the next 12 to 15 years. This will support a stronger Vietnam and enhance bilateral relations. This strategy should highlight the paramount task of upgrading Vietnam’s technological capacity and level to compete with other successful economies in East Asia. Failure to do so will make it harder to build a stronger Vietnam no matter how high the two countries’ expectations are.
Second, the Trans-Pacific Partnership (TPP) should be promptly and comprehensively implemented after its ratification by the legislatures of the 12 member countries. The TPP is a very important agreement for both the United States and Vietnam. The United States needs this agreement to strengthen and maintain its deep engagement with Asia. For Vietnam, the agreement will help boost development and the technological level of its economy. Without TPP and without close cooperation with the United States and other developed countries such as Japan and Australia, it will be difficult for Vietnam to become an industrialized country.
Third, Vietnam should promptly adopt policies and strategies for developing a knowledge economy characterized by a high level of technology and productivity, thereby improving the competitiveness of the economy and developing high value-added industries. Vietnam is not in a position to scatter its resources by developing unselective cooperation with economies of low technological level. Only economies possessing original technologies and an advanced level of development like that of the United States can help Vietnam reform and grow quickly.
To realize these economic goals, Vietnam should actively promote its economic relations with the United States and cooperate with Washington to establish a U.S.-Vietnam Economic Center to coordinate a medium term economic cooperation strategy. This center could have branches in locations such as Hanoi, Ho Chi Minh City, and Da Nang. The purpose of this Economic Center is to guide and promote U.S.-Vietnam economic relations towards the commitments made by the presidents of the two countries in their comprehensive partnership agreement in 2013.
The main activities of the center could include: 1. Organizing annual U.S – Vietnam economic cooperation meetings with the participation of government and business leaders from the two countries; 2. Promoting and coordinating bilateral trade and investment activities, in line with Vietnam’s goal of restructuring its economy into a modern one; 3. Supporting U.S businesses to expand investment opportunities, technology transfer, and management experience in Vietnam, while on the other hand pushing to open the U.S market for Vietnamese enterprises and helping improve business competitiveness in Vietnam; 4. Supporting the effective implementation of the TPP in Vietnam; 5. Reporting annually to both the U.S and Vietnam governments on the results and challenges for increased bilateral cooperation.
Dr. Nguyen Tuan Minh is deputy editor-in-chief of Americas Today Journal of the Vietnam Institute of American Studies. The views expressed are solely those of the author and do not necessarily reflect the views of the Vietnam government.