Early US recognition of market economy to increase opportunities for Vietnamese exports

Canned coconut water processing at Bến Tre Import and Export Joint Stock Company (Betrimex) in Bến Tre, Mekong Delta Province. – VNA/VNS photo

HÀ NỘI — US recognition of market economy in Vietnam will expand business opportunities for Vietnamese companies and pave the way for Vietnamese exports to this market, experts say.

In early May 2024, the U.S. Department of Commerce conducted an investigation into recognizing Vietnam as a market economy.

Viet Nam has long made efforts to meet the six criteria for the United States to recognize its market economy status, including carrying out economic reforms to meet the criteria recommended by the United States, currency conversion, salary and wage negotiations between employees and employers, status. Foreign investment in economic activities, and issues related to government and private ownership.

According to the evaluations of many international analysts, Việt Nam has demonstrated its performance as better or often better than other countries with market economy status according to the criteria mentioned above. Việt Nam intervenes less in state-owned enterprises than India, and is more open to foreign investment than Indonesia, Canada and the Philippines.

Nguyễn Thị Thu Trang, director of the WTO and Integration Center under Vietnam Trade and Industry (VCCI), said winning US recognition is of great importance to manufacturing and export industries, as exports to this market will receive tax cuts. The move will encourage US companies to diversify their supply chains.

Johns Hopkins University’s Paul H. James Borden, a non-resident senior fellow at the Foreign Policy Institute (FBI) at the Nietzsche School of Advanced International Studies (SAIS), wrote in a published article on this. geopoliticalmonitor.com Market status recognition will bring many economic benefits to both countries.

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Growing trade between the two countries and the White House’s push to establish the Indo-Pacific Economic Framework (IPEF) partnership agreement, market-level recognition, will help expand trade and investment ties with the United States.

Bilateral benefits for U.S. companies derived from recognizing Việt Nam as a market economy include market access and export opportunities, such as in agriculture, machinery, aviation, and pharmaceutical products, all of which contribute to the development of a U.S.-friendly supply chain. Interests.

Market-level recognition will also contribute to lowering trade barriers, making it easier for US businesses to export goods and services to Việt Nam at lower costs, Borton says.

Also, US recognition of Việt Nam as a market economy will further encourage US companies to diversify their supply chains. In addition, lower import prices and improved market access will help US companies increase their manufacturing and production in Việt Nam. This gives US companies operating in Việt Nam the ability to generate increased sales revenue and profits, he wrote.

According to Nguyễn Đình Lương, former head of the Vietnamese negotiating team of the Vietnam-US Bilateral Trade Agreement (BTA), Việt Nam should learn from global laws and apply global laws to be truly recognized as a market economy by the US. New areas, and should have a map to gradually gain a firm footing in the general playing field.

VCCI’s Trang advised businesses to study and regularly update the regulations of the US market and pay attention to regulations related to trade remedies, epidemic prevention, health, technical standards, rules of origin and labor employment standards. – VNS

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