EMBASSY OF VIET NAM IN THE UNITED STATES
August 22, 2006
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I- Achievements of Vietnam economy:
Vietnam is a dynamic, stable, and fast-growing economy.
• The 2001-2005 average growth rate of 7.5%. Particularly, in 2005 despite numerous difficulties such as bird flu, natural disasters and oil price hike, it was 8.4 % and the per capita income is from USD 400 to USD 640 in this same period. Over last five years, GDP has increased almost 50% from $31 billion to $52 billion.
• The growth rates are forecasted to remain at 8-8.5 % during the next few years.
• The number of SOE has been cut from over 12.000 to now 2.800 and will be reduced further.
• Private sector development, the non-state sector has now accounted for 69% of GDP and employed almost 90% of the labor force.
• The annual export growth rate in 2004 and 2005 were 31.5 % and 21.6 % respectively and is expected 16.4 % increase in 2006.
• Foreign direct investment: As of Dec 2005, there have been more than 6000 foreign investment projects in operation in Vietnam with total registered capital of over 50 billion dollars. FDI hit a high record in 2005 with total capital of 5.8 billion USD, the highest level for the last 8 years and it is estimated to attract at least 6 billion in 2006. FDI accounts for more than 14% of the GDP, nearly 35% of industrial production, 31% of export value.
II- Achievements in Vietnam-US economic relations:
• The two-way trade volume amounted from 1.5 billions in 2001 to 7.8 billion in 2005. The United States is currently the largest trading partner of Vietnam and the US exports to Vietnam have increased by 250 % in the past three years.
• The US has 273 projects licensed with total registered capital of 1.47 billions, ranking the 11th among foreign investors. If the combined US direct investment and the investment from US third-country subsidiaries is taken in to account, the US has become one of the biggest foreign investors in Vietnam.
• Many American corporations are operating and reaping success in almost all areas from oil and gas, telecommunications, banking and insurance to auto-making and production of consumer goods.
• Last year, Prime Minister Phan Van Khai’s visit to the United States elevated the relations into a new height of a long-lasting and stable partnership. And a visit to Vietnam of President Bush on the occasion of APEC Summit Meeting in November 2006 will further boost the relations between the two countries and facilitate businesses of both nations.
• Most recently, Intel has chosen Vietnam over China or India to build its new facilities. It has a plan to invest 600 million in the country and the first phase investment to build 300 million plants to package and test microchips that power personal computers and mobile phones was licensed.
III- The Bilateral Agreement on Vietnam’s WTO Accession: The WTO accession Agreement creates more opportunities for the US businesses with the following provisions:
• About 94% of the manufactured goods that the United States exports to Vietnam will face duties of 15% or less. On key products in the construction equipment, pharmaceuticals and aircraft sectors the U.S. negotiated low duties of 0-5%.
• Approximately three-fourths of U.S. agricultural exports to Vietnam will face bound duty rates of 15% or less. Products subject to these reduced tariffs include cotton, selected beef, pork, and variety meats, whey, grapes, apples and pears, and soybeans. Vietnam is also making numerous improvements to its implementation of WTO rules on sanitary and phytosanitary measures. In addition, Vietnam has agreed to recognize the U.S. systems of inspecting beef, pork and poultry as equivalent to its inspection systems.
• Vietnam has made substantial commitments to open up key services sectors, like telecom (including satellite services), distribution, financial services and energy services, to foreign participation. Vietnam has offered to open up for branching in insurance (non-life) and securities, and it already provides for bank branching.
• Vietnam is reducing the role of state enterprises in commercial activities, including eliminating the role of the state as the sole importer of certain products. In addition, U.S. firms will have access to the market to supply goods and services to Vietnam’s state-owned and controlled enterprises, which will be obligated to make purchases and sales of goods and services based on commercial considerations.
• Vietnam will eliminate restrictions on goods that foreign-invested companies can import. A very limited number of products are subject to a short transition period before trading rights will be granted, and the importation of a few products will be through state trading enterprises.
• Vietnam will eliminate prohibited subsidies that it provides to its industries. For most industries, including textiles and apparel, this will be in effect immediately upon WTO accession. Benefits under two specific programs will be phased out over a five-year period.
• The U.S. will remove all remaining quotas on textile and apparel imports from Vietnam but will have the ability to re-impose quotas under certain circumstances. If the U.S. believes that Vietnam has not complied with its obligation to eliminate prohibited subsidies for the textile and apparel sector, it will be able to request consultations with Vietnam. If the consultations do not resolve the dispute, it would be referred to a WTO arbitrator. If no decision is reached within 120 days, or if the arbitrator finds that Vietnam is in violation, the U.S. will be able to immediately re-impose quotas. However, this process will only be available for the first 12 months after Vietnam’s WTO accession. There is no safeguard process like the one provided in the bilateral agreement on China’s WTO accession.
• Vietnam is finalizing intellectual property legislation and regulations. The U.S. will continue to work with Vietnam on the new law to ensure that it is consistent with and fully implements the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.
• Nothing in the accession agreement will change Vietnam’s status as a non-market economy for U.S. trade remedy purposes. The U.S. will continue to use non-market methodology in antidumping cases until such time as Vietnam is no longer treated as an NME or for 12 years after Vietnam becomes a WTO member./.
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