Comprehensive partnership pushes US trade prospects

When the United States and Vietnam announced the Comprehensive Strategic Partnership (CSP) in September 2023, our countries’ leaders reaffirmed the importance of economic, trade, and investment cooperation and innovation-driven, inclusive economic growth as core foundations of our relationship. We are dedicated to the continued potential of our trade and investment relationship.

US Ambassador to Vietnam Marc E. Knapper

The potential in the US-Vietnam trade and investment relationship has never been brighter. Indeed, the distance we have covered in nearly three decades since the establishment of diplomatic relations is nothing short of remarkable.

The level of bilateral goods trade between the United States and Vietnam stands at $124 billion annually, approximately 300 times greater than it was in 1995. Vietnam is our ninth-largest trading partner, and the United States is Vietnam’s largest export market.

The strength of this trade relationship is energised in no small measure by substantial foreign direct investment that continues to flow into Vietnam.

The concrete pledges we made as part of the historic upgrade in relations will serve as key engines of momentum for deepening our economic ties and growing the bilateral relationship overall. These pledges have not been idly made, and we have already witnessed substantial progress in cooperation with Vietnam to achieve results that will contribute to greater trade and investment.

Progress achieved

On June 25, the United States and Vietnam convened the first-ever CSP Economic Dialogue. During the dialogue, the United States and Vietnam worked together to advance objectives laid out by our countries’ leaders as part of the upgrade to the CSP.

The dialogue discussions focused on important topics such as economic security, semiconductors, cyberspace, energy, critical minerals, and the digital economy. By advancing our mutual objectives on these topics in the economic dialogue and other venues, the United States and Vietnam are laying the groundwork that will deepen our economic relationship and drive more robust bilateral trade and investment.

More concretely, since the announcement of the CSP, we have begun to deliver substantial results by investing in the innovation economy and through cooperation in science and technology, which will serve as springboards to greater trade and investment.

Key achievements include the February announcement of a $13.8 million cooperative agreement between the Department of State and Arizona State University that will bolster semiconductor manufacturing capabilities in critical partner countries, including Vietnam, as well as the expansion of educational exchanges and workforce development initiatives.

Additionally, the US Mission to Vietnam, through the US Agency for International Development (USAID), is partnering with multiple ministries to create a more dynamic and technologically savvy workforce and improve the domestic innovation and investment environment. With the Ministry of Education and Training, we are investing up to $20 million to promote higher education reforms and upgrade STEM-focused teaching programmes, including those related to semiconductors.

With the Ministry of Industry and Trade, USAID is partnering on a $3.25 million effort to improve the legal and regulatory environment for digital trade. And with the Ministry of Planning and Investment, USAID is co-designing a new $20 million activity to strengthen investment in, and the commercialisation of, Vietnamese products and services.

The progress that the United States and Vietnam have achieved so far under the CSP is not a function of government effort alone. The private sector has made, and will continue to make, critical contributions to the success of our partnership.

For instance, we have been delighted to witness an expansion of partnerships between US and Vietnamese firms in the semiconductor industry, and announcements by leading US semiconductor firms to establish or expand operations in Vietnam serve as strong indicators that our CSP will continue to flourish.

We also applaud Vietnam’s decision in June to sign on to the Supply Chain Agreement of the Indo-Pacific Economic Framework for Prosperity, a move that will help Vietnam build resilient supply chains in support of trade across the Indo-Pacific region.

These actions speak to the immediacy of the potential in our trade and investment relationship, in which investors from both of our countries are already demonstrating the substantial sums of investment they are willing to make in each other’s country.

Record-setting numbers

While the CSP Economic Dialogue was taking place, we welcomed the largest-ever Vietnamese delegation – including more women business leaders than ever before – to the 2024 SelectUSA Investment Summit, the highest-profile event in the United States dedicated to facilitating business investment. Vietnam’s strong showing at the summit testifies to the bright potential of our trade and investment relationship.

Vietnamese companies are making an outstanding decision by choosing to invest in the United States, which will generate prosperity in both our countries and across the Indo-Pacific region. Our mission is fully committed to supporting potential Vietnamese investors as they consider opportunities in the United States.

Likewise, investors have been travelling to Vietnam like never before, buoyed by the historic upgrade in bilateral relations. We have witnessed record-setting numbers of business travellers coming to Vietnam, eager to seize this important moment and unlock the tremendous potential in our trade and investment relationship.

New investment in Vietnam by the US International Development Finance Corporation (DFC) provides another clear example of the US government’s commitment to the future of the US-Vietnam economic relationship. As part of President Biden’s historic visit to Vietnam last year, DFC announced $465 million in new commitments to Vietnam, bringing DFC’s total exposure in Vietnam to $737 million and making Vietnam DFC’s largest partner in Southeast Asia. In November 2023, DFC also announced its intent to open an office in Ho Chi Minh City.

Through these commitments, DFC is promoting private sector investment to finance solutions for critical challenges facing Vietnam. DFC actively originates, develops, and structures new private sector business leads in priority development sectors: critical infrastructure (including in ICT and critical minerals), clean energy, agribusiness, health, and financial services and support for small businesses.

The record levels of foreign direct investment that Vietnam attracted in 2023 testify to the tremendous interest of foreign investors to establish or expand their operations in Vietnam. In order to maintain this trend and encourage high-quality investment in support of sustainable and inclusive economic growth, maintaining an attractive investment climate is critically important.

Vietnam will also need to meet the needs of investors in a competitive, dynamic global economy. Meaningful, substantial dialogue with partners, concrete reforms, and legal-regulatory improvements will be of the essence.

We have every belief that Vietnam will be able to address these challenges, and the United States will continue to be Vietnam’s steadfast partner. The US-Vietnam partnership has never been stronger, and our economic relationship, bolstered by two-way trade and investment, will only become richer and more vibrant.

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