Moving from former adversaries to trusting and valued partners

Adam Sitkoff - Executive director AmCham Hanoi

One of the relationship’s strengths is its multifaceted nature. Economically, the United States is a key trading partner and investor for Vietnam. Politically, Vietnam and the United States share the same interest: peace and stability in East Asia, and mitigating the impact of the COVID-19 pandemic that has upended lives, jeopardised employment for millions, and disrupted the global trading system on which both nations depend.

Our countries now have a strong friendship anchored in mutual respect and work closely in many areas including regional security, education, global health, food and energy security, disaster response, and more.

Of equal importance are cultural links. The United States has the largest population of Vietnamese people outside Vietnam. Americans of Vietnamese ancestry are playing a critical role in Vietnam’s development. Their investment, as well as their talent and entrepreneurship have helped drive Vietnam’s impressive economic growth.

Back in 1995, only 60,000 Americans visited Vietnam. Last year’s total was almost 700,000 visitors and we hope to accelerate that growth once international travel normalises after the pandemic. In addition, there are over 30,000 young Vietnamese people studying in the United States, where they are acquiring much-needed skills and knowledge.

Trade is the cornerstone of the bilateral relationship and great changes have taken place in the development of the American business community here.

Soon after the resumption of economic relations, a small group of Americans founded the American Chamber of Commerce (AmCham) at its first meeting at the Dragon Hotel near West Lake in 1994.

AmCham then began holding small monthly meetings on the top floor of the Army Hotel in Hanoi. AmCham organised many activities for members of the community in those early days including lunches with visiting government officials, softball games, a traditional Thanksgiving holiday dinner in the former conference hall of the Metropole Hotel, and the first American Independence Day celebration in over 40 years held in Hanoi.

AmCham members have contributed significantly to the transformation and growth of Vietnam’s economy and many of our longtime members were instrumental in helping normalise the bilateral relationship.

AmCham is an independent, non-political, and non-profit membership organisation that serves as the “Voice of American Business” in Vietnam. Our mission is to increase trade and investment between the United States and Vietnam and our diverse membership of agriculture, retail, education, manufacturing, services, and the not-for-profit sector, is unified by a common commitment to the principles of free trade, open markets, private enterprise, and the unrestricted flow of information.

We aim to support the success of our members by promoting a healthy business environment, strengthening bilateral commercial ties, and providing high-quality events and information for members. AmCham offers assistance and information pertaining to government, referrals, and business laws to members.

The chamber provides trade information and guidance for companies seeking new business contacts or for those wishing to establish operations in Vietnam or in the United States, as well as a forum where knowledge and experience can be exchanged among members and prominent guest speakers.

Together, AmCham members represent billions of dollars in foreign investment, tens of thousands of direct employees, hundreds of thousands of indirect employees, and a significant share of Vietnam’s exports and tax revenues. Business activity started slowly for Americans here but now we see US companies and investors active in almost every sector of Vietnam’s economy.

In 1995, bilateral trade was just $451 million. It is now almost $75 billion. US exports to Vietnam have more than quadrupled in the last decade, and the United States remains the largest export market for Vietnam, even during this terrible pandemic.

As we look towards the future, we hope both governments can begin efforts towards a bilateral free trade agreement. This would improve investment and trade flows, would assist sustainable supply chains, and would improve business conditions that strengthen the private sector, ensure sustainable economic and social development, and promote prosperity.

AmCham members bring high-quality products and state-of-the-art technologies, services, and business practices to Vietnam. We partner with Vietnam to develop high-tech, innovative industries. We commit to upholding Vietnam’s labour and environment laws, and to being good corporate citizens.

Our companies are leaders in promoting sustainability and innovation in Vietnam through global business practices that ensure responsible supply chains and combat climate change.

We want to partner to develop infrastructure that ensures energy security and facilitates sustainable growth. We share an interest in developing a globally competitive workforce, creating quality jobs, and investing in the professional development of our Vietnamese team members.

American investors are optimistic about business prospects in Vietnam. We support efforts to create a modern economy that will attract future investment and high-paying jobs for Vietnamese people.

For Vietnam to be successful, non-productive red tape must be controlled and the country’s regulatory framework must be stable and predictable.

AmCham members remain concerned with changes in policy and regulations which are not consistent with international best practices. We encourage continuous improvements in infrastructure development, protection of intellectual property, education reform, legal and tax policy certainty, and enhanced transparency in Vietnam.

Maybe most important is to enact smooth, fair, and consistent tax and audit procedures. Too often, US investors feel there is an arbitrary and unpredictable audit and tax system. Progress in these areas will not only help attract more foreign investment, but will also support Vietnam’s aspirations to propel itself to the next sphere of economic competitiveness.

With a growing trade imbalance, it is critical that our members encounter an equal, level, and predictable playing field as a foundation, not only to attract new investment, but also to maintain and grow the investment that is here.

In addition, we recommend that international investment limitations, an overly restrictive legal framework of laws, and burdensome administrative procedures should be carefully reviewed and selectively relaxed to encourage increased US investment.

As major investors here, American companies have an interest in Vietnam’s continued success. The issues raised above highlight our belief that the business climate can best be helped by actions that increase productivity and reduce the costs and risks of doing business in Vietnam.

More importantly, decreasing the cost and complication of doing business will benefit Vietnamese-owned businesses – many of which are small businesses – and will spur entrepreneurship which will ensure Vietnam’s future competitiveness and growth.

Our members see great opportunity and a bright future here. AmCham will continue to work on lowering barriers to trade, to help the Vietnamese government make it easier to do business, and to create a high-standard, transparent, and stable business environment.