The U.S.-Vietnam relationship is a trustworthy and stable partnership that has led to growth, and American companies feel welcome in Vietnam, says Virginia Foote, vice chairwoman of AmCham Hanoi.
Vietnam has become an important manufacturing base/supplier for U.S. giants like Intel, Cargill, Apple and Nike, while the country’s electric vehicle maker VinFast is building a factory in North Carolina. These are developments that would have been difficult to imagine not too long ago. Could you comment on these from your vantage point?
These development haven't surprised me. I am very happy that we have reached this stage so fast and feel optimistic about the future. Vietnam and the U.S. began the establishment of diplomatic relationship 28 years ago and this year we celebrate 10 years of our Comprehensive Partnership. Within this short period of time, Vietnam has become one of the top 10 trading partners of the U.S. with trade in goods exceeding $138 billion in 2022 - proof of the remarkable developments we can accomplish with efforts from both sides.
The bilateral relationship has come a long way in the last few decades - from conflict to normalization of relations and then a comprehensive partnership. What do you think comes next?
Both countries are very much hoping their partnership will be upgraded during this trip to reflect the steady progress we have made. An upgrade would establish a very important framework at the top level reflecting the deepening ties between our two countries and lay down a path for the future.
During his official visit to Vietnam in April, Secretary of State Antony Blinken said both countries have forged “a robust, dynamic and consequential relationship, and the U.S respects Vietnam’s right to shape its future under its own political system". What does Blinken’s statement mean for U.S. companies who consider trust and safety paramount before making investment decisions?
The Secretary of State reaffirmed the U.S. commitment to the relationship, and of course this continuity is very important to the both the U.S. and Vietnam’s business communities. Trustworthy and stable partnerships lead to growth. "Made in Vietnam" is a welcome label among U.S. consumers and Americans and American companies feel welcome in Vietnam.
This year marks 10 years of the U.S.-Vietnam comprehensive partnership. Over the past decade, the global and Vietnamese contexts have significantly changed. There is an argument that says it’s time the two countries forge new ways of strengthening economic cooperation. Do you agree?
I agree that the future is full of challenges and opportunities that are different from the past, and the world is becoming increasingly competitive. Consumer demands have changed, company expectations have changed, and we are all looking for more sustainable ways of doing business.
Vietnam is blessed with abundant renewable energy resources, for example, that can be brought on line quickly helping to reduce the carbon footprint caused by power generation, manufacturing, and public consumption.
Global standards are going up and innovation is the name of the game - countries that can embrace these higher standards will do well. This next period will open great opportunities for Vietnam and together we can meet the challenges of sustainability, enhancing administrative ease, and increasing human resource development.
Vietnam aims to promote a technology-based, innovation-driven economy towards green development and net zero emissions. Related to this, there is a strong focus on joining global supply chains including chip production, logistics, digitalization, and fighting climate change. Would U.S. investors be interested in business opportunities arising from these national targets?
Very much so. Of course companies are pleased with Vietnam’s 2050 commitments, but actually we need to immediately reduce direct emissions that they own or control and indirect emissions that are a consequence of inputs. Meeting those demands is an enormous investment opportunity for Vietnam.
Vietnamese Minister of Planning and Investment Nguyen Chi Dung once said the U.S should have been the No. 1 investor in Vietnam. Registered U.S. direct investment in Vietnam from 2018 to 2022 was $550 million, $460 million, $360 million, $739 million and $748 million, respectively. The figure for the first half of 2023 was $405 million, putting the powerhouse in eighth position. Why are the official figures (excluding capital from American companies' subsidiaries in third countries) so small after nearly three decades since the normalization of relations?
Direct investment from the U.S cannot be assessed in a traditional sense - supply chains and investment chains are increasingly complicated. For example, many U.S. companies have regional hubs in Vietnam’s neighboring countries and these regional subsidiaries bring investment to Vietnam on behalf of the headquarters of companies, but that investment is not counted as “directly” from the U.S.
Also, as the U.S. is the largest export market for Vietnam, we drive much of the foreign investment into Vietnam, bringing investment and connecting supply chains from many countries. The U.S. is also a large player in high quality soft infrastructure development such as in financial, digital, tourism, education, entertainment and other services for Vietnam.
This visit by President Biden and a large team from the U.S., including Vietnam’s long time friend John Kerry, and the bilateral upgrade of our partnership to a top level would be a wonderful milestone. The business community salutes this accomplishment and the bright future it portends.
U.S. companies are accustomed to operating in an environment with few administrative procedural barriers and one that strongly encourages and incentivizes innovation. Are they happy with the business environment in Vietnam?
Yes, we must acknowledge that in Vietnam, some companies have to go through extra steps in terms of administrative procedures in order to invest or expand their businesses. However, the Vietnamese government is trying its best to help and assist foreign companies to overcome these barriers. Moreover, I think the Vietnamese market has many things to offer to offset these administrative barriers like affordable labor and a stable political landscape.
Virginia Foote has been awarded the Vietnam President's Friendship Order Medal for active contribution to the normalization and development of ties between Vietnam and the U.S.
She is currently the president and CEO of Bay Global Strategies.