The lifting of the trade embargo on Vietnam by President Clinton 30 years ago paved the way for all the terrific advances in the U.S.-Vietnam trade and economic relationship, said ambassador Marc Knapper.
Together with the normalization of bilateral relations in 1995, the removal of the two-decade trade embargo helped boost bilateral trade to $139 billion in 2022, which is 300-plus times that in 1995, Knapper said at the 30th anniversary of the lifting held by the U.S. Embassy in Hanoi on Friday.
With rapid trade growth, Vietnam is now the U.S.’s eighth largest trading partner and biggest trading partner in ASEAN. In turn, the U.S. is Vietnam’s second largest trading partner and number one export market.
“We firmly believe in the importance of Vietnam in terms of global supply chains,” the ambassador affirmed.
He recalled that during President Biden’s Hanoi visit last September, the U.S. committed to work with Vietnam to help it develop the semiconductor industry and other high-tech industries, including the formation of a workforce for the 21st century: computer scientists, engineers and IT workers.
“We're very excited about the great work we have ahead of us. In the meantime, we very much welcome all the great market-based economic reforms that Vietnam has made,” the diplomat said.
He noted that the U.S. is currently reviewing Vietnam's non-market economy status. “This is not a political decision. Basically, it's a quasi-judicial one,” he said, echoing what U.S. Under Secretary of State for Economic Growth, Energy, and the Environment Jose W. Fernandez said earlier this week.
At the panel discussion, all four speakers stressed the importance of the lifting of the trade embargo as a driving force for the deep and extensive trade, economic, and investment cooperation between the two former war foes.
Can Van Luc, chief economist of Hanoi-based bank BIDV cum director of the BIDV Training and Research Institute, commented that the U.S. government was “very smart” in lifting the embargo on February 3, 1994, which was the 64th anniversary of the founding of the Communist Party of Vietnam.
Such a move helped large international and American financial institutions such as the IMF, World Bank, and Citibank expand their operations in Vietnam.
Luc highlighted that the U.S. now accounts for 27-30% of Vietnam’s overall exports and is Vietnam’s 12th largest import market.
The U.S. ranks 11th biggest investor in the Southeast Asian country, with some $13 billion committed. “We do hope that after the double upgrade of bilateral relations [to a comprehensive strategic partnership], the U.S. will become among top 10 or even seven among the largest foreign direct investors in Vietnam,” Luc said.
If investments in Vietnam by companies in Singapore, the EU, and the UK with American companies’ shares are taken into account, the U.S. would already be one of the 10 largest investors in the country, he commented.