With Vietnam-US trade set to hit $100 billion, we expect more barriers to drop

Our countries have a strong friendship anchored in mutual respect and we work closely in many areas including regional security, education, food and energy security, disaster response, and mitigating the impact of the pandemic that has upended lives, jeopardized employment for millions, and disrupted the global trading system on which both nations depend.

Life is slowly getting back to normal but the fight against the coronavirus continues and the pandemic is far from over. Case numbers keep climbing although that was expected following the relaxation of restrictions last month. This is what "living with Covid" looks like.

Serious cases in most parts of the country are at a manageable level and in Hanoi and HCMC, almost all adults have received at least one dose of vaccine and many people have either received their second shot or will get it very soon.

Following frequent requests to President Joe Biden from AmCham and others, the U.S. government is sending another four million doses of vaccine here this week. This latest shipment brings the total number of vaccine doses donated by the U.S. to Vietnam to around 20 million doses – by far more than any other country has given. In addition to vaccine donations, the U.S. has provided Vietnam with Covid test equipment, ultra-low temperature freezers, and life-saving devices such as ventilators, oxygen concentrators, and liquid-oxygen tanks.

AmCham is also working in partnership with the Global Task Force on Pandemic Response (GTF), a public-private partnership run by the U.S. Chamber of Commerce that mobilizes and delivers resources across the globe. The GTF is working to quickly donate around $1 million of diagnostic and testing equipment including rapid antigen tests, PCR testing equipment, and genomic sequencing systems as part of the ongoing effort by both the U.S. business community and government to support Vietnam's Covid-19 response and recovery.

Vietnam's recovery from Covid is not only about physical health. It is also about economic health. Trade is the cornerstone of our 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 April 1994. This was around the same time that Amazon was founded and Justin Bieber was taking his first breaths.

Since those early days, AmCham members have contributed significantly to the transformation and growth of Vietnam's economy. 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 U.S. companies and investors active in almost every sector of Vietnam's economy. U.S. 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.

Containers at Cat Lai Port in Ho Chi Minh City, April 2021. Photo by VnExpress/Quynh Tran

We expect to hit a significant milestone next month as 2021 could be the first year of $100 billion in trade between Vietnam and the United States. As we look towards the future, we hope both governments can begin efforts towards a bilateral Free Trade Agreement (FTA). 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 here.

Many of the American investors I work with are optimistic about business prospects in Vietnam. For Vietnam to be successful, non-productive red tape must be controlled and the country's regulatory framework must be stable and predictable. Many business people 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.

AmCham members face continued challenges bringing necessary people into Vietnam due to: complicated and burdensome paperwork procedures on permission to enter Vietnam, and difficulties getting work permits because of unreasonable requirements established by Decree 152 earlier this year. While there has been some improvement lately, the requirements and procedures remain unnecessarily difficult. A faster and more dependable process for entry into Vietnam will help facilitate travel for both foreigners and Vietnamese, and promote greater trade and investment ties.

Maybe most important is to enact smooth, fair, and consistent tax and audit procedures that avoid retroactive rulings that vary from province to province, and conflict with global supply chain tax procedures. 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 a fair, transparent, predictable, and streamlined regulatory environment that values innovation. This will not only attract new investment, but will also maintain and grow the investment that is already here. In addition, we recommend that foreign investment limitations, an overly restrictive legal framework of laws, and burdensome administrative procedures should be carefully reviewed and selectively relaxed to encourage increased U.S. investment.

I have lived and worked in Hanoi for 20 years and I see great opportunity and a bright future here. This year, however, is proving to be quite challenging for many people. The economic implications of the pandemic for Vietnam are severe and will impact us for quite some time. Even as the economy begins to recover, the financial pressure for many companies will remain significant.

Our members' top priority is the health and safety of their workforce. From the beginning of the pandemic, U.S. companies in Vietnam have taken every step possible to prevent the spread of infection. We can all do our part to help during these challenging times because social distancing does not mean social disengagement. AmCham members stand together with the Vietnamese people and U.S. businesses continue to donate goods and other resources to assist outbreak areas.

To boost economic recovery, AmCham will continue to work on lowering barriers to trade, to help the Vietnamese government make it easier to do business, and to promote an innovative and sustainable business environment so that all investors have fair access to the great opportunity here.