Reporter of Cong Thuong Newspaper had an interview with Associate Professor, Dr. Nguyen Thuong Lang, senior lecturer of the Institute of International Trade and Economics, National Economics University about this issue.
Sir, on May 8, 2024, local time, the US Department of Commerce heard online debate in Washington DC on whether to recognize Vietnam as a market economy. The hearing is part of the assessment process, with the final decision to be made on July 26, 2024. What is your comment on this?
I think the United States needs to recognize Vietnam’s remarkable progress sooner, especially when the two sides upgraded their relationship to a Comprehensive Strategic Partnership during President Joe Biden’s visit to Hanoi. This point is very important.
If the United States considers the dossier and recognizes Vietnam’s market economy status, this will be a new step to deepen the Comprehensive Strategic Partnership between the two countries. This will greatly change Vietnam’s role and position in the international arena, far different from when it was considered a non-market economy, causing many obstacles and barriers in trade cooperation relations as well as attracting investment.
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| US recognizes Vietnam as market economy: Brings mutual benefits to both countries |
It can be said that the US challenge for Vietnam is too long. However, until now, it is better late than never. This is a good signal for the Vietnamese economy, so that Vietnamese goods when exported to this market will not be considered as dumped, subsidized and Vietnam will enjoy other trade benefits.
From there, the relationship between the two countries will be strengthened in substance, especially in trade, investment and other activities, which will bring benefits to both sides.
Could you elaborate on the benefits that Vietnamese export enterprises could receive if the United States recognized Vietnam as a market economy?
Firstly, Vietnam is currently exporting many products to the US market such as textiles, footwear, agricultural, forestry and fishery products, iron and steel, etc. If it is not recognized as a market economy, it means that any export product of Vietnam that is at risk of being dumped will be put on the US review list and thus will slow down the pace of Vietnamese goods when sold to this market. During the review period, Vietnam's competitors will quickly seize the opportunity and jump into the US market.
Second, being considered a non-market economy has a great impact on Vietnamese enterprises, especially in anti-dumping investigations. Accordingly, goods from non-market economies are subject to higher tax rates in anti-dumping investigations. The United States will use the value of a third country considered to have a market economy to calculate the production costs of enterprises in Vietnam instead of using data provided by Vietnamese enterprises, causing the dumping margin to be pushed up very high and not reflecting the production situation of Vietnamese enterprises.
Third, when goods are suspected, the US side will investigate, and Vietnamese businesses must cooperate, provide information, and many other issues. These things are costly in terms of money, time, and opportunities for businesses. Especially related to the reputation and prestige of Vietnamese goods and businesses, leading to a decline in the entire value chain of the investigated industry, creating opportunities for competitors and we will lose relationships with strategic partners.
From the above analysis, I believe that when Vietnam is recognized by the United States as a market economy, businesses will sell at a higher rate, without potential threats such as anti-dumping taxes, anti-subsidy taxes, and other trade defense measures.
When export activities go smoothly, businesses will have a large market space and expect that the export turnover of goods to this market can double within the next 2-3 years.
On the other hand, if the United States recognizes Vietnam as a market economy, what benefits will it bring to the United States, sir?
I think that American consumers will be the beneficiaries, because they will have access to quality Vietnamese goods at affordable prices. This will also help stimulate the competitiveness of competitors in this market.
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| Associate Professor, Dr. Nguyen Thuong Lang, senior lecturer, Institute of International Trade and Economics, National Economics University |
The US's early recognition of Vietnam's market economy status will contribute to concretizing the commitments of the two countries' senior leaders, strengthening the Vietnam-US Comprehensive Strategic Partnership, thereby promoting economic and trade relations, bringing practical benefits to businesses and people of the two countries.
When the Vietnam-US relationship is tightened and trust is enhanced, investment and trade flows between Vietnam and the US will continue to expand. The US is a very large market, currently we only export to this market a few tens of billions of USD each year, while the total annual import turnover of goods from this market is thousands of billions of USD.
If Vietnam's export turnover to the United States increases, Vietnam's position will also increase significantly. On the contrary, the United States will also benefit greatly. Because the industries in which the United States does not have a competitive advantage will be replaced by imports from Vietnam, while the United States focuses on developing its potential advantageous products, thereby promoting the process of improving the economic structure of the United States to a new, higher stage.
Do you expect the US to recognize Vietnam as a market economy in 2024?
I think there is no reason why the United States should not recognize Vietnam as a market economy, because Vietnam and the United States have upgraded their relationship to a Comprehensive Strategic Partnership, which confirms that Vietnam is a country with very high trade reliability.
The US Treasury Department has issued a report on “Macroeconomic and foreign exchange policies of major US trading partners”, continuing to determine that Vietnam does not manipulate currency, and at the same time giving positive comments on the results of Vietnam's monetary and exchange rate policy management.
In fact, all market information in Vietnam is completely transparent. Besides the United States, Vietnam exports to many countries and territories. The export turnover of goods in 2023 is estimated at 355.5 billion USD, of which, Vietnam's export of goods to the United States is 97 billion USD. This is Vietnam's largest export market.
If the United States recognizes Vietnam as a market economy, it will increase Vietnam's position, which is also a victory for the United States, affirming that they are working with a genuine business partner. This recognition will bring benefits to both sides.
Thank you!
| According to the General Department of Customs, in 2023, Vietnam's goods exports to the United States will reach 97 billion USD, down 12.4 billion USD compared to 2022. However, the United States is still Vietnam's largest export market. In the first 4 months of 2024, the United States continued to be our country's largest export market with an estimated turnover of 34.12 billion USD, accounting for 27.6% of the country's total export turnover and up 19.1% over the same period last year. |
Source: https://congthuong.vn/hoa-ky-cong-nhan-viet-nam-la-nen-kinh-te-thi-truong-se-mang-lai-loi-ich-cho-ca-hai-nuoc-319483.html
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