Benefits of the US recognizing Vietnam as a market economy

On May 8, 2024, local time, the US Department of Commerce heard an online debate in Washington DC on whether to recognize Vietnam as a market economy. The hearing is part of the assessment process, with a final decision due on July 26, 2024.

US President Joe Biden at a press conference in Hanoi on September 10, 2023. Photo: AFP

During the hearing, Attorney Eric Emerson of Steptoe LLP - representing the Ministry of Industry and Trade of Vietnam - argued that Vietnam should be upgraded to a market economy because it has met the six criteria of the US Department of Commerce. "Vietnam has demonstrated that its performance on these criteria is as good or often better than other countries that have been granted market economy status," Attorney Eric Emerson said. In his argument, Vietnam said that it should be removed from the non-market label because it has undergone recent economic reforms and that being labeled a non-market economy is not good for the bilateral relationship between Vietnam and the US. Supporting the US recognition of Vietnam as a market economy, Mr. Scott Thompson - Director of Public Policy of Samsung Electronics US branch - said that Samsung Electronics has become one of the largest employers in Vietnam thanks to Vietnam's market-oriented changes. "Vietnam has emerged as a stable and secure supply chain partner of the United States, bringing ultimate benefits to the US economy," he said. At the hearing, the opposing parties argued that Vietnam's policy commitments have not been matched by actions, and were concerned about the heavy dependence of Vietnamese industries on investment and imports of raw materials from China, many of which are subject to anti-dumping duties by the US. Mr. Jeffrey Gerrish - a former trade official in the Donald Trump administration and representative of steelmaker Steel Dynamics - said that the US's recognition of Vietnam as a market economy would lead to a wave of unfairly traded imports from Vietnam, thereby creating a foundation for China to circumvent tariffs in the US. Currently, Vietnam, along with China, Russia, Belarus, Azerbaijan and nine other countries, are on the list of non-market economies. This year, the US International Trade Commission extended the anti-dumping tax of 25.76% on frozen farmed shrimp from Vietnam, while the tax on shrimp from Thailand - a market economy - was only 5.34%. At the press conference of the Vietnamese Ministry of Foreign Affairs on the afternoon of May 9, Spokesperson Pham Thu Hang welcomed the hearing of the US Department of Commerce on May 8. "This is an important step in the process of reviewing the dossier for recognition of Vietnam's market economy status," said Ms. Hang. The Spokesperson of the Ministry of Foreign Affairs emphasized: "At the hearing, the Vietnamese side clearly presented arguments, information, and data affirming that the Vietnamese economy fully meets the criteria for market economy status, and emphasized that the Vietnamese economy is doing even better than many economies that have been recognized as market economy status." The representative of the Vietnamese Ministry of Foreign Affairs pointed out that, to date, 72 countries have recognized Vietnam as having a market economy, including major economies such as the UK, Canada, Australia, Japan, etc. Vietnam has also participated in 16 bilateral and multilateral free trade agreements with more than 60 partners across continents. "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," the Spokesperson emphasized. Commenting on Deutsche Welle, Ms. Trinh Nguyen - senior economist in charge of emerging Asia at Natixis, a bank branch of French banking group BPCE - emphasized: "Recognizing a market economy helps Vietnam avoid anti-dumping taxes from the US, so if recognized as a market economy, Vietnam will make its products more competitive." Ms. Trinh Nguyen added: "The US is a key market, so being recognized as a market economy will help Vietnam."

Laodong.vn

Source: https://laodong.vn/the-gioi/loi-ich-khi-my-cong-nhan-viet-nam-la-nen-kinh-te-thi-truong-1338417.ldo