US Business Lauds Trade
Agreement with Vietnam
Washington, DC, July 13, 2000. The US-ASEAN Business
Council today applauded the agreement reached between the U.S. and Vietnamese governments
for a trade pact between the two countries. The Council is the premier organization in the
United States representing American business interests in Southeast Asia
(www.us-asean.org). The agreement, which was signed by President Clinton and Vietnam's
Trade Minister Vu Khoan this afternoon in Washington, D.C., will normalize trade
relations. It has been strongly supported by the business community as a key measure to
expanding trade and investment between the United States and Vietnam.
"This agreement is the big step we needed. It is great news for U.S. business."
said Ernest Z. Bower, President of the US-ASEAN Business Council. “It gives U.S.
investors a reason to take a new look at Vietnam. It is different from the boomlet we saw
just after normalization of relations in 1995. This time the agreement will provide legal
protections for U.S. companies operating in Vietnam, and will support Vietnamese
entreprenuers. In the medium and longer term, this agreement will lead to more U.S.
exports to Vietnam and to greater U.S. investment in that country."
Mr. Lionel Johnson, Chairman of the US-Vietnam Business Committee of the Council and Vice
President of Citigroup said, "The Vietnamese
have now made a profound commitment to move forward on reform. We believe the commitment
to reform is real. With this agreement, the U.S. and Vietnam private sectors can move
forward and begin to build productivity and jobs in both our economies."
Following the lifting of the U.S. trade embargo with Vietnam 1994, U.S. exports to Vietnam
quickly grew to a peak of $616 million in 1996, but fell off sharply the following year.
American exports have stagnated since then, as Vietnam has suffered from the effects of
the Asian Financial Crisis, and as economic reform and liberalization efforts have lost
momentum.
Nonetheless, as economic recovery proceeds across the region, the trade picture appears to
be improving. In the first quarter of 2000, U.S. exports to Vietnam stood at $111 million,
nearly double the figure for the same quarter of 1999. The U.S. currently accounts for
only 3% of the foreign investment in Vietnam. Singapore, Taiwan, Japan, South Korea, and
Hong Kong are the leading foreign investors. Vietnam’s economy grew 4.4% last year,
and the Asian Development Bank forecasts a 5% expansion in 2000.
Part of Vietnam's comparative advantage vis China or India is its membership in the
Association of Southeast Asian Nations (ASEAN). Vietnam joined ASEAN in 1995, and has
committed to reducing its tariff and non-tariff barriers within that 10 country, 500
million person market place by 2006. "Being part of ASEAN makes Vietnam incrementally
more attractive to American investors," said Ernest Bower of the Council. "ASEAN
is a currently the third largest overseas trading partner of the United States, and it
buys more than three times the U.S. exports that China or India purchase."
The trade agreement must still be approved by the U.S. Congress. The US-ASEAN Business
Council will actively support the approval of the pact as Congress takes it under
consideration. For more information please contact Frances Zwenig, Director of the
US-Vietnam Business Committee at fzwenig@usasean.org.
US-ASEAN Business Council is a private, non-profit membership organization working to
promote increased trade and investment between the U.S. and the member countries of ASEAN.
For information on the US-ASEAN Business Council or general information on the ASEAN
region, please contact John Goyer at jgoyer@usasean.org
or visit the Council’s Web site at www.us-asean.org.
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advisories as they are issued, click here.
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