Despite a slowdown in recent years, Vietnam still offers growing opportunities for U.S. exporters and investors. Vietnam’s economic growth rate has been among the highest in the world in the past decade, expanding at an average of seven percent per year during the period 2002-2010. Since 2011, annual economic growth has averaged around five percent.
• Inflation was a major risk for the economy up to 2011 when it hit 18.8 percent. But, inflation has remained below seven percent the last few years as the Government of Vietnam (GVN) tightened macroeconomic policy and balanced growth targets with price stability measures.
• The momentum and direction generated by the U.S.–Vietnam Bilateral Trade Agreement (BTA) in 2001 transformed the bilateral commercial relationship between the United States and Vietnam and accelerated Vietnam’s entry into the global economy with Vietnam joining the WTO in January of 2007. Since the BTA, bilateral trade increased from $2.9 billion in 2002 to almost $30 billion in 2013.
• U.S. goods export to Vietnam grew by nearly 8.4 percent to $5 billion in 2013. During the same period, Vietnam’s exports to the U.S. increased almost 22 percent to $24.6 billion resulting in a $19.6 billion bilateral trade deficit with Vietnam.
• In 2013, U.S. exporters saw significant growth in agricultural products sector, which accounted for over 30 percent of U.S. exports to Vietnam. Industrial inputs also continued to see steady growth as Vietnam continues to import machinery, chemicals, instruments and software to support its growing industrial sector.
• Registered foreign direct investment (FDI) in Vietnam saw a 36 percent jump in 2013 reaching $22 billion according to government figures. Over 1500 new foreign invested projects were licensed during the year. The two largest projects each with registered capital of $2 billion is a Samsung electronics assembly facility and a Chinese invested thermal power plant, Vinh Tan No 4.
• The bilateral trade and investment momentum has continued with the United States and Vietnam signing a Trade and Investment Framework Agreement (TIFA) in 2007. Under TIFA, the United States and Vietnam continue to address trade and investment issues with the aim of advancing the BTA and Vietnam’s WTO commitments.
• Foreign exchange reserves increased to $35 billion as of April 2014, up from an estimated $9 billion in 2011. However, a weak banking system fraught with nonperforming loans is an ongoing concern for those doing business in this country.
• In November 2010, Vietnam joined the United States, Peru, Chile, Malaysia, Singapore, Brunei, New Zealand, and Australia to participate as a full member in the Trans-Pacific Economic Partnership (TPP) negotiations to conclude a high-standard, 21st century Asia-Pacific free trade agreement. Canada and Mexico have since joined as full members in the negotiations, and in March 2013 Japan announced its
intention to join. The conclusion of the TPP with Vietnam as a member will provide an increasingly favorable environment for American businesses to enter and expand in the market.
• Vietnam’s convictions of political activists, arrests of lawyers and journalists, pressure on independent research organizations and tightening restrictions on the media threaten to negatively impact the growing bilateral relationship.
Source: export.gov