What are the American business community’s expectations for Prime Minister Nguyen Xuan Phuc’s visit to the US at the end of May?
|Jonathan L. Moreno, chairman of AmCham
We look forward to the renewal of high-level meetings between Vietnam and US leaders, and are especially happy to see that Prime Minister Phuc will be the first leader from the ASEAN region to meet with President Trump. We expect that the meetings will strengthen trade and investment relations between our countries.
Do you think that the US and Vietnam will need another trade tool, for example a new bilateral free trade agreement, to replace TPP and the existing bilateral trade agreement, to increase trade and investment co-operation?
AmCham strongly supported and advocated the ratification of the Trans-Pacific Partnership (TPP). We believed that it would produce significant income gains for each of its 12 signatory member states. While we regret that the present administration effectively ended US participation, AmCham believes there are new paths forward to increase trade and investment between the US and Vietnam.
Among other things, we support a path towards a free trade agreement between our two countries through the Trade and Investment Framework Agreement. For an FTA to move forward, it will need to be viewed as beneficial and fair by all parties. The American business community in Vietnam stands ready to do its part to make this goal a reality.
In addition, Vietnam’s robust implementation of the WTO Trade Facilitation Agreement would be an excellent trade tool. A WTO Secretariat study reported that such implementation would reduce Vietnam’s trade costs by 20 per cent, making Vietnam much more competitive as a destination for foreign direct investment (FDI), and would help Vietnamese-based businesses connect to cross-border production networks.
According to AmCham’s recent survey, Vietnam is the number one choice for US companies. What are the factors driving the positive sentiment of American investors?
The main factor is the very positive results of FDI from the US. Trade between Vietnam and the US in 2016 exceeded $52 billion, with another double digit increase. Vietnam is the largest exporter to the US in the ASEAN region, accounting for 26.6 per cent of all ASEAN exports to America. In addition, Vietnam is the fastest-growing ASEAN export market for the US.
Renewable energy is one of the most attractive sectors for American investors. How are American investors preparing to tap into this sector?
AmCham and its partners wrote the Made in Vietnam Energy Plan, which provides a roadmap of necessary reforms to attract American investors, equipment suppliers, manufacturers, and operators.
The plan highlights the speed, low risk, and economic efficiency of fully utilising renewable energy resources, natural gas, and energy-efficient technology in Vietnam to meet the relentless growth in energy demand. The plan also lays out a roadmap to energy security in Vietnam from 2018 to 2030.
Global trends in the energy market include American consumers’ increasing demand for access to clean energy. American firms like Intel, Microsoft, Apple, Nike, and Walmart lead this dynamic movement.
The falling cost of American solar and wind technology now brings them close to parity with the cost of energy supplied by coal and natural gas.
Americans also present a new architecture for the power market with the 4th Industrial Revolution technologies. No longer is a power consumer playing a single role in the market. Consumers do not simply buy power and suppliers do not simply sell power. The American consumer in Vietnam now also wants to produce power with solar panels and store power in batteries, utilise the internet of things, and charge electric vehicles.
However, American firms state that if the Draft Solar Circular and the Draft Solar Power Purchase Agreement (PPA) are not improved and the PPA template of the Ministry of Industry and Trade remains non-bankable, actual development and investment in solar power projects may be more limited than expected under the amended Power Development Plant VII, even though Vietnam has great potential as a solar power producer.
What are AmCham’s plans for advancing US-Vietnam trade relations in 2017 and into the future?
AmCham will certainly continue to champion efforts to strengthen trade and investment between the US and Vietnam. It will constructively co-operate in identifying non-tariff trade barriers and supporting Prime Minister Phuc’s efforts to reduce red tape and business costs.
Additionally, we are dedicated to assisting the development of Vietnamese SMEs and their increased participation in global supply chains via our participation, along with VCCI and USAID, in the Vietnam Trade Facilitation Alliance. This Alliance provides technical assistance related to customs administration, trade facilitation, and food safety. This year, AmCham will also be expanding the very popular Supplier Day programme, whereby FDI companies meet with Vietnamese enterprises to establish business links.
We also congratulate the government on the hosting of APEC 2017 and express our hope and confidence among the business community that Vietnam’s best days are ahead of it.