The increased exports, primarily by foreign invested firms doing business in Vietnam, will in turn fuel growth of good paying middle income jobs in the employment market and technological advancement of local firms in the sector.
The economists also say official statistics show exports to the US have been on a steady upward trajectory over the past 15 years and in 2015 climbed a hefty 16.9% year-on-year to a record high US$33.5 billion.
In addition, they point out that those same figures show Vietnam registered a US$25.7 billion trade surplus with the US last year, the largest ever recorded, though they caution about reading too much into the figure.
The biggest problem with trade surplus as well as deficit figures published by any country lies in the fundamental assumption that each finished product for export is 100% made in a single country.
In accordance with the ‘rules of origin’ established by the World Trade Organization (WTO), a finished good is wholly ascribed to the country where it underwent its last ‘substantial transformation’.
However, in today’s globalized marketplace, almost nothing – not clothing nor Nike shoes nor iPhones – are made in any one country.
Take the iPhone for example. It is, for the most part, assembled in China and then shipped to Vietnam and following WTO rules, factored into the Vietnam-China trade surplus/deficit calculations.
But iPhones are not really ‘Made in China’ and if one looks closely on the back cover of the phone they will find the words “Designed by Apple in California” and “Assembled in China” clearly inscribed.
All told, at least a dozen companies from at least five countries around the globe supply parts for the IPhone including those in Germany, Japan, and the US to name only a select few.
A similar analysis could be made for the IPad and tens of thousands of other products, but the point is the economists say, that balance of trade figures are somewhat nebulous and are intended solely to provide some indication as to the status of trade between countries.
They are statistics that need to be interpreted with great care by experienced professionals with economic training or completely erroneous conclusions would most likely result.
Trade surpluses are not necessarily good and trade deficits not necessarily bad as far too many uninformed people incorrectly perceive— but each individual situation needs to be carefully evaluated in light of the totality of the facts and circumstances.
Minister Counsellor of Trade Dao Tran Nhan at the Embassy of Vietnam in the US is one of the strongest advocates for Vietnamese local firms and he readily acknowledges they now have tremendous opportunities to sell their products in the US marketplace.
The US market is immense in its size and there has never been more opportunity for local firms and companies than there is today to not only access the US market he says, but gain entry into the entire North American market including Canada, Mexico and the Caribbean countries.
He specifically points out that the Trans-Pacific Partnership (TPP) Agreement, should it be ratified, would create many additional possibilities for local firms, particularly those in the textile, clothing and footwear sector – but make no mistake – the opportunities for Vietnam businesses are not dependent on the TPP, he says.
Nor he says is the TPP the panacea that many try to make it out to be and many claims to that effect made – in particular by members of the Vietnamese press – are outright false and misleading.