Vietnam deserves to be recognized as a market economy by the US

To date, 72 countries have recognized Vietnam as a market economy, including major economies such as Canada, Australia, England, Japan, and South Korea. The two major economies, the US and the EU, have not yet recognized Vietnam as a market economy, causing many losses and shortcomings for Vietnam in economic development, especially in production activities and exports.

US President Joe Biden’s state visit to Vietnam in September 2023 opened a new chapter in the relationship between Vietnam and the US with the leaders of the two countries declaring the establishment of a “Comprehensive Strategic Partnership for peace, cooperation and sustainable development” and many breakthrough cooperation agreements worthy of upgrading relations have been announced. However, the fact that the US has not recognized Vietnam’s market economy status has caused much harm to the economic benefits of both countries and the bilateral cooperative relationship that is increasingly being nurtured, developed by the leaders of the two countries.

Currently, the US is an important export market of Vietnam with a total turnover in 2022 of nearly 109.4 USD (accounting for 29.5% – according to data from the General Department of Customs).

In fact, since 2008, after officially joining the WTO, Vietnam and the US have established a bilateral Working Group on market economy. Up to now, information from the Ministry of Industry and Trade – the focal point on the Vietnamese side – said that the two sides have held many meetings, updating the US on Vietnam’s market economic situation. The above content was also discussed by senior Vietnamese leaders during working trips to the US.

The request for the US to soon recognize Vietnam’s Market Economy status was mentioned by Prime Minister Pham Minh Chinh when meeting US Secretary of Commerce Gina Raimondo on September 19, 2023 in Washington. The joint statement between General Secretary Nguyen Phu Trong and President Joe Biden on upgrading Vietnam-US relations to a Comprehensive Strategic Partnership previously also mentioned this issue.

According to researcher James Borton at the Johns Hopkins Foreign Policy Institute (USA), the Comprehensive Strategic Partnership not only helps strengthen US-Vietnam diplomatic relations but is also an opportunity for Washington to recognize Vietnam as a market economy, thereby the two countries can enjoy more economic benefits.

Author Borton commented that, in the context of the US Government’s efforts to promote the Indo-Pacific Economic Framework for Prosperity (IPEF), recognition of market status will help Vietnam to increase trade and investment with the US. In return, the benefits that American companies get are market access and export opportunities, especially in the fields of agriculture, machinery, aircraft and pharmaceuticals. All contribute to promoting supply chains that align with US interests.

Recognition of Vietnam’s market status will also contribute to reducing trade barriers, helping US businesses export goods and services to Vietnam more easily and at lower costs. It also helps American companies to diversify their supply chains. Additionally, lower import prices and greater market access could allow US companies to increase output and production in Vietnam. This offers the potential to increase sales and profits for American companies operating in Vietnam.

Telecommunications, information technology, power generation, transportation infrastructure construction, environmental project management and technology will continue to provide promising opportunities for American companies.

Besides, Vietnam is making efforts in promoting a favorable and equal business environment for international investors. The 2020 business report of the World Bank (WB) showed that this agency ranked Vietnam 70th out of 190 commendable economies, reflecting Vietnam’s commitment to creating favorable conditions for the economy and business activities.

US News and World Report magazine ranked Vietnam 7th out of 78 countries where it is recommended to start a business in 2021, up 5 places compared to 2020.

Therefore, the US should soon recognize Vietnam as a market economy, contributing to reducing trade barriers and creating substantive and deep cooperative relations that commensurate with the new comprehensive strategic partnership between the two countries, helping Vietnam to develop rapidly and narrow the gap with other countries.