Infrastructure economic growth

Washington D.C, (VNA) – The US will bolster support for countries in the Mekong subregion through the Mekong-US partnership, US Principal Deputy Assistant Secretary of State for the Bureau of East Asian and Pacific Affairs Atul Keshap said at a recent online seminar to reveal results of a report on transboundary rivers and addressing challenges in Mekong River.

He said the support will focus on the management of transboundary water resources, regional economic connection, human resources development and response to non-traditional security challenges, including those in the health sector.

The report was based on outcomes of a virtual Indo-Pacific conference on enhancing management of transboundary rivers hosted by the East-West Centre last October.

Speakers at the event said that the Mekong subregion is facing challenges in security, development and climate change.

Keshap expressed the US ’s concerns over impacts of hydropower dams in the Mekong River ’s upper reaches on food security, economic development and environmental conditions of countries in lower reaches.

The US highly appreciates Vietnam’s efforts in pushing ASEAN’s cooperation to help the Mekong subregion cope with such challenges, he said.

Congressman Ted Lieu also affirmed that the US Congress wants the US government to further boost cooperation with the Mekong sub-region via the US-Mekong partnership. Since the launch of the Lower Mekong Initiative in 2009, the US has earmarked 3.5 billion USD for countries in Mekong River’s lower reaches.

At the event, Vietnamese Ambassador to the US Ha Kim Ngoc underscored the significance of water security, especially transboundary water resources, to peace and prosperity in the region.

Countries in the Mekong subregion share responsibilities for the use and management of Mekong River’s water resources in a sustainable manner in a bid to offset impacts on development and the environment, he added.

The diplomat affirmed that Vietnam is always a responsible member in joint efforts to cope with challenges in environmental issues, climate change, economic development and security in the Mekong subregion.

He proposed that countries work together to build regulations and legally binding frameworks to manage transboundary rivers .

He also called on the US and other partners to invest in the region in the spheres of energy, infrastructure, climate change adaptation and sustainable development./.

VNA

Projects such as Bunge’s agribusiness are expected to increase in number through stronger US ties. Photo: Le Toan

In his first few days in office five years ago, President Donald Trump withdrew from the Trans-Pacific Partnership, which was a pillar of the Barack Obama administration’s pivot towards Asia. The remaining 11 member states have since reframed the agreement as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and President Joe Biden’s commitment to rebuilding relations with allies has sparked speculation about the US returning to the fold.

Fitch Solutions under global ratings firm Fitch Group told VIR in a statement that Vietnamese trade would receive a surefire boost should new Biden decide to rejoin the CPTPP.

“Biden stated in 2019 that the US should renegotiate parts of the CPTPP and re-assemble a coalition to counterbalance China’s perceived expansionist policies. The Trump administration withdrew from the original deal in 2017 under the pretext that it would harm US workers. A scenario where the US rejoins the CPTPP would deliver substantial tailwinds to Vietnamese exports to the US from lower tariffs in major export categories,” Fitch said.

In fact, the CPTPP may offer great windfalls to the US. Statistics from law firm Duane Morris Vietnam LLC showed that the population of the CPTPP countries exceeded 513 million people as of October 2020. The CPTPP countries account for nearly 45 per cent of US total exports and 37.6 per cent of US general imports in 2014. By cutting over 18,000 taxes in regards to CPTPP, there would be a great benefit for American importers and exporters by enabling them to enter new markets.

As the United States International Trade Commission estimates, the US exports of goods and services to the world would expand by $27.2 billion by 2032 thanks to the CPTPP, while US imports would expand by $48.9 billion.

Oliver Massmann, general director of Duane Morris Vietnam LLC, pointed out various benefits for the US if it rejoins the CPTPP. He took public procurement as an example. “Dropping the CPTPP means that the US has lost access to government procurement of other CPTPP countries, which amounts to $1.47 trillion,” he said in a letter recently sent to President Biden.

Massmann cited the International Monetary Fund’s World Economic Outlook database in October 2019 as stating that in Vietnam, government procurement’s percentage of GDP in 2019 was 12 per cent or $40.87 billion.

The great advance of the CPTPP will be that even Vietnam, Malaysia, and Brunei, which have not agreed to coverage of their government procurement before and are currently not covered by an existing US free trade agreement or government procurement agreement of the World Trade Organization, have undertaken to do so.

“This is a key export opportunity for US goods producers and services companies. Currently Chinese companies profit the most. About 90 per cent of power, mining, manufacturing, ferrous, and chemical projects of state-owned companies in Vietnam are awarded to Chinese contractors,” Massmann noted.

Furthering ties

Early this month, Vietnam’s Deputy Prime Minister, Minister of Foreign Affairs Pham Binh Minh held phone talks with US Secretary of State Antony Blinken. Both sides agreed bilateral ties have advanced across fields over the past 25 years, and pledged to cooperate in deepening ties “in a more comprehensive manner, with a focus on economy-trade-investment, overcoming war consequences, enhancing maritime capacity, fighting COVID-19, and adapting to climate change.”

It is expected that in 2021, there will be more connections and talks between both nations’ high-level leaders, investors, and enterprises.

Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi (AmCham) told VIR that he expected US-Vietnam trade and investment cooperation to further flourish thanks to several reasons including the US new administration’s positive stance towards both nations’ bilateral ties.

“As major investors here, American companies have an interest in Vietnam’s continued success. It is a new year and we welcome the incoming leaders in both countries,” Sitkoff said. “American investors are optimistic about business prospects in Vietnam and we support efforts to create a modern economy that will attract future investment and high-paying jobs for Vietnamese people. We will continue to work on lowering barriers to trade, to help the Vietnamese government make it easier to do business, and to create a high-standard, transparent, and stable business environment to ensure that all investors have fair access to that opportunity.”

Statistics from Vietnam’s Ministry of Planning and Investment showed that as of January 20, US investors registered over $9.51 billion in Vietnam for more than 1,000 valid projects, making the US the 11th-largest foreign investor in the Southeast Asian nation. In January alone, the US ranked fourth in investment in Vietnam, with total newly-registered capital of $122.2 million.

Currently many US firms are exploring opportunities in Vietnam, such as Morgan Stanley, ACORN International, General Dynamics, Nue Capital LLC, BlackRock’s Asian Credit, Lockheed Martin International, Smart City Works, Google, Columbia University, and USTelecom.

Positive impacts

Fitch Solutions believed that the incoming Biden administration will have largely positive implications for Vietnam.

“The impact on Vietnam’s trade growth should be positive, given that Biden will take a more pragmatic approach towards Vietnam’s growing trade surplus with the US, which means a lower risk of punitive trade tariffs than under Trump’s currency policies,” the Fitch Solutions statement read.

“Trump-era trade tariffs on Chinese exports and rising geopolitical tensions between China and the West have also set in motion a relocation of manufacturing to Vietnam, which is likely to continue. Should the US decide to join the CPTPP in the coming years, Vietnam would also benefit from accelerated trade expansion with the US.”

Fitch Solutions further explained that Biden is likely to take a more pragmatic view towards trade developments with its economic partners.

“In particular, we believe that the Biden administration will come to understand that Vietnam’s trade surplus with the US will grow as more manufacturers relocate to the Southeast Asian nation due to the ongoing US-China trade war. Furthermore, while there is bipartisan support in the US for a hardline stance on trade with China, we believe that a desire by the Biden administration to rebuild its relations with its allies would see an easing of the trade tensions with allied countries generated by the Trump administration. Therefore, we believe that the Biden administration will entail lower risk of further US tariffs on Vietnamese exports.”

In 2020, total export-import turnover between Vietnam and the US was $90.1 billion, up from $76 billion in 2019.

Hurdles need removing

Sitkoff from AmCham in Hanoi told VIR that though Vietnam and the US have many common foundations to further cement their trade and investment ties, he hoped Vietnam’s government will take more drastic action to remove obstacles currently facing investors.

“It is critical that US companies and investors here in Vietnam encounter an equal, level, and predictable playing field as a solid foundation, not only to attract new investment, but also to maintain and grow the investment that is already here,” Sitkoff said.

“In addition, we recommend that foreign investment limitations, an overly restrictive legal framework, and burdensome administrative procedures should be carefully reviewed and selectively relaxed to encourage increased US investment,” he suggested. “In our view, by opening its market to more US goods and services, Vietnam can help to rectify the growing trade imbalance between the two countries in a manner that benefits both countries.”

According to AmCham, one of the biggest hurdles for foreign firms including US ones in Vietnam is the tax system.

“While Vietnam’s corporate income tax rate of 20 per cent is competitive, data shows that filing and paying taxes in the country is still too high a burden compared to neighbouring countries. Too many companies are also suffering from what seems to be unfair and non-transparent reassessments with penalties and interest,” said an AmCham statement recently sent to the government. “We hope to see real progress on advanced pricing agreements which create the stability and predictability necessary for integrating into global supply chains.”

Hanoi (VNA) – Outcomes of the 11th National Congress of the Lao People’s Revolutionary Party (LPRP) were informed to the Communist Party of Vietnam (CPV) at a video conference on February 26.

At the event, Soonthorn Xayachak, Secretary of the LPRP Central Committee and head of the committee’s Commission for External Relations, who is the Special Envoy of General Secretary of the LPRP and Lao Prime Minister Thongloun Sisoulith, said that the LPLP’s 11th National Congress was a success, becoming an important milestone to a new development period of the revolution of Laos.

The congress approved a Political Report of the 10th LPRP Central Committee, along with socio-economic development in the 2021-2025 period, as well as the amendment and supplementation of the LPRP Charter, and reviewed the leadership of the 10th LPRP Central Committee. The congress also elected the 11th LPRP Central Committee.

Soonthorn Xayachak thanked the CPV Central Committee, CPV General Secretary and State President Nguyen Phu Trong as well as leaders of the Party, State and major agencies of Vietnam for extending congratulations to the congress and their Lao counterparts. He also thanked Vietnam for supporting Laos in organising the congress, while congratulating the CPV on the success of its 13th National Congress.

For his part, Hoang Binh Quan, head of the CPV Central Committee’s Commission for External Relations and Special Envoy of Party General Secretary and State President Nguyen Phu Trong, showed his delight at the fruitful results of the LPLP’s 11th National Congress and the election of deputies to the 9th Lao National Assembly, describing them as important political events of Laos, opening up a new period in the national defence and construction of Laos.

Quan expressed his belief that under the leadership of the LPRP, the Lao people will continue to gain new achievements in their renewal process and successfully realise the resolution released at the 11th LPRP National Congress, thus building a nation of peace, independence, democracy, unification and prosperity towards socialism.

He affirmed that the Party, State and people of Vietnam always give strong and comprehensive support to the national reform, defence, construction and development of Laos.

Quan and Soonthorn Xayachak shared the pleasure with the growth of the special solidarity between the two countries, which has brought about practical benefits to their people.

The two sides underscored the determination to work closely together to overcome difficulties and challenges to implement the resolution of each party, while coordinating closely in effectively implementing agreements reached by senior leaders of the two Parties and countries.

In any circumstance, the two sides will do their utmost to protect, maintain and reinforce the Vietnam-Laos ties and make the relations stronger, evergreen and everlasting to pass on to younger generations, they stated./.

VNA