More than 20 years ago, Vietnam and the US could not imagine that the two countries' business relationship would develop as strongly as today.

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Today, US President Joe Biden has a state visit to Vietnam. Since 2000, presidents including Bill Clinton, George W. Bush, Barack Obama and Donald Trump have all come to Vietnam during their terms. Mr. Joe Biden will be the fifth US President to come to Vietnam and can witness the achievements of building cooperative relations between the two countries, especially trade - which is the foundation of the bilateral relationship.

Each visit of the US president to Vietnam has taken place in the context of significant changes in trade between the two countries.

As President Bill Clinton commented, the Vietnam - US Trade Agreement (BTA) - "sowing the seeds for a good future" - was signed a few months before his visit to Vietnam in 2000.
Vietnam joined the World Trade Organization (WTO) when President George W. Bush attended APEC 2006 in Hanoi. Also that year, Intel announced the expansion of its factory investment project with a capital of 1 billion USD. Intel's decision at that time confirmed that Vietnam could also be an address to attract many "eagles".

Even though the TPP Agreement failed for many objective reasons, in 2016, during President Obama's visit, Vietnam - US completed negotiations, showing the development of good relations between the two sides.

"The US and Vietnam are close friends, something unimaginable before," said Mr Adam Sitkoff, CEO of the American Chamber of Commerce (AmCham) in Hanoi, who has lived in Vietnam for over 20 years, told VnExpress. He said many American companies and investors actively operate in most economic fields in Vietnam.

Twenty years ago, Vietnam's economic scale was only 31.2 billion USD, and GDP per capita was nearly 400 USD (according to World Bank data). Goods exported from Vietnam to the US are only 880 million USD; from the US, exported to Vietnam is about 416 million USD.

The scale of Vietnam's GDP has increased more than 15 times, reaching 478 billion USD; GDP per capita increased 11 times, reaching 4,436 USD. The value of bilateral trade exceeded $123 billion last year.

Amcham represents more than 650 large businesses and 2,500 individual American businesses throughout Vietnam. According to Amcham, these businesses account for billions of dollars in FDI capital, have hundreds of thousands of direct and indirect employees, and contribute significantly to export revenue and taxes in Vietnam.

According to data from the Foreign Investment Agency (Ministry of Planning and Investment), American investors poured capital into 1,216 projects in Vietnam, with a total investment capital of 11.4 billion USD by the end of 2022. This country ranks 11th among the countries and territories investing the most in Vietnam.

"Vietnam has become a significant economy compared to previous years. We are the 7th largest partner in the US, surpassing other traditional markets. In the US supply chain, Vietnam is also gradually becoming an important link," said Mr Le Hong Hiep (Institute of Southeast Asian Studies - ISEAS - Yusof Ishak Institute, Singapore). He assessed that Mr. Biden's visit at this time shows that the US increasingly focuses on Vietnam's role in many aspects.

Ambassador Pham Quang Vinh commented, "Vietnam's position is constantly increasing" over the years. Because Vietnam has a position and role in Asia-Pacific, the US and other countries attach importance to the economy of 100 million people when looking at this region.

Vietnam has deeply integrated with the world, especially in trade. "That is where we have strengthened ourselves," Mr. Vinh said. In 2000, Vietnam had only one FTA, AFTA - signed with the ASEAN region. The number has been 16, with most major countries and regions in the world, including CPTPP, EVFTA, and RCEP. Therefore, investing in Vietnam also means connecting to a large-scale, quality FTA network.

"We have innovated, incorporated, and developed into a market that attracts American corporations and investors to come and conduct business and earn profits. They see Vietnam's upward momentum. This is the motivation to bring the two countries closer together," he said.

The economic approach between the two countries has also changed many times. Instead of just manufacturing as before, Vietnamese-American businesses expanded into energy, digital economy, and finance with higher capital content and added value.
"The digital economy is a field rich in potential. American businesses have advantages in infrastructure that Vietnamese businesses can take advantage of, helping Vietnamese digital goods travel around the world at competitive costs," Nguyen Quang Dong, Director of the IPS Institute for Policy Research and Media Development, commented. In addition, he also noted that the trend of green growth and fighting climate change is of mutual concern to both countries.

According to the US-ASEAN Business Council (USABC), US companies tend to continue expanding production centres and supply chains here in the semiconductor, fast-moving consumer goods, digital economy, and creative economic sectors. In addition, the aerospace, defence and security sectors also witnessed renewed interest from both sides.

Therefore, many economic expectations were raised during Mr. Biden's state visit here.

According to Mr. Pham Quang Vinh, with what Vietnam is doing well in trade relations with the US, it is necessary to continue to promote it. That is maintaining the growth rate of trade and the volume of goods because the two countries still have much room.

He said Vietnamese goods must increase their appeal and competitiveness, adding that the country's economy is still expanding and the US market is sizable and highly consumed.

Next, Vietnam must take advantage of shifting to areas where the US has advantages, such as digital transformation, green transformation, and semiconductor products. "If we can welcome this, Vietnam - US cooperation will grow much faster," he said.

According to the Vietnamese Ambassador to the US, Nguyen Quoc Dung, during Mr. Biden's visit, the two sides are expected to meet technology businesses and sign important economic agreements and contracts worth billions of dollars.

Many people also expect the possibility of a free trade agreement. IF FORMED, an FTA between the two countries will strengthen each other's market access with more favourable conditions.

In February 2023, after the meeting between Ms Katherine Tai and Vietnam's Minister of Industry and Trade Nguyen Hong Dien, the US Trade Representative (USTR) said that Ms Tai expressed interest in promoting bilateral economic cooperation under the Vietnam-US Trade Framework Agreement (TIFA).

TIFA was signed in November 2007, during President Nguyen Minh Triet's visit to the US. At that time, the Agreement was considered the next step of the BTA and the opening step towards a Free Trade Agreement.

Suppose BTA is the initial skeleton for Vietnam and the US to have normal trade relations. In that case, creating momentum to join the WTO, then TIFA (bilateral cooperation council at ministerial level, discusses orientation, policies, and resolves trade difficulties) is the next step towards a free trade agreement (opportunity for low taxes on goods and services, even zero for goods from both sides).

Mr Biden is expected to meet General Secretary Nguyen Phu Trong, Prime Minister Pham Minh Chinh and many other senior leaders. This visit is considered to establish an important milestone in Vietnam - US relations, commemorating the 10th anniversary of the two countries establishing a comprehensive partnership.

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