According to experts, thanks to upgrading relations, Vietnam can transform its economy and deeply participate in the global high-tech supply chain.

In a meeting with President Joe Biden on September 11, Prime Minister Pham Minh Chinh said it is necessary to consider economics, trade, and investment as the "eternal engines" of bilateral cooperation.

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The announcement between Vietnam and the US to establish a Comprehensive Strategic Partnership, according to Ambassador Pham Quang Vinh, "the trust and understanding between the two countries has been increased, certainly creating a driving force for "long-term cooperation". According to him, the US desperately needs reliable places to ensure production in the context of supply chain disruption, transition, and competition between major countries.

 
Many experts see that the significance of Vietnam-US relations at the highest level is building strategic trust, which is the basis for businesses to make long-term investments.

Dr Nguyen Khac Giang, a guest researcher at the Yusof Ishak Institute Singapore, said the Biden administration promotes de-risking, shifting the supply chain to friendly, friendly partners (friend-shoring). The upgrading of relations between Vietnam and the US creates a basis for exploiting this strategic opportunity.

"This is a sufficient condition - a political relationship that protects businesses from both sides to do business and develop," said Mr. Nguyen Quang Dong, Director of the Institute of Policy Research and Media Development. Its premise is the decades-long favourable and reciprocal business relationship between Vietnamese and American businesses.
The US side mentioned the friend-shoring strategy to Vietnam during the July visit of Treasury Secretary Janet Yellen. She said the US wants to expand trade relations and diversify the supply chain among trusted partners like Vietnam. This is to minimize global shocks and geopolitical risks. Since 2021, the US has stepped up efforts to restructure the global supply chain, especially with the semiconductor industry, which contains many key technologies.

Vietnam's first opportunity is to transform the economy towards modernity, integrating it into the high-tech supply chain.

In the joint statement, the US committed to supporting Vietnam in training and developing a high-tech workforce, supporting the rapid development of the semiconductor ecosystem here.

Many American semiconductor businesses have invested in Vietnam recently. Amkor Technology (headquartered in Arizona) plans to complete the $1.6 billion semiconductor factory in Bac Ninh in September 2023, with trial production by the end of October. The business said that this is Amkor's largest factory globally. In mid-May, Marvell Technology Group announced the establishment of the world's leading IC Design Center in Ho Chi Minh City - on par with Marvel's US, India, and Israel centres.

Vietnam is expected to continue progressing in trade, especially when facing a decline in export orders due to the global economic slowdown.

The joint statement of General Secretary Nguyen Phu Trong and President Joe Biden affirmed that Vietnam and the US will create favourable conditions and further open the market for each country's goods and services, support trade policies economy, Resolve barriers to market access through the Framework Agreement on Trade & Investment.

"Traditional export products with strengths such as textiles, furniture, footwear, and electronics will recover with positive growth rates," Minister of Industry and Trade Nguyen Hong Dien assessed. Vietnamese agricultural products also have more access to the US market. Freshly shaved coconuts were the eighth fruit officially exported to this country in August.

Data from the statistics agency shows that Vietnam-US trade reached nearly 124 billion USD last year, an increase of 275 times in 27 years. The US is Vietnam's largest export market and second-largest trading partner. In contrast, Vietnam is the world's 7th largest trading partner of the US, the largest in ASEAN.

However, according to experts, Vietnam still has a lot of work to do because this opportunity only comes true by chance.

For example, when participating in high-tech supply chains, Mr. Nguyen Quang Dong said it is necessary to review the failures encountered by the supporting industry for decades.

The ecosystem for supporting industries could be stronger, causing Vietnamese businesses to outsource at the lowest level. With high-tech supply chains, the requirements will be even harsher.

"We need to carefully analyze which link in this new supply chain we can squeeze into, and from there, invest in domestic businesses methodically and strategically. Don't think right away can participate," Mr. Dong said. This is to avoid repeating supply chain failures for FDI enterprises in the previous period.

"Vietnam itself must improve its capacity to absorb new opportunities," Ambassador Pham Quang Vinh added. According to him, the Government needs to work with the US side to implement the proposed major policies, focusing on the policy framework, infrastructure, and human resources.
With trade, Minister Nguyen Hong Dien noted that the US is a huge, super competitive import market with a scale of 3,277 billion USD, requiring businesses to adapt quickly.

Enterprises must clearly define product strategies, partners, and distribution channels; Thoroughly research regulations, export barriers, and possibilities related to trade defence cases; ensure input materials have clear origins; and research to upgrade production facilities and factories according to "green production standards". Businesses must also apply customer diversification strategies and search for niche markets to reduce risks.

Mr. Nguyen Khac Giang also said that, at this time, the most important thing is to create conditions for domestic businesses to take advantage of opportunities and become an indispensable part of the global flow of goods and services.

"When this 'favourable time' is over, the Vietnamese economy itself must have enough internal strength to stand in a higher position globally," he said.

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