Socialist Republic of Vietnam

Vietnam's Trade Minister Truong Dinh Tuyen visited Washington this summer to talk trade. His key message is that Vietnam remembers its past, but that the key is to look to the future.

In this vein, Vietnam has modernized and integrated in the world. And Vietnam has changed in the process, becoming wealthier, reducing poverty, but also becoming more transparent and rule-of-law based. "When I met last year with [U.S. Trade Representative Robert Zoellick]," says the minister, we identified issues of disagreement. The American side focused on transparency. This year we discussed these issues. Vietnam now has an official Gazette, where all official decisions of the government are published."

The other part of the U.S. critique is lax enforcement, especially of intellectual property rights. But Tuyen argues that the United States is too impatient. "Property rights is an Asian issue," he says. "It takes time to change attitudes. This is not a justification for the problems, but an acknowledgement of the difficulties."

"Before you could walk, you had to crawl," he says, hinting at the fact that the U.S. economic system with its enforcement structures took decades to evolve, while rapidly developing countries are asked to change their attitudes over night.

"It is a process," he says about the ongoing efforts to bring Vietnam into the international community of trading countries, a process that will culminate with membership in the World Trade Organization (WTO), in 2005 if all goes well.

Vietnam needs to be a member if it wants to continue on its path of rapid, export-led growth. Tuyen says Vietnam expects to more than double its trade volume to $50 billion in 2010 from $20 billion now. But just like in the attempt to change attitudes, to change an economy at this rate, foreign support will be key.

"We need to produce high value-added products, and for this we cannot rely on Vietnamese businesses only. We need foreign investors to bring in the technology and know-how." Tuyen supports his argument with a statistic: Half of all Chinese exports onto the world market are from foreign companies operating in China, only one third of Vietnam's are today (excepting crude oil). This means that there is room for foreign investors in Vietnam's export economy, and indeed many are looking for a second leg besides China.

This kind of growth is mutually beneficial, says Tuyen, arguing that Vietnam will be able to provide labor-intensive processes while the U.S. investor obtains a high-quality product for sale on the world market. At the same time, as Vietnam exports, it will buy American high-tech products to transform its own economy with the hard currency earned from the booming trade.

Especially the U.S. service industry will benefit from an ever stronger Vietnamese economy. "We are already opening our service industry [ahead of schedule under Bilateral Trade Agreement (BTA) provisions] and American companies are doing good business."

While other U.S. financial services providers, including insurance groups like ACE or New York Life, are waiting for more opening, the minister says that not all grievances are on the U.S. side. "Textile, fish and shrimp trade are very sensitive for Vietnam, many people work in these sectors. We hope that the United States will treat us fairly. If these sectors are capped [by U.S. protectionist legislation], the BTA will lose much of its meaning." That is a polite way of saying that Vietnam wants the market access that the United States had long promised, but closed again when Vietnam's exporters became too successful.

WTO membership could be the ultimate solution. If Vietnam joins, it will be harder for the United States to keep Vietnamese products out based on U.S. protectionist lobbies, and Vietnam will have to open its service sector even faster.

In the end, that's an outcome the minister whose job is to boost trade can certainly live with.

The Washington Times, September 28, 2004