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In early May, the U.S. Department of Commerce held a hearing to consider recognizing Vietnam as a market economy, which would afford Vietnam greater benefits in trade remedy investigations.
The request for the U.S. to elevate Vietnam’s market status was made several months ago, highlighted by Prime Minister Pham Minh Chinh’s visit to the U.S. to meet with the Chief Economist of the U.S. State Department, Emily Blanchard.
This issue was also mentioned during President Joe Biden’s visit to Vietnam and at various other international diplomatic events between the two nations. Following these efforts, the U.S. Department of Commerce has officially responded to Vietnam, with the opinion process expected to conclude in July 2024.
If successful, this decision would not only facilitate the export of Vietnamese goods to the U.S. market but also bolster the comprehensive strategic partnership between the two countries.
Currently, the U.S. classifies Vietnam as a “non-market economy” alongside China, Russia, and 11 other countries, resulting in higher anti-dumping duties or unfavorable tax calculation methods in investigations for Vietnam.
The decision is currently supported not only by Vietnamese businesses but also by many American businesses and retailers.
A positive sign for Vietnam is that during the hearing, Ted Osius, President of the U.S.-ASEAN Business Council and former U.S. Ambassador to Vietnam, stated that Vietnam has met the key criteria of a market economy, such as currency convertibility, leading to increased American investment in Vietnam.
The U.S. Department of Commerce has stringent criteria for determining a country’s market economy status, including currency convertibility, wages determined through negotiation between workers and employers, and policies on joint ventures or other forms of foreign investment. Additionally, the agency considers the extent of government control and ownership over production means, resource allocation, and decisions on pricing and output.
According to other experts, with the increasing U.S.-Vietnam trade relations in recent years and the political tensions between the U.S. and China, the likelihood of the U.S. recognizing Vietnam as a market economy is particularly promising.
However, Vietnamese businesses should note that recognition as a market economy will not directly affect their operation. Companies that violate laws, engage in dumping, subsidies, or trade remedy circumventions will still be judged fairly and subject to penalties if violations are found.
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