USA Wants to Grant Vietnam “Market Economy Country” Status

The US Department of Commerce has begun the process of determining whether to “recognize Vietnam as a market economy.” If such a radical decision is made, although strongly opposed by representatives of various sectors of the US economy, especially the steel industry and fishery, most of the “barriers” preventing trade between the two countries, or rather slowing down Vietnamese exports to the USA, will be torn down.

Vietnam’s economy has grown by leaps and bounds in recent years, both in consumer goods and sophisticated technology. Many multinational companies are shifting production from China to other Asian countries, including Vietnam. In 2023, it became the second largest producer and exporter of footwear in the world after China and before Italy.

As American newspapers wrote, “it is very difficult for Washington to make a choice. On the one hand, there is a battle for the support of US industry lobbies ahead of the presidential election in November. On the other hand, there are US geostrategic goals in Southeast Asia, which range from countering China’s growing influence to bringing Vietnam closer to the US alliance system in the Indo-Pacific.”

If Washington denies Vietnam the status of a market economy, it will be not due to the real economic situation of this developing Asian country, but for purely domestic reasons. They are linked to the current election campaign in America, in which President Joe Biden is in an increasingly weak position compared to his rival, former White House chief Donald Trump. “Vietnam is already a market economy,” wrote Ted Osius, former US ambassador to Vietnam and director of the US-ASEAN Business Council, in a lengthy article titled “Why Should We Care About Southeast Asian Economies?” The US-ASEAN Business Council is a very influential organization. It promotes economic and trade ties between the USA and the Association of Southeast Asian Nations (ASEAN), which includes Brunei, Cambodia, the Philippines, Indonesia, Laos, Myanmar (formerly Burma), Malaysia, Singapore, Thailand, and Vietnam.

Last year, President Biden visited Vietnam. The two countries then elevated the relationship to a “comprehensive strategic partnership.” Days after the US Commerce Department hearing began, Vietnam warned that the “non-market economy” status pressured on Hanoi was hindering bilateral relations with the United States. Amid the trade war between Washington and Beijing, Vietnamese Prime Minister Pham Minh Chinh called for the decision, reminding the American side of “Vietnam’s importance specifically for diversifying supply chains from China.”