NEW YORK: Vietnamese prime minister Pham Minh Chinh on Wednesday asked US Treasury secretary Janet Yellen to support granting the communist country “market economy” status and help ease other trade irritants as the Biden administration courts the Southeast Asian export powerhouse as a strategic and counterweight to China.
Chinh raised the issue, along with numerous US anti-dumping duty investigations on Vietnamese goods, at the start of a bilateral meeting with Yellen on the sidelines of the UN General Assembly in New York.
“I hope that the US will come up with the strong political will to recognise the market economy status of Vietnam, like you did to the Russian Federation,” Chinh told Yellen. He was referring to a 2002 determination that Russia’s economy was market-driven, a status that limited the calculation of US anti-dumping duties on Russian goods at the time. But the US commerce department revoked Russia’s market economy status in November 2022, citing significant increases in state direction of its economy, especially since its February 2022 invasion of Ukraine.
Vietnam and China are treated as non-market economies with extensive state determination of production, which allows the commerce department to use third-country pricing in determining the fair market value of goods, resulting in significantly higher anti-dumping duties.
Chinh also called for a reduction in the number of US duty investigations into Vietnamese exports to the US, including on footwear, apparel and electronics.
The often high duty rates are irritants for Vietnam as its economic relationship with the US deepens.
During a visit to Hanoi last week, US president Joe Biden struck deals with Vietnam on semiconductors and minerals, and Vietnam elevated the US to its highest diplomatic status, alongside China and Russia.
In remarks to Chinh, Yellen did not address Vietnam’s market economy status but instead emphasised the upgrade of the US-Vietnam relationship to a “comprehensive strategic partnership”
“The Biden-Harris administration views Vietnam as a key partner in our ‘friend-shoring’ approach to deepen integration with a broad set of partners and allies to create diverse, resilient, and sustainable supply chains in key industries,” Yellen said.
“We are encouraged by the growing investments that companies are making in Vietnam and recognise Vietnam’s tremendous potential as a major player in the semiconductor industry,” Yellen added.
Vietnam is now among the top 10 US trading partners, with record two-way goods trade of nearly US$139 billion last year, bolstered by a many companies shifting production to the fast-growing Southeast Asian country from China.
But some aspects of the relationship remain strained, including commerce department investigations into Vietnamese exports of steel, solar panels and other products for potentially circumventing duties on Chinese-origin goods through further processing in Vietnam.
Vietnam had been labeled a currency manipulator by the Treasury department during then-president Donald Trump’s administration, and was subjected to a US “Section 301” investigation for its currency practices, which threatened potential broad tariffs. The probe did not lead to tariffs, and recent Treasury currency reports have removed Vietnam from the “watch list.”
Chinh ended his remarks by thanking Yellen for the Treasury’s work on the Section 301 probe and on currency issues. - Reuters
