As part of the ongoing series of activities celebrating the 30th anniversary of the establishment of Vietnam - US diplomatic relations, Nghe An Newspaper, Radio and Television reporters had an interview with Mr. Nguyen Dinh Luong - former Head of the Vietnam - US Trade Agreement (BTA) Negotiation Delegation about issues surrounding this negotiation process.
PV: Sir, what difficulties did Vietnam encounter when negotiating the BTA?
Mr. Nguyen Dinh Luong: At that time, although the two countries had normalized diplomatic relations, they still considered each other as "former enemies", distrusting and suspicious of each other. Vietnam did not accept Americans to do business. The economies of the two countries were completely different. They were market economies, we were centrally planned economies. Our GDP was only 33 billion dollars, theirs was over 10 trillion dollars. They had a developed science and technology sector, while we were still poor.
PV: What motivated you to succeed in economic negotiations with the US?
Mr. Nguyen Dinh Luong: After many years of research and study, we have found that America is very rich, the American market is an open market, anyone can enter and any goods can be sold, as long as they are competitive and the whole world competes to enter America to get rich. China, Korea, Japan, Taiwan, Singapore, Malaysia and even Western Europe... all take advantage of this. In 1979, China signed a trade agreement with the United States, at that time China's exports to the United States were 49 million dollars, but in 2000 it was over 400 billion, now it has reached 600 - 700 billion dollars.
Our country was poor at that time and in need of development, so we had to sign the BTA Agreement to exploit the US market. That was the reason why we tried to sign it no matter how hard and difficult it was, and in the end we succeeded.
PV: Some people say that BTA has contributed to eliminating subsidies and establishing a market economy mechanism. What is your opinion, sir?
Mr. Nguyen Dinh Luong: During the negotiations, the US side requested that the BTA must ensure the principle of "mutual benefit", we accepted because it is a universal and fair principle. To ensure the principle of "mutual benefit", we must follow the standards of the world market. Only by accepting the standards of the world market can the US enter the Vietnamese market, and Vietnam can enter the US market, and Vietnam can exploit the world market. That is the path for Vietnam to join the World Trade Organization (WTO), where there is only a market economy.
PV: Can you tell us the difference in BTA negotiations?
Mr. Nguyen Dinh Luong: The principle of the negotiator is to find and agree on principles so that those principles do not clash with the current legal system, and we have done so for a long time. But with the Vietnam - US Trade Agreement, it is different. The US itself is a market economy, so Vietnam must abandon the subsidy mechanism and form a market mechanism to match the US and the world. Here, it is not a matter of us losing or the US winning, but rather, what is contrary to the international community and the market, we must abandon or have a roadmap to abandon, to pave the way for the country to develop.
PV: According to BTA, what should we do and what should the US do, sir?
Mr. Nguyen Dinh Luong: The US economy itself is a typical market economy and the US has made commitments in the WTO, the US does not have to do anything more. For Vietnam, the BTA is a roadmap to eliminate subsidies and build a transparent market economy.
We must eliminate monopolistic, discriminatory, and subsidized measures in our legal system. After the BTA, we must review the legal system to plan for law making. During the 2001-2005 National Assembly term, we had to amend and supplement 135 legal documents, including amending and supplementing the Civil Code, Criminal Code, Commercial Law, Investment Law, Intellectual Property Law, and writing new laws in the service sector such as: Finance, banking, telecommunications, transport, tourism... which were completely non-existent before. We must build a tariff system which previously only had import-export tax, agricultural tax... When building and amending laws according to the market mechanism, we must ensure 3 requirements:
1. Laws must be transparent, clear, easy to understand and easy to enforce.
2. Before passing laws, it is necessary to ensure that people and businesses, both domestic and foreign, can participate in giving opinions.
3. Enhancing the position of the people: In the past, people had to ask for permission to do business, and the State allowed them to do business in whatever they wanted. Now, people and businesses are free to do business in anything that the State does not prohibit.
PV: Can you share more about the factors that contributed to the success of the BTA trade negotiations?
Mr. Nguyen Dinh Luong: When negotiating, to be successful the negotiator must meet three conditions:
1. Must understand the partner thoroughly, understand the people, history, culture, economics, politics...
2. Must understand the rules of the game at the negotiating table. Must understand why the Trade Agreement includes an Investment Chapter, a Trade Chapter, an Intellectual Property Chapter, and a Services Chapter. Trade Agreements usually have only 4 or 5 pages, while the BTA has 150 pages in Vietnamese and 150 pages in English. Why must the Investment Chapter take the provisions of the NAFTA Agreement (North America) as the standard? Why do other chapters take WTO standards? and many other issues.
3. We must compare with Vietnam's current legal system to find solutions to develop the country. We have changed many of the US's requirements as well as proposed new things in investment and service chapters... and they have accepted and welcomed them.
PV: There is an opinion that we have to wait and see if Vietnam implements the BTA well before the US agrees to let Vietnam join the WTO?
Mr. Nguyen Dinh Luong: At that time, the WTO was dominated by the US. Vietnam's WTO negotiations were with 28 countries, but the main and most difficult were with the US.
Vietnam signed the BTA and Vietnam implemented it seriously. The US also spent 300,000 USD to set up a project, located in the capital Hanoi to urge and help amend the law. When Vietnam built a legal system according to the market mechanism, and 7 years later we joined the WTO. The bilateral and multilateral FTAs we signed later were based on the basis that Vietnam is a market economy.
PV: Thank you very much!
Born in 1940 in Nam Dan district, Nghe An province, with the dream of becoming a mechanical engineer to help the people of Nghe An reduce their hardships, life led Mr. Nguyen Dinh Luong to become a negotiator with extensive knowledge, professionalism, courage, resilience, flexibility, dedication, diligence and reliability.
For more than two decades as a Government-level trade negotiator, Mr. Nguyen Dinh Luong directly participated in negotiating agreements with the Soviet Union, socialist countries, Singapore, Canada, Norway, Switzerland... and finally the Vietnam - United States Bilateral Trade Agreement (BTA) lasting for 5 years from 1995 - 2000.30 years of establishing diplomatic relations between Vietnam and the United States, the relationship between the two countries has made great strides, in line with the aspirations of the people of the two countries, while actively contributing to peace, stability and development in the Asia-Pacific region as well as in the world. By the end of 2024, US direct investment in Vietnam is estimated at 11.94 billion USD with over 1,400 projects. Most major US corporations are present and investing effectively in Vietnam. On the Vietnamese side, there are 252 investment projects in the United States, with a total investment capital of more than 1.36 billion, ranking 6th out of 83 overseas investment locations. Vietnam is the 8th largest trading partner and the 4th largest export market of the United States in the ASEAN region.
Source: https://baonghean.vn/hiep-dinh-thuong-mai-viet-nam-hoa-ky-cu-bat-tay-lich-su-10308182.html
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