Vietnam is a completely market economy.

American economic and international relations experts believe that the US needs to soon recognize market economy status for Vietnam.

Recently, Foreign Ministry spokesperson Pham Thu Hang said that at the hearing of the US Department of Commerce held on May 8, the Vietnamese side clearly stated arguments, information, and data affirming that Vietnam's economy fully meets the criteria of market economy status. "We welcome the US Department of Commerce for holding the hearing. This is an important step in the process of reviewing the dossier for recognizing Vietnam's market economy status," Ms. Pham Thu Hang said, emphasizing: "The US's early recognition of Vietnam's market economy status will contribute to strengthening the Vietnam-US Comprehensive Strategic Partnership, promoting economic and trade relations between the two countries."

Reasonable decisions are necessary

Regarding the above issue, expert Murray Hiebert (Southeast Asia Program, Center for Strategic and International Studies - CSIS, USA) recently published an analysis article on the CSIS website titled: High Time for the United States to Graduate Vietnam from Its Nonmarket Economy Status .

Việt Nam hoàn toàn là nền kinh tế thị trường- Ảnh 1. — *According to many American economic experts, Vietnam is assessed to fully meet the criteria of a market economy.*

Mr. Hiebert pointed out: Vietnam has been included in the US group of non-market economies for more than 20 years, which includes 12 countries such as Russia, China, etc. This still exists even though Vietnam is one of the US's closest partners in Southeast Asia, and plays an important role in ensuring security in the East Sea. Just a few days before upgrading bilateral relations to the level of Comprehensive Strategic Partnership in September 2023 and having many security and economic initiatives, Vietnam officially submitted a request to the US to remove the non-market economy status. A month later, the US Department of Commerce agreed to review and remove Vietnam from the above list - which is likely to face the strictest criteria when accused in anti-dumping lawsuits. According to US regulations, the US Department of Commerce has 270 days, or until the end of July, to complete the survey on Vietnam's current status. Vietnam launched economic reforms in the late 1980s by opening the country to foreign direct investment, sharply reducing subsidies for state-owned enterprises and abandoning collectivized agriculture and price controls. Today, Vietnam is a major magnet for foreign investment as companies seek to decouple from China and find alternative manufacturing hubs. US companies such as Apple and Intel have established major factories and research centers, and the country is among the US’s top 10 trading partners. When US President Joe Biden visits Vietnam in 2023, he has pledged to increase cooperation in semiconductor manufacturing and boost digital infrastructure. Vietnam is a partner in US-led negotiations to establish the 14-economy Indo- Pacific Economic Framework (IPEF) to boost regional economic ties. Vietnam is also a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which has agreed to give independent labor unions a greater role. The expert also pointed out: "Many global economies, including Japan, Australia, the UK and Canada, have recognized Vietnam as a market economy. So the US's designation of Vietnam as a non-market economy seems arbitrary and counterproductive for a country with which the US has deep economic ties and increasingly strong security cooperation." Therefore, the article emphasized: "The next logical step in Vietnam-US relations would be for Washington to recognize Vietnam as a market economy next July."

Unreasonable obstacles

In favor of the above recognition, author Hiebert commented: "Some US trade organizations such as the National Retail Federation will strongly support granting market economy status to Vietnam. This organization cites the country's openness to foreign investment, currency convertibility and free negotiation to set wages."

Việt Nam hoàn toàn là nền kinh tế thị trường- Ảnh 2. — *The 2023 annual Vietnam - US Trade Forum with the theme "Upgrading - Starting" took place in Ho Chi Minh City*

He also cited that Vietnam almost meets most of the US criteria for a market economy. But he was concerned: "The sixth criterion allows the US Department of Commerce's reviewers to consider other "appropriate" issues. This category can be quite subjective." In addition, according to him, another obstacle is that some organizations in the US, such as the American Shrimp Processors Association, have commented calling on the administration not to remove Vietnam from the list of non-market economies. According to them, removing Vietnam from the list will "harm US shrimp producers". Other industries such as US honey, catfish, steel and kitchen cabinet producers may also object. This is also the concern of Professor David Dapice (economic expert at the ASH Center of the Kennedy School of Public Policy of Harvard University, USA) - a person who has done a lot of research on the Vietnamese and regional economies. Responding to Thanh Nien on May 23, Professor Dapice said: "Labor unions and some politicians in the US consider any relaxation of non-market regulations by Vietnam as a way to "give" something to Vietnam and "take" something from American workers and companies. I do not agree with this, but I am concerned about this pressure when this is an election year." He emphasized: "With inflation being a concern, the supply of reasonably priced goods should be welcomed rather than opposed. If Vietnam does not export smartphones or furniture, other countries will. Those jobs will not return to the US."

Important partners of each other Since Vietnam and the US established diplomatic relations in 1995, in 2022, bilateral trade turnover increased nearly 300 times, exceeding 120 billion USD. In 2023, due to common factors of the global economy, bilateral trade turnover between Vietnam and the US decreased compared to 2022 but still reached over 111 billion USD. The US is currently Vietnam's largest export market. In the first 4 months of 2024, the US continued to hold this position, when Vietnam's exports to the US reached over 34 billion USD, accounting for nearly 28% of the country's total export turnover and increasing by 19% over the same period last year.

Responding to Thanh Nien , many American economic experts also highly appreciate the market nature of the Vietnamese economy. The Vietnamese economy is increasingly moving towards a free market structure .

Việt Nam hoàn toàn là nền kinh tế thị trường- Ảnh 3.

There are many signs that the Vietnamese economy is moving more and more towards a free market structure. The effort to expand credit to the private sector is one example. Interest rates have been lowered in 2023 as well. Vietnam has also increased credit availability for greater investment and innovation in the private sector. In addition, Vietnam has transparent currency transactions, with real wages determined through negotiations between workers and employers. Moreover, Vietnam has always welcomed foreign direct investment, which is the main driver of the economy at the moment. Recognition of Vietnam as a market economy would signal that it is a safe and stable economy to invest in, driven by market principles rather than central government policies. This would allow Vietnam to attract larger inflows of foreign direct investment. At the same time, when recognized as a market economy, Vietnam will be less subject to high tariffs when exporting to major markets. And for US policymakers, that will also be a signal to companies around the world that Vietnam becomes a reasonable destination to diversify supply chains. Dr. Steven Cochrane (Chief Economist for the Asia-Pacific region, Moody's Financial Analysis Company, USA) Trading at market prices is a market economy

Việt Nam hoàn toàn là nền kinh tế thị trường- Ảnh 4.

The criteria for assessing a market economy are sometimes more political than economic. From an economist's perspective, I would say that an economy where most transactions are conducted on the market at market prices is a market economy. But the legal criteria set by the US Department of Commerce may include a number of other considerations. Professor Dwight Perkins (Economics, Harvard University, USA) Vietnam should be classified as a market economy

Việt Nam hoàn toàn là nền kinh tế thị trường- Ảnh 5.

In terms of exports and imports, Vietnam should be classified as a market economy. Vietnam does not have subsidies to artificially cheapen its exports. However, some low prices are due to other factors. Vietnam's exchange rate is managed but not manipulated for unfair advantage. Some inputs such as land or some services may not be fully market-oriented or open, but they do not have a major impact on trade or investment flows. Professor David Dapice (economist at the ASH Center, Kennedy School of Public Policy, Harvard University, USA)