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Pact gives US ocean carriers, service providers equal access to Vietnamese markets

WASHINGTON, DC – 03/22/07 – A new bilateral US-Vietnamese agreement on maritime services could make the Vietnamese economy more competitive internationally and help Vietnam attract more foreign investment and know-how, US Maritime Administration (MARAD) officials say.

Signed last week in Washington, the US-Vietnam Bilateral Maritime Agreement gives US ocean carriers and logistics service providers “broader access” to Vietnam’s growing transportation market, according to a US Department of Transportation (USDOT) press release.

“The agreement puts American ship operators on an equal footing in Vietnam, paves the way to forming US-controlled joint ventures, and sets a course to achieve wholly foreign-owned subsidiaries in Vietnam,” said US Maritime Administrator Sean Connaughton.

Under the agreement, US-based companies will be able to acquire a controlling 51% share in joint-venture enterprises. Prior to the agreement, they were restricted to minority holdings in Vietnamese firms.

In addition, five years from the date of the agreement’s implementation, they will be permitted to operate without Vietnamese partners.

The US welcomes foreign shipping businesses in its ports, and Vietnamese companies already have had access to American markets, said a US maritime official that did not wish to be identified.

The key goal of the new agreement, he said, was to “achieve a level playing field.”

According to the MARAD release, opening the Southeast Asian country’s maritime services sector to foreign partnership “could attract to Vietnam the best in global shipping and logistics practices today” – practices that “can in turn boost foreign manufacturing sourcing in Vietnam by making it more reliable and profitable.”

The Vietnamese see a clear business advantage to their economy in bringing in Western software, technology and know-how, it added.

“There is a lot of money to be made” on streamlining the supply chains and moving goods quickly to global markets, the officials said.

The new agreement builds on previous US-Vietnamese trade initiatives, which were launched following the 2000 Bilateral Trade Agreement between the two countries.
Since then the US and Vietnam have signed several other agreements, including ones on illegal narcotics enforcement, the trade in textiles, and civil aviation.

Trade between the two countries and US direct investments in Vietnam have been growing since the countries normalized their diplomatic relations in 1995, and has quadrupled since the Bilateral Trade Agreement went into force in December 2001, according to US Commerce Department sources.

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