Remarks on the 20th Anniversary of Normalization of U.S.-Vietnam Diplomatic Relations

Charles H. Rivkin
Assistant Secretary, Bureau of Economic and Business Affairs
University of Economics
Ho Chi Minh City, Vietnam
May 29, 2015

Thank you. When I heard that I would be speaking at the University of Economics, I was delighted. You attract the most talented students from every corner of Vietnam, as well as Laos and Cambodia.

You are ranked as one of the best business schools in the world. So who could be better suited to hear about the depth and breadth of our economic engagement with Vietnam? Who could better appreciate its critical role in maintaining the 20 years of diplomatic and economic engagement that we celebrate this year?

Today I am here to deliver a simple message: The economic engagement between our two nations has been the foundation behind its great success. That same engagement can and must be the platform for all future success – and there are no finer candidates than you to take that message and make it real.

There’s another reason I consider you such an important audience. Vietnam is one of the younger nations in the world, with more than 40 percent of its population under the age of 25. As young people, you are not only the forthcoming custodians of the future. You also will be its longest beneficiaries, deep into this century.

As future economists, academics, business people, policy makers and community leaders, you will be even more directly involved, at the front lines of our economic engagement. So, for you, there is nothing abstract about the economic engagement between our nations. Its success or failure will have enormous impact on your lives, from the decisions you make, to the families you raise, to the businesses you start up –or don’t.

As I look around this room, I see that many of you are about the same age as my son and my daughter. About two weeks ago, in the United States, my wife and I went to our son’s university for his graduation.

This was a day of mixed emotions. We knew we had done everything we could to support him and his sister, and we knew it’s now up to them to do the rest.

But we also recognized that there are other factors above and beyond their control that will also determine how successful their futures – and yours – will be. Many of those factors are economic, and they are at the heart of our most threatening challenges, from lack of economic opportunity for young people, especially in developing and emerging economies, to the devastating and expensive consequences of climate change.

It stands to reason, that we should work to create economic policies and strategies that not only address these challenges but also bring benefits to all of us – from my son and daughter to everyone in this room.

The world is flatter and more connected than ever. Shared prosperity is no longer an abstraction. It’s a 21st century reality.

So today, I want to outline how our economic engagement is working to underwrite our bilateral relationship, and helping more people take advantage of that prosperity and make their lives better. I also want to talk about a ground breaking multilateral trade deal that we believe will take that economic engagement to the next level.

Over the past 20 years, business and investment ties between our nations have grown, and so has our political and diplomatic cooperation. This growth in our economic relationship has paved the way for us to cooperate in many other areas, like education and people-to-people exchanges; cooperation in the fields of the environment, science, and health; enhanced security cooperation and addressing climate change.

Through the “Agreement on Economic and Technical Cooperation,” signed 10 years ago, we have a framework to address many challenges, from combating HIV/AIDS to disaster risk reduction. That framework also extends to our strong cooperation on addressing climate change, practicing sustainable development, and employing clean energy in the Mekong region – which is so important to the lives and livelihoods of the Vietnamese population and the entire sub-basin.

In a year of many milestones for our relationship, we also celebrate the 15th year of our Bilateral Trade Agreement – or the BTA.

Thanks in large part to the BTA, Vietnam exports more goods to the United States than to any other country. Our trade has grown dramatically, from $451 million in 1995 to $36 billion in 2014.

Vietnamese entrepreneurs, the backbone of the economy, have benefitted greatly, exporting clothing, furniture, consumer electronics, and food to the United States.

Of course, this also means we have created thousands of jobs in Vietnam and in the United States. Since normalization in 1995, Vietnam’s GDP was already growing at a rate of more than four percent every year. Since the signing of the BTA in 2000, that figure rose to more than five percent – each and every year. Ladies and gentlemen, a growth rate of more than five percent each year for 15 years is very impressive, by any standard.

Since the signing of the BTA, and thanks to decisions made by the Government of Vietnam, the nation’s poverty rate has dropped from 60 percent to 17.2 percent. Domestic prices of imported goods have also decreased and given the Vietnamese people more consumer choices.

These successes help to illustrate a very simple principle: When a country bustles with economic opportunity, people are inspired to become more productive. They see that starting a business does more than solve their immediate financial problems. It brings jobs to their communities. It contributes to economic growth.

The better their economic situations, the greater their desire to advocate for bigger and better things.

Those include a stronger rule of law; more robust intellectual property rights to protect their ideas and patents; better schools for their children; better healthcare for their families; better working conditions; better environmental standards; and, most importantly of all, universal respect for human rights.

As a business culture, we believe our companies abroad must answer to higher ethical questions than merely profit margins. They must not only demonstrate due diligence in their awareness and transparency of their supply chains, they also should work to enhance the communities where they do business.

Here in Vietnam, for example, the American agriculture company Cargill has been sharing new technologies and sustainable farming techniques with cocoa farmers in the Mekong Delta.

American companies, including IBM, Coca-Cola and Boeing, are all doing their part, investing time and money – some to build schools, others to protect the environment or contribute to the health of their local communities.

Some are donating computer equipment and software to schools. Others are sending out company representatives to speak with Vietnamese students – or helping employees learn critical skills.

All are showing that they are committed to serving the peoples and communities where they operate for the long-term.

I just came from Hanoi where I helped launch a public-private partnership between the State Department and the Asia Injury Prevention – or AIP – Foundation.

As you know, many Vietnamese, including many children, die as a result of motorbike accidents. So we are asking for the help and support of American companies to distribute up to 25,000 child helmets and promote road safety awareness.

I could share many more examples, but I believe the point is clear. As long as there is opportunity for economic engagement, our firms are eager to partner with Vietnam to build a shared and prosperous future.

This brings me to the Trans-Pacific Partnership trade agreement – better known as TPP. This trade deal will allow 12 participating countries – which account for almost 40 percent of the world’s GDP – to trade and invest more freely, openly, and competitively in each other’s markets.

TPP, when successfully concluded, will allow both our countries, and the 10 other partners, to open many more doors to opportunity.

It will allow commerce to flow across a dozen borders without government protectionism and other barriers.

It will set high standards for labor and the environment that will lay down a marker for the world.

It will promote a free and open internet, protect intellectual property rights, and clarify regulations so that more businessmen and women can explore new markets and grow their businesses.

This treaty will be transformative for both our countries, and according to some estimates, it may increase Vietnam’s GDP by as much as 30 percent in the next decade.

It will support the Government of Vietnam’s stated goals to modernize the country, and its efforts to transform state-owned enterprises and important sectors of the economy like energy and banking.

It will also help Vietnam attract greater investment, achieve more regional integration and, by extension, help build greater security across the Asia-Pacific.

There is a Vietnamese saying. And please forgive my pronunciation. But it is something like this: Có chí thì nên. Essentially, it echoes a well-known expression in English, which is: Where there’s a will, there’s a way.

In other words, when you are sufficiently determined to achieve something, there is no substitute for the power of the human will.

If there’s one lesson that we can draw from our 20 years of normalization, I believe it’s the power of our economic engagement to support our greatest aspirations and needs.

Look at what we have already done in these past two decades. I believe we can look forward to so much more, not only in terms of our shared prosperity but also in terms of our quality of life.

By embracing TPP and its high standards, Vietnam can be a leader and model for others to follow. Together we can build a brighter, stronger future for our people, our nations, and the entire Asia-Pacific region. Thank you.