During the afternoon meeting on January 31, US Ambassador to Vietnam Marc E. Knapper and Deputy Prime Minister Le Minh Khai discussed several issues related to the implementation of the post-upgrade Comprehensive Partnership agreement, including the recognition of Vietnam as a market economy.
Deputy Prime Minister Le Minh Khai emphasized that this is a matter of great concern to the leadership of both countries and requested the Ambassador to continue to speak out strongly and contribute to accelerating the US’s recognition of this regulatory regime, with hopes that this process will be completed as soon as possible, preferably in 2024. For Vietnam, relevant agencies will prepare complete documents as required for the US to review as soon as possible.
Deputy Prime Minister Le Minh Khai and US Ambassador Marc E. Knapper also exchanged views on strategic trade control and high technology to create favorable conditions for enhancing cooperation, especially in the new context where the two countries have upgraded their Comprehensive Partnership.
Expressing appreciation for Deputy Prime Minister’s time, US Ambassador Marc E. Knapper said that 2023 is the most important year in the bilateral relationship with many high-level visits, the most prominent of which is the visit of the US President to Vietnam. During this visit, the high-level leaders of the two countries agreed to upgrade the Comprehensive Partnership. He also affirmed that the US is always ready and eager to cooperate with Vietnam.
Regarding the recognition of Vietnam’s market economy, Ambassador Marc E. Knapper stated that the US Department of Commerce is conducting a detailed and urgent review, hoping to reach a conclusion by June 2024.
What Does Recognizing a Market Economy Signify?
According to the Ministry of Industry and Trade, 72 countries have recognized Vietnam as a market economy, including major economies such as Canada, Australia, Japan, and South Korea. Most recently, the United Kingdom has officially recognized Vietnam’s market regime through a formal letter.
The market economy is a concept used by some countries when conducting anti-dumping investigations on imported goods from other countries. The determination of a country as a market economy is usually based on an assessment of the degree of state intervention in business decisions and the level of control and intervention by the state in production factors such as capital and labor. A country with excessive state intervention may not be considered a market economy.
If a country exporting goods is not considered a market economy, instead of using information on costs and production prices of the business itself to calculate the dumping margin, the importing country will use representative information of a third country that is considered a market economy. The consequence is that the dumping margin is often determined to be higher, resulting in much higher trade remedies than countries considered market economies.
Being recognized as a market economy allows for fairer treatment of exported goods, better conditions for market penetration and expansion, and more stable business operations. A stable and transparent environment will attract investment capital and contribute to the development of the economy.