Herb Cochran Executive Director

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Doing Business in Vietnam:

Strategic Opportunities and Challenges

from AEC, TPP, VN-EU FTA, … TFA

April 12-13, 2015

!  Informally re-established in Mar 1994

!  Formally licensed Sep 19, 1998 – Decree No. 08/1998/ND-CP, Regulations on

Foreign Business Associations

!  Two chapters, HCM City and Hanoi – HCM City: 433 companies – Hanoi: 181 companies

About AmCham

!  Phase 1: 1994 - 2001 (MNCs and “Pioneers”)

– Coca-Cola, Pepsico, P&G, 3M, Kimberly-Clark …

!  Phase 2: 2001 – 2006 “Partner Factories” – For U.S. market (Apparel, Footwear, Furniture …)

!  Phase 3: 2007 - … “Modern manufacturing” – For global markets (Intel, Digital Logic, GE,

Honeywell, Timken, … )

U.S. (related) FDI in Vietnam

www.amchamvietnam.com

Key Issues - Business Environment �  U.S. Embargo lifted Feb 1994 �  U.S. – Vietnam Relations Normalized Jul 1995 �  Bilateral Trade Agreement 1996 - Dec 2001 �  WTO Accession 2002 - Jan 2007 �  Bilateral Textile Agreement 2002 – Jan 2009 �  Labor Relations 2008 - 2013 �  TransPacific Partnership 2013 – �  Food Safety (excise tax on CSD, etc.) 2014 – �  WTO Trade Facilitation Agreement 2014 – �  ASEAN Economic Community 2015 –

www.amchamvietnam.com

Việt Nam - U.S. Trade

Việt Nam - U.S. Trade …

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www.amchamvietnam.com/download/1481

Southern Key Economic Region

www.amchamvietnam.com/download/1481

GMS Connectivity

Road Transport Network

1992

www.amchamvietnam.com/download/1481

Road Transport Network

2006

GMS Connectivity

www.amchamvietnam.com/download/1481

Road Transport Network

2015

GMS Connectivity

ASEAN

ASEAN

ASEAN

ASEAN

U.S. Imports from ASEAN …

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TPP (trade data 2012,GDP and population data 2011)

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TPP Opportunities …

! Exports up 28.4% in 2025 over the “base line” w/o TPP

–  $239 billion without TPP apparel/footwear $113 billion –  $307 billion with TPP apparel/footwear $165 billion

! GDP up 10.5% in 2025 over the “base line” w/o TPP

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TPP Results for Vietnam

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Challenges … Links to internat’l supply chains

!  Become a “qualified” supplier to U.S. and global firms !  Industry Trade Shows in the U.S. !  D-U-N-S® Number … an International Unique ID Number !  Electronic Data Interchange (EDI) !  Testing & Certification

–  Quality, Safety, Labour, Environmental, Sustainability, … !  Product Liability Insurance / Marine Cargo Insurance !  Logistics • Security • Customs & Border Protection (CBP) !  Your Company Web Site … and “Vina Baba”

Challenges … Links to internat’l supply chains

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Step 2 Supplier Questionnaire

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Step 2 Supplier Questionnaire

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Step 2 Supplier Questionnaire

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EDI Requirements

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Challenges … Momentum for reform

www.amchamvietnam.com/4604

!  Implement the WTO Trade Facilitation Agreement

!  which is similar to …

!  Trans-Pacific Partnership (TPP) Free Trade Agrement

!  EU-Viet Nam Free Trade Agreement

!  ASEAN Economic Community 2015

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Challenges … Momentum for reform … customs

TPP Why should Gov’t help … ?

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!  Committee on Trade Facilitation; Single Window (BIEC) !  Customs – Business Partnership / Cooperation (COAC)

!  e-Customs (Automated Commercial Environment • ACE)

!  Advance Ruling: Classification, Valuation, Rules of Origin

!  Authorized Economic Operator

!  Many similar provisions in “U.S. Customs Modernization Act,” 1993 in preparation for implementation of North American Free Trade Agreement (NAFTA) on Jan 1, 1994

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AEC, TPP, EU-VN … TFA commitments include

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AEC, TPP, EU-VN … Momentum for reform … growth

Technical assistance commitment in the TFA Section II, Art 9. Provision of Assistance for Capacity Building “9.1. Donor Members agree to facilitate the provision of assistance and support for capacity building to developing country and least developed country Members, on mutually agreed terms and either bilaterally or through the appropriate international organizations. The objective is to assist developing country and least developed country Members to implement the provisions of Section I of this Agreement.”

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AEC, TPP, EU-VN … TFA includes technical assistance

TPP and TFA Why should Gov’t help … ?

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Commercial Operations Advisory !  Committee on Trade Facilitation

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!  COAC Members

Swift Transportation Corporation, FedEx Trade Networks Transport & Brokerage, Kraft Foods Group, The Walt Disney Company, UPS Supply Chain Solutions, Coppersmith Global Logistics, National Association of Beverage Importers, Maritime Products International, NYK Line (North America), Airforwarders Association, U.S. Chamber of Commerce, Abbott Laboratories, Janell Group of Los Angeles, Liberty International, Inc., Regal-Beloit Corporation, Raytheon, General Motors, Airlines for America, Target, Sandler & Travis Trade Advisory Services

Committee Members (U.S.)

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www.amchamvietnam.com/download/1783

Le Tu Cam Ly Member, Board of Governors

AmCham Vietnam

World’s middle class = 5 billion by 2030

Herb Cochran Executive Director

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Doing Business in Vietnam:

Strategic Opportunities and Challenges

from AEC, TPP, VN-EU FTA, … TFA

April 12-13, 2015