July 17, 2009
Foreign Trade University
*As Prepared for Delivery*
On a September morning seven years ago, my Vietnam Airlines flight broke through the clouds as it approached Hanoi. I looked out of my window to see the brilliant green landscape unfold below me, and rice fields stretched out as far as I could see. As the wheels of the plane hit the runway I thought how a few days earlier I had packed a single suitcase in Washington, D.C., and left behind my friends and a comfortable life. I wasn't quite sure what I had gotten myself into.
Soon I was in a car rushing past the farm fields near the airport, crossing the Red River and onto the crowded Dike Road. Cars, bicycles, and motorbikes shared the road until we arrived in the buzzing excitement of Hanoi. Overwhelmed by all that surrounded me, I quickly began to understand that this was the beginning of what would be two of the most exciting years of my life.
I would make my home in an apartment on Hang Khay near Hoan Kiem Lake. Every morning I walked from my apartment to the Press Club and the offices of the U.S.-Vietnam Trade Council - the USVTC. At first I had wanted to commute like my Vietnamese colleagues - by motorbike. This experiment began on a borrowed Honda Dream on Tran Hung Dao Street. It ended two blocks later against a shopkeeper's building wall, with me flat on my back, a torn suit, and surrounded by worried onlookers. I decided walking suited me better.
Giving up on the motorbike, I set to learning Vietnamese. My colleagues at the USVTC taught me my first Vietnamese phrases - "dep qua" (very pretty) and "dat qua" (very expensive). Despite their efforts and patient tutoring, I ultimately learned "mot it," or very little, Vietnamese.
Yet my experience in Vietnam could not have been more rewarding. With my colleagues at the USVTC, I worked with Vietnamese government officials to implement the U.S.-Vietnam Bilateral Trade Agreement - one of the first agreements of its kind. Together we addressed the challenging reforms and commitments that would help underpin Vietnam's effort to join the World Trade Organization (WTO). And once each month I flew to Ho Chi Minh City to teach a course at the law school and the Ho Chi Minh City Bar Association, sharing what I knew and learning more than I could imagine.
The sheer size and complexity of the economic challenges facing Vietnam in 2002 were overwhelming. But in every discussion and every negotiation with my Vietnamese counterparts, I was struck by their consistent and frank approach, and by their pragmatism. Too often in my work, I have heard the many reasons why a solution is impossible, why the answer to a question must be "no." But in Vietnam it was different. In Vietnam, everyone wanted to find the solution, to identify the possible, and to get to "yes."
In subsequent years, we saw that yes, Vietnam would begin to overcome its many challenges to build a more modern, market-oriented economy based on the key principles included in the Bilateral Trade Agreement and the WTO Agreement. And yes, in 2007 Vietnam joined the WTO and completed yet another step toward greater integration in the world economy. And yes, amidst many challenges over the past decade including SARS, avian influenza, high commodity prices, and poor weather, Vietnam found a way to grow its economy year after year. Vietnam's economic growth created jobs, transformed its economy, and lifted 30 million people out of poverty over the last decade.
Much has changed since I first landed in Hanoi seven years ago. I have less hair on my head and am a few pounds heavier. Cannon and Yamaha factories have taken root in rice fields between the airport and the Red River. More cars share the road with the crowds of motorbikes and bicycles. Vietnam's booming economy is struggling through a global economic recession on a scale unprecedented in recent decades. The U.S. economy too is struggling through an historic financial and economic crisis. While our recession is stabilizing and job losses are slowing, more than 6 million Americans have lost their jobs since November 2007, pushing unemployment over 9 percent.
Americans have also voted for historic political change, electing a new Congress and President Barack Obama. Under the leadership of President Obama, a bipartisan plan to reform America's economic future is underway. Congress passed and the President signed a robust economic stimulus plan to save and create new jobs - a plan that is already helping our economy. As I stand before you today, policy makers are shaping plans to reform America's broken healthcare system. We have laid financial sector regulatory reform plans. And legislation to encourage alternative energy and address global climate change is moving forward.
These and other domestic economic reforms promise to make America's economy more competitive and prosperous for generations to come. America's domestic economic reforms are also a commitment to the global economy. For an America more competitive and prosperous at home is also an America that can be more ambitious and engaged with its economic partners around the world. This engagement will not only benefit Vietnam and other countries, enhancing their exports, creating jobs and raising standards of living, but it will also create more jobs at home by increasing U.S. exports to the world.
The dynamic economies of Asia are at the heart of America's global economic engagement. Economies like Vietnam, that have embraced the global trading rules of the WTO and engaged the United States in vigorous bilateral trade agreements. Countries that want to find solutions to our challenges, and find a way to say "yes" to difficult questions.
Even in these difficult economic times, U.S.-Vietnam trade and economic ties give us grounds for optimism. Last year, bilateral trade in goods grew 25 percent to reach an all time high of nearly $16 billion. While Vietnamese exports to the United States continued to grow at a rapid pace, U.S. exports too grew nearly 50 percent last year, and agriculture exports grew over 80 percent. These numbers support well-paying jobs and strengthen our bilateral trade ties. U.S. investment too has been significant, supporting an even deeper economic relationship.
It is on these successes that the United States and Vietnam are building and will continue to build, as well as on our common pragmatism and desire to "get to yes." Shortly after Vietnam's WTO accession, the United States and Vietnam concluded a Trade and Investment Framework Agreement, or TIFA, that now serves as the focal point of our dialogue to strengthen and deepen our bilateral trade relations. Together we are using the dialogue to discuss and resolve outstanding bilateral issues and also to explore new initiatives to expand trade. In the tradition of the cooperation we provided under the BTA, the United States is also incorporating considerable technical and capacity building assistance into our bilateral dialogue to strengthen the ability of Vietnam's ministries to implement trade policies and further legal reforms.
We approach these TIFA discussions as equals and partners, where both Vietnam and the United States will ask and answer difficult questions on issues like GSP, and address controversial policies like those concerning catfish. The TIFA framework also holds open the possibility of developing new policies and reforms, and provides a forum for discussion of future bilateral and regional agreements.
We will continue to engage in issue-specific dialogues on labor, human rights, and Vietnam's market economy status. These issues do not have easy answers or quick solutions. For example, we commend Vietnam for undertaking a comprehensive labor law reform and understand such far reaching reforms require thoughtful assessment and deliberation. However, as Vietnam considers how best to move forward the process of reforming its labor regime, we also encourage the Government of Vietnam to take interim steps or implement interim measures. Measures that would help address concerns on these issues and further strengthen bilateral ties. Measures that much like the Bilateral Trade Agreement was for WTO accession, can serve as benchmarks for future successes.
The United States and Vietnam also have engaged in Bilateral Investment Treaty, or BIT, discussions. A BIT will further ensure fair and equitable treatment for Vietnamese and U.S. investors and further boost investment that creates jobs and increases productivity. Ambassador Kirk and I were encouraged by progress our negotiators reported from BIT discussions in Hanoi in June. We look forward to moving these discussions forward over the coming months.
Beyond strengthening our bilateral economic ties with Vietnam, the United States' engagement with Asia will embrace and enhance regional economic institutions. This month, when Senior Officials of the Association of Southeast Asian Nations meet, U.S. officials will present new ideas to enhance our ties with ASEAN. Southeast Asia is America's fifth-largest trading partner behind only Canada, Mexico, China, and the European Union. To make our ties even stronger, the United States has proposed seven new areas to enhance engagement: trade facilitation, logistics services, digital economy, trade finance, transparency, and a government to business dialogue. I believe that each area offers great promise for the U.S.-ASEAN partnership, and will clear the path for an even more ambitious economic agenda. We hope to work closely with Vietnam on these proposals as it prepares to chair ASEAN next year.
In addition, the United States is also working within APEC to engage the Asia-Pacific region. Our main priority in this organization continues to be the regional economic integration agenda - which Vietnam was so instrumental in launching when it hosted APEC in 2006. APEC in many ways is uniquely positioned to advance this agenda - given its membership and its significance to the world economy. APEC economies represent over half of the world's economic output and over 40 percent of world trade.
Ambassador Kirk and I will be travelling to Singapore next week for the Annual APEC Trade Ministers' meeting. We plan to use this occasion to engage our counterparts on how we can work together to push forward a bolder vision for APEC - focusing on areas such as services, and the environment - for which this organization can serve as a global incubator. We will also seek to explore ways to more closely bind the futures of the the Asia-Pacific economies. And, we hope to lay the foundation for what will be a significant agenda when the United States hosts APEC in 2011, further anchoring America's engagement in Asia.
As much as Vietnam has changed since I first arrived here seven years ago, so much remains familiar. I feel the familiar and infectious excitement and optimism. I feel the sparks of ambition and ingenuity in the conversations with my many Vietnamese friends. I see the familiar hope and potential on the faces of young people crowding Hanoi's streets. And as I travel around Asia, I see that Vietnam's emergence as a competitive manufacturing base with a clear vision of where it wants to take the economy has changed not only Vietnam, but the dynamic in the entire Asia region.
I am pleased to have the opportunity to return to Vietnam in my new job and hope to do so again soon, to experience the new and the familiar, and to drive forward President Obama's international economic agenda in Asia. I know that together we can succeed in taking our economic relationship to new heights. I look forward to your questions and suggestions, so long as no one recommends I try to get back on that Honda Dream motorbike.