In September 2024, Vietnam celebrated the first anniversary of its Comprehensive Strategic Partnership with the United States. This milestone underscores the nation’s commitment to collaboration across pivotal industries, fostering economic growth and advancing sustainable innovation.
The U.S. is now Vietnam’s 11th largest foreign investor, primarily in the semiconductor industry, which is expected to grow at an 11.62% CAGR from 2023 to 2027, reaching USD 20.15 billion. Integrated circuits alone have generated USD 16.44 billion in revenue this year.
To bolster this growth, the U.S.-backed Policy and Supply Chain Leadership Institute was launched in Hanoi. In the first eight months of 2024, U.S. investment rose by 27.5% year-on-year, totaling USD USD 135.8 million through capital injections and stake acquisitions. Companies like Procter & Gamble plan to invest USD USD 100 million to expand production, while AES focuses on renewable energy.
The partnership also covers infrastructure, energy transition, and digital innovation. Recently, Vietnam welcomed 50 U.S. businesses and signed a USD 3.2 million USAID agreement with the Ministry of Industry and Trade to enhance digital trade and the economy. Agribank and VPBank also strengthened financial support for agriculture, reinforcing rural development cooperation.
Enhancing Sustainable Energy and Green Growth
The partnership between Vietnam and the United States underscores a commitment to sustainable energy, as evidenced by the Direct Power Purchase Agreement (DPPA) executed in July 2024. This agreement facilitates the direct purchase of electricity by firms from private producers, thereby fostering investments in green energy.
The Ministry of Industry and Trade (MOIT) and the United States Agency for International Development (USAID), after eight years of collaboration, are at the forefront of initiatives designed to promote environmentally sustainable solutions. Key areas of focus include the reduction of greenhouse gas emissions, enhancement of waste management practices, and the adoption of innovative agricultural techniques, such as the environmentally friendly incineration of rice straw.
Expanding France-Vietnam Strategic Cooperation
Vietnam has strengthened its ties with France, becoming the first European country to establish a Comprehensive Strategic Partnership in October 2024. This partnership focuses on aerospace, airport infrastructure, and artificial intelligence (AI), with French investments also expanding into telecommunications, healthcare, manufacturing, food, and high-quality agriculture.
A key development is France’s commitment to ratify the EU-Vietnam Investment Protection Agreement (EVIPA), which aims to ease trade barriers and address the yellow card issue affecting Vietnam’s seafood exports to the EU.
Additionally, the two countries are collaborating on the Just Energy Transition Partnership (JETP) to improve Vietnam’s renewable energy infrastructure, leveraging France’s expertise in hydrogen technologies and renewable energy to meet global environmental standards.
Growing Trade and Investment between Vietnam and France
Trade relations between Vietnam and France have shown a robust expansion, with bilateral trade hitting USD 3.4 billion within the first eight months of 2024, marking a 6.9% increase compared to the previous year. France has ascended to become Vietnam’s fourth-largest European trading partner, with the trade volume multiplying by 1.5 times since the inception of the Strategic Partnership in 2013. A significant trade and business exchange event was hosted in France on October 21, 2024, with the goal of showcasing Vietnamese products and forging enduring business ties with French entities.
The alliance between Vietnam, France, and the U.S. underscores the importance of circular agriculture and eco-friendly solutions, fostering sustainable methods across various sectors and diminishing the ecological footprint. These joint efforts are instrumental in bolstering vital areas such as water management and infrastructure, which are in line with Vietnam’s ambitions to enhance sustainability and cater to the growing domestic and industrial needs.
These partnerships are also pivotal in backing energy transition endeavors, contributing to an 11.11% surge in the electricity production sector in the third quarter of 2024. Initiatives like the Direct Power Purchase Agreement (DPPA) are pivotal in promoting renewable energy, meeting energy requirements while minimizing environmental impacts, and spurring further development in the manufacturing and logistics domains.
Investments derived from these international partnerships have spurred the growth in the processing and manufacturing sectors, which saw a 9.76% increase. Prominent industries such as automotive, furniture production, and refined petroleum have reaped the benefits of improved supply chains and the integration of green technologies. These enhancements have positioned these sectors to align with international market standards, opening up new export avenues and reinforcing Vietnam’s presence in the global supply network.
In essence, these global collaborations are instrumental in fortifying Vietnam’s industrial framework and championing sustainable development for the long haul, nurturing innovative approaches and solutions.