- Vietnam has pushed Biden administration for upgraded status
- Decision follows boosting of diplomatic ties between nations
The Biden administration rejected Vietnam’s request to be classified officially as a “market economy,” a setback for the country’s efforts to boost exports to its most important market.
The trade-dependent Southeast Asian economy has pressed the administration to revise the status since the upgrade in diplomatic ties during a visit by President Joe Biden to Vietnam in September last year.
The “non-market” economy label mainly works against Vietnam when the US applies anti-dumping complaints. A change would have been a signal of closer ties at a time when the US is seeking to bolster relationships in the region as a counterweight to China.
“Despite Vietnam’s substantive reforms made over the past 20 years, the extensive government involvement in Vietnam’s economy distorts Vietnamese prices and costs and ultimately render them unusable for the purpose of calculating US antidumping duties,” the US Commerce Department’s International Trade Administration said in a statement.
Vietnam filed the request to the Commerce Department last September and has appealed directly to US officials, including Treasury Secretary Janet Yellen, citing economic reforms made in recent years.
Vietnam, which has signed numerous free trade agreements, is making greater access to the US market a priority. Its total trade — exports and imports — is equivalent to about twice the size of its economy.
Changing Vietnam’s market status has drawn bipartisan Congressional push-back, with critics arguing Vietnam’s control over prices and production and subsidized enterprises threaten America’s manufacturing base.
The US in 2022 removed Vietnam from its monitoring list for currency manipulation, curbing the risk of higher tariffs. The country pledged last year not to use its foreign exchange policy to boost trade.
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