U.S. business takes a second look

“The distance between Washington and Vietnam has closed considerably thanks largely to the effective campaign of the U.S.-Vietnam Trade Council. Founded in 1989, it remains one of the most vocal and active voices for improving economic relationships between the two former enemies. “Even with the success of the signed bilateral trade agreement, our work will continue as we observe how the implementation process will impact on U.S. business operations in Vietnam,” said the evangelical co-founder and president Virginia Foote.

More than 700 American companies are doing business in Vietnam—scores more from offices in the United States. Americans even have their own health center, Columbia-Gia Dinh International Clinic, in Ho Chi Minh City to serve the locals and expats.

Since the country’s reforms appear to be more focused, there is a need for more American companies, large and small enterprises, to take a second look at Vietnam. The first time around investors were equally excited after the first blush of doi moi or renovation in the late 80s. The U.S. ventures that came after the initial normalization process were almost uniformly disappointing. Many companies scaled back or others simply packed their bags and went home. Now there appears to be a possible second wave of cautious optimism and new investments associated with the bilateral trade agreement.

Boeing Airlines year-end block buster sale of four 777s to Vietnam Airlines, which has been valued at $680 million, has set the tenor for a renewed and positive business accord between Vietnam and the United States under the historical bilateral trade agreement ratified by the two countries.

“We are very proud to be preferred and selected by Vietnam Airlines, and we are looking forward to strengthening our partnership with Vietnam Airlines and CAAV as the airline becomes a major carrier in the region,” exclaimed CEO Alan Mulally.

Fred Burke, a youthful veteran of ten years in country and now a managing partner for Baker & McKenzie thinks that “with the signing of the bi-lateral trade agreement, Vietnam has taken huge steps to integrate with the global economy and in the process created more opportunities for US. business.”

Others like Rick Mayo-Smith of Indochina Capital Corporation in HCMC, are less sanguine about the agreement. “Sure this deal will help improve the level playing field here, yet the government must continue to be pressed to continue its reforms in 2002,” remarked the savvy venture capitalist.

Vietnam’s market of 80 million consumers does offer an allure to multinationals from AIG, Motorola and now Boeing, as Vietnam demonstrates its ability to purchase significant goods and services.

Chris Tragakis, head of American International Group’s (AIG) successful Vietnam insurance venture and chairman of the Hanoi Chamber of Commerce, adamantly believes that Vietnam will fulfill its obligations and open up its markets. “ The Vietnamese know that they need full access to the largest market, the US and so they are willing to make the tough decisions and take appropriate actions to make this happen.” added Tragakis.

Since March of 2001, UPS 35-ton payload Boeing 757F freighters have landed and taken off at the busy Tan Son Nhat Airport in HCM City. “Our business is still relatively small but we do anticipate a brighter future,” remarked Charles A. Adams, UPS Asia-Pacific president.

To facilitate their business in the country, namely its weekly cargo flights to and from Vietnam, UPS sealed a deal with Vietnam Airlines. Goods are flown to Taiwan and then to Tokyo and Osaka before en route to 17 major international cities.

“It’s abundantly clear that Vietnam has made great strides since it opened its doors and we continue to witness even faster developments in both the financial sector and stock market,” added US-based Saigon Investment Group LTD’s chairman Gene Schecher.

The Saigon Investment Group is a Nevada corporation formed by Schecher, and Mrs. Nguyen Thi Ngoc Dieu, president, a Vietnamese national. The company was founded in 1997 as a vehicle to bring investment, technologies and development into the Socialist Republic of Vietnam. A license has been granted to them to build a wafer semiconductor factory at the My Tho Industrial Park in Cuu Long, near the Mekong Delta.

According to the Washington based, U.S.-ASEAN Business Council, US. investment in Vietnam in 2000, totaled $1.25 billion in licensed projects.

“Vietnam is already a great place for manufacturing and we believe it will even get better since our workers are educated and we are even providing training, remarked Nike’s Lalit Monteiro, general manager of their Vietnam operations.

Greig Craft, an American consultant and entrepreneur, who has ridden the ups and downs of business relations in Vietnam for 10 years believes that the country is fully committed to moving forward with its reforms.

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