1. In what way does the political environment in Vietnam pose both an opportunity and a threat for American MNCs seeking to do business there?
Vietnam used to have a bad political environment for the United States to trade with due to the Vietnam War from the mid-1970s. However, Vietnam is now well on its way in establishing a vigorous trading relationship with the United States. In 1993, United States permitted the U.S. companies to take part in ventures in Vietnam that were financed by international aid agencies. Then a growing number of American firms began doing business in Vietnam. Vietnam is also the 150th member of the World Trade Organization. The entering of Vietnam shows the willingness of Vietnam government to open its trade market. The Vietnam government may have found that the economy of its neighbors in Southeast Asia, such as Thailand and Malaysia, has grown rapidly. However, the economy of Vietnam has been up and down, and it has lagged behind its neighbors. It might be the reason why Vietnam government started to warm up its relationship with the United States and enter the WTO. As the country has the willingness to build trade relationships with other countries, the United States MNCs will have opportunity to do business in Vietnam.
However, before Vietnam had entered the WTO, the trading market in Vietnam was not that easy for the U.S. MNCs. There are numerous and ever-changing bureaucratic rules enacted by the communist government officials. Things went better after Vietnam joined the WTO, but these concerns can never be solved because of the differentiation of the social formation. As a communist country, Vietnam government still closely controls the economy and can affect free trading market. The opportunity of the U.S. companies will be limited due to the interference of the Vietnam government.
2.
Vietnam is a true emerging marketing which can offer ground floor and growing opportunities for the U.S. MNCs. In recent years, the economy growth rate of Vietnam has been among the highest in the world. The trading market of Vietnam has great potential for both exporters and investors.
After the country has entered the WTO, its accession to the WTO provides a context of greater certainty and predictability in the business and broader economic environment. Vietnam received more than US$85.5 billion in foreign direct investment in 2008 and 2009, exceeding the total of US$83.1 billion in the previous 20 years. Even among the global recession in 2010, U.S. exports to Vietnam grew by an impressive 19.8 percent to US$3.7 billion. Besides that, the bilateral trade investment momentum has continued with the United States and Vietnam signing a Trade and Investment Framework Agreement in 2007 stating that the U.S. and Vietnam will continue to address trade and investment issues with the aim of advancing Vietnam’s WTO commitments. This country offers a lot of potentials to the U.S. investors and exporters by opening its free trade market.
When compared with China, Vietnam is regarded as the new China in future’s world market. Some analysts state that the wages of