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U.S. AID FOR TRADE Vietnam STAR Project

U.S. AID FOR TRADE Vietnam STAR Project. Walter North Director USAID Mission, Jakarta. June 14, 2011 Jakarta, Indonesia. STAR Support for U.S. - Vietnam Bilateral Trade Agreement. U.S.-Vietnam BTA entered into force in December 2001

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U.S. AID FOR TRADE Vietnam STAR Project

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  1. U.S. AID FOR TRADEVietnam STAR Project Walter North Director USAID Mission, Jakarta June 14, 2011 Jakarta, Indonesia

  2. STAR Support for U.S. - Vietnam Bilateral Trade Agreement • U.S.-Vietnam BTA entered into force in December 2001 • Contains comprehensive requirements related to: trade in goods and services, IPR, commercial law and dispute settlement, transparency, business facilitation, and investment • STAR program has achieved significant results in supporting the Government’s trade reform agenda • Modernizing legal and regulatory framework • Adopting internationally accepted standards • Strengthening institutional and human capacity and streamline administrative procedures • STAR supported trainings, activities and reforms that created a better business enabling environment leading to greater economic growth

  3. Key Factors for Success • Aid for Trade is a complement to trade liberalization • Aid for Trade works best when host government is committed to the project • U.S. Aid for Trade priorities are demand-driven and developed primarily through USAID bilateral missions

  4. What does this mean for STAR?

  5. Improvements in Legal and Economic Policy Environment Supported by STAR • Reform laws and regulations • Increased judicial independence • Strengthened National Assembly • Strengthened institutional capacity • Training GVN officials and business leaders “A variety of factors were responsible for the changes in trade and investment patterns, but a sound and predictable legal framework is one of the most important considerations.”(Support for Trade Acceleration II Project [USAID STAR II]) (October 30, 2010)

  6. STAR Supported Trade-Specific Reforms • Develop approx. 75 laws/regulations related to trade liberalization needed to implement BTA in areas including IPR, standards, and investment • Provide research on bilateral investment treaties • Build institutional capacity related to TBT and SPS • Train government officials and private sector on trade remedies • Develop online tariff database for GVN Customs • Trained approximately 1,000 faculty members on fundamentals of WTO law and economics of international trade

  7. Trade and Investment Impacts • U.S.-Vietnam trade accelerates significantly: • U.S. has become largest market for Vietnamese exports • Vietnam has become a solidly growing market for U.S. exports • FDI has expanded dramatically • U.S. has become one of Vietnam’s largest suppliers of investment “The striking expansion in economic activity between the two countries translated the BTA’s policy and legal changes into economic reality.”(Supporting Vietnam’s Legal and Governance Transformation (USAID, February 2008))

  8. Growth in U.S.-Vietnam Trade

  9. Growth in U.S.-Vietnam Trade

  10. Foreign Direct Investment in Vietnam Expands Foreign Direct Investment: Approved Amounts, Projects

  11. Implementation Challenges • Limited resources required prioritization of demands (although this also allowed project to be more focused and effective). • STAR program engaged primarily with government of Vietnam despite the important role the private sector plays in making legal and economic reforms work.  Building the private sector’s capacity to participate in reform efforts is also an important element of Aid for Trade that sometimes, including in the case of STAR, could use more attention. • Challenges with subsequent implementation and enforcement of reforms will require ongoing assistance and engagement.

  12. Conclusions • Vietnam demanded STAR technical assistance and owned the activities • Example of effective donor coordination to support trade liberalization in partnership with host government • Strong U.S. – Vietnam partnership for economic growth

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