Biden cannot butter the bread on both sides regarding Vietnam
US President Joe Biden always boasts that his diplomacy with Vietnam is a “highlight” of his foreign policy. The US Department of Commerce held a public hearing on whether to recognize Vietnam’s “market economy status” on Wednesday. It will complete the review and make a final decision on that before July 26.
But the heated discussions at the hearing demonstrate that Biden’s attempts to court Vietnam as a strategic ally conflict with his desire to secure the votes of union workers.
During Biden’s visit to the Southeast Asian country last year, he announced that the US-Vietnam relationship would be upgraded to a “comprehensive strategic partnership”. Later, US Treasury Secretary Janet Yellen called Vietnam a “friendly” investment destination, and declared that the country is a suitable supply chain alternative for the US.
More than 10 countries, including China, Russia, Vietnam, the Democratic People’s Republic of Korea and Azerbaijan, are listed as having “nonmarket economy status” as designated by the US Department of Commerce.
For the “nonmarket economy” countries, the US imposes high tariffs on goods imported from them and allows the imposition of so-called antidumping tariffs.
The US Department of Commerce has established a set of criteria to “determine” whether a country has market-driven economic attributes: whether the country’s currency is freely convertible; whether its wage rates are freely negotiated between labor and capital; whether joint ventures or other foreign investments are allowed; whether the means of production in the country is owned by the state; whether the state controls the allocation of resources and price and output decisions; whether human rights and labor rights are protected in the country.
Yet these criteria are nothing but excuses trying to cover up the fact that the “nonmarket economy” list is a geopolitical tool. Washington has launched many antidumping investigations against Vietnam over the years. In January this year, a number of US senators and representatives wrote to the US Department of Commerce stating that granting market economy status to Vietnam would exacerbate ongoing trade distortions, erode the US’ manufacturing base, and threaten US workers and industry. Things that many workers’ unions have also expressed concerns about.
As such, to try and grant Vietnam market economy status before the US presidential election stems from the Biden administration’s needs to cater to some voters’ demands for “decoupling” from China.