California wines feature prominently on the websites of Vietnamese online wine retailers due to high consumer demand. Image: CGR Wine Expert

Strong Trade Ties Underpin the Vietnam-California Relationship

ASEAN The Mekong

In mid-October, Vietnamese Ambassador to the United States Pham Quang Vinh visited California with the aim of expanding their trade relationship. In his op-ed in the Sacramento Bee, he highlighted the 37% annual growth of American wine exports to Vietnam, of which Californian wines comprise the vast majority, at 95%. Vietnam is also the 9th largest export market for California wine producers.

In 2000, the United States and Vietnam signed a bilateral trade agreement, which reduced tariffs on trade in goods and services, protected intellectual property, and improved investment relations between the two countries. Since then, trade has grown rapidly between the two countries, and California has done especially well. Two-way trade between Vietnam and California currently totals $9.2 billion. California’s main export goods include computer and electronic products, agriculture products, food, chemicals, and waste and scrap. Additionally, of the 90,057 Californian jobs that are supported by exports to ASEAN, 44,850 Californian jobs are supported by exports to Vietnam alone, or roughly half of the total.

Vietnam is the 10th largest global export market for California’s agriculture sector, with the state exporting around $333 million worth of agricultural goods to Vietnam in 2013, up 69% from the previous year. For example, walnut exports from California to Vietnam have been strong in the last few years, even beating California’s walnut exports to China in the first three months of the 2014/2015 season, despite the significantly larger market in China.

The bond between California and Vietnam goes beyond economic ties. California has the highest number of Vietnamese residents of any state, with more than 580,000, which is triple the number in Texas, which ranks 2nd. In his op-ed, the Vietnamese ambassador also expressed a hope that California’s Vietnamese-American population would contribute to the continuing development of their homeland.

Recent years have also seen other US states, such as Arkansas, expanding trade relations with Vietnam. As Vietnam is one of the 12 nations, along with the US, working to implement the TPP agreement, Ambassador Vinh expressed his belief that bilateral economic cooperation will be further expanded once the agreement is adopted.

Raveena Ugale is a Research Intern at the East-West Center in Washington and a Senior at the George Washington University.