While still a communist country, Vietnam is home to hundreds of multinational companies with an economy that has doubled in size during the last decade.

“Vietnam is one of the world’s fastest-growing economies and we see a great opportunity for american manufacturers to participate,” says Michael Violette, president of Washington Laboratories, an engineering testing lab based in Gaithersburg, Md. For the past 20 years, Washingtonton Labs has provided critical testing services to U.S. manufacturers to help them comply with international industry standards. The firm works with more than 200 American manufacturers to prepare their products for foreign markets.   

Violette recently returned from a visit to Hanoi, Vietnam, where he held a workshop with Underwriter Laboratories and the local government standards body, the Directorate for Standards and Quality, for about 130 Vietnamese engineers and manufacturing firms on conformity standards for various industries including electronics, food and toys.

While still a communist country, Vietnam is home to hundreds of multinational companies with an economy that has doubled in size during the last decade. In 2006, Vietnam was accepted into the World Trade Organization (WTO) and as such is now recognized as part of the global trading system. Vietnam’s accession to the WTO also requires implementation of international standards into its trading regime. To fully comply with the WTO, it is necessary that technical barriers to trade be removed so that the Vietnamese market is open and accessible.

While only joining the WTO a year ago, foreign direct investment grew nearly 50 percent in 2006 to $8 billion and Vietnam’s gross domestic product rate has been running this year at a remarkable 8.4 percent clip, one of the fastest in the world. According to the American Chamber of Commerce (Amcham) in Hanoi, total trade between the United States and Vietnam may reach $12 billion in 2007. This would be an eight-fold increase since the Bilateral Trade Agreement (BTA) between the two countries went into effect in December 2001. Once full WTO compliance is achieved, one can only imagine the potential growth for Vietnam.

Amcham Chairman Chris Muessel recently stated that while Amcham is very pleased with cooperation between governments and businesses, U.S. exporters are not yet enjoying the balance of market access opportunities that was promised when the BTA was signed in July 2000. A key factor for American business’ ability to compete in Vietnam is the fact that Vietnam’s system of standards is complicated and not always transparent. This is not a small issue. There are a plethora of trade barriers that prevent American products from entering Vietnam if this is not addressed. Some items are subject to national standards and some are subject to regulations of the functioning agencies; and some are subject to both. “My big concern is limiting technical barriers to trade,” Violette says.

Washington Labs is working with various standards groups and local businesses in Vietnam to help harmonize the various standards that will have the effect of bringing down these trade barriers. Common standards and regulations reduce transaction costs and provide investor confidence. By providing common reference points for quality, safety and best practices, industry increases its competitive position and countries that encourage quality and conformity also enhance their investment environment. It appears as if Vietnam has learned from others countries’ mistakes and wants an open and level playing field. This will be good for Vietnam and for American manufacturers who want to participate in this economic juggernaut.

Washington Labs provides conformity assessment services to ensure American products don’t get blocked from entry to overseas markets. The firm’s approach to success in Vietnam has been to promote an inclusive approach so that rules and policies are written to provide equal market access for all. “No other private sector group is playing this particular role from industry,” Violette said.

The firm is acting as a catalyst, bringing different players from different sectors to focus on these issues. They are not only engaging the Vietnamese authorities, but the local test lab authorities in the food, safety, construction materials, energy and infrastructure sectors. “Washington Labs, working on behalf of the American Council of Independent Labs and the U.S. conformity assessment system in general, should be commended for making important contributions to the U.S.-Vietnam business-to-business engagement,” says Dao M. Le, commercial officer, U.S. Consulate General, Ho Chi Minh City, Vietnam.

“The timing of our involvement in Vietnam is just right,” Violette says. As a smaller country, Vietnam requires a great deal of external aid and investment and is looking for cooperative relationships. Vietnam is a good bet and a key access point to the rest of the Association of South East Asian Nations (ASEAN), representing more than 500 million potential consumers.  “Engagement in Vietnam is access to ASEAN and their access to standards,” Violette says. “If we get this right, it allows us a great launching point for the region.”  

Although Washington Labs may be playing a unique role from the private sector side, it is not working alone on this standards issue. The U.S. Commerce Department, the U.S. Trade Representative’s Office, the National Institute of Standards and Technology and the U.S. Trade Development Agency (USTDA) have all been active in looking after U.S. industry interests related to standards and technical regulations. “We have been working on industry standards for the past 10 years, but recently we’ve adopted a broader standards cooperation initiative, starting in China, and have added initiatives in Vietnam and India,” says Henry Steingass, regional director for South East and South Asia, USTDA. The U.S. government agency is charged with advancing economic development and U.S. commercial interests in developing and middle-income countries like Vietnam.

Given the impact of standards conformity on trade regimes and implications for U.S. exports, USTDA has become an active player at the macro level, bringing various groups together. “We want to help shape a standards environment that recognizes transparent and non-exclusionary standards as the global standard, while also helping Vietnam with its WTO obligations,” Steingass says. “Our trade interests are to promote standards where U.S. companies are included.” USTDA sees direct commercial opportunities evolving from the conformity standards process in Vietnam in the construction, public utilities/power, communications, information technology, chemicals and chemical disposal markets.

As a key private sector catalyst for industry harmonization, the opportunities for Washington Labs are profound in Vietnam. Specifically, providing technical services for the burgeoning electronics industry is a distinct need. Second, opening a testing laboratory is of interest. It is still early in the country’s development and the upside is all there; Vietnam is now on the verge of taking off.

“The pace of change is quickening, so the game will be won by the early entrants, many of whom are already in place,” Violette says. “We don’t want to be left on the sideline.”

Peter R. Gourlay is the president of the Maryland-Asia Environmental Partnership and chairman of the Business Growth Committee of the World Trade Center Institute. He can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .