Ho Chi Minh City - Deputy U.S. Trade Representative Karan Bhatia and
Vietnamese Deputy Minister of Trade Luong Van Tu today formally signed a
bilateral market access agreement that is required as part of Vietnam’s bid to
accede to the World Trade Organization (WTO). The bilateral agreement, which
will be implemented fully when Vietnam joins the WTO, will create significant
new opportunities for U.S. producers and exporters of industrial and
agricultural goods as well as U.S. services providers.
"This is a great agreement for the United States. It opens a vibrant and
growing market for American agricultural goods, a range of services, and
manufactured products. It also opens the door for Vietnam to join the
international rules-based trading system. Through this agreement, Vietnam will
become more transparent in its regulatory trade practices, enhance the economic
freedoms enjoyed by its people, and establish a more level playing field between
Vietnamese and foreign companies," said Ambassador Bhatia.
"While we work internationally with our trading partners and Vietnam on the
multilateral aspects of the accession, we will be seeking the approval of
Congress for Permanent Normal Trade Relations (PNTR) status for Vietnam. We
believe there is strong bipartisan support for the PNTR and will continue to
work closely with both parties in Congress in the hopes of completing that
process as soon as possible," added Bhatia.
"This truly is an historic step in the relationship between out two
countries. It marks the passing of another milestone on the road to full
normalization of relations between our two countries. Eleven years ago, the
United States and Vietnam agreed to a roadmap to normalize relations. Both
Republican and Democratic Administrations have followed that roadmap and the
agreement that we sign today moves us a step closer toward fulfillment of a
mutual goal -- Vietnam’s WTO accession," Bhatia concluded.
Vietnam’s tariff commitments in the agreement include membership in the
Information Technology Agreement (ITA) that provides for duty-free entry of IT
products such as computers and semiconductors. Vietnam has also agreed to zero
duties on aircraft. Over 94 percent of U.S.
exports of manufactured goods will face duties of 15 percent or less upon
implementation of Vietnam’s accession commitments. Approximately three-fourths
of U.S. agricultural exports to Vietnam will face bound tariff rates of 15
percent or less.
U.S service providers will benefit in particular from more open access in the
areas like telecommunications (including satellite services), distribution,
financial services (including branching for insurance in addition to existing
branching commitments with respect to banking) -- and energy services.
The bilateral market access agreement also addressed the application of
science-based measures in regulating products that are a priority to U.S.
exporters of agricultural products. Other issues that are addressed include
shelf-life requirements and market access for large motorcycles and technology
products with encryption. Vietnam will reduce export duties on non-ferrous and
steel scrap, and eliminate WTO prohibited industrial subsidies. Vietnam will
immediately stop disbursements under the key subsidy program for Vietnam’s
textile and garment industries and terminate all WTO-prohibited subsidies to
these industries on accession to the WTO.
Vietnam has been negotiating its terms of accession to the WTO since 1995. To
complete its accession bid, Vietnam must complete multilateral negotiations on a
Working Party Report and Protocol of Accession that details the changes Vietnam
will make to bring its trade regime into conformity with WTO rules. Vietnam is
continuing to enact and implement legislation that will enable it to apply WTO
provisions after its accession. It is making rapid progress in this effort.
To effectuate the agreement, Congressional action is necessary to terminate
application of the Jackson-Vanik amendment to Vietnam and authorize the granting
of permanent normal trade relations (MFN) tariff treatment to products of