Vietnam Bilateral Trade Agreement
Historic Strengthening of the U.S.-Vietnam Relationship
In 1993, President Clinton began a policy of normalization of relations
with Vietnam to encourage Vietnam's cooperation on issues of interest to
the United States and to promote Vietnam's integration into the region
and the world economy. The decision to pursue the trade agreement was
made after Vietnam had established a record of cooperation in accounting
for POW-MIA's from the war, the highest priority in our relations.
The Bilateral Trade Agreement signed on July 13, 2000, marks a key step
in the historic reconciliation between the United States and Vietnam.
By normalizing trade relations and committing Vietnam to sweeping
economic reform, it will help lay the foundation for a new American
relationship with Vietnam.
The policy of normalization has led to:
Strengthened cooperation on the fullest possible accounting of our
missing from the war. Since 1993, the United States has undertaken 39
joint field activities with Vietnam, repatriated 288 possible sets of
remains, and identified the remains of 135 formerly unaccounted for
Resettlement of tens of thousands of refugees through the Orderly
Departure Program and related programs. Over 500,000 Vietnamese have
emigrated as refugees or immigrants to the United States and only a
small number of refugee applicants remain to be processed.
Enhanced cooperation in combating narcotics trafficking, promoting
human rights and religious freedom and expanding economic linkages. Our
human rights dialogue, begun in 1993, has led to release of prisoners
and some improvements in the overall situation.
The process of normalization has been accomplished in a step-by-step
manner, leading to the Bilateral Trade Agreement:
1989 -- Vietnam withdraws from Cambodia and seeks admission into
regional organizations, sending a clear message that Vietnam intended to
play a positive role in regional security and economic liberalization;
1993 - The President authorizes the United States to support
international lending for Vietnam and allows for U.S. firms to join in
1994 - The President lifts economic embargo to allow U.S. firms to
export to Vietnam and compete for business opportunities in Vietnam that
had been closed;
1995 -- Vietnam joins the Association of Southeast Asian Nations
1995 -- The United States opens normal diplomatic relations with
1996 -- The United States begins negotiations with Vietnam on a
Bilateral Trade Agreement that would improve the opportunities and
protections available to U.S. firms;
1997 -- Exchange of ambassadors. President Clinton appoints former
Congressman and POW, Douglas "Pete" Peterson to be the U.S. Ambassador
1998 -- Vietnam joins the Asia Pacific Economic Cooperation (APEC)
1998 -- The United States grants the first waiver of the
Jackson-Vanik amendment extending U.S. export promotion and investment
support programs to Vietnam. The waiver was then renewed in 1999 and
1999 -- The United States and Vietnam reach an agreement in
principle on key provisions of the Bilateral Trade Agreement; and
2000 -- The United States and Vietnam reach final agreement on the
Bilateral Trade Agreement, fulfilling the President's goal of
negotiating a comprehensive trade agreement with Vietnam that would
advance reform by leading to significantly more open markets and to
Vietnam's firmer integration into the global economic community.
Vietnam has made a comprehensive set of commitments on: tariffs and
non-tariff barriers for industrial and agricultural goods, the full
range of services, intellectual property rights, investment,
transparency and other issues. This constitutes for the first time a
broad opening of Vietnamese markets for the United States, and will
provide a major stimulus to Vietnam's economic reform efforts. This
agreement sends a positive signal regarding Vietnam's commitment to
integrating into the world economy and is an important step toward both
the development of the rule of law in Vietnam and its eventual
membership in the World Trade Organization (WTO).
The agreement has five major sections, including:
-- Dramatic new market access for agricultural and industrial goods
for American citizens and companies;
-- Increased intellectual property rights protection;
-- Market access in a broad array of service sectors;
-- Investment provisions to protect U.S. investments; and
-- Transparency Measures making Vietnamese laws, rules, and
regulations in these areas public and including a right to appeal for
U.S. total (two-way) goods trade with Vietnam totaled $900 million in
1999. Exports to Vietnam have increased considerably in recent years
from $4 million in 1992 to $291 million in 1999.
DETAILS OF THE BILATERAL TRADE AGREEMENT
The agreement has five major sections:
Market Access for Industrial and Agricultural Goods. Vietnam
agrees to allow all Vietnamese firms, and over time U.S. persons and
firms, the right to import and export freely from within its borders for
the first time. It has agreed to sharply lower tariffs on the full range
of U.S. industrial and agricultural exports, phase out all non-tariff
measures, and to adhere to the WTO standards in applying customs, import
licensing, state trading, technical standards and sanitary and
Intellectual Property Rights. Vietnam agrees to adopt the WTO
standard for intellectual property protection within 18 months and take
further measures in several other areas such as protection of satellite
Market Access for Services. Vietnam allows U.S. persons and firms
to enter its services market in the full range of services areas,
including financial services (insurance and banking),
telecommunications, distribution, audio visual, legal, accounting,
engineering, computer and related services, market research,
construction, educational, health and related services and tourism.
These commitments are phased-in over time, typically within three to
Investment Provisions. Vietnam has agreed to protect U.S.
investments from expropriation, eliminate local content and export
performance requirements and phase out its investment licensing regime
for many sectors.
Transparency Provisions. Vietnam has agreed to adopt a fully
transparent regime with respect to each of the four substantive areas
above, by issuing draft laws, regulations and other rules for comment,
ensuring that advance public notice is given for all such laws and
regulations, that these documents are published and available, and by
allowing U.S. citizens the right to appeal rulings made with respect to
all such relevant laws and regulations.
Under U.S. law, for Vietnam to receive annual NTR status, a bilateral
trade agreement must be completed and approved by Congress, and the
President must waive the "Jackson-Vanik" provision, indicating that such
a waiver would substantially promote freedom of emigration from Vietnam.
Since 1998, the President has granted the annual Jackson-Vanik waiver
for Vietnam. Thus, completion of this agreement, and its subsequent
approval by Congress, would clear the way for Vietnam to receive NTR
treatment on an annual basis. This in turn would bring Vietnam's trade
commitments into force.