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 American servicemen;

• 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 development projects;

• 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 (ASEAN);

• 1995 -- The United States opens normal diplomatic relations with Vietnam;

• 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 to Vietnam;

• 1998 -- Vietnam joins the Asia Pacific Economic Cooperation (APEC) forum;

• 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 2000;

• 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. citizens

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 phytosanitary measures.

• 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 signals.

• 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 five years.

• 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.

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