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 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
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
1995 The United States opens normal diplomatic relations
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
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 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
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.