U.S.- Vietnam Bilateral Trade Agreement

October 2001

On October 16, 2001, President Bush enacted the U.S.-Vietnam Bilateral Trade Agreement (BTA). Earlier this month, the Senate had approved it by a vote of 88-12. The Agreement is now before Vietnam’s National Assembly, which is expected to take up the matter in mid-November. Once Vietnam ratifies it, the countries will exchange written notifications that each has inacted the BTA at which point the agreement will be fully implemented.

The BTA will grant Vietnam normal trade relations with the United States, and is expected to create a predictable and transparent business environment for U.S. companies. It should increase the volume and variety of products currently traded between the two countries. Up to now, Vietnam has exported to the United States mostly shrimp, footwear, coffee, petroleum products, and cashews. The United States has exported to Vietnam primarily aircraft, industrial machinery, office machinery, footwear parts, telecommunications equipment, and fertilizer.

The Agreement, which was signed on July 13, 2000 by former United States Trade Representative Charlene Barshefsky and Vietnam’s Trade Minister Vu Khoan, covers four areas: (1) Market Access, (2) Intellectual Property Rights, (3) Trade in Services, and (4) Investment. In market access, Vietnam has agreed to eliminate quotas over 3-7 years, reduce tariffs on 250 specific products by 30-50%, and adhere to WTO rules in applying customs, import licensing, technical standards, and sanitary and phytosanitary measures. With respect to intellectual property rights, Vietnam has agreed to phase in over 18 months the WTO Agreement on Trade Related Intellectual Property Rights (TRIPS). In the area of services, Vietnam has agreed to allow U.S. companies to invest in its service sector, including banking, insurance, and telecommunications. Finally, in investment, Vietnam will phase out investment screening, provide foreign multinationals the same rights to convert currency as Vietnamese corporations, and allow U.S. companies within 3 years to select executives without regard to nationality