Fact Sheet on the US-Vietnam Bilateral Trade Agreement

click here for White House Fact Sheet on the Bilateral Trade Agreement


On June 8, 2001, the White House submitted a request to Congress for the extension of Normal Trade Relations or NTR status for Vietnam. Congress is likely to vote on this request before the August 2001 recess. The U.S. and Vietnam signed an Agreement on Trade Relations on July 13, 2000.

What is Vietnam’s current trade status?

While Vietnam has granted U.S. products NTR tariffs on a waiver basis, the U.S. has not granted Vietnam NTR status since the end of the war. Vietnam is one of only six countries that do not have NTR status, including Afghanistan, Cuba, Laos, North Korea, Serbia & Montenegro. Now that the trade agreement has been signed and submitted to Congress, procedures for its approval can begin.

How does Vietnam receive NTR status under U.S. Law?

In order for Vietnam to receive NTR status from the U.S., the following criteria must be met under Title IV of the Trade Act of 1974, as amended: 1) A waiver of the Jackson-Vanik Amendment must be in force and renewed annually by the President; and 2) the U.S. and Vietnam must have concluded a bilateral trade agreement. With these two items in place, NTR is extended through a joint “approval resolution” passed by both the House and the Senate. NTR status for Vietnam will be subject to annual renewal each summer through the continuation of the Jackson-Vanik waiver. The trade agreement itself must be renewed every three years.

What are the Congressional procedures for the Jackson-Vanik waiver?

The first waiver of the Jackson-Vanik amendment was granted in 1998. Under the Trade Act of 1974, as amended, this waiver needs to be renewed annually. On June 1, 2001, the White House submitted its annual request to waive Jackson-Vanik for Vietnam. Congress now has the opportunity to disapprove the overall authority, or to withhold it for Vietnam alone through a joint resolution of disapproval, which must pass both chambers before September 1st. If Congress does not vote to disapprove, this waiver is automatically renewed. Thus far the Jackson-Vanik waiver for Vietnam has only allowed for EXIM, OPIC and other trade agencies to operate in Vietnam, but as in the case of China from 1979 to the present, once Congress approves NTR status, an annual Jackson-Vanik review will be required until Vietnam is accepted into WTO and receives PNTR from Congress.

What are the Congressional procedures for NTR and legislative timetable?

Pursuant to Section 152 (b) of the Trade Act of 1974, as amended, an approval resolution for NTR status is first introduced (by request) to the House and the Senate and then is referred to the House Ways and Means Committee and the Senate Finance Committee. As a Jackson-Vanik country and being a revenue bill, the NTR request has a built-in timetable and procedures for Congressional consideration and must pass the House before being voted on by the Senate. The agreement cannot be amended and the request must be voted on by the House and the Senate within 90 session days of the President’s submission of the agreement to Congress, with a maximum of 45 legislative days in the House Ways & Means committee, 15 days on the House floor, 15 days in the Senate Finance Committee, and 15 days on the Senate floor. Debate on the floor is limited to 20 hours each for both Houses. Both the House and the Senate must vote in favor of NTR for it to be granted.

What happens after Congressional approval?

Upon Congressional approval in the U.S. and ratification of the trade agreement by Vietnam, diplomatic notes are exchanged between the two heads of state, formally extending reciprocal NTR status. Following this, the executive order is signed, submitted to the Federal Register, and NTR status for Vietnam becomes law. Tariff duties for Vietnamese products entering the U.S. thus shift from Column 1 to Column 2 rates.

What further steps are there in achieving economic normalization with Vietnam?

In the future, Vietnam and the U.S. will also negotiate a bilateral textile agreement and talks are underway for a bilateral aviation agreement. Vietnam will also continue talks with its Working Party for accession into the World Trade Organization (WTO). Upon conclusion of negotiations with the U.S. and other trading partners on WTO accession, which are expected to take 2-4 years, legislation will be submitted to the U.S. Congress requesting the granting of Permanent Normal Trade Relations (PNTR) for Vietnam.

June 26, 2001

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