U.s.-Vietnam Bilateral Trade Agreement (Bta)

In accordance with the requirements of Title IV of the Trade Act of 1974 , section 402 of which is commonly referred to as the „Jackson-Vanik Amendment“, the signing of a bilateral trade agreement is a necessary step for the United States to restore the treatment of MFN in some socialist countries, including Vietnam. The approval of the BTA by Congress will allow the President to extend the treatment of MFN in Vietnam. Such MFN status will be subject to conditions, because, as with all Title IV NTAs, it will require annual presidential extensions that Congress may refuse. Conservatives fear that economic reforms will undermine the „socialist foundations“ of the country`s economic and political systems, undermining the legitimacy and monopoly of VCP power. They also fear that Vietnam`s sovereignty could be undermined by Vietnam`s growing economic dependence on the West and Vietnam`s increasing vulnerability to regional economic downturns such as the 1997-99 Asian financial crisis. To their specific concerns are the Conservatives, who fear that the transition to a more market-oriented economy will force the Politburo to reduce subsidies to the country`s state-owned enterprises, the backbone of the socialist economic system. It is understandable that many Conservatives are concerned that further rationalization will increase the unemployment rate, which some estimates are already over 10%. Social and political pressure on the party has been exacerbated in recent years by peasant uprisings and widespread accusations of corruption by the government. The strong pressure exerted by the United States on Vietnam because of its human rights record during Secretary of State Madeleine Albright`s trip to Vietnam in September 1999 would have further pushed conservative forces opposed to the trade agreement. In the field of basic voice telecommunications services (local telephone, remote and international telephone services), press reports indicate that the 1999 agreement would gradually have an investment right after 11 years, with a maximum share of 51% for American companies.

Under the 2000 BTA, Vietnam is expected to allow U.S. companies to create joint ventures after six years, with a 49% cap on U.S. ownership. „There was no other country with such rapid growth in trade with the United States,“ Luong noted. When the BTA came into force on December 10, 2001, the United States immediately granted Vietnamese products and businesses access to the U.S. market – a market that accounts for nearly one-third of global GDP – on the same basis as other countries with which they have normal trade relations. This means, among other things, that Vietnamese products are now subject to much lower tariffs, which increase from an average of 40% to 3% on average when they enter the United States. The Vietnamese side has pledged to reform its trade and investment regime to provide a much fairer and more equitable „playground“ for American companies and products in Vietnam. In many cases, Vietnam`s commitments are gradually introduced over several years, in recognition of the state of transition of the Vietnamese economy and the important reforms needed to bring its regulatory system in line with international standards.

Negotiations on the comprehensive trade agreement were particularly difficult, as Luong only negotiated with socialist countries that have similar institutions and legal systems with Vietnam, he said. „The main obstacle to an agreement was trust. The legacy of the war was heavy and painful. Leaders and the people were cautious in accepting the return of the United States.