The Bilateral Trade Agreement between the United States and Vietnam (BTA) is a comprehensive document on trade in goods, protection of intellectual property rights, trade in services, investment protection, business facilitation and transparency. The 140-day agreement, which lasted nearly five years, is highly technical and was drafted in accordance with the World Trade Organization (WTO) and other international trade and investment principles. The BTA can essentially be summarized as a commitment by both parties to create the necessary conditions for the products, businesses and nationals of the other party to have equitable access to competition in the other party`s markets. Relations between the United States and Vietnam have flourished. Nearly 30,000 Vietnamese are currently studying in the United States. The new Fulbright University Vietnam, which presented its first cohort in the fall of 2017, will help bring first-rate, independent education to Vietnam. More than 21,000 Vietnamese are members of the Young Southeast Asia Leaders initiative. The United States and Vietnam signed a peace agreement in 2016. 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. With the Trump administration and trade balances, what`s in the past is probably a prologue: tariffs on Vietnam. But there are two problems with this approach. First, a trade deficit remains a poor way to assess a trade relationship. Second, tariffs risk the government`s main security objectives vis-à-vis China. The House remains hopeful that the United States and Vietnam will eventually want to conclude a free trade agreement, while bending to the reality that such an agreement is not a short-term prospect.