United States and Vietnam Forge New Trade Agreement, Lowering Barriers for American Exporters
In a significant move to strengthen economic ties, the United States and Vietnam have announced a framework for a new trade agreement designed to be reciprocal, fair, and balanced. The agreement, outlined in a joint statement, aims to provide “unprecedented access” to each other’s markets by addressing long-standing non-tariff barriers that have hindered U.S. exporters.
A key focus of the forthcoming Agreement on Reciprocal, Fair, and Balanced Trade is the dismantling of regulatory hurdles for American products entering the Vietnamese market. Vietnam has committed to a series of specific measures, including:
· Streamlining regulatory requirements and approvals for U.S. pharmaceutical products.
· Addressing import licenses for U.S. medical devices.
· Accepting vehicles built to U.S. motor vehicle safety and emissions standards, a major win for the American automotive industry.
· Fully implementing its obligations under international intellectual property treaties.
· Addressing U.S. concerns with conformity assessment procedures.
These steps are expected to create a more level playing field for American workers and businesses, ranging from farmers to manufacturers.
On market access, Vietnam has agreed to provide preferential treatment for “substantially all” U.S. industrial and agricultural exports. In return, the United States will maintain reciprocal tariffs on Vietnamese goods at 20 percent, as established in a previous executive order, while identifying a list of products that will receive a zero percent tariff rate.
The agreement extends beyond goods to include commitments to finalize terms on digital trade, services, and investment. Both nations have also pledged to cooperate on enhancing supply chain resilience, addressing intellectual property rights, and tackling distortionary practices by state-owned enterprises.
The announcement was bolstered by news of major commercial deals, signaling immediate economic benefits. Vietnam Airlines has committed to purchasing 50 aircraft from Boeing in a deal valued at over $8 billion. Additionally, Vietnamese companies have signed memoranda of understanding to purchase U.S. agricultural commodities worth an estimated $2.9 billion.
The United States and Vietnam will work in the coming weeks to finalize the agreement and complete domestic formalities before it enters into force, marking a new chapter in a bilateral economic relationship that began with a trade agreement in 2000.
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