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BTA UPDATE - March 2001 

By Peter N. Sheridan

Vietnam's Trade Barriers May Start To Come Down; American Political Conservatives May Start to Raise anti-BTA Barriers.

Continuing our reports on substantial changes being projected if not implemented by the State authorities, it is important to note that these practices and procedures are not couched in terms of the US Vietnam Bilateral Trade Agreement (BTA).

However, each is directly related to Vietnam’s need to change the way in which business is conducted in order to comply with many of provisions of the BTA which mirror requirements for Vietnam to join the WTO.

Importers and exporter must pay attention to these important changes. The basic tenant is that Vietnam may not do with non-tariff barriers that which is it prohibited from doing with tariff barriers.  Not all of these protections will come into force at once.  For details on the BTA see our linked pages at :www.vvg-vietnam.com/bta2000.htm  The full agreement consists of more than 135 pages and can be found on line. For more information start at http://www.state.gov/www/regions/eap/fs-us-vietnam_trade_000713.html

Recent headlines in Vietnam read, "Vietnam to take broom to trade restrictions." 

But in the US, there is a different tact being taken as recent headlines  proclaim, "US Official Sees Hurdles To Passage Of Vietnam Trade Pact."

This comes early under the leadership of the new Bush (called "junior" or "43" to distinguish him from his father, the 41st president, or "shrub" to contrast him with the father Bush, neither of whom is seen rising to the stature of an Oak, much less a Redwood, tree). 

Behind the headlines and before the propaganda, what is really happening is the foundation of this article and those to follow on the BTA UPDATE.

FROM VIETNAM:  Vietnam plans to at least quadruple its export value in the next 10 years by scrapping almost every import-export restriction imposed on both domestic and foreign enterprises.

This new proposal, already submitted to the government for approval, would allow any licensed business to export or import any commodity, except some special goods banned by the state. Until now, the rules have decreed that only those businesses licensed to import or export are allowed to do so. This non-tariff barrier is prohibited by the BTA.

The new rules on national export coordination will become more flexible, allowing exporters to make direct contact with foreign buyers.

Some key restrictions will remain in place, including a ban on certain dangerous items.  Additionally, the use of licensed coordinators will remain in place for imports of radio-transmitting facilities, dynamite, medicines, fertilizers, books and movies, and for market-controlled exports such as rice, coffee and coal. For full details on what is considered nation-protected, please refer to the full text of the BTA.

Existing non-tax tools used to restrict imports and exports will gradually be lifted, and new trade protection tools will be introduced to meet the requirements of international trade organizations. At present, Vietnam still uses non-tax tools to regulate imports and exports that include bans, temporary cancellations, import and export quotas, time permits, extra charges and minimum tax rates.

However, the nation does not use internationally recognized trade protection tools like tariff rates, maximum tax rates, seasonal tax rates, anti-dumping taxes and anti-price subsidy taxes.

Also new will be a cutback in the Trade Ministry's periodically issued list of restricted imports and exports. The number of items on the list will be gradually reduced. This year, the only restricted export will be garments, because of quotas imposed by importing countries.

Meanwhile, the list of restricted imports this year will contain just 10 commodities, and the aim is to eventually remove each of these from the list. Moreover, the list of specialized imports subject to sectoral or ministerial control will be gradually abolished. Instead, the ministry or sector that oversees the specialized imports will use technical standards as norms to monitor the quality of imports, and no restriction will be imposed on the volumes of imports.

FROM THE U.S.:  HANOI (AP)--The wide-ranging trade agreement is likely to be submitted to the U.S. Congress in March, but ratification will be considerably more difficult than originally thought, an unnamed U.S. official.

The pact is considered the last major step in the process of normalizing relations that began in 1995 with the establishment of diplomatic ties between the two former foes.

The senior U.S. official, who briefed reporters on the condition he not be named, said approval is likely to be delayed by personnel changes in Congress and the U.S. administration, and by questions over Vietnam's observance of human, religious and labor rights. 

"The process is proving to be more difficult than we had originally anticipated," the official said. 

Questions about human rights in Vietnam have been highlighted by recent unrest in the coffee-growing Central Highlands region.  

Soldiers and riot police quelled the occasionally violent protests. Journalists and foreigners have been barred from visiting the area.  See more from FEER.

U.S. Ambassador to Vietnam Pete Peterson will travel to Washington next week to meet members of Congress and the Bush administration to urge passage of the trade agreement. 

He will also ask for help from U.S. business groups in educating Congress on the benefits of the pact, the official said.  

He said most people "will unfortunately seize on the negative," such as the government's handling of the Central Highlands unrest, instead of looking at the positive aspects of the trade deal. But he predicted the pact would eventually be approved. 

The agreement, signed after four years of negotiations, is expected to greatly increase two-way trade. It requires that Vietnam introduce an unprecedented level of competition and financial openness.  

It requires that trade barriers be lowered, state industries compete with foreign companies, and copyright and investment guarantees be raised to international levels.

Vietnam has begun to review all its laws and regulations to make them compliant with the trade agreement and with regulations of the World Trade Organization.

 "There's a huge amount of work that needs to be done in that area," the official said. "It will require many years to get all those laws, circulars and directives adjusted."

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