Michael F. Martin
Specialist in Asian
Since the resumption
of trade relations in the 1990s, Vietnam has rapidly risen to become a significant
trading partner for the United States. Along with the growth of bilateral
trade, a number of issues of common concern, and sometimes disagreement,
have emerged between the two nations. Congress may play a direct role in
the U.S. policy on some of these issues.
Bilateral trade has grown from about $220 million in 1994 to $21.86 billion in
2011, transforming Vietnam into the 30th largest trading partner for the
United States. Vietnam is the second-largest source of U.S. clothing
imports, and a major source for footwear, furniture, and electrical machinery.
Much of this rapid growth in bilateral trade can be attributed to U.S.
extension of normal trade relations (NTR) status to Vietnam. Another major
contributing factor is over 20 years of rapid economic growth in Vietnam,
ushered in by a 1986 shift to a more market-oriented economic system.
Bilateral trade may increase if both nations become members of the
Trans-Pacific Strategic Economic Partnership Agreement (TPP). The United
States and Vietnam are among the nine countries negotiating the terms of
expansion of the trade association. Vietnam’s incentive to join the TPP is
largely contingent on greater market access in the United States, particularly
for agricultural goods, aquacultural goods, clothing, and footwear.
Vietnam is also a party to negotiations to form a larger pan-Asian
regional trade association based on the Association of Southeast Asian
Nations (ASEAN) that could exclude the United States and prove to be an alternative
to the TPP.
The growth in bilateral trade has not been without its accompanying issues and
problems. Vietnam has applied for acceptance into the U.S. Generalized
System of Preferences (GSP) program and is participating in negotiations
of a Bilateral Investment Treaty (BIT) with the United States. Vietnam
also would like to be officially recognized as a market economy.
There have also been problems with U.S. imports of specific products from
Vietnam, particularly catfish-like fish known as basa or tra. In 2008, the
110th Congress passed legislation that transferred the regulation of
catfish from the Food and Drug Administration to the U.S. Department of
Agriculture (USDA) and authorized the Secretary of Agriculture to determine if basa
and tra are to be considered catfish. The Vietnamese government strongly
protested the law as a protectionist measure. On February 24, 2011, the
USDA released proposed new catfish regulations, which did not resolve the
status of Vietnam’s basa and tra exports.
An examination of recent trends in bilateral trade reveals that other product
categories—such as footwear, furniture, and electrical machinery—could
generate future tension between the United States and Vietnam. Observers
of Vietnam’s economic development have also been critical of Vietnam’s
protection of workers’ rights, its enforcement of intellectual property rights
laws and regulations, and the country’s exchange rate policies.
The 112th Congress may play an important role in one or more of these issues,
as have past Congresses. The 112th Congress would have to consider
implementing legislation if a TPP agreement is concluded. Congressional
action on key legislation, such as the Agriculture Reform, Food, and Jobs
Act of 2012 (S. 3240), could have an impact on the TPP negotiations. This
report will be updated as circumstances require.
Date of Report: June 11, 2012
Number of Pages: 26
Order Number: R41550
Document available via
e-mail as a pdf file or in paper form.
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