U.S. shippers voice little concern about approval of Vietnam PNTR
Representatives of several U.S. shipper groups told the Senate Finance Committee Wednesday that Congress should approve Permanent Normal Trade Relations (PNTR) status for Vietnam.
With a PNTR designation, Vietnam takes the final steps toward becoming a full-fledge member of the World Trade Organization, which i9n expected to occur by October.
“In Vietnam, a country of 84 million people, pork represents 72 percent of meat consumption and will be an excellent market for U.S. pork and pork products,” testified Jon Caspers, past president of the National Pork Producers and a hog farmer from Swaledale, Iowa.
Vietnam has made numerous concessions and trade law changes to open its agricultural market to U.S. exports. The Southeast Asian country has also committed to implement the WTO agreement on sanitary and phytosanitary measures upon accession.
“This is critically important because non-scientific barriers are used in many other countries to prevent meat and poultry imports from the U.S., even after tariffs are reduced in trade deals,” Caspers said.
In addition, Vietnam has made commitments to grant distribution and trading rights for all foreign-owned companies.
“It is therefore relinquishing state control of essentially all
agricultural products, providing a meaningful opportunity for U.S. pork exporters to have many customers in Vietnam,” Caspers told the Senate Finance Committee. “This is a very ambitious commitment, given that China took years to phase out distribution and trading rights after its WTO accession.”
American shippers of deciduous tree fruits such as apples and pears are eager to spread their business in Vietnam. Christian Schlect, president of the Northwest Horticultural Council, believes Vietnam will become just as important a market in Asia for these fruits as Hong Kong, Taiwan and Singapore are today.
“Even now, for the 2005 shipping season U.S. apple exports to Vietnam totaled 116,000 cartons,” Schlect said. “Upon accession to the WTO and PNTR, importers in Vietnam expect these shipments to jump by 40 percent.”
The United States and Vietnam entered a bilateral trade agreement in 2001. Since then, two-way trade reached more than $7.8 billion in 2005, a five-fold increase over 2001. U.S. exports to Vietnam increased 24 percent between 2004 and 2005, reaching $1.2 billion, according to the U.S. Chamber of Commerce.
“Tariffs for most manufactured goods will be reduced to an average of less than 15 percent,” noted Virginia B. Foote, president of the U.S.-Vietnam Trade Council. “Tariffs for U.S. priority sectors such as construction equipment, pharmaceuticals, aircraft parts, chemicals and IT products will, for the most part, have low duties of 0 to 5 percent.”
Karan K. Bhatia, deputy U.S. trade representative, told the committee that Vietnam has committed to eliminate or phase out all WTO-prohibited industrial and agricultural export subsidies. “Indeed, as a result of our agreement, Vietnam already repealed its major subsidy program for its textile and garment producers, and upon accession will cease all prohibited subsidies — an issue that our textile manufacturers identified as a major goal in these negotiations,” he said.
Schlect warned that failure of Congress to approve Vietnam’s PNTR status could have serious long-term consequences for American shippers.
“Rejecting PNTR for Vietnam would be a critical commercial and foreign policy misstep by our country,” Schlect said. “Instead, PNTR’s passage is a quiet opportunity for the United States to further open doors of understanding and trade to a country, once a bitter enemy, which is now actively seeking a more constructive and mature relationship.”