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The United States remains committed to further deepening our long-term economic and strategic relationship with Vietnam, in line with the Administration’s rebalance to Asia. Over the past two decades, bilateral trade and investment relations between our two nations have multiplied rapidly, with U.S. goods exports to Vietnam reaching record highs last year. With a population over 90 million and rapid economic growth fueled by its economic reform agenda, Vietnam’s economy presents many opportunities for Made-in-America goods exports. The high-standard Trans-Pacific Partnership (TPP) Agreement will strengthen our economic ties and provide the tools to support Vietnam’s economic reforms.
Once implemented, the TPP will eliminate over 18,000 tariffs that TPP countries like Vietnam impose on Made-in-America products, providing unprecedented access to some of the fastest growing markets in the Asia Pacific. Nowhere is this market-opening more far reaching than in Vietnam, where average tariff rates are the highest among TPP countries, and where TPP will eliminate over 5,000 tariffs on U.S. goods. The TPP will bring benefits to U.S. workers, businesses, farmers, and ranchers by significantly expanding market access and eliminating tariffs as high as 74 percent on key American exports, extending across the full range of goods from heavy industry to high-tech; consumer goods; crops, agricultural commodities, and food products:
- U.S. Machinery Exports: In 2014, the United States exported $311 million in machinery to Vietnam. However, these goods, like construction equipment, pumps, valves, and electric motors faced tariffs as high as 59 percent when entering the Vietnamese market. When the TPP enters into force, more than 80 percent of Made-in-American machinery exports will be immediately duty free in Vietnam. All other Vietnamese tariffs on machinery will be eliminated on a set schedule.
- U.S. Automotive Exports: In 2014, the U.S. exported $131 million worth of automotive parts, passenger vehicles, motorcycles and related goods to Vietnam. These products face some of the highest tariffs in Vietnam, with tariffs up to 70 percent on vehicles, 74 percent on motorcycles, and up to 32 percent on parts. TPP will eliminate all these tariffs on Made-in-USA automotive industry, opening a fast-growing market and avoiding the risk of prohibitive tariff differentials in competition with Japan, Europe, and China.
- U.S. Forestry Exports: The TPP will eliminate tariffs on Made-in-America forest products, supporting and helping to grow the more than $342 million in American forestry and wood products exports to Vietnam by eliminating import taxes as high as 25 percent on U.S. forestry products like craft paper, paperboard, and plywood. Moreover, the TPP will enforce high standards against illegal logging and deforestation to ensure that trade policy contributes to efforts to protect the unique and irreplaceable upland forest resources and habitat of Vietnam.
- U.S. Textile Exports: The TPP will eliminate tariffs as high as 20 percent on U.S. textile and apparel exports to Vietnam. In 2014, the United States exported $206 million in these goods to Vietnam. Upon implementation, 98.4 percent of U.S. textile and apparel exports, including nonwoven fabrics, industrial and advanced textile fabrics, and dresses will be immediately duty free in Vietnam.
- U.S. Information and Communication Technology (ICT) Exports: Upon implementation, TPP will eliminate tariffs as high as 35 percent on U.S. ICT exports to Vietnam. In 2014, U.S. exports of video recording equipment, monitors and projectors, optical media (CDs and DVDs), insulated cable contributed to the more than $525 million in U.S. exports of ICT products to Vietnam.
- U.S. Chemical Exports: Vietnam currently places tariffs as high as 35 percent on Made-in-America exports of chemical goods like cosmetics, soaps, paints, lubricants, glues, and plastic tubes. In 2014, the U.S. exported more than $465 million in chemical goods to Vietnam, and 87.5 percent of which will be immediately duty free upon implementation.
- U.S. Beef Exports: The United States exported $22.1 million of beef and beef products to Vietnam in 2014 – a country of 94 million, where every corner stall sells bowls of beef soup. Under TPP, all of Vietnam’s tariffs on beef and beef products, currently as high as 34 percent, will be eliminated in three to eight years. Tariffs on fresh and frozen beef muscle cuts will be eliminated in three years.
- U.S. Wine, Beer, and Spirits Exports: The United States exported more than $26 million in alcoholic beverages to Vietnam in 2014. Under TPP, Vietnam will eliminate tariffs on all wine products, currently as high as 55 percent, in 11 to 12 years; tariffs on all beer products, currently as high as 35 percent, in 11 years; and tariffs on all distilled spirits, currently as high as 45 percent, in 11to 12 years.
- U.S. Fresh Fruit Exports: The United States exported $55 million of fresh apples, $4 million of fresh cherries, and $235,000 of fresh pears to Vietnam in 2014. Vietnam’s 10-percent tariffs on these fruits will be eliminated in three years.
- U.S. Wheat and Wheat Product Exports: The United States exported $78.5 million of wheat and wheat products to Vietnam in 2014. Vietnam’s tariffs on wheat and wheat products, currently as high as 35 percent, will be eliminated within four years.
And these market access opportunities are only part of the story. TPP also will secure Vietnam’s markets for U.S.-supplied services, ranging from entertainment and express delivery to software apps, telecommunications, and financial services. Commitments on customs and e-commerce will facilitate trade and provide greater opportunity for U.S. small businesses seeking to find customers and build partnerships with Vietnam. The strong and balanced intellectual property protection required by TPP will protect and promote U.S. innovation. And the commitments on State-owned enterprises (SOEs) will help ensure that U.S. businesses and workers are able to compete fairly with SOEs. In sum, TPP is a transformative agreement that will fortify an already strong relationship and make this fast-growing country of 90 million people a uniquely favorable market for American manufacturers, farmers, small businesses, and services providers.