US exports of industrial goods to Vietnam surged by 50 per cent in the four years since the implementation of the Vietnam-US Bilateral Trade Agreement (2001) and exceeded $900 million last year.
As part of the WTO bilateral market access agreement, Vietnam will further expand market access to US exports by significantly reducing tariffs on many manufactured goods. More than 94 per cent of US exports of manufactured goods will face duties of 15 per cent or less upon the implementation of Vietnam’s WTO accession commitments.
Vietnam committed to bind all tariff lines, creating greater transparency for US exporters, and to lower its average bound tariff rate on industrial and consumer goods by 20 per cent after full implementation.
Average staging for all consumer and industrial products will be approximately two years with many commitments being implemented immediately upon accession.
Some examples of tariff reductions in areas of commercial significance to the US include:
IT Products: Upon accession, Vietnam will join the Information Technology Agreement (ITA), which eliminates tariffs on information technology products including computers, cell phones and modems. US exports to Vietnam in these products exceeded $40 million in 2005.
Chemicals, Cosmetics and Pharmaceuticals: Vietnam has committed to reduce tariffs to the harmonization rates required by the Chemical Harmonization Agreement on 80 per cent of chemical products, which will cover the vast majority of US chemical exports to Vietnam.
Vietnam’s average tariff on cosmetics, a key sub-sector in chemicals, will be reduced from 44 per cent to 17.9 per cent upon full implementation. Pharmaceutical tariffs will average 2.5 per cent within five years after accession.
Civil Aircraft Equipment: Vietnam’s tariff on airplanes and engines will be bound at zero upon accession. Vietnam’s average tariff on all aircraft parts will fall to less than 9 per cent after full implementation.
Motor Vehicles and Parts: Tariffs on priority US vehicles such as sports utility vehicles (SUVs) will be reduced by 50 per cent after full implementation. Tariffs on auto parts will be reduced by 19 per cent to an average of 13 per cent. Vietnam also will reduce its tariff on large motorcycles by 56 per cent and motorcycle parts by 32 per cent after full implementation.
Agriculture and Construction Equipment: Vietnam will bind tariffs at 5 per cent or less for close to 90 per cent of its tariff lines.
Medical and Scientific Equipment: Vietnam will bind tariffs at zero on 91 per cent of medical equipment products within five years of accession. The average tariff rate for this entire sector will be less than 1 per cent. Vietnam will eliminate all duties on 96 per cent of scientific equipment within three years after accession.
Wood Products: Vietnam’s average tariff on wood products will be approximately 4 per cent upon accession.
Vietnam also addressed non-tariff issues that significantly impact on the scope and quality of market access:
Motorcycles: Vietnam eliminated its ban on imports of large motorcycles (i.e., those with engines with capacities greater than 175cc’s). Within a year, Vietnam will establish a non-discriminatory and transparent system for the importation, distribution, and use of large motorcycles by individuals and firms that meet agreed criteria.
Products Equipped with Encryption Technology: Vietnam will exempt general, commercially traded goods, including all products covered by the Information Technology Agreement, from restrictions imposed on imports of encryption machines and software.
Ferrous (Steel) and Other Scrap Metals: Vietnam will reduce export duties on these important, globally traded inputs to steel and other metalworking production by up to 51 per cent of current levels over the next five to seven years.
State-Owned and State-Controlled Enterprises: Vietnam has confirmed that its state-owned and state-controlled enterprises will make purchases (not for governmental use) and sales in international trade based on commercial considerations.
Young People, US Trade Representative
Vietnamese
