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Vietnam Invited to Join WTO

Nov 13, 2006

Vietnam Invited to Join WTO

After 11 years of negotiations, the World Trade Organization (WTO) last week formally invited Vietnam to become the organization's 150th member, a move which should lead to expanded U.S. dairy export opportunities. As a WTO member, Vietnam will gain increased access to foreign markets and the ability to take trade grievances to a neutral arbiter for action. In return, the country will be required to drop its high tariffs on imports and eliminate subsidies for state-owned companies.

"This is good news for the dairy industry," said Clay Hough, IDFA senior vice president. "Last year, dairy exports to Vietnam were worth approximately $50 million. We look forward to improved market access and lower tariffs for whey, cheese and ice cream."

All WTO members are required to give non-discriminatory market treatment to other member countries. For the United States to receive lower tariffs, however, Congress must first grant permanent normal trade relations (PNTR) to Vietnam.

Until now, Vietnam had been ineligible for permanent status, due to an amendment to the Trade Act of 1974. The Jackson-Vanic amendment withholds normal trade relations status from countries that restrict emigration, but U.S. legislation under consideration would eliminate the amendment's restrictions for Vietnam.

That bill, however, is stalled in the Senate. Senator Mel Martinez (R-FL) has blocked its consideration as leverage to free a Florida resident and U.S. citizen from a Vietnamese jail. She was arrested during a visit to her former country and has been held for more than a year for alleged "terrorist activities." Both governments are attempting to resolve the issue before President Bush visits Vietnam for the Asia Pacific Economic Cooperation summit later this week.

In general, Congress has shown broad bipartisan support for the PNTR legislation, and some movement is expected soon. President Bush has expressed hopes that the bill will pass, at least in the House of Representatives, before his trip to Hanoi.

Vietnam will officially join the WTO 30 days after its national assembly ratifies the accession agreement, which includes the country's commitment to lower tariffs, expand quotas, eliminate export subsidies and comply with the WTO rules of origin, anti-dumping and subsidies agreements.

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Posted November 13, 2006

Dairy Delivers