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Dairy Facts 2016

U.S. House Vote Delays Permanent Trade Relations with Vietnam

Nov 20, 2006

U.S. House Vote Delays Permanent Trade Relations with Vietnam

The U.S. House of Representatives last week failed to pass legislation that would grant permanent normal trade relations (PNTR) to Vietnam, putting the dairy industry's hopes for increased trade access and lower tariffs on dairy exports to that country on hold. House Republican leadership brought the legislation to a vote on the suspension calendar usually reserved for non-controversial measures, expecting passage. However, the bill did not receive the two-thirds majority needed to pass.

The legislation (HR 5602) will be considered again in early December once congressional leaders have returned to Washington, D.C., after the Thanksgiving break. The measure must be approved by the Senate, where it also faces opposition.

"Giving permanent normal trade relations to Vietnam is important for the dairy industry," said Clay Hough, IDFA senior vice president. "Without PNTR, U.S. dairy exports to Vietnam will not be given the improved market access that other World Trade Organization (WTO) members will receive."

The vote last week was a setback for the current administration. President Bush, who attended the Asia-Pacific Economic Cooperation (APEC) forum in Hanoi this past weekend, was hoping to deliver the news that Congress had approved PNTR for Vietnam.

Although House Minority Leader Nancy Pelosi (D-CA) and Ways and Means Ranking Member Charles Rangel (D-NY) supported the bill, 94 Democrats opposed it. Those opposed to the bill cited their concerns with Vietnam's policies on human rights and religious freedom. Some members also wanted to express their displeasure with trade liberalization, while others believe that Vietnamese exports could harm the U.S. textile industry.

Earlier this month, Vietnam was invited to be the 150th member of the WTO. The United States must extend PNTR to Vietnam to benefit from the country's accession into the world trade body and receive lower tariffs for its exports. Vietnam has been barred from PNTR by the Jackson-Vanic amendment, which withholds normal trade relations status from countries that restrict emigration. If Congress approves the pending legislation, this restriction would be removed.

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 20, 2006

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