Congress Approves PNTR for Vietnam, Extends Trade Preference Programs

As one of its final acts, the Republican-led 109th Congress earlier this month sent to President Bush a package of trade legislation that included permanent normal trade relations (PNTR) with Vietnam and renewed expiring trade preference programs, including the Generalized System of Preferences (GSP). The legislation passed the U.S. House of Representatives by a vote of 212 to184 and the U.S. Senate by a vote of 79 to 9.

"We are extremely pleased that Congress was able to pass this important trade package before it adjourned," said Clay Hough, IDFA senior vice president. "Both PNTR for Vietnam and the extension of the Generalized System of Preferences are important to IDFA members, because they will allow U.S. companies to compete more effectively in domestic and global markets."

Last year, U.S. dairy exports to Vietnam were valued at $50 million. Once Vietnam is admitted to the World Trade Organization, which is expected to happen January 11, the country has agreed to cut its tariff rates on finished dairy products by 5% over the next five years. PNTR will give U.S. companies increased market access.

"IDFA supported the GSP extension because it allows products important to the dairy industry to enter the United States at a preferable duty rate," Hough said. "We expect U.S. dairy companies will benefit from this trade preference program."

Although GSP was extended for two years, the administration can choose to revoke trade preferences after six months on certain products that are deemed able to compete effectively in the U.S. market without tariff relief.

Other trade legislation in the package included the Miscellaneous Trade and Technical Corrections Act (MTB) and the Andean Trade Preferences Extension Act (ATPEA). The MTB amends the U.S. Harmonized Tariff Schedule (HTS), modifying duty rates for certain products. IDFA had strongly opposed including language in the MTB that would increase tariffs on milk protein imports, and was pleased that the final legislation did not contain any regulations that would adversely affect U.S. dairy companies.

Regarding ATPEA, IDFA supports the bilateral free trade agreements that United States signed this year with Peru and Colombia, and believes that extending trade preferences for these countries is an appropriate measure.

"IDFA looks forward to working with the new Congress next year to move the free-trade agenda forward to the benefit of the U.S. dairy industry," Hough said.

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Posted December 18, 2006