Cattlemen See Potential in Vietnam Trade Agreement
WASHINGTON - A bilateral market access agreement signed today between the United States and Vietnam will boost export opportunities for U.S. cattle producers. Members of the National Cattlemen’s Beef Association strongly support the agreement, required as part of Vietnam's bid to become a member of the World Trade Organization (WTO).
“A key component of our Beef Industry Long Range Plan is tripling U.S. beef export markets by the year 2010,” says NCBA Chief Economist Gregg Doud. “For U.S. cattle producers, this agreement with Vietnam is a big step on the way to breaking down market access barriers to our beef.”
According to the negotiated terms, Vietnam will immediately begin accepting all U.S. beef and beef products from animals less than 30 months of age. Upon Vietnam’s entry into the WTO, tariffs on U.S. beef offal will be reduced from the most favored nation (MFN) rate of 20 percent to 15 percent immediately, and staged down to 8 percent over four years. Boneless beef will also enjoy a significant tariff cut, from 20 percent to 14 percent over five years. Beef sausages which faced a MFN duty of 50 percent, will drop immediately to 40 percent and be phased down further to 22 percent over five years. Bone-in U.S. beef will face a 20 percent applied tariff rate.
“Lowering tariffs on U.S. beef exports is always a victory for us,” says Ed Blair, a South Dakota cattle producer and chairman of NCBA’s International Markets Committee. “We raise cattle that produce exceptional beef, and high tariffs on our valuable U.S. exports make it difficult for us to compete fairly. Vietnam is a promising market for U.S. beef, and this agreement marks an important precedent to be set with one of our up-and-coming Asian trading partners.”
“Unlike free trade agreement (FTA) negotiations, bilateral WTO accession negotiations rarely eliminate tariff rates,” says Doud. “However, this agreement will eliminate a key [minimum price] barrier to entry into the Vietnamese market and will become the platform from which future trade negotiations with Vietnam will advance. Therefore, the terms negotiated in this agreement are a major accomplishment.”
In addition, NCBA and other agriculture groups will be urging Congress to now move to provide Permanent Normal Trade Relations (PNTR) status to Vietnam, the next step in negotiating Vietnam’s accession to the WTO. The granting of PNTR allows for unconditional, unlimited, permanent market access and ends the required annual review of Vietnam’s trade status. To achieve final accession, Vietnam must work with individual WTO members to break down trade barriers, conform to WTO rules and allow market access on a non-discriminatory basis.
“Through the WTO accession process, the United States will gain significant new access to Vietnam’s growing market,” says Doud. “As the next step, granting Vietnam PNTR status would give them most-favored nation market access. NCBA supports WTO membership for Vietnam, and extending PNTR is a necessary step in the WTO membership process.”