U.S.-VIETNAM TRADE PACT PASSES PANEL IN SENATE
Byline: Joanna Ramey
WASHINGTON — The Senate Finance Committee approved a U.S.-Vietnam bilateral trade agreement Tuesday that would drastically lower tariffs on imports, sending the landmark pact to a full-Senate vote expected as early as this month.
The agreement is the next step in normalizing U.S. trade relations with Vietnam. President Clinton took the first step in 1994 by lifting a trade embargo imposed since the Vietnam War.
The Vietnam trade pact, negotiated under Clinton, has broad support in both chambers of Congress and from President Bush. It calls for lowering tariffs in Vietnam on U.S. exports, as well as Vietnamese imports into the U.S. For example, Vietnamese apparel imports now face U.S. duties of 50 to 90 percent and under the pact tariffs would be lowered to 10 to 20 percent. The House has yet to consider the trade agreement.
After it is ratified, the U.S. is likely to next negotiate a U.S.-Vietnam bilateral textile agreement setting quotas on Vietnamese apparel and textile imports. A textile bilateral isn’t required, but because of domestic textile concerns about curbing import growth, limits are usually negotiated when a country has the potential for large apparel production.
Finance Committee Chairman Max Baucus (D., Montana), said he would like a Vietnam textile bilateral to include labor and environmental standards “to follow the Cambodia model.” Baucus was referring to the Cambodia bilateral textile agreement negotiated during the Clinton administration — the first U.S. trade pact to reward improvements in labor standards with an increase in market access. Linking trade to labor standards has angered retailers and other textile and apparel importers because they contend that measuring improvements is subjective.
Including labor and environmental standards in trade agreements is a huge issue on Capitol Hill, one that’s touching practically every trade measure on the congressional agenda.
That debate was rekindled Tuesday as the Finance Committee also considered — then delayed — a vote on approving a Jordan Free Trade Agreement. The FTA contains a provision stating that each country must enforce its labor and environmental laws, which Republican panel members fear will be precedent-setting.
Committee member Phil Gramm (R., Texas) bristled at the Jordan FTA labor and environment provisions, arguing they could lead to trade sanctions, thus interfering with U.S. sovereignty. Gramm offered an amendment that would effectively gut the labor and environment standards from the pact.
In the end, the committee tabled consideration of the Jordan pact. But Gramm said even if the pact reaches the Senate floor he will use procedural tactics to keep it from a full vote.