EXPLANATION OF H. J. RES. 51
APPROVING THE U.S. - VIETNAM BILATERAL TRADE AGREEMENT

Present law

Vietnam's trade status is subject to the "Jackson-Vanik" provisions in the Trade Act of 1974 (the Act). This provision of law governs the extension of normal trade relations (NTR), including NTR tariff treatment, and access to U.S. Government credits, credit guarantees, or investment guarantees, to nonmarket economy countries ineligible for NTR treatment as of the enactment of the Act.

In order to receive NTR tariff treatment, a country subject to Jackson-Vanik must meet two requirements. First a country must either comply with the freedom of emigration requirements under the Act, or receive an annual waiver of such requirements by the President. On June 1, 2001, the President issued a 12-month renewal of the waiver for Vietnam for the period July 3, 2001 through July 2, 2002. Last week, the Ways and Means Committee marked up and voted to report adversely a resolution which would have disapproved the President's waiver with respect to Vietnam. A floor vote on that disapproval resolution (H.J. Res. 55) is scheduled for this week.

Second, the extension of NTR tariff treatment also requires the conclusion and approval by Congress of a bilateral trade agreement (BTA) with the United States providing for reciprocal nondiscriminatory treatment. Without a BTA, a country is merely eligible for access to U.S. trade financing programs. A BTA was signed by the United States and Vietnam on July 13, 2000. President Bush transmitted the BTA to Congress for its approval on June 8, 2001. On June 12, 2001, H.J. Res. 51 was introduced by request (as required by the Act), which would approve the BTA.

The BTA provides that once it is approved and enters into force, it would remain in effect for a 3-year period and would be extended automatically unless renounced by either party. Each extension would require a presidential determination that Vietnam is satisfactorily extending reciprocal NTR treatment to U.S. exports.

Procedures

• On June 12, 2001, H.J. Res. 51 was introduced (by request, as required by the Act), which would approve the BTA between the United States and Vietnam.
• The Congressional approval process for H.J. Res. 51 is subject to special "fast-track" procedures in the Act, under which amendments are not permitted.
• House Action: There is a deadline of 45 session days for consideration by the Ways and Means Committee, and 15 session days for floor debate. On the floor, a motion to proceed to the consideration of the resolution is highly privileged and is not debatable. Amendments to the motion are not in order. Floor debate is limited to 20 hours.
• Senate Action: The Finance Committee approved the BTA on July 17, 2001 (S.J. Res. 16). Floor procedures are similar to the House.
• Because the approval resolution is considered a revenue measure, the House must act before the Senate can send legislation to the House.
• Vietnamese Action: On June 21, 2001, Vietnam's Prime Minister initiated the ratification process in Vietnam by sending the BTA to President Tran Duc Long.
• The BTA would enter into force and NTR would take effect after an exchange of letters indicating that both countries have approved the agreement.

Explanation of resolution

H.J. Res. 51 states that Congress approves the extension of nondiscriminatory treatment with respect to the products of the Socialist Republic of Vietnam. The effect of this resolution would be Congressional approval of the U.S. - Vietnam BTA, which would grant temporary NTR treatment to Vietnam, subject to an annual review by the President (similar to the process for China prior to its accession to the World Trade Organization).