The Department of Commerce’s International Trade Administration (ITA) helped members of the U.S. food and beverage industry overcome a trade-restrictive import licensing policy imposed by the Government of Vietnam’s (GoV) Ministry of Industry and Trade (MOIT). This market access barrier had the potential to notably decrease U.S. exports to Vietnam.
Why it Matters
Had the ITA not acted to ensure that Vietnam did not expand its trade-restrictive import licensing requirements, U.S. food and beverage product companies would have continued to face non-transparent and overly-restrictive import regulations that delayed and reduced their exports. This, in turn, could have led to a permanent reduction of U.S. companies’ market share in Vietnam.
In 2010, Vietnam’s Prime Minister issued a resolution that directed its Ministries to “reduce the trade deficit, and improve the balance of payments,” and specifically called on MOIT to “strictly control the import of items that are not really necessary…[and] promulgate a list of dispensable import goods and non-encouraged imports of consumer goods.” MOIT then issued new requirements to reduce the import of specific goods, including a broad range of food, beverage and agricultural products. The new measures were not transparent and resulted in decreased U.S. exports, raising questions about Vietnam’s commitment to the World Trade Organization Agreement on Import Licensing Procedures.
In response to Vietnam expanding its import licensing requirements, ITA coordinated with U.S. government agencies and U.S. companies to fully engage the GoV by raising USG concerns in the WTO Import Licensing Committee. Subsequently, MOIT issued a September 2012 circular which suspended the implementation of these new import licensing requirements. This suspension has provided relief from the import licensing policy that limited U.S. exports to Vietnam. MOIT officials later confirmed that consistent communications from U.S. government and industry representatives played a significant role in the decision to suspend the import licensing policy.
Working closely with U.S. companies, ITA creates, expands, and defends market access for U.S. goods and services overseas through the Trade Agreements Compliance Program. We promote policy that develops a more favorable business climate for U.S. companies in global markets, employ commercial diplomacy to resolve trade barriers, and leverage our bilateral and multilateral trade agreements to ensure our trading partners live up to their commitments so that American businesses can compete on a level playing-field.