U.S. Businesses Voice Support For Vietnam-U.S. Permanent Normal Trade Relations
U.S. businesses on Wednesday urged the Congress to move forward 
expeditiously to approve three important trade agreements that promote U.S. economic growth by opening foreign markets for American workers, farmers, and businesses, including a legislation which extend Permanent Normal Trade Relations to Vietnam.
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June 21, 2006 The Honorable Dennis Hastert Dear Speaker Hastert: These three agreements will (1) level the trade playing field, (2) expand U.S. 1. Level the Playing Field. These high-standard and commercially-meaningful trade agreements will level the playing field and create new market access opportunities for U.S. workers, farmers, and business. Leveling the playing field through market-opening trade agreements is essential in today’s highly competitive world economy. For example, the United States has a weighted average tariff rate of less than 2%, and 98% of Peru’s imports already enter the United States duty-free under trade preference programs. U.S. exports to Peru and Oman, however, face higher tariffs that make U.S. products less competitive. According to the World Bank, the weighted average tariff of Oman is 14% and Peru 9%. 2. Expand U.S. Export Growth. Recent U.S. free trade agreements have a solid record of promoting U.S. export growth. For example, the U.S.-Chile Free Trade Agreement was implemented on January 1, 2004, and immediately began to pay dividends for American businesses and farmers. U.S. exports to Chile surged by 33% in 2004 and by an additional 43% in 2005. While the U.S. International Trade Administration had forecast total export growth of 18-52% for the first 12 years of the agreement’s implementation, U.S. exports to Chile nearly doubled — a combined 91% in just two years. In addition, the U.S. trade surplus with Singapore nearly quadrupled over the first two years of implementation of the U.S.-Singapore Free Trade Agreement (2004-2005), reaching $5.5 billion last year. Under the Peru and Oman trade agreements, U.S. business and agriculture exporters would receive excellent access to these growing markets immediately. Over two-thirds of U.S. agricultural exports will be given immediate duty-free access to the Omani and Peruvian markets. U.S. consumer and industrial products will enjoy similar benefits, with over 80% of U.S. exports to receive duty free access upon implementation. Vietnam PNTR would enable the United States to receive the full benefits of Vietnam’s impending accession to the WTO and would advance and deepen a burgeoning bilateral economic relationship with one of the fastest growing economies in Asia. 3. Promote the Rule of Law. These agreements are also important because they promote the rule of law in emerging markets around the globe and in many areas establish WTO-plus commitments. For example, with respect to government procurement, the trade agreements guarantee transparency in government procurement, mandate competitive bidding and require information be made publicly available — not just to well-connected insiders. The trade agreements also create a level playing field in the regulatory environment for services, including telecoms, insurance, and express shipments. Furthermore, these trade agreements improve legal protections for U.S. intellectual property rights as well as the actual enforcement of these rights. These are vital issues of importance to advancing U.S. global competitiveness. At the same time, these trade agreements provide an opportunity for the partner countries to improve their investment climate by undertaking legal and judicial reforms and resolving investment disputes (e.g., the criminalization of commercial disputes). Congress should insist these disputes be resolved. 4. Strengthen U.S. Foreign Policy and National Security Relationships. These trade agreements are critical elements of U.S. foreign policy and national security objectives. The Oman and Peru agreements come at a time when these countries have taken positive steps to deepen economic and strategic ties with the United States — solidly rejecting threats from those who reject American democratic principles. The Oman Agreement is the fourth trade agreement with countries in the Middle East and is part of a strategic vision of building closer and more prosperous allies in the region. In Peru, the stakes are also high in supporting a newly elected leader who is committed to deepening economic ties with the United States. Granting PNTR to Vietnam represents the capstone of the normalization process with Vietnam. Now is not the time to turn our backs on these allies. Clearly, the importance of all three of these trade agreements lies in their ability to signal to our global trading partners that the United States remains committed to liberalizing trade, expanding growth and opening markets for U.S. firms and farmers. We understand that the legislative agenda is crowded, but given the economic, foreign policy and national security significance of these agreements, we hope that the Congress will make the time to move them forward before the August recess. We stand ready to work with you to help move these agreements forward. Sincerely, 3M |
