Vietnam Trade Agreement: Approval and Implementing Procedure
CRS Report for Congress
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Vietnam Trade Agreement: Approval and
Vladimir N. Pregelj
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
To enter into force, the U.S. trade agreement with Vietnam must be approved by
the enactment of a joint resolution of Congress, considered under a specific fast-track
procedure with deadlines for its various stages, with mandatory language and no
amendments. Joint resolutions S.J.Res. 16 and H.J.Res. 51 to approve the trade
agreement with Vietnam were introduced, respectively, on June 11 and 12, 2001.
S.J.Res.16 was reported favorably July 27, 2001 (S.Rept 107-49); H.J.Res. 51 was
reported favorably September 5, 2001, (H.Rept. 107-189) and passed by the House
September 6, 2001. The functional sequence of the legislative and executive steps
involved in the implementation of the agreement is described in this report.
After protracted negotiations and a one-year delay after its adoption in principle, the
United States and Vietnam signed, on July 13, 2000, a comprehensive bilateral trade
agreement. The key statutory purpose of the agreement is the restoration of
nondiscriminatory tariff treatment2 (“normal-trade-relations” (NTR), formerly “most-
favored-nation” treatment) to U.S. imports from Vietnam, suspended since 1951. Hence,
the agreement contains a provision reciprocally extending the NTR treatment and certain
other provisions required by law for trade agreements with nonmarket economy (NME)
countries. In addition, it contains comprehensive specific commitments by Vietnam in
matters of market access (e.g., reduced tariff rates on imports from the United States),
1 For detailed background information on the U.S.-Vietnam trade agreement, see CRS Report
RL30416, The Vietnam-U.S. Bilateral Trade Agreement, by Mark E. Manyin.
2 Although the internationally adopted term "most-favored-nation treatment" has been replaced, in
all current and future U.S. statutes, under Section 5003 of P.L. 105-206, by the term "normal trade
relations" or a similar expression, its functional equivalent—nondiscriminatory treatment—has
been retained in the relevant legislation, while the term “most-favored-nation treatment” remains
in universal international use.
Congressional Research Service ˜ The Library of Congress
intellectual property rights, trade in services, and investment, such as the United States
already has in force as a matter of general trade policy. To enter into force, the agreement
must be approved by the enactment of a joint resolution of Congress.
Restoration of NTR treatment to Vietnam as an NME country is also contingent on
Vietnam’s compliance with the freedom-of-emigration requirement of the Jackson-Vanik
amendment (Section 402) of the Trade Act of 1974.3 In the case of Vietnam, such
compliance is achieved by an annual Presidential waiver of full compliance under specified
statutory conditions; such waiver may be disapproved by the enactment of a joint
resolution of Congress. The President has issued such waivers for Vietnam since mid-
1998, but in no instance has a disapproval resolution, if introduced, been passed by
Congress, allowing the waiver to continue in force.
The statutory requirements and legislative procedure leading to the enactment and
entry into force of a trade agreement with a nonmarket economy (NME) country,
including Vietnam, are set out in detail in Sections 151, 404, 405, and 407 of the Trade
Act of 1974 (P.L. 93-618), as amended. Section 151 has been enacted as an exercise of
the rulemaking power of either house and supersedes its other rules to the extent that they
are inconsistent with it. Its provisions can be changed by either house with respect to its
own procedure at any time, in the same manner and to the same extent as any other rule
of that house (Section 151(a); 19 U.S.C. 2191(a)).
All alphanumerical statutory references cited in this report are to sections of the
Trade Act of 1974. While care has been taken to reflect accurately the meaning of the
statutes, consulting the actual language of any statute is recommended in case of any
Functionally, the consideration and enactment of the approval resolution and the
implementation of the agreement follow a specific expedited (“fast-track”) procedure
explained below. Additional information, based on past practice of implementing trade
agreements with NME countries in general, but applicable also to Vietnam, is provided in
(1) Enactment necessary.
The agreement can take effect only if approved by enactment of a joint resolution
(Section 405(c)); 19 U.S.C.2435(c)).
(2) Transmittal of the agreement by the President to Congress.
The text of the bilateral trade agreement with Vietnam must be transmitted by the
President to both houses of Congress, together with a proclamation4 extending
nondiscriminatory treatment to Vietnam and stating his reasons for it (Section 407(a); 19
3 For detail on the Jackson-Vanik amendment, see CRS Report 98-545 E, Jackson-Vanik
Amendment: A Survey, by Vladimir N. Pregelj.
4 Although the proclamation is issued at the time of transmittal of the agreement to Congress (i.e.,
well in advance of the eventual enactment of the approval resolution and its implementation), its
entry into force is specifically delayed to the date of the exchange of notices of acceptance of the
agreement by its two parties.
U.S.C. 2437). While there is no statutory deadline for the transmittal of the proclamation
and the agreement to Congress after its signing, the law requires that the transmittal take
place “promptly” after the proclamation is issued.5
(3) Mandatory introduction of approval resolution.
On the day the trade agreement is transmitted to the Congress (or, if the respective
house is not in session on that day, the first subsequent day on which it is in session), a
joint resolution of approval (Sec. 151(b)(3); 19 U.S.C. 2191(b)(3)) must be introduced (by
request) in each house by its majority leader for himself and the minority leader, or by their
designees (Sec. 151(c)(2); 19 U.S.C. 2191(c)(2)).6
(4) Language of approval resolution.
The language of the resolution is prescribed by law (Sec. 151(b)(3); 19 U.S.C.
"That the Congress approves the extension of nondiscriminatory treatment with
respect to the products of Vietnam transmitted by the President to the Congress on June
(5) Committee referral.
The resolution is referred in the House to the Committee on Ways and Means and in
the Senate to the Committee on Finance (Sec. 151(c)(2); 19 U.S.C. 2191(c)(2)).
(6) Amendments prohibited.
No amendment to the resolution, and no motion, or unanimous-consent request, to
suspend the no-amendment rule, is in order in either house (Sec. 151(d); 19 U.S.C.
(7) Committee consideration in the House.7
If the Ways and Means Committee has not reported the resolution within 45 days8
after its introduction, the Committee is automatically discharged from further
consideration of the resolution, and the resolution is placed on the appropriate calendar
(Sec. 151(e)(1); 19 U.S.C. 2191(e)(1)).
5 Trade agreement with Vietnam and other required documents were transmitted by the President
to Congress on June 8, 2001. They have been published as House Document 107-85.
6 S.J.Res. 16 and H.J.Res. 51 to approve the trade agreement with Vietnam were introduced,
respectively, on June 11 and 12, 2001.
7 Committee consideration in the House as described in the body of this report, differs from that
in the Senate (see item (9). This is due to the treatment, in this report, of the approval resolution
as a “revenue” measure (an “implementing revenue resolution”, which it is widely presumed to be,
since it would affect–adversely– customs revenues due to the significantly lower NTR tariff rates
assessed on imports from Vietnam after the agreement enters into force (cf. Sec. 151(b)(2)); 19
U.S.C. 2191(b)(2); but see also footnote 11). As such, the resolution is required by the U.S.
Constitution to originate in the House.. This origination provision, however, does not mean that a
companion resolution may not be introduced and considered in the Senate, but only that the
measure eventually passed by both houses and submitted to the President for signature, has to be
a House measure.
8 In computing the number of days in either house, any day on which that house is not in session
is excluded (Sec. 151(e)(3); 19 U.S.C. 2193(e)(3)).
(8) Floor consideration in the House.
(a) A motion to proceed to the consideration of the approval resolution is highly
privileged and nondebatable; an amendment to the motion, or a motion to reconsider the
vote whereby the motion is agreed or disagreed to, is not in order (Sec. 151(f)(1); 19
(b) Debate on the resolution is limited to 20 hours9, divided equally between the
supporters and opponents of the resolution; a motion further to limit debate is not
debatable; a motion to recommit the resolution, or to reconsider the vote whereby the
resolution is agreed or disagreed to, is not in order (Sec. 151(f)(2); 19 U.S.C. 2191(f)(2)).
(c) Motions to postpone the consideration of the resolution and motions to proceed
to the consideration of other business are decided without debate (Sec. 151(f)(3); 19
(d) All appeals from the decisions of the Chair relating to the application of the rules
of the House of Representatives to the approval resolution are decided without debate
(Sec. 151(f)(4); 19 U.S.C. 2191(f)(4)).
(e) In all other respects, consideration of the approval resolution is governed by the
rules of the House of Representatives applicable to other measures in similar circumstances
(Sec. 151(f)(5); 19 U.S.C. 2191(f)(5)).
(f) The vote (by simple majority) on the final passage of the approval resolution mustth10
be taken on or before the 15 day after the Ways and Means Committee has reported the
resolution, or has been discharged from its further consideration (Sec. 151(e)(1); 19
(9) Committee consideration in the Senate 11
An approval resolution adopted by the House of Representatives and received in the
Senate is referred to the Finance Committee (Sec. 151(c)(2) and (e)(2); 19 U.S.C.
15 days after its receipt from the House or 45 days after the introduction of its own
corresponding resolution (whichever is later), the Committee is automatically discharged
from further consideration of the resolution, and the resolution is placed on the appropriate
calendar (Sec. 151(e)(1); 19 U.S.C. 2191(e)(1)).
(10) Floor consideration in the Senate.
(a) A motion to proceed to the consideration of the approval resolution is privileged
and nondebatable; an amendment to the motion, or a motion to reconsider the vote
9 This statutory deadline has in past practice often been reduced by floor action.
10 Computed as in footnote 8.
11 This item describes the procedure for enacting “revenue” joint resolutions approving trade
agreements with nonmarket economy countries. Ambiguity in the applicable statutory language,
however, has engendered a controversy as to whether they are to be considered as “revenue” or
“nonrevenue” measures, which may eventually have to be resolved by a parliamentarian ruling.
12 Although a joint resolution of approval must be introduced in both houses (see item (3)), Section
151 contains no specific provisions regarding the consideration of a Senate “revenue” approval
resolution (situation presumed in the procedure as described in this report). The reason for this
omission appears to be in that a “revenue” measure can be enacted only as a House measure (see
13 Both computed as in footnote 8.
whereby the motion is agreed or disagreed to, is not in order (Sec. 151(g)(1); 19 U.S.C.
(b) Debate on the approval resolution and on all debatable motions and appeals
connected with it is limited to 20 hours, equally divided between, and controlled by, the
majority leader and the minority leader, or their designees (Sec. 151(g)(2); 19 U.S.C.
(c) Debate on any debatable motion or appeal is limited to one hour, equally divided
between, and controlled by, the mover and the manager of the resolution, except that if the
manager of the resolution is in favor of any such motion or appeal, the time in opposition
is controlled by the minority leader or his designee; such leaders may, from time under
their control on the passage of the resolution, allot additional time to any Senator during
the consideration of any debatable motion or appeal (Sec. 151(g)(3); 19 U.S.C.
(d) A motion further to limit debate on the approval resolution is not debatable; a
motion to recommit it is not in order (Sec. 151(g)(4); 19 U.S.C. 2191(g)(4)).
(e) The vote (by simple majority) on the final passage of the approval resolution must
be taken on or before the 15th day14 after the Finance Committee has reported the
resolution, or has been discharged from its further consideration (Sec. 151(e)(2); 19
(f) Although, unlike in the case of the House procedure, this is not specifically
mentioned in Section 151, the Rules of the Senate govern the consideration of the
approval resolution in the Senate in all aspects not specifically addressed in Section 151.
(g) If prior to the passage of its own approval resolution, the Senate receives the
approval resolution already passed by the House, it continues the legislative procedure on
its own resolution, but the vote on the final passage is on the House resolution.
(11) President’s implementing authority.
(a) After the joint resolution approving the trade agreement with Vietnam is passed
by both houses and signed by the President, it becomes public law, in effect, authorizing
the President to put into effect the already issued proclamation16 implementing the
agreement extending nondiscriminatory treatment to Vietnam (Secs. 404(a) and 405(c);
(b) Application of nondiscriminatory treatment is limited to the term during which the
agreement remains in force (Sec. 404(b); 19 U.S.C. 2434(b)) (see also footnote 16 and
text which it accompanies).
(c) The President may at any time suspend or withdraw nondiscriminatory treatment
of Vietnam (Sec. 404(c); 19 U.S.C. 2434(c)) and thereby subject all imports from that
country to column 2 tariff rates (i.e., full rather than NTR rates).
(12) Approval by Vietnam.
The agreement also must be approved by Vietnam’s National Assembly.
(13) Entry into force.
After the joint resolution of approval is enacted and the agreement is approved by
Vietnam, the proclamation (see item (2) becomes effective, the agreement enters into
14 Computed as in footnote 8.
15 See item (8)(e).
16 See footnote 4.
force, and nondiscriminatory treatment is extended to Vietnam on the date of exchange
of written notices of acceptance of the agreement by the United States and Vietnam. A
notice of the effective date of the agreement is published by the U.S. Trade Representative
in the Federal Register.
(14) Maintenance in force.
According to its own terms (Article 8 of Chapter VII - General Articles), the
agreement with Vietnam remains in force for a period of three years and is automatically
renewable for successive three-year terms unless either party to it, at least 30 days before
the expiration of the then current term, gives notice of its intent to terminate the
agreement. If either party ceases to have domestic legal authority to carry out its
obligations under the agreement, it may suspend the application of the agreement, or, with
the agreement of the other party, any part of the agreement.17
In addition, Section 405(b)(1) (19 U.S.C. 2435(b)(1)) limits the life of trade
agreements restoring nondiscriminatory treatment to NME countries to an initial term of
three years. Agreements may be renewable for additional three-year terms if a satisfactory
balance of trade concessions has been maintained during the life of the agreement and the
President determines that actual or foreseeable U.S. reductions of trade barriers resulting18
from multilateral negotiations are satisfactorily reciprocated by the other country.
17 One such circumstance would arise if Vietnam’s waiver under the Jackson-Vanik amendment
(see p. 1-2) were no longer in force either by the President’s failure to renew it annually or through
the enactment of a joint resolution disapproving its annual extension. Enactment of such resolution
(H.J.Res. 55) to disapprove the extension of Vietnam’s waiver, introduced on June 1, 2001 (but
defeated in the House on July 26, 2001) would have prevented the extension of nondiscriminatory
treatment to Vietnam or, if already in force, nullified it.
18 The latter provision reflects the fact that, by being granted nondiscriminatory treatment by the
United States, an NME country would benefit from U.S. concessions extended to third countries,
without itself, theoretically, having to extend any concessions specifically to the United States; it
would merely have to apply to the United States the same concessions that it has granted to third
countries. In the case of Vietnam, however, the bilateral agreement does provide for comprehensive
U.S.-specific concessions in addition to those applicable merely on MFN basis.