Timber agreement marks a new chance for improved market access

October 23, 2021 | 11:00
Earlier this month, the Office of the US Trade Representative (USTR) announced an agreement with Vietnam to resolve concerns that led to the initiation in October 2020 of a Section 301 investigation into Vietnam’s acts, policies, and practices related to timber imports.
Adam Sitkoff - Executive director American Chamber of Commerce in Hanoi
Adam Sitkoff - Executive director American Chamber of Commerce in Hanoi

According to the USTR’s notice, the new agreement with Vietnam secures commitments that will help keep illegally harvested or traded timber out of the supply chain and protect the environment and natural resources.

The USTR will monitor the implementation of the agreement and does not plan to impose any trade remedies. The American Chamber of Commerce in Vietnam (AmCham) believes that the United States and Vietnam have developed a healthy trade and investment relationship and we are pleased that the two governments were able to reach this agreement and ease trade tensions.

These tensions were primarily driven by Vietnam’s rising trade surplus with the US. To effectively address the trade imbalance, we would prefer the US government continue to work closely with the US business community in Vietnam on the principal challenges and opportunities that matter most.

For example, there are many areas that US companies view as unfair or discriminatory policies and practices in Vietnam. Examples include digital trade and broadcast, intellectual property rights, customs and tax procedures, and more.

Over the past year of this investigation, AmCham repeatedly urged the US government to resolve issues with Vietnam without resorting to duties, tariffs, or other trade barriers. In our view, we see a great opportunity to create a win-win situation by improving market access conditions for US exports of goods and services to Vietnam as the bilateral trade relationship develops on both sides.

Right now is an important time for Vietnam. We see many businesses here that continue to face significant operational challenges, especially with the frequent changes in regulations that are announced and implemented on very short notice. We need policies that are practical, effective, and affordable. Most importantly, we need to see better coordination at all levels of government on implementing pandemic-related policies.

AmCham is working with the government to ensure a fair, transparent, predictable, and streamlined regulatory environment that values innovation. In these uncertain times, the regulatory approval processes for foreign investment should be less burdensome to encourage and expedite more US investment to support post-pandemic economic recovery here.

As major investors here, American companies have an interest in Vietnam’s continued success. We can all do our part to help during these challenging times because social distancing does not mean social disengagement.

AmCham members stand together with the Vietnamese people and US businesses continue to donate goods and other resources to assist outbreak areas. Working together, we can overcome the challenges caused by the virus.

United States Trade Representative Katherine Tai on October 1 announced an agreement with Vietnam that addresses US concerns in the Vietnam Timber Section 301 investigation. This was the first 301 investigation to address environmental concerns. The agreement secures commitments that will help keep illegally harvested or traded timber out of the supply chain and protect the environment and natural resources.

Ambassador Tai determined that the agreement provides a satisfactory resolution of the matter subject to investigation and that no trade action is warranted at this time. Going forward, the Office of the USTR will monitor Vietnam’s implementation of the agreement. “I commend Vietnam for its commitment to address our concerns,” said Ambassador Tai. “Vietnam will provide a model – both for the Indo-Pacific region and globally – for comprehensive enforcement against illegal timber. The USTR looks forward to working with Vietnam to deepen collaboration and information exchange.”

The agreement contains multiple commitments by Vietnam on issues related to illegal timber, including commitments to improve its Timber Legality Assurance System; keep confiscated timber (meaning timber seized for violating domestic or international law) out of the commercial supply chain; verify the legality of domestically harvested timber regardless of export destination; and work with high-risk source countries to improve customs enforcement at the border and law enforcement collaboration. “Illegal timber in the supply chain damages the global environment and the natural resources on which we all depend, and is unfair to US workers and businesses who avoid such timber,” added Ambassador Tai. “USTR’s first use of Section 301 in this investigation shows the strength of using this tool to address concerns regarding environmental risks or the enforcement of environmental laws.” Source: Office of the US Trade Representative

By Adam Sitkoff

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