The BGA Vietnam Team, led by Managing Director Nguyen Viet Ha, wrote an update on the finalized framework for reciprocal trade between Vietnam and the United States.

Context

  • U.S. President Donald Trump and Vietnam Prime Minister Pham Minh Chinh finalized a framework for reciprocal trade October 26 while attending the Association of Southeast Asian Nations (ASEAN) Summit in Kuala Lumpur, Malaysia. The initiative, along with several agreements Trump struck with other Southeast Asian countries, is intended to underscore Washington’s commitment to strengthening economic relations with the ASEAN bloc — an important trading partner for both China and the United States. It comes ahead of an expected meeting between Trump and Chinese President Xi Jinping during the Asia-Pacific Economic Cooperation summit in Korea October 31.

Significance

  • The joint statement on the U.S.-Vietnam Framework for an Agreement on Reciprocal, Fair and Balanced Trade (the framework) is designed to grant exporters from both nations increased market access. Under the terms of the framework, Vietnam will provide preferential access to nearly all U.S. industrial and agricultural products, and the United States will retain a 20 percent tariff rate on Vietnamese exports, with “potential tariff adjustments for aligned partners” on goods listed in Annex III. Additionally, the joint statement establishes commitments to reduce nontariff barriers, boost imports of U.S. agricultural products, enhance collaboration in the aerospace and energy sectors and improve market access for U.S. digital services. It omits any references to “transshipment” or “origin of goods,” issues that may result in higher U.S. tariffs.

Implications

  • While these provisions predominantly support U.S. export interests, they also offer strategic and long-term advantages to Vietnam by reinforcing adherence to a rules-based, open trading environment, in turn promoting predictability and confidence among foreign investors. The framework indicates that additional negotiations are necessary to finalize a comprehensive agreement, expected to be concluded by late November. Vietnamese negotiators are expected to draw insights from the U.S. agreements with Malaysia and Cambodia, noting that the Malaysia deal has not fully met domestic public expectations (see BGA’s update on the trade deal with Malaysia).

We will continue to keep you updated on developments in Vietnam. If you have any comments or questions, please contact BGA Vietnam Managing Director Nguyen Viet Ha at vietha@bowergroupasia.com

Best regards,

BGA Vietnam Team

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Managing Director

Ha is a highly respected Vietnamese lawyer, with special expertise in financial transactions, mergers and acquisitions, as well as general business, trade and investment-related issues. Before joining BGA as managing director for Vietnam, Ha managed the Vietnam operations of BrooksBowerAsia for three years. She built and led the Vietnam team and serviced clients in various sectors ranging from energy and ICT to healthcare, logistics and consumer production. Ha practiced law in Vietnam in the 1990s, providing legal advice and consulting services to Fortune 500 clients. She also participated in drafting a number of laws and regulations, including the Foreign Investment ... Read More