The United States and Vietnam will finalise a trade agreement in the coming weeks that will maintain 20 per cent tariffs on most Vietnamese goods but lift duties on certain products that will be decided at a later stage, the White House said on Sunday.
In return Vietnam committed to offering "preferential access" for most all US goods.
The two countries have agreed to a framework for the agreement on "reciprocal, fair and balanced" trade between the two nations, the countries said in a joint statement released by the White House.
US President Donald Trump in July announced that the United States would place a 20 per tariff on many Vietnamese products, as well as a 40 per cent levy on trans-shipments through Vietnam from third countries.
US TARIFFS TO FALL TO ZERO ON SOME VIETNAM PRODUCTS
In the new deal, the United States will maintain its tariff rate on Vietnamese goods at 20 per cent, but will identify products where the levy can be reduced to zero.
The agreement "will provide both countries' exporters unprecedented access to each other's markets", the Sunday statement said.
Last year, Vietnam, had a trade surplus of $123 billion with the United States, its largest export market.
"In the coming weeks, the United States and Vietnam will work to finalize the Agreement on Reciprocal, Fair, and Balanced Trade, prepare the Agreement for signature, and undertake domestic formalities in advance of the Agreement entering into force," the statement said.
UNITED STATES AND VIETNAM ADDRESS NON-TARIFF BARRIERS
The United States and Vietnam will also work to address both countries' interests when it comes to non-tariff barriers, it said.
Vietnam has agreed to accept vehicles built to U.S. motor vehicle safety and emissions standards, address the issue of import licenses for U.S. medical devices, and streamline regulatory requirements and approvals for U.S. pharmaceutical products.
It will also fully implement Vietnam's obligations under certain international intellectual property treaties, it added.
"The United States and Vietnam are committed to strengthening cooperation towards our shared goals to enhance supply chain resilience, including addressing duty evasion and cooperating on export controls," it said.
VIETNAM TO BUY MORE US PRODUCTS
Vietnam has in recent months promised to boost its imports of American products to narrow the trade gap between the two countries.
Vietnam Airlines, the country's flag carrier, has agreed to purchase 50 aircraft from Boeing, in a deal worth over $8 billion, according to the White House statement.
Vietnamese companies have also signed twenty memorandums of understanding with U.S. companies to purchase US agricultural commodities worth a total estimated value of over $2.9 billion, it added.
Bilateral trade between the United States and Vietnam in the first nine months of this year rose 27 per cent from a year earlier to $126.4 billion, according to Vietnam's customs data.
Vietnam's trade surplus with the United States in the January-September period widened to $99.1 billion from $77.2 billion a year earlier, the data showed.