New Opportunities for U.S. Animal Ag in Vietnam

Jamie Johansen

tpp-vietnam-infographicSecretary of Agriculture, Tom Vilsack, traveled to Vietnam to meet with his counterparts from the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade, among others, to discuss the details of the Trans-Pacific Partnership (TPP) agreement.

Vietnam remains one of the fastest-growing markets for U.S. food and agricultural products, with U.S. exports totaling $2.3 billion in 2015. That’s a 357 percent increase from 2007, the year Vietnam joined the World Trade Organization (WTO). Vietnam now ranks as the United States’ 11th-largest agricultural export market and dairy is one of those top products.

Vietnam is a member of the ASEAN Free Trade Zone and has concluded free trade agreements with a number of other countries, including key U.S. competitors such as Australia, Chile, Korea, and New Zealand. In addition to being part of the TPP, Vietnam is in the process of negotiating agreements with China, the European Union, Hong Kong, and Israel. In these negotiations, Vietnam has agreed to tariff reductions on many agricultural products, potentially putting U.S. exporters at a disadvantage.

Under the TPP, Vietnam will reduce and eventually eliminate tariffs across a broad range of food and agricultural products, helping put U.S. exports on a level playing field and giving the United States a leg up on non-TPP competitors.

Beef: The United States exported $32.3 million of beef and beef products to Vietnam in 2015. Under the TPP agreement, all of Vietnam’s tariffs on beef and beef products, currently as high as 34 percent, will be eliminated in 3-8 years. Tariffs on fresh and frozen beef muscle cuts will be eliminated in three years.

Dairy: In 2015, the United States exported $168 million of dairy products to Vietnam, more than three times the value a decade ago. All of Vietnam’s tariffs on dairy products, currently as high as 20 percent, will be eliminated within five years. Tariffs on cheese, milk powder, and whey will be eliminated immediately.

Pork: The United States exported $3.8 million of pork and pork products to Vietnam in 2015. As a large consumer of pork, Vietnam provides significant potential for U.S. exporters. Under the TPP agreement, Vietnam will eliminate tariffs on pork and pork products, currently as high as 30 percent, in 5-10 years. Tariffs on frozen cuts and shoulders will be eliminated in eight years and on preserved pork, fresh pork cuts and shoulders, and fresh and frozen carcasses in 10 years.

Poultry and Eggs: The United States exported nearly $100 million of poultry and poultry products to Vietnam in 2015. Vietnam’s tariffs on poultry and poultry meat, currently as high as 40 percent, will be eliminated within 13 years. This includes tariffs on frozen chicken cuts and offal, which will be eliminated in 11 years. Vietnam will eliminate in-quota tariffs for eggs within its WTO tariff-rate quota (TRQ) in six years. According to Vietnam’s WTO commitments, this TRQ will continue to grow in perpetuity by five percent per year.

Ag Group, Beef, Dairy, Eggs, Export, Policy, Pork, Poultry, usda