The Office of the US Trade Representative (USTR) has issued a formal determination in the Vietnam Currency Section 301 investigation confirming no trade action is “warranted at this time”.
|US Trade Representative Katherine Tai. Source: CNN|
The move came following a related agreement was reached on July 19 between the US Department of the Treasury and the State Bank of Vietnam, in which the USTR said it has provided a satisfactory resolution of the subject matter under investigation.
“I commend Vietnam for its commitment to addressing US concerns with its currency practices and setting an important example for the Indo-Pacific region,” said US Trade Representative Katherine Tai.
“Going forward, in coordination with Treasury, we will work together with Vietnam to ensure implementation, and we will continue to examine the currency practices of other major trading partners,” she noted.
Earlier this week, US Secretary of the Treasury Janet L.Yellen and SBV’s Governor Nguyen Thi Hong held an online meeting to address the Treasury’s concerns about Vietnam’s currency practices as described in Treasury’s Report to Congress on the Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the US.
In a joint statement released afterward, the SBV confirmed that Vietnam is bound under the Articles of Agreement of the International Monetary Fund (IMF) to avoid manipulating its exchange rate in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage and will refrain from any competitive devaluation of the Vietnamese dong (VND).
With the same goals of maintaining the strength, stability, development, and resilience of each country’s economy and financial system, both the US Department of the Treasury and the SBV have committed to maintaining close cooperation and addressing shared challenges, such as supporting a strong and inclusive recovery from the Covid-19 pandemic.
The US Department of Treasury on April 17 lifted Vietnam, Switzerland, and Taiwan (China) from the list of currency manipulators for the lack of evidence to conclude that the three countries had manipulated their exchange rates for "purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade."
Along with such a move, the US announced a Monitoring List of major trading partners that needs close attention to their currency practices and macroeconomic policies, comprising of China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, and Mexico.