Potential Trade Effects of Adding Vietnam to the Generalized System of Preferences Program

In May 2008, Vietnam formally requested to be added to the U.S. Generalized System of Preferences GSP program as a developing country. On June 20, 2008, the office of the U.S. Trade Representative USTR announced that it was initiating a formal review of Vietnams eligibility for GSP benefits and would accept public comments on the application until August 4, 2008. Vietnam has already been accepted into several other developed-country GSP programs around the world, including Canada, the European Union EU, and Japan. The GSP statute provides the President with the authority to designate any country a beneficiary developing country, provided the country complies with various trade policy and labor conditions. Congress does not need to act to approve GSP status for Vietnam. The President is, however, required to notify Congress of his intention. The inclusion of Vietnam into the GSP program is generally viewed as another step in the development of closer bilateral relations.