Notice2021-16095
Determination on Action and Ongoing Monitoring: Vietnam's Acts, Policies, and Practices Related to Currency Valuation
Primary source
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Published
July 28, 2021
Issuing agencies
Trade Representative, Office of United States
Abstract
Based on an agreement reached between the Department of the Treasury (Treasury) and the State Bank of Vietnam (SBV) regarding Vietnam's currency practices, the U.S. Trade Representative has determined that no action under the Section 301 investigation is warranted at this time because Vietnam's agreement with Treasury provides a satisfactory resolution of the matter subject to this investigation. The U.S. Trade Representative, in coordination with Treasury, will monitor Vietnam's implementation of its commitments under the agreement and associated measures.
Full Text
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<title>Federal Register, Volume 86 Issue 142 (Wednesday, July 28, 2021)</title>
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[Federal Register Volume 86, Number 142 (Wednesday, July 28, 2021)]
[Notices]
[Pages 40675-40676]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-16095]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
[Docket Number USTR-2020-0037]
Determination on Action and Ongoing Monitoring: Vietnam's Acts,
Policies, and Practices Related to Currency Valuation
AGENCY: Office of the United States Trade Representative.
ACTION: Notice.
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SUMMARY: Based on an agreement reached between the Department of the
Treasury (Treasury) and the State Bank of Vietnam (SBV) regarding
Vietnam's currency practices, the U.S. Trade Representative has
determined that no action under the Section 301 investigation is
warranted at this time because Vietnam's agreement with Treasury
provides a satisfactory resolution of the matter subject to this
investigation. The U.S. Trade Representative, in coordination with
Treasury, will monitor Vietnam's implementation of its commitments
under the agreement and associated measures.
FOR FURTHER INFORMATION CONTACT: For questions concerning the
investigation, contact Michael T. Gagain, Assistant General Counsel,
202-395-9529, or Marta M. Prado, Acting Assistant U.S. Trade
Representative for Southeast Asia and the Pacific, 202-395-6216.
SUPPLEMENTARY INFORMATION:
I. Proceedings in the Investigation
The U.S. Trade Representative initiated an investigation of
Vietnam's acts, policies, and practices related to the valuation of its
currency pursuant to Section 302(b)(1)(A) of the Trade Act of 1974, as
amended (the Trade Act), on October 2, 2020. See 85 FR 63637 (Oct. 8,
2020) (notice of initiation). On the same date, USTR requested
consultations with Vietnam. Consultations were held on December 23,
2020. The Section 301 Committee solicited public comments, and held a
public hearing on December 29, 2020. See 85 FR 75397 (Nov. 25, 2020).
On January 15, 2021, in consultation with Treasury, based on the
information obtained during the investigation, and taking account of
public comments and the advice of the Section 301 Committee and
Advisory Committees, the U.S. Trade Representative determined that
Vietnam's acts, policies, and practices related to currency valuation,
including excessive foreign exchange market interventions and other
related actions, taken in their totality, are actionable under Sections
301(b)(1)(A) and 304(a) of the Trade Act. See 86 FR 6732 (Jan. 22,
2021) (actionability notice). The U.S. Trade Representative's
determination was accompanied by a comprehensive public report (the
Report). The Report is posted on the USTR website at <a href="https://ustr.gov/sites/default/files/enforcement/301Investigations/Vietnam_Currency_301_Actionability_Report_Jan_15_21.pdf">https://ustr.gov/sites/default/files/enforcement/301Investigations/Vietnam_Currency_301_Actionability_Report_Jan_15_21.pdf</a>.
In particular, the U.S. Trade Representative determined:
1. Vietnam's acts, policies, and practices with respect to currency
valuation, including excessive foreign exchange market interventions
and other related actions, taken in their totality and as discussed in
further
[[Page 40676]]
detail in the Report, are unreasonable in light of U.S. and
international norms that exchange rate policy should not be undertaken
to gain an unfair competitive advantage in international trade, should
not artificially enhance a country's exports and restrict its imports
in ways that do not reflect the underlying competitiveness, should not
prevent exchange rates from reflecting underlying economic and
financial conditions, and should not prevent balance of payments
adjustment;
2. Vietnam's acts, policies, and practices that contribute to
undervaluation of its currency through excessive foreign exchange
market interventions and other related actions burden or restrict U.S.
commerce; and, accordingly,
3. The acts, policies, and practices under investigation are
actionable under Section 301(b) of the Trade Act.
II. Determination on Action
Sections 301(b) and 304(a)(1)(B) of the Trade Act provide that if
the U.S. Trade Representative determines that an act, policy, or
practice of a foreign country is unreasonable or discriminatory and
burdens or restricts U.S. commerce, the U.S. Trade Representative shall
determine what action, if any, to take under Section 301(b). Where an
agreement or measures provide a satisfactory resolution of the matter
subject to investigation, the U.S. Trade Representative may determine
under Section 304 that no action is appropriate. Under Section 306 of
the Trade Act, in such circumstances the U.S. Trade Representative must
monitor the agreement or measures, and may take action at a future time
upon a finding that the implementation has not been satisfactory.
In its December 2020 and April 2021 semiannual foreign exchange
reports to Congress, Treasury determined that Vietnam satisfied the
three criteria in Section 701 of the Trade Facilitation and Trade
Enforcement Act of 2015 regarding Vietnam's currency practices, which
triggered enhanced bilateral engagement between Treasury and the SBV on
this issue.
On July 19, 2021, Treasury and the SBV issued a joint statement
announcing that they had reached an agreement. The joint statement
provides, inter alia, that:
Treasury and the SBV have had constructive discussions in recent
months through the enhanced engagement process, and reached
agreement to address 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 United States.
. . . Vietnam confirms that it is bound under the Articles of
Agreement of the 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. The SBV is also
making ongoing efforts to further modernize and make more
transparent its monetary policy and exchange rate framework. In
support of these efforts, the SBV will continue to improve exchange
rate flexibility over time, allowing the Vietnamese dong to move in
line with the stage of development of the financial and foreign
exchange markets and with economic fundamentals, while maintaining
macroeconomic and financial market stability.
The SBV will continue to provide necessary information for
Treasury to conduct thorough analysis and reporting on the SBV's
activities in the foreign exchange market in Treasury's semiannual
Report to Congress on the Macroeconomic and Foreign Exchange
Policies of Major Trading Partners of the United States.
See Joint Statement from the U.S. Department of the Treasury and the
State Bank of Vietnam (July 19, 2021), <a href="https://home.treasury.gov/news/press-releases/jy0280">https://home.treasury.gov/news/press-releases/jy0280</a>.
The U.S. Trade Representative has found that that the Treasury-SBV
agreement and the measures of Vietnam called for in the agreement
provide a satisfactory resolution of the matter subject to
investigation. Accordingly, the U.S. Trade Representative has
determined under Section 304 of the Trade Act that no action at this
time is appropriate in this investigation. The Trade Representative's
determination was made in consultation with Treasury, and takes into
account the advice of the interagency Section 301 Committee and public
comments and Advisory Committee advice received during the
investigation.
III. Ongoing Monitoring
Pursuant to Section 306(a) of the Trade Act, the U.S. Trade
Representative, in coordination with Treasury, will monitor Vietnam's
implementation of its commitments under the agreement and associated
measures. Pursuant to Section 306(b) of the Trade Act, if the U.S.
Trade Representative in consultation with Treasury subsequently
considers that Vietnam is not satisfactorily implementing the agreement
or associated measures, then the U.S. Trade Representative will
consider further action under Section 301.
Greta Peisch,
General Counsel, Office of the United States Trade Representative.
[FR Doc. 2021-16095 Filed 7-27-21; 8:45 am]
BILLING CODE 3290-F1-P
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