The United States also has expressed an interest in closer economic relations, including the possible elimination of restrictions on arms sales to Vietnam, but has previously told the Vietnamese government that it needs to make certain changes in the legal, regulatory, and operating environment of its economy to conclude either the BIT agreement or to qualify for the GSP program. The growth in bilateral trade also has created sources of trade friction. Another complicating factor during the negotiations was Vietnam's negotiations with 15 other nations to form another regional trade agreement, the Regional Comprehensive Economic Partnership (RCEP), that does not include the United States. It is uncertain how RCEP would affect Vietnam's interest and commitment to TPP, if both regional trade agreements are finalized. Key TPP Issues for U.S.-Vietnam Trade Relations

The final text of the TPP agreement contains a number of provisions of particular importance to trade relations between the United States and Vietnam. These include amending existing laws, decrees or resolutions such that:
"workers, without distinction, employed by an enterprise" may form a grassroots labor union of their own choosing without prior authorization; the grassroots labor unions may be formed across enterprises "and at levels above the enterprise"; the grassroots labor unions can register with its choice of either the VGCL or a "competent government body"; "A grassroots labour union registered with the competent government body shall have the right autonomously to elect its representatives, adopt its constitution and rules, organize its administration, including managing its finances and assets, bargain collectively, and organize and lead strikes and other collective actions related to the occupational and socio-economic interests of the workers at its enterprise"; "A grassroots labour union registered with the competent government body shall have no lesser rights in law and practice with regard to the labour rights as stated in the lLO Declaration than a grassroots labour union under the VGCL"; Vietnam's laws do not mandate that "A labour union registered with the competent government body to operate according to the Statutes of Viet Nam General Confederation of Labour"; all labor union officials are elected by that labor union's membership, and union can employ persons to assist with its activities; and Vietnam's laws allow for rights-based strikes, consistent with ILO guidance. The Plan also establishes a Senior Officials Committee (SOC):
composed of senior officials from the Office of the U.S. Trade Representative and the Department of Labor for the United States and from the Ministry of Industry and Trade and the Ministry of Labor, Invalids, and Social Affairs for Viet Nam to monitor, assess and facilitate rapid response to any concerns about compliance with and implementation of the legal and institutional reforms under this Plan. Vietnam's National Assembly reportedly will consider the TPP agreement in July 2016. Vietnam is a major exporter of frozen fish fillets using certain varieties of fish—known as basa , swai , and tra in Vietnamese—that are commonly referred to as catfish in the global fish market. The 2008 Farm Bill transferred catfish inspection (including basa , swai , and tra ) from the Food and Drug Administration (FDA) to the U.S. Department of Agriculture (USDA). The transfer was confirmed in the Agriculture Act of 2014 ( P.L. 113-79 ). As discussed in more detail below, the new inspection regime took effect on March 1, 2016. By these provisions, the 2008 Farm Bill effectively transferred the regulation of imported catfish from the FDA to the USDA, which is generally viewed as maintaining stricter inspection standards than the FDA. Arms Sales

Restrictions on the sales of military equipment and arms are one of the few U.S. trade restrictions with Vietnam that remains in place since the end of the Vietnam War in 1975. For over 20 years, Vietnam has been transitioning from a centrally planned economy to a market economy. Alternatively, Congress could pass legislation stipulating additional eligibility criteria for the President to consider when deciding to confer BDC status to Vietnam. U.S. The value of U.S. clothing imports from Vietnam continued to rise every year until 2009, with the largest year-on-year increases occurring in 2003 and 2007—the first full years after the U.S. granted Vietnam conditional and permanent NTR status, respectively. The perceived continuing problems with Vietnam's IPR protection may have played a role in the TPP negotiations, as well as in any consideration of Vietnam's GSP application. Key Trends in Bilateral Trade

The preceding sections of the report have focused on current and past issues in U.S.-Vietnam trade relations. According to U.S. trade statistics, the top U.S. imports from Vietnam in 2015, besides clothing, were (in order): electrical machinery; footwear; and furniture and bedding (see Table 1 ). The implication is that efforts to curtail the growth of certain top exports of Vietnam to the United States could result in a decline in U.S. exports to Vietnam and possible job losses in the United States. Vietnam was the second-largest source of footwear imports for the United States in 2015 (after China), more than three times the size of imports from Indonesia (the next largest source). Pursuant to this agreement, the two associations are supporting the TPP.
The year 2015 was a memorable year in U.S.-Vietnam relations, marking the 40th anniversary of the end of the Vietnam War, the 20th anniversary of the reestablishment of diplomatic relations, the first U.S. visit by a Chairman of the Vietnamese Communist Party (VCP) (in July), and the conclusion of the Trans-Pacific Partnership (TPP) trade negotiations (in October). This year also will be marked with historical events, including the 15th anniversary of the United States granting Vietnam permanent normal trade relations (PNTR), the February signing of the TPP, and President Obama's first official visit to Vietnam in May.
According to U.S. trade statistics, bilateral trade has grown from about $220 million in 1994 to $45.1 billion in 2015, transforming Vietnam into the 13th-largest source for U.S. imports and 37th-largest destination for U.S. exports. Vietnam is the second-largest source of U.S. clothing imports (after China), and a major source for electrical machinery, footwear, and furniture. Much of this rapid growth in bilateral trade can be attributed to U.S. extension of normal trade relations (NTR) status to Vietnam in 2001. Another major contributing factor is over 20 years of rapid economic growth in Vietnam, ushered in by a 1986 shift to a more market-oriented economic system.
Vietnam's incentive to join the TPP largely is contingent on greater market access in the United States, particularly for agricultural goods, aquacultural goods, clothing, and footwear. For the United States, Vietnam offers a significant market for U.S. exports, but some parties are concerned about Vietnam's protection of workers' rights, protection of intellectual property rights, and potential unfair competition from state-owned or state-controlled enterprises. Vietnam is also a party to negotiations to the Regional Comprehensive Economic Partnership (RCEP), a pan-Asian regional trade association that currently does not include the United States. It is uncertain how RCEP would affect Vietnam's interest and commitment to TPP, if both regional trade agreements are finalized. Congress would have to consider implementing legislation for the United States to comply with the TPP.
The growth in bilateral trade has not been without accompanying issues and problems. Vietnam would like the United States officially to recognize it as a market economy and to further relax U.S. restrictions on arms sales to Vietnam. In addition, the two nations have disagreed over U.S. treatment of the import of catfish-like fish known as basa, swai, or tra, from Vietnam. In 2008, the 110th Congress passed legislation that transferred the regulation of catfish from the Food and Drug Administration to the U.S. Department of Agriculture (USDA), which many analysts contend maintain stricter inspection standards than the FDA. The Vietnamese government strongly protested the law as a protectionist measure. The Agricultural Act of 2014 (P.L. 113-79) confirmed the transfer of inspection to the USDA, and explicitly included basa, swai, and tra as catfish. In November 2015, the USDA released final regulations for the import of catfish that went into effect in March 2016. While Vietnam continues to object to the regulatory change, it is making efforts to comply with the new U.S. inspection regime.
The 114th Congress may play an important role in one or more of these issues, as have past Congresses. The Human Rights Act of 2016 (S. 2632) opposes the "further easing of the prohibition on the sale of lethal military equipment to the Government of Vietnam" unless certain human rights conditions improve. The House report accompanying the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (H.R. 1890), cites a perceived lack of a "mechanism to ensure compliance by TPP parties" to international standards for labor laws and practices, and in particular Vietnam. Vietnam's compliance with a bilateral trade and labor relations side agreement to the TPP may factor in congressional consideration of the larger TPP agreement. This report will be updated as circumstances require.