January 29, 2024

Warren, DeLauro, 31 Lawmakers Express Concerns about Department of Commerce Review of Vietnam’s Nonmarket Economy Status

Granting Vietnam Market Economy Status Could Threaten American Workers and Manufacturers, Bolster China

“We urge you and your agency to thoroughly consider the economic and labor conditions in Vietnam as you conduct your review of Vietnam’s market economy status, and believe the evidence points to one conclusion: Vietnam does not meet the requirements to receive market economy status under U.S. trade law.”

Text of Senators’ Letter (PDF) | Text of Representatives’ Letter (PDF)

Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), a member of the Senate Finance Committee, and U.S. Representative Rosa DeLauro (D-Conn.), Ranking Member of the House Appropriations Committee, led 31 lawmakers in letters to Secretary of Commerce Gina Raimondo, expressing significant concerns with the Department of Commerce’s (Commerce) review of Vietnam's status as a nonmarket economy (NME) under U.S. trade law and arguing there is significant evidence suggesting Vietnam does not meet the requirements to be designated a market economy. 

“Secretary Raimondo should listen to the concerns of American workers, not jeopardize their job security with bad trade policy. Upgrading Vietnam’s status before its labor standards are improved, including a greenlight for goods produced by forced labor in China, would be a serious mistake,” said Senator Warren. 

“It is vital that the Commerce Department ensure the intended result of our trade laws by maintaining Vietnam’s nonmarket economy status,” said Congresswoman DeLauro. “Any premature graduation to market economy status could erode the U.S. manufacturing base and weaken trade remedies for U.S. workers and industries. Our own government has completed extensive research which reinforces Vietnam’s role as a conduit for an influx of unfairly traded Chinese goods that evade established trade laws. We must ensure our trade laws are not compromised by unwarranted and unfounded requests.”

“USW members are sadly all too familiar with Vietnam’s non-market operations, losing jobs and market share as we have been forced to file trade petitions on a wide range of goods. Given our experiences, it’s clear that Commerce’s review of Vietnam’s non-market economy status is premature and threatens the integrity of our trade enforcement laws. As Commerce undertakes its evaluation, our union commends Sen. Elizabeth Warren and Rep. Rosa DeLauro for spearheading efforts to safeguard our system and protect working families,” said United Steelworkers President David McCall. 

In October 2023, Commerce announced the initiation of a changed circumstances review (CCR) of Vietnam’s NME status. The Tariff Act of 1930 established a six-factor test to determine whether or not a country qualifies as a nonmarket economy, and the lawmakers note that the reality of Vietnam’s economy—including evidence collected by the U.S. government itself—shows Vietnam does not meet any of the first five factors.

The sixth factor Commerce is required to consider is a catch-all, giving it the flexibility to consider additional factors it deems appropriate. The lawmakers urged Commerce, as part of its evaluation of Vietnam’s ability to meet the sixth factor, to take into account Vietnam’s close economic relationship with China, especially as China and Vietnam actively seek to further deepen their trade ties. Vietnam’s manufacturing sector relies heavily on inputs from China, making it “vulnerable to forced labor risks in supply chains.”  Moreover, Commerce itself has raised the alarm about China’s use of Vietnam to circumvent U.S. antidumping duties on Chinese-made products.  

The lawmakers continued by noting that Commerce must consider severe labor issues in Vietnam as a part of the sixth factor: child labor, forced labor, debt bondage, and violations of other internationally recognized labor standards remain prevalent in Vietnam, and nearly 80 percent of Vietnam’s labor force works in the informal economy, with few or no labor protections. 

“There is abundant evidence suggesting that Vietnam does not meet the legal requirements established by Congress to receive market economy status. We are especially concerned by reports that Commerce pledged to the government of Vietnam that your agency’s review will result in a favorable determination, to the detriment of U.S. industries and workers.  We urge Commerce to examine the full range of evidence as it conducts its review and to consider the impact on American jobs and producers in its final determination,” wrote the senators in their letter.

“Granting Vietnam market economy status before it addresses its clear nonmarket behavior and the severe deficiencies in its labor law will worsen ongoing trade distortions, erode the U.S. manufacturing base, threaten American workers and industries, and reinforce Vietnam’s role as a conduit for goods produced in China with forced labor. We urge you and your agency to thoroughly consider the economic and labor conditions in Vietnam as you conduct your review of Vietnam’s market economy status, and believe the evidence points to one conclusion: Vietnam does not meet the requirements to receive market economy status under U.S. trade law. To find otherwise would weaken our trade enforcement laws and jeopardize the livelihoods of American workers,” concluded the senators in their letter. 

In the letter sent by members of the House of Representatives, the lawmakers made clear that granting Vietnam market economy status would undermine U.S. workers and trade law.

“The evidence that Vietnam remains an authoritarian country with state control over critical aspects of the economy is overwhelming…” wrote the representatives in their letter. “…Commerce must protect the efficacy of our nation’s trade laws by maintaining Vietnam's nonmarket economy status. Any premature graduation to market economy status will exacerbate existing economic trade distortions, weaken trade remedies for U.S. workers and industries, erode the U.S. manufacturing base, reinforce Vietnam's role as a conduit for an influx of unfairly traded Chinese goods that evade established trade laws and circumvent regulations such as the Uyghur Forced Labor Prevention Act, and undermine U.S. supply chain resiliency.”

Senator Warren led Senators Sherrod Brown (D-Ohio), Tammy Baldwin (D-Wis.), Bob Casey (D-Pa.), Debbie Stabenow (D-Mich.), Bernie Sanders (D-Vt.), John Fetterman (D-Pa.), and Tina Smith (D-Minn.) in a Senate letter, and Representative DeLauro (D-Conn.) led Representatives Donald Norcross (D-N.J.), Jill Tokuda (D-Hawaii), Paul Tonko (D-N.Y.), Susan Wild (D-Pa.), Linda Sanchez (D-Calif.), Nikkie Budzinski (D-Ill.), Donald Davis (D-N.C.), Morgan McGarvey (D-Ky.), Barbara Lee (D-Calif.), Zoe Lofgren (D-Calif.), Mark Pocan (D-Wis.), Betty McCollum (D-Minn.), Chris Deluzio (D-Pa.), John Garamendi (D-Calif.), Marcy Kaptur (D-Ohio), Debbie Dingell (D-Mich.), Terri Sewell (D-Ala.), Frank Mrvan (D-Ind.), Jan Schakowsky (D-Ill.), Eleanor Holmes Norton (D-D.C.), Adam Schiff (D-Calif.), Val Hoyle (D-Ore.), Pramila Jayapal (D-Wash.), and Katie Porter (D-Calif.) in a House letter. 

Senator Warren has led efforts to push for trade policy that benefits American workers, manufacturers, and industry: 

  • In November 2023, Senator Warren and Representative Schakowsky led 10 lawmakers in a letter to President Joe Biden, commending his administration’s actions countering Big Tech’s influence in trade negotiations, and asking him to replace “digital trade” provisions lobbied for by Big Tech in Indo-Pacific Economic Framework (IPEF) negotiations with new language to ensure regulatory agencies and Congress are able to counter Big Tech abuses and develop a new model for digital rules in trade agreements that promotes competition and protects workers, consumers, and small businesses. 
  • In August 2023, Senator Warren and Representative Jayapal sent a letter to Ambassador Tai, Secretary of State Antony Blinken, and Secretary of Commerce Gina Raimondo, urging them to rebalance the trade advisory committee system to include the interests of of all pertinent stakeholders, including labor, environmental, and other public interests – not just big business.
  • In April 2023, Senator Warren led six of her colleagues in sending a letter to Ambassador Tai and Secretary Raimondo, reiterating concerns about the impact that including skewed digital trade rules in the IPEF will have on the U.S. government’s ability to promote competition, regulate AI, and protect consumer and worker privacy. The lawmakers are also urging USTR to prioritize transparency as they continue to negotiate IPEF.
  • In March 2023, at a hearing of the Senate Finance Committee, Senator Warren questioned USTR Tai on the agency’s approach to digital trade policy in enforcement of existing rules and negotiation of the IPEF.
  • In October 2022, Senator Warren and Representative Jayapal sent a letter to Secretary Raimondo underscoring the dangers of Big Tech’s digital trade agenda.
  • In August 2022, Senator Warren and Representative DeLauro sent a letter to USTR Tai, Secretary Raimondo, Secretary of Blinken, and National Security Advisor Jake Sullivan, requesting that the agencies involved engage in robust consultation with Congress and outside stakeholders on the recently announced IPEF and APEP, and urging them learn from the failures of the Trans-Pacific Partnership (TPP).
  • In July 2022, Senator Warren and Representative Jayapal sent a letter to Secretary Raimondo raising questions about the revolving door between the Department of Commerce and Big Tech companies, and its potential impact on global digital trade rules.
  • In April 2022, Senators Warren and Casey sent letters to USTR Katherine Tai and Secretary of Commerce Gina Raimondo regarding their plans to negotiate an IPEF and how this new trade deal may impact U.S. workers. 
  • In April 2022, at a hearing of the Senate Finance Committee, Senator Warren secured a commitment from USTR Katherine Tai to bring a progressive, worker-centered approach to trade policy in her role as U.S. Trade Representative. 

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