From the mid-1970s to the mid-1990s, economic and trade relations between the United States and Vietnam remained virtually frozen, in part a legacy of the Vietnam War. On May 2, 1975, after the Democratic Republic of Vietnam (North Vietnam) defeated U.S. ally the Republic of Vietnam (South Vietnam), President Gerald R. Ford extended President Richard M. Nixon's 1964 trade embargo on North Vietnam to cover the reunified nation. Under the Ford embargo, bilateral trade (including arms sales) and financial transactions were prohibited. Economic and trade relations between the two nations began to thaw during the Clinton Administration, building on joint efforts during the Reagan and George H. W. Bush Administrations to resolve a sensitive issue in the United States—recovering the remains of U.S. military personnel declared "missing in action" (MIA) during the Vietnam War. The shift in U.S. policy also was spurred by Vietnam's withdrawal from Cambodia. President Bill Clinton ordered an end to the U.S. trade embargo on Vietnam on February 3, 1994, and on July 11, 1995, the United States and Vietnam restored diplomatic relations. Two years later, President Bill Clinton appointed the first U.S. ambassador to Vietnam since the end of the Vietnam War. Bilateral relations also improved in part due to Vietnam's 1986 decision to shift from a Soviet-style central planned economy to a form of market socialism. The new economic policy, known as doi m oi ("change and newness"), ushered in a period of 30 years of rapid growth in Vietnam. Since 2000, Vietnam's real GDP growth has averaged over 6% per year. Much of that growth was generated by foreign investment in Vietnam's manufacturing sector, particularly its clothing industry. The United States and Vietnam signed a bilateral trade agreement (BTA) on July 13, 2000, which went into force on December 10, 2001. As part of the BTA, the United States extended to Vietnam conditional most favored nation (MFN) trade status, now known as normal trade relations (NTR). Economic and trade relations further improved when the United States granted Vietnam permanent normal trade relations (PNTR) status on December 29, 2006, as part of Vietnam's accession to the World Trade Organization (WTO). In June 2007, the United States and Vietnam signed a Trade and Investment Framework Agreement (TIFA), and set up a ministerial-level Trade and Investment Council to discuss issues related to the implementation of the TIFA and WTO agreements, as well as trade and investment policies in general. Since signing the TIFA, Vietnam has indicated a desire to foster closer trade relations. In 2008, Vietnam applied for acceptance into the U.S. Generalized System of Preferences (GSP) program and the two nations started negotiations of a bilateral investment treaty (BIT). Both those initiatives, however, receded in importance once Trans-Pacific Partnership (TPP) negotiations got underway in 2008. The United States also has expressed an interest in closer economic relations, but has told the Vietnamese government that it needs to make certain changes in the legal, regulatory, and operating environment of its economy to conclude the BIT agreement or to qualify for the GSP program. For the first few years following the end of the U.S. embargo in 1994, trade between the two nations grew slowly, principally because of Vietnam's lack of NTR (see Figure 1 ). However, following the granting of conditional NTR in December 2001, trade flows between the United States and Vietnam grew quickly. According to both nations' official trade statistics, merchandise trade nearly doubled between 2001 and 2002. Bilateral trade continued to climb after the United States granted PNTR status to Vietnam in 2006. U.S . imports from Vietnam slid 4.7% in 2009 because of the U.S. economic recession, but have rebounded sharply since 2010. According to U.S. trade statistics, U.S. exports to Vietnam declined by nearly $2 billion in 2017, but Vietnamese trade statistics show an increase in imports from the United States of almost $500 million. The growth in bilateral trade also has created sources of friction over specific goods. A rapid increase in Vietnam's clothing exports to the United States led to the implementation of a controversial monitoring program from 2007 to 2009. The growth in Vietnam's catfish exports (also known as basa , swai , and tra ) has also generated tensions between the two nations (see " Catfish " section below). The recent growth of new merchandise exports from Vietnam, such as electrical machinery, may become subject to future bilateral trade friction. A possible area for growth in U.S. exports to Vietnam is arms sales (see " Arms Sales " section below). In May 2016, President Obama announced that he would lift the remaining restrictions on arms sales to Vietnam. The Trump Administration has repeatedly signaled its interest in increasing arms sales to Vietnam, and has reportedly made such sales a priority for the Defense Department, the State Department, and the U.S. embassy in Hanoi. So far, such arms sales have been limited, despite the expressed interest displayed by both governments. The Trump Administration has indicated that reducing U.S. bilateral trade deficits will be a priority in its trade policy. During a June 2017 meeting with South Korea's President Moon Jae-in, President Trump reportedly said, "The United States has trade deficits with many, many countries, and we cannot allow that to continue." The $32 billion bilateral merchandise trade deficit with Vietnam in 2016 was reportedly a major issue during President Trump's May 2017 meeting at the White House with Vietnam's Prime Minister Nguyen Xuan Phuc. The bilateral trade deficit also was discussed during President Trump's meeting with Vietnam's President Tran Dai Quang in Hanoi in November 2017. Since 2001, the U.S. merchandise trade deficit with Vietnam has risen significantly, resulting in its rise from 45 th largest in 2001 to the 5 th largest bilateral deficit in 2017 (see Table 1 ). The increase in the U.S. trade deficit with Vietnam has been largely driven by substantial and successive increases in the import of new types of goods from Vietnam, starting in the early 2000s with clothing, apparel and footwear, and then from 2012 to 2017 expanding into electronics and machinery. This growth largely reflects changes in Asia's regional supply chains, in which major manufacturers from China, Japan, South Korea, the United States, and other nations have relocated some of their production facilities to Vietnam, resulting in an increase in Vietnamese exports. The joint statement issued following Prime Minister Phuc's May 2017 meeting with President Trump identified a number of measures to be taken to "actively promote mutually beneficial and ever-growing economic ties to bring greater prosperity to both countries." The measures included: Both nations "creating favorable conditions for the businesses of both sides, particularly through the effective use of the Trade and Investment Framework Agreement to address issues in United States-Vietnam relations in a constructive manner"; Vietnam pursuing "a consistent policy of economic reform and international integration, creating favorable conditions for foreign companies, including those of the United States, to do business and invest in Vietnam"; Vietnam protecting and enforcing intellectual property; Vietnam "bringing its labor laws in line with Vietnam's international commitments"; and Both nations pledging "to continue to work together constructively to seek resolution of other priority issues of each country, including those related to intellectual property, advertising and financial services, information-security products, white offal, distiller's dried grains, siluriformes , shrimp, mangos, and other issues." Following their November 2017 meeting, President Quang and President Trump released a joint statement that stated: The two leaders pledged to deepen and expand the bilateral trade and investment relationship between the United States and Vietnam through formal mechanisms, including the Trade and Investment Framework Agreement (TIFA). … The leaders committed to seek resolution of remaining agricultural trade issues, including those regarding siluriformes , shrimp, and mangoes, and to promote free and fair trade and investment in priority areas, including electronic payment services, automobiles, and intellectual property rights enforcement. In addition, Vietnam's Minister of Trade and Investment Tran Tuan Anh met with U.S. Trade Representative Robert Lighthizer on May 30, 2017, and asked that the United States recognize Vietnam as a market economy, lift the new catfish inspection regulations, and accelerate the licensing of Vietnamese fruit exports to the United States. As both joint statements indicate, the United States and Vietnam have agreed to utilize the 2007 bilateral TIFA, and its Trade and Investment Council (the Council), as a major vehicle to discuss trade and investment issues. According to Article Two of the TIFA, the Council "shall endeavor to meet no less than once a year." The two nations held the first Council meeting since 2011on March 27-28, 2017, in Hanoi. During the meeting, Assistant U.S. Trade Representative Barbara Weisel urged Vietnam to address certain bilateral trade issues, such as agriculture and food safety, intellectual property, digital trade, financial services, customs, industrial goods, transparency and good governance, and illegal wildlife tracking. During a May 2017 meeting with U.S. Trade Representative Robert Lighthizer, Minister of Industry and Trade Tran Tuan Anh urged the United States to recognize Vietnam as a market economy, repeal the special catfish inspection procedures (see " Catfish " below), and reduce barriers to Vietnamese fruit imports. Catfish have been a source of trade friction between the United States and Vietnam since 2002. 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. Since 1999, Vietnamese exports of basa , swai , and tra frozen fish fillets have secured a growing share of the U.S. market, despite the objections of the U.S. catfish industry and the actions of the U.S. government.