[lbo-talk] US, Vietnam sign trade deal to put Hanoi in WTO

uvj at vsnl.com uvj at vsnl.com
Wed May 31 16:45:24 PDT 2006


Reuters.com

US, Vietnam sign trade deal to put Hanoi in WTO http://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID=2006-05-31T122343Z_01_HAN253224_RTRUKOC_0_US-TRADE-VIETNAM-USA.xml

Wed May 31, 2006

By Grant McCool

HO CHI MINH CITY (Reuters) - Former enemies Vietnam and the United States solidified peacetime ties by signing a new trade deal on Wednesday in the historic palace where communist tanks ended the war in 1975.

Vietnamese and American trade officials signed the pact, which will open the Southeast Asian country's markets in virtually every sector, in the Reunification Palace in Ho Chi Minh City, formerly Saigon.

It paves the way for one-party Vietnam to enter the World Trade Organization this year, 11 years after it began applying.

"I think you will see a jump in two-way trade soon after accession, but the companies who are already here will continue to do well and attract other companies," Virginia Foote, president of the U.S.-Vietnam Trade Council said at the palace, the venue in February when Intel Corp. the world's biggest computer chip maker, announced a $605 million investment.

Since a previous trade deal came into effect in 2001, Vietnamese exports to the United States have grown to more than $6.5 billion in 2005. U.S. exports were more than $1.2 billion.

Wednesday's signing is the latest in a series of business deals and diplomatic steps by the country of 83 million to integrate its small, but fast-expanding economy into the global trading system. Vietnam's gross domestic product grew 8.4 percent in 2005, one of the world's fastest rates after China.

After officials signed and exchanged documents at a long red-cloth covered table in the palace, Vietnam Trade Minister Truong Dinh Tuyen said, "Both sides have been speeding the process of Vietnam's accession to the WTO. It makes important trade preconditions and mutual benefits for both sides."

Vietnamese officials want to finish talks with the Geneva-based WTO in July.

OPEN MARKETS

Details of the agreement released by the United States at the signing showed Vietnam would open its markets to a range of U.S. agricultural goods, services and manufactured products.

For the deal with the United States to come into effect, the U.S. Congress must grant what is called Permanent Normal Trade Relations Status. Any bill passed by Congress will be opposed by some critics of Vietnam's human rights and religious rights record. The textiles industry complained the agreement will open the U.S. market to subsidized foreign competition.

"It was not an easy agreement to reach but that makes the signing all the sweeter," Deputy U.S. Trade Representative Karan Bhatia said at the signing ceremony.

The United States and Vietnam restored diplomatic ties in 1995, 20 years after the April 30, 1975 end of the Vietnam War when communist North Vietnam tanks crashed through the gates of the then presidential palace of the U.S.-backed South Vietnam.

Vietnam agreed to duty-free entry of computers and semiconductors and no tariffs on aircraft. It made commitments that will phase the opening of its energy services market.

More than 94 percent of U.S. exports of manufactured goods will face duties of 15 percent or less and about three quarters of U.S. agriculture exports to Vietnam such as beef, pork, dairy, fruits and nuts will face tariffs of 15 percent or less.

Vietnam limits foreign banks to a minority shareholding of 30 percent but from April 1, 2007 U.S. and other foreign banks will be able to establish 100 percent foreign-invested subsidiaries.

© Reuters 2006. All Rights Reserved.



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