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WORLD / Asia-Pacific

U.S., Vietnam remove last trade barriers
(AP)
Updated: 2006-05-31 20:34

The United States and Vietnam signed a trade pact Wednesday that removes one of the last major hurdles in Hanoi's bid to join the World Trade Organization.

The deal would knock down remaining trade barriers between the two countries, which saw bilateral trade rise 21.6 percent to nearly $8 billion last year, by ending U.S. quotas on Vietnamese textiles and garments and giving American companies greater access to a growing Southeast Asian market.

It also paves the way for Vietnam to reach its goal of becoming a member of the global trading body before Hanoi hosts the Asia Pacific Economic Cooperation summit in November, which

President Bush is scheduled to attend.

A vote in the U.S. Congress is still needed for the pact to take effect.

Deputy Trade Minister Luong Van Tu and Deputy U.S. Trade Representative Karan Bhatia signed the agreement during a ceremony that was attended by Trade Minister Truong Dinh Tuyen and Deputy Prime Minister Vu Khoan as well as U.S. Trade Representative-designate Susan Schwab.

Calling it a "historic step forward," Bhatia said, "Today's signing is the culmination of years of hard work and preparation on both sides."

The United States was the last country that Vietnam had to negotiate a bilateral treaty with for WTO access but a final challenge remains: the U.S. Congress must vote to grant Vietnam permanent normal trading relations.

A vote is needed before Congress breaks in August or else the entire process could be delayed until next year due to U.S. elections in November. However, observers are hopeful that Hanoi will achieve its decade-long goal.

Bhatia said the U.S. Trade Representative's office will seek "prompt approval" for permanent normal trading relations for Vietnam, but said the climate in Congress was challenging, suggesting the deal may face some opposition.

"It's a tight time frame but I think it's doable," said Virginia Foote, with the U.S. Vietnam Trade Council, a Washington, D.C.-based business advocacy group. "This is a huge accomplishment for both sides but especially Vietnam."

A historic bilateral trade agreement in 2001 pushed two-way trade from under $1 billion a year to $7.8 billion last year — most of it exports from Vietnam.

This trade pact will help reduce barriers even further, with Vietnam agreeing to reduce tariffs to 15 percent or less on U.S. manufactured and agricultural goods and open up its telecoms, financial and energy services to foreign companies.

Vietnam also agreed to scrap a $4 billion government plan to improve its textile and garment industry, which the U.S. considered a subsidy.

However, observers are hopeful that Hanoi will achieve its decade-long goal.

 
 

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