|Vietnamese Trade Minister Truong Dinh Tuyen (R) meets with Dorothy Dwoskin, assistant US Trade Representative for WTO|
The United States and Viet Nam have reached an agreement in principle paving the way for Viet Nam to join the World Trade Organization this year, U.S. and Vietnamese officials said on May 14.
The pact lowers Ha Noi's tariffs on US industrial and farm products and removes other barriers that block US companies in sectors such as telecommunications, retailing, banking, insurance and energy from doing business in Viet Nam, the US Trade Representative's office said.
US officials hailed it as a milestone in a two-decades-old process of normalizing relations and said it would boost US exports in one of the fastest-growing markets in Asia.
In Ha Noi, the Tuoi Tre newspaper quoted an official at the Vietnamese Embassy in Washington as saying the two countries were expected to sign the agreement in early June.
"Viet Nam recognizes that broad-based reform and economic liberalization are essential to its integration into the global economy," outgoing U.S. Trade Representative Rob Portman said. "We intend to work hard with Viet Nam to complete the process of its full accession to the WTO."
Once a deal is completed, the US Congress must vote on giving the Southeast Asian country of 83 million people the Permanent Normal Trade Relations Status (PNTR). Then Viet Nam would submit its final request for WTO membership later in 2006.
Sen. Max Baucus, a Montana Democrat whose constituents could see increased beef exports under the deal, said he would push for approval of PNTR before August.
Viet Nam agreed to eliminate WTO-prohibited industrial subsidies as part of the pact, including in its textile sector, US trade officials told reporters in a conference call.
That is enforced through a special mechanism allowing the US to re-impose quotas on Viet Nam's textile and clothing shipments if it does not abolish the prohibited subsidies before joining the WTO, they said.
The actual amount of Viet Nam's textile subsidies are nowhere near "the billions of dollars that have been bandied around," a senior US trade official said.
"We believe ... it's a very small program. But whatever it is, it needs to be eliminated and the Vietnamese have committed to us that it will be eliminated," he told reporters on condition he not be identified.
The two countries could sign a final agreement when Viet Nam hosts the annual APEC (Asia Pacific Economic Cooperation) trade ministers meeting in early June.
US trade officials said they did not expect the congressional vote on establishing permanent normal trade relations with Ha Noi to be contentious.
The United States and Viet Nam restored diplomatic relations in 1995. Since the countries signed a business deal in 2001, Vietnamese exports to the United States have grown to more than US$6.5 billion in 2005. The United States exported more than US$1.2 billion of goods to Viet Nam last year.
Ha Noi wants to be a WTO member by the time it hosts President Bush in November 2006 for the annual summit of the 21-member APEC forum. Viet Nam has completed deals needed to join the Geneva-based WTO with all of its other leading trade partners, but still needs to finish work on a multilateral agreement bringing its overall trade regime in line with global rules.