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US agrees deal for Vietnam to join WTO

Posted on: Sunday, 14 May 2006, 04:54 CDT

WASHINGTON (Reuters) - Vietnam has reached agreement on a trade deal with the United States that paves the way for the communist-run country to join the World Trade Organization this year, U.S. and Vietnamese officials said on Sunday.

The agreement lowers tariffs on U.S. industrial and farm products and removes non-tariff barriers that block U.S. service providers from working in Vietnam, Stephen Norton, a spokesman for the U.S. Trade Representative, said in a statement.

In Hanoi, the state-run Tuoi Tre (Youth) newspaper quoted an official at the Vietnamese embassy in Washington as saying the two countries, former war enemies in the 1960s and 70s, were expected to sign the agreement in early June.

Once a deal is completed, the U.S. Congress must vote on giving the Southeast Asian country of 83 million people Permanent Normal Trade Relations Status. Then Vietnam would submit its final request for WTO membership later in 2006.

Outgoing U.S. Trade Representative Rob Portman, who has been nominated to be the next White House budget director, said it was a "good agreement" for U.S. business.

"It opens a new and growing market for American agricultural goods, services, such as financial services, and manufactured products," said Portman, whose designated successor Susan Schwab was scheduled to visit Vietnam on June 1 and 2 for a conference of Asia Pacific Economic Cooperation (APEC) trade ministers.

"Vietnam recognises that broad-based reform and economic liberalisation are essential to its integration into the global economy," Portman said. "We intend to work hard with Vietnam to complete the process of its full accession to the WTO."

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The VietnamNet online newspaper quoted sources close to the Vietnamese trade negotiators as saying the two sides reached agreement after "finding a common voice" on outstanding issues.

Tuoi Tre said the deal included Vietnam scrapping a $4 billion subsidy plan for garments and textiles as soon as it joins the world's biggest trading club.

Some members of the U.S. Congress were expected to put religious and human rights constraints on any trade bill. But on a visit to Hanoi last month, U.S. House of Representatives Speaker Dennis Hastert, an Illinois Republican, urged Congress to pass a deal, saying the "greater good" outweighed human rights concerns.

Vietnam has completed deals needed to enter the Geneva-based WTO with all of its other leading trade partners.

The United States and Vietnam restored diplomatic relations in 1995, 20 years after the end of the Vietnam War. Since the countries signed a previous business deal in 2001 known as the Bilateral Trade Agreement, Vietnamese exports to the United States have grown to more than $6.5 billion in 2005.

Hanoi wants to be a WTO member by the time it hosts President Bush in November for the annual summit of the 21-member APEC forum.

(Additional reporting by Nguyen Nhat Lam and Grant McCool in Vietnam)

Source: REUTERS

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