July 23, 1999
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| July 23, 1999 | atimes.com | |
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| Southeast Asia U.S.-Vietnam trade accord will make waves By Jim Lobe WASHINGTON - The United States, moving to end one ofthe last vestiges of the Cold War, may conclude a trade deal soonwith Vietnam that will fully normalize economic ties between theformer foes. The U.S. State Department, confirming published reports fromHanoi, said Wednesday that ''significant progress'' had been madein narrowing several issues that remain to be settled before afinal deal is struck. The Office of the U.S. Trade Representative (USTR), leading theU.S. side in talks that began in Hanoi earlier this week, alsoconfirmed that progress had been made but insisted that a reportin the Los Angeles Times that a deal could be signed ''within days''was premature. ''That was way out in front of where we are,'' USTR spokeswomanHelaine Klasky told IPS. Still, officials here are optimistic that the remaining gaps -which centered on Washington's demands for greater access for U.S.-made goods and services and for the stronger protection ofintellectual property rights - could be closed relatively quickly. This would bring to an end negotiations that began in 1995, soonafter the two countries normalized diplomatic ties. A nation of 80 million people, Vietnam emerged relativelyunscathed from the Asian financial crisis which wreaked havoc onmost of its Southeast Asian neighbors. As a result, U.S. businesses have been eager to compete with theirforeign competitors which, until now, enjoyed the advantagesprovided by normal trade ties. Vietnam also stands to benefit by much better access for itsexports to the world's largest market. By sharply reducingbarriers to both trade and investment, Hanoi could expect a rushof U.S. companies eager to invest in labor-intensive industries,such as footwear, apparel and toys, said trade experts. While the precise impact of normal trade ties is difficult todetermine, there is no doubt that they will make a hugedifference, experts say. Tariffs on many goods exported by Vietnam to the U.S.could drop several-fold. Tariffs on shoe exports, for example, could be cut by about 60percent, giving Vietnam a major competitive advantage compared toits neighbors, especially Indonesia and China, which haveattracted tens of millions of dollars in investment from major U.S.footwear retailers. Vietnam currently exports about $470 million in goodsto the U.S., an amount that could nearly double in thefirst year of a trade agreement, according to the World Bank. In a recent study, the bank estimated that 70 percent ofVietnam's exports could be bound for the U.S. within fouryears of such an accord. Some 350 U.S. companies are now active in Vietnam and, withnormal trade relations, that number could also grow significantly,according to a USTR official. ''We've seen a falling off of business interest in the last yearor so as these talks didn't seem to make progress,'' he said. ''Anactual agreement would certainly help renew interest." Indeed, many U.S. companies which rushed into Vietnam afterPresident Bill Clinton lifted the 19-year-old trade embargo in1994 have since gone home. Frustrated by Hanoi's bureaucracy, trade barriers, and what theWorld Bank called the ''glacial'' pace of economic reform, foreigninvestors have been much more cautious about their commitment toVietnam over the past two years. Foreign investment actually fell by almost half during the firsthalf of 1999 compared to the same period last year, according tothe bank. The International Monetary Fund has been so disappointedwith the pace of reform that it cut off lending earlier this yearand is now negotiating a new structural-adjustment loan with Hanoiwhich it hopes to conclude by year's end. On the other hand, bilateral donors and the World Bank havecontinued to support Vietnam. Last December, donors pledged $2.7billion in loans, credits and grants for this year, upfrom $2.4 billion in 1998. Once an agreement is concluded, it must be approved by the U.S.Congress. While any move to normalize ties with Hanoi wascontroversial four years ago, most analysts here now believe itwill pass relatively smoothly. On Tuesday, for example, the Senate voted 94-5 to defeat a far-right effort to formally disapprove Clinton's trade-openingpolicies toward Vietnam. Several Republican senators took the floor to denounce theeffort, with John McCain, a former Vietnam prisoner of war who isamong the three most popular Republican candidates vying for theirparty's presidential nomination, arguing in favor of enhancedeconomic relations with Vietnam. In addition, powerful agricultural interests, which have beenoutspoken against trade sanctions against any country, have made itclear they favor normal ties with Vietnam. A bilateral trade accord would crown a slow process ofnormalization launched back in 1987 - 12 years after U.S. forceshurriedly evacuated South Vietnam - when then-President RonaldReagan sent Gen. John Vessey to Vietnam to propose a joint effortto resolve the fate of U.S. servicemen missing in action during theVietnam War. In 1991 the administration of President George Bush presentedHanoi with a ''roadmap'' plan for a gradual normalization ofrelations - a process that was boosted by President Bill Clintonin 1994 when he lifted the 19-year U.S. trade embargo against Hanoi. In March 1998, Clinton upgraded economic ties by lifting a banon government loans and guarantees for U.S. firms doing businesswith Vietnam. (Inter Press Service) | |||||||||
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