Vietnam Approves Trade Pact with U.S.

HANOI – Vietnam Wednesday approved a historic agreement to normalize trade with former enemy the United States and give it access to the world's biggest market on the same terms most other nations enjoy.

The National Assembly voted 278 in favor and 85 against the market opening pact, which was ratified by Washington last month.

The trade pact, which took years to negotiate and sixteen months to fully ratify after signing in July 2000, will finally remove Vietnam from a small group of states, including North Korea, Afghanistan, Serbia and Cuba, denied normal trade relations with the United States.

Economists say Vietnam will see the most immediate benefits as tariffs on its exports are slashed to about four percent from 40 percent.

Trade Minister Vu Khoan told a news conference the two countries were completing legal formalities to allow for implementation, expected from the start of next year.

"With this event, the process of normalising relations between the Socialist Republic of Vietnam and the United States has been fully realized," Khoan said.

U.S. Charge d'affaires Robert Porter said the United States was confident the pact would take effect by year's end and would do much to dispel remnants of mistrust from the Vietnam War.

"(It) is further evidence that two countries are engaging in a broader, more open relationship," he said in a facsimile message answering questions from reporters.

Vu Khoan said Vietnam had always stressed its willingness to consign the past to the past, but added that U.S.-Vietnam ties needed to be based on mutual respect for independence and non-interference in each other's internal affairs -- terminology Hanoi uses to ward off criticisms of its rights record.

Do Van Tai, head of the assembly's external relations department, said the vote for ratification would have been higher had it not been for a bill approved this year by the U.S. House of Representatives that would tie future U.S. aid to Vietnam to greater respect for rights.

Assembly delegates reiterated calls for the bill to be scrapped, arguing it was hypocritical given the damage the United States had done to Vietnam during the war that ended with a communist victory in 1975.

Khoan said more needed to be done to repair war damage.

Washington imposed a punishing trade embargo on Hanoi until 1994, a year before normalization of diplomatic ties under the Clinton administration.

If properly implemented, diplomats say the pact should ease Hanoi's eventual accession to the World Trade Organization.

Khoan said it was a very important step toward WTO accession, something shown by a plan by the global trade body's director-general Mike Moore to visit Hanoi Thursday.

"We shall now start to discuss the essence of our application to join the WTO," he said. "We have already had four rounds of talks with the WTO, but they have been about transparency only."

Khoan said the National Assembly had instructed the government to takes steps to tighten observance of intellectual property rights, a key requirement of the trade agreement, and admitted that implementation of existing laws was a problem.

Khoan added that further talks would be necessary with the United States to reach an agreement covering textile imports.

Earlier this year analysts said the trade pact could double Vietnam's annual exports to the United States to more than $1.0 billion within one or two years.

But that expectation has been tempered somewhat by the global economic downturn and the turmoil that has followed the September 11 attacks on the United States.

Kazi Matin, the chief World Bank economist in Hanoi, told reporters the trade agreement should provide a boost despite the current slackening of U.S. demand.

"I think Vietnam can still expect some growth of its exports to the U.S. in 2002, and probably a must faster growth rate in 2003 and 2004 when the recovery starts," he said.