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AmCham protests Vietnam tariff rise on U.S. goods

HANOI - A decision by Vietnam to raise import tariffs by 50 percent on all U.S. goods is harming development of commercial ties between the two countries, the American Chamber of Commerce said on Friday.

AmCham's chairman in Hanoi, Anthony Salzman, said the organisation had protested to the Vietnamese government about the move, which took effect on January 1 but received little publicity. Many U.S. firms were ``deeply upset,'' he added.
U.S. executives said the tariff increase was prompted by a new law passed last year that required Vietnam to hike tariffs by 50 percent on any goods that came from countries that did not accord Hanoi with Most Favoured Nation (MFN) trade status.
The move also comes in the middle of efforts by Hanoi and Washington to reach a trade agreement.
A trade agreement with the United States would incorporate MFN for Vietnam, which Washington now calls Normal Trade Relations (NTR).
The sixth round of trade negotiations was held last September but no date has been set for the next session. Before the sixth round, U.S. Ambassador Pete Peterson said it was difficult to predict when an agreement would be in place.

``AmCham believes the 50 percent import surcharge on goods imported from the U.S. is harmful to the reputation of Vietnam as an attractive place to invest, to American businesses in Vietnam and to the continuing development of commercial ties between our two countries,'' Salzman said.
Salzman told Reuters that the tax increase would raise the cost of U.S.-produced goods in Vietnam because suppliers would inevitably pass on the increase to local customers.
``As a result, vitally needed technology, capital goods and equipment will become more expensive in Vietnam,'' he said.
``The American Chamber of Commerce in Vietnam supports the efforts of both the U.S. and Vietnamese governments to reach consensus on the terms of a bilateral agreement consistent with World Trade Organisation open-market principles, thereby allowing businesses in both countries to benefit.''

Salzman is also president of V-TRAC Infrastructure Development Company, the authorised dealer in Vietnam for heavy equipment maker Caterpillar Inc (CAT.N).
He said that a position statement signed by the chairmen of the Hanoi and Ho Chi Minh City AmCham chapters had been sent to the Vietnamese government, but he declined to provide details.

Reuters has obtained from the Trade Ministry a large booklet containing new tariff rates that apply from the start of the year. However, they contain no comparative figures.
U.S. executives said the across-the-board increase followed the adoption of the new tariff law last May.
They said that until January 1, Hanoi had applied the same tariff rate on goods from all countries.
Washington and Hanoi were battlefield foes during the Vietnam War that ended in 1975. They normalised ties 20 years later.
Figures published in official media show Vietnam imported $330 million worth of U.S. goods last year from $416 million the previous year.
Vietnamese exports to the U.S. were $470 million last year from $273 million in 1997.

Reuters - February 05, 1999.