Hanoi formally recognises private sector equality
HANOI - Former enemies Vietnam and the United
States have put into force a historic bilateral trade agreement,
finally allowing Vietnamese exporters to compete on level terms in the world's biggest
market.
Letters implementing the pact, which was signed in July 2000 after years of negotiations,
were exchanged in Washington on Monday by U.S. Trade Representative Robert
Zoellick and Vietnam's Trade Minister Vu Khoan, Zoellick's office said.
A Vietnamese trade official said the signing meant the pact took effect from 3 p.m.
Washington time on Monday (2000 GMT).
It grants Vietnam normal trade relations status with the United States, removing it from a
small list of countries denied this, including North Korea, Afghanistan, Serbia and Cuba.
The World Bank says the pact would boost Vietnam's exports to the United States by $1
billion in four years.
Hanoi and Washington were bitter enemies in the Vietnam War, which ended with a
communist victory in 1975. Until 1994, Washington imposed a punishing trade embargo
that seriously restricted Vietnam's economic development and did not restore diplomatic
ties until a year later.
The USTR called the trade pact a "key step" in the process of normalisation of relations.
Vietnam's Foreign Ministry said the process had been "more fully implemented".
"Our agreement represents progress for the United States, but also for the world trade
system," Zoellick said. "This is an example of how two nations, once divided by war, can
employ trade as a tool to work towards reconciliation."
Symbolising the new era, Boeing Co and Vietnam's government signed a deal on Monday
for the purchase of four Boeing 777-200ER airliners capable of flying non-stop between
the two countries. Boeing put the value of the deal at $680 million.
Equal rights for private sector
Communist-ruled, but increasingly market-driven Vietnam gave a further boost to the
private sector on Tuesday when its National Assembly approved a constitutional
amendment formally guaranteeing private firms equal treatment.
An assembly official told Reuters a supplement to Article 16 read: "All economic sectors
are important components of the socialist-orientated market economy."
Deputy Prime Minister Nguyen Tan Dung told Reuters last month the message of the
amendment to the private sector was "they will be treated completely equally to other
sectors".
The trade pact means Vietnam can now ship goods to the United States at the lowest
possible tariff rates, while U.S. firms get gradually improved access to Vietnam.
Also, provided the terms are properly observed, U.S. firms should get protection of
intellectual property rights, which are widely abused in Vietnam.
Tariffs on Vietnam's exports are slashed to around four percent from an average of about
40 percent, allowing it to compete equally in the world's biggest market.
The Vietnamese trade official said the tariffs would be reduced immediately. But he said it
normally took several days to computerise the new rates, so refunds would be given to
anyone having to pay the old tariffs.
Chris Tragakis, chairman of the American Chamber of Commerce in Vietnam, said the
business community was "very, very pleased" an agreement had finally been reached.
He said it would be a boost for Vietnamese industries ranging from footwear to textiles
and furniture, and provide opportunities for U.S. service providers in areas such as
telecoms and banking.
He said implementation of the terms would be tough, especially in areas like intellectual
property.
"I think the Vietnamese have been very wise not to over expect and the U.S. side does
not over expect," he said.
"We all recognise there's a great deal of work, a lot of technical assistance that's going to
have to go both ways for business people to take full advantage of the opportunities."
Another potential fly in the ointment is human rights, with Hanoi fearing pressure from
Washington on this front given that its normal trade relations status needs to be renewed
annually.
Zoellick said Washington hoped the pact would speed Vietnam's integration into world
economies and said it provided a solid basis for its bid to join the World Trade
Organisation.
"We look forward to contributing to that effort," he said.
By USTR figures, U.S. firms exported more than $368 million worth of goods, including
industrial machinery, fertilisers and semiconductors to Vietnam last year, while Vietnam
exported $821 million of goods to the United States.
By David Brunnstrom - Reuters - December 11, 2001.
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