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The Vietnam News |
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HANOI -
American and Vietnamese
businessmen on Monday hailed a
trade pact struck by the two
governments and predicted steady
growth in commercial ties.
U.S., Vietnam firms laud trade pact, eye dealsThey said the announcement on Sunday that Washington and Hanoi had reached agreement in principle on the deal after three years of talks would boost local exports to the U.S. and eventually make Vietnam a more lucrative place to invest. Officials hope to have the trade pact approved by the U.S. Congress and Vietnam's National Assembly by the year-end. Once passed by Congress, Vietnam will benefit from Normal Trade Relations (NTR), which allows goods to enter the U.S. at the same low tariff rates accorded to most countries. Chris Helzer, corporate responsibility and government relations manager in Vietnam for athletic footwear giant Nike Inc, said enactment of the deal would boost Nike shoe shipments to the U.S. and also improve trademark protection. ``A good portion of footwear that Nike ships into the U.S. comes from China and Indonesia because the higher duties make product out of Vietnam less competitive. Obviously the pact will put Vietnam on an equal footing,'' Helzer told Reuters. He gave no figures for the expected increase in Nike shoes that would be shipped to the U.S. from Vietnam under NTR. Nike makes 20 million pairs of shoes annually through five sub-contractors in Vietnam, worth $400 million in shipments, or four percent of the country's total exports. While Nike did not yet distribute its products in Vietnam, the pact would improve market access and eventually put in place protective trademark mechanisms that would make the country an attractive market to crack, Helzer said. Fred Burke, managing partner at lawyers Baker & McKenzie in Vietnam, said two U.S. investors in the country had already expressed interest in expanding output in children's apparel and furniture production, respectively, for export. In addition, he predicted increased interest from U.S. pharmaceutical and software companies in Vietnam. However, many lawyers have also said they did not expect a flood of quick investment from the United States because Vietnam was still fundamentally a tough place to make money. Many of Hanoi's commitments under the pact, such as cutting tariff rates, will take several years to be implemented. The head of a local textile firm said Vietnam's exports of textiles and garments would be $1.5 billion this year from $1.35 billion in 1998. NTR would help push textile and garment exports to $2 billion in 2000, he added. Economists have estimated Vietnam's exports to the United States -- which were $450 million last year-- would double in the first full year of the agreement. Pham Chi Lan, vice president of the Vietnam Chamber of Commerce and Industry, said U.S. garment tariffs were currently an average 68 percent for Vietnamese-sourced imports versus 10 percent for NTR holders. The rate on footwear was an average 33 percent against five percent. Those high rates had discouraged local manufacturers from diversifying their products, she added. However, foreign manufacturers in Vietnam would probably respond more quickly to NTR than local exporters, who lacked international marketing experience, Lan said. She also predicted an increase in local exports to the U.S. of processed food, rubber, chemicals and minerals. Hanoi and Washington were rivals during the Vietnam War that ended in 1975. They normalised diplomatic ties in 1995. Reuters - July 26, 1999. |