U.S., Vietnam seal pact, lift WTO obstacle

The U.S. yesterday signed off on an agreement that will allow Vietnam into the World Trade Organization.

The pact removes one of the last hurdles barring the communist nation from joining the world’s capitalist club.

“This truly is an historic step in the relationship between our two countries,” Deputy U.S. Trade Representative Karan Bhatia said in Ho Chi Minh City.

The U.S. evacuated the city, then known as Saigon, in 1975 at the end of a war that cost more than 58,000 American lives. The countries have since slowly rebuilt political and economic ties, and are poised to permanently normalize trade relations.

Congress still must vote on WTO membership for Vietnam. The Bush administration hopes that will happen this summer.

Rep. Benjamin L. Cardin, Maryland Democrat and a party leader on trade issues, said both parties are likely to have concerns about Vietnam’s human rights record as well as its export of manufactured goods such as textiles.

“But there is broad support among Democrats and Republicans to support Vietnam’s admission into the WTO,” he said.

U.S. business groups widely favor WTO membership for Vietnam as a way to open the country’s market and to ensure it plays by global trade rules. But apparel and textile manufacturers oppose the pact.

The deal lifts barriers to bilateral trade, opening opportunities for U.S. companies but also eliminating quotas that capped Vietnam’s fast-growing exports of clothing and fabric to the U.S.

“This deal is a disaster for U.S. manufacturing, and the U.S. textile industry in particular,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.

Mr. Bhatia dismissed textile and apparel concerns during a May 22 briefing in Washington, saying the pact included safeguards to protect the industry.

Apparel is the top U.S. import from Vietnam, valued at $2.9 billion last year — 55 times greater than it was in 2000. Furniture, footwear, coffee and seafood — mostly shrimp and catfish — are other major imports. Aircraft, worth $346 million, was the major U.S. export to Vietnam. The U.S. ran a $5.4 billion trade deficit with Vietnam last year.

Congress in 2002 voted 338-91 to allow President Bush to temporarily normalize trade relations with Vietnam. Mr. Bush has since renewed that status each year.

The country is denied permanent normal trade relations under a 1974 law that links trade to freedom of emigration.

Vietnam also must settle details of its membership with a WTO committee, likely postponing formal membership to at least until the fall.

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