- The Washington Times - Thursday, November 29, 2001

HANOI (AP) Vietnam's National Assembly yesterday ratified a landmark trade agreement with the United States, the last step in a decades-long process of normalization of ties between the former wartime enemies.
But in a sign of continuing tensions, it warned that any U.S. interference in Vietnam's internal affairs could jeopardize implementation.
Vietnam's Communist government has bitterly complained over the U.S. House of Representatives' passage of a Vietnam Human Rights Act that would tie future U.S. nonhumanitarian aid to improvements in Vietnam's human rights record. Vietnamese lawmakers said they fear the U.S. Senate also will pass the act after the trade agreement is approved.
Under the trade deal, Vietnamese goods and services will gain access to the world's largest market with the same low tariffs enjoyed by most nations. In return, Vietnam must open its state-controlled markets to foreign competition and international standards.
The pact symbolizes Vietnam's efforts to integrate into the world economy, said economist Do Duc Dinh of the Institute of World Economy in Hanoi.
"I think this sends a clear and strong signal of Vietnam's willingness to join the international community," he said.
The pact, approved 278-85 by the National Assembly with 17 abstentions, was signed in July 2000 after years of difficult negotiations. It was ratified by Congress and signed by President Bush in October.
"There is a huge sigh of relief that U.S.-Vietnam relations will be normalized," said Susan Adams, chief representative of the International Monetary Fund in Vietnam. "After the war, and all the deep feelings, we've finally buried the hatchet and moved on."
The United States and Vietnam had no formal relations and limited contact in the two decades after the end of the Vietnam War in 1975. The trade deal completes the reconciliation process begun with the lifting of a U.S. trade embargo in 1994 under President Clinton.
In passing the trade agreement, the National Assembly said it "opens a new stage in the economic and trade relations between the two countries."
But it said any American interference in Vietnam's internal affairs, such as passage of the human rights act, "may do harm to bilateral economic and trade relations, including the implementation of the trade agreement."
Trade Minister Vu Khoan, who supports the trade pact, said, "We demand that this act must be buried along with the dark past so together we can look forward to a better future."
The trade pact, which could be implemented Jan. 1, has far-reaching ramifications for Vietnam. It requires that trade barriers be lowered, state industries compete with foreign companies, and copyright and investment guarantees be raised to international levels.
In a concession to Hanoi's fears that American companies will overwhelm domestic industries, U.S. companies will initially have restricted access to Vietnam's banking, insurance, telecommunications, tourism and technical services markets. That will be lifted slowly over a seven-year period.
U.S. tariffs on Vietnamese-made products will drop from as high as 40 percent to about 4 percent.
That is expected to give an immediate boost to Vietnamese exporters of garments and textiles, footwear and seafood. The World Bank has estimated that Vietnam's exports to the United States could double from the current $800 million a year.
The worldwide economic slowdown has cut into those expectations, but Vietnam still expects an increase of up to 30 percent.
For American businesses already in Vietnam, lowered tariffs could provide an incentive to manufacture more.
Nike Inc., which produces 12 percent to 14 percent of its footwear in Vietnam, said it may expand its production once tariff rates drop.

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