U.S. in the race to woo Vietnam

Updated On: Jul 14, 2006

The U.S. Bush administration is urging Congress to approve normal trade relations with Vietnam and set in place a series of high-level visits to Vietnam this year for political, strategic and economic reasons especially Vietnam’s trade potential.

The Permanent Normal Trade Relations (PNTR) status is necessary for Vietnam’s accession to the World Trade Organization (WTO). Vietnam is currently ineligible for PNTR as the U.S. law withholds the status from certain communist or ex-communist countries. “We believe that WTO accession for Vietnam will benefit theUnited States economically, it will promote reform in Vietnam and it will support broader American interests in Southeast Asia,” said U.S. Trade Representative Karan Bhatia.

The pact required Vietnam to lower import barriers on broad range of U.S. goods and services while U.S. in exchange would have to provide Vietnam the same tariff treatment all other WTO members enjoy. This includes eliminating quotas on clothing which faced opposition from US textile groups. The National Retail Federation Vice President Mr. Pfister however urged senators to reject U.S. textile makers’ demand for continued quotas as Vietnam accounts for only 3.2 percent of US textile and apparel imports by dollar value and 1.9 percent by volume.

Besides the textile industry, the accord enjoys strong support from other industry sectors. According to Mr. Pfister, “extending PNTR for Vietnam will provide the business predictability necessary for retailers to expand commerce ties and investment in Vietnam.”

“The time is now, before other countries, like China, beat us to the punch, by benefiting first from Vietnam’s market-opening commitments,” added U.S. Senator Max Baucus. As Vietnam opens up to be a more confident and attractive regional actor, US fears the growing attention and influence that China has on Vietnam asU.S. pursues a policy of “Hedged engagement with China”.

According to Mr. Thayer, a Vietnam expert at the Australian Defence Academy, “both Hanoi and Washington are receptive to gradually stepping up their military-to-military relationship but Vietnam is keen to do the same with China,” displaying Vietnam’s interest to balance both strategic superpowers.

U.S. Secretary of State Condolezza Rice would be visiting Hanoi later this month to reassure Southeast Asian that the U.S. regards it as important after she skipped the Asean meeting last year. U.S. President George Bush would also be attending the Asia-Pacific Economic Forum in Hanoi this November.


U.S. woos Vietnam (Straits Times, 11 July 2006)

Congress urged to pass Vietnam trade deal soon (Reuters, 11 July 2006)

US Congress urged to pass Vietnam trade deal (Thanhnien News, 12 July 2006)

US govt. urges Congress to back trade ties with Vietnam (Thanhnieh News, 13 July 2006)

US retailers urge PNTR for Vietnam (Thanhnien News, 13 July 2006)