Socialist Republic of Vietnam

The public in both Vietnam and the US has recently focused its attention on consideration by the US Congress whether to grant its Permanent Normal Trade Relations (PNTR) status to Vietnam.

Following the conclusion of the two countries' negotiations on Vietnam's entry into the World Trade Organisation (WTO), PNTR is described as the last door to a completely normal economic and trade relations between Vietnam and the US.

If granted, it would be a popular decision with the US and Vietnamese people and businesses, as it would bring opportunities and enormous benefits to both sides.

It is not by accident that 120 members of the US-Vietnam WTO Coalition sent a letter to each member of the US House of Representatives and recommended that the House ratify Bill H.R 5602 concerning the grant of PNTR for Vietnam as early as in August.

The letter said "Congressional approval of PNTR for Vietnam is necessary for the US business community to take full advantage of the benefits that will be granted to all World Trade Organisation (WTO) members after Vietnam's accession. Without PNTR, the US would be the only WTO member country that would not have access to new market openings for goods and services in Vietnam."

American businessmen are fully aware that with a population of 83 million, Vietnam is one of the ten fastest growing economies in the world, and it is not only a potential Asian market for US products, but also a charming destination for US tourists.

With PNTR approval, US businessmen will be offered a chance to make use of the privileges generated by Vietnam's commitments to opening markets for commodities and services after it joins the world trade body.

Upon becoming a WTO member, Vietnam will levy a tariff level of below 15 percent on three-quarters of US farm products and more than 90 percent of US-manufactured industrial goods. This is seen as an ideal pre- condition for US goods to penetrate the Vietnamese market.

Vietnam's strong commitments to opening markets for the telecommunications, distribution, finance, and energy sectors will also provide big investment opportunities for US businessmen.

If PNTR is approved, US consumers will also have access to Vietnam's low-priced, high-quality products, including seafood, farm and forest products, wooden furniture, clothes, and footwear. Because of this many US congressmen, businesses, workers, farmers and consumers have showed support to the grant of PNTR to Vietnam.
Eleven years after the normalisation of the Vietnam-US diplomatic relationship (July 12, 1995), despite differences and the repercussions of the war, bilateral relations have recorded practical and effective progress.

Worthy of note was the boom in two-way trade after the Vietnam-US Bilateral Trade Agreement (BTA) took effect in December, 2001. Vietnam's exports to the US jumped from US $1.053 billion in 2001 to US $5.276 billion in 2004 and nearly US $7 billion in 2005.

The US quickly became Vietnam's largest importer regarding staples including textiles and garments, aquatic, footwear, wooden furniture and agro-forestry products.

Vietnam is fourth among footwear exporters to the US with its turnover increasing by 40-50 percent every year. It is also fifth in the export of textiles and garments and tenth in exporting wooden furniture.

With its annual import turnover of US $1.7-1.8 trillion, the US will be a very important and potential market for Vietnamese goods.

The investment relationship between the two countries, though it has not been booming, the US has still invested about US $2 billion in more than 250 projects in Vietnam, ranking among the top ten investors.

With the potential in capital and technology of the US, and the efforts of Vietnam in reforming and opening its markets, especially when it enters the World Trade Organisation, the investment relationship is expected to undergo rapid progress.

Source: VNA