Landmark trade pact with U.S. has boosted relations: Vietnam

Landmark trade pact with U.S. has boosted relations: Vietnam

Agence France-Presse, Hanoi

Vietnam said Monday that its landmark trade pact with the
United States had boosted bilateral relations between the two
former battlefield foes despite their squabble over catfish.

"The bilateral trade agreement (BTA) has contributed greatly
to the normalization of relations between Vietnam and the United
States," Deputy Trade Minister Luong Van Tu said on the eve of
the pact's first anniversary.

"The BTA is in the interests of the economic, trade and
investment relations between the two countries," he told
reporters.

Billed as a precursor for Vietnam's entry into the World Trade
Organization, the BTA was signed in July 2000 after six years of
tortuous negotiations, but only came into force on Dec. 10, 2001.

For Vietnam, it triggered the immediate slashing of punitive
U.S. tariffs on Vietnamese exports, while U.S. investors were
promised a loosening of the communist-ruled country's tightly
controlled markets in a phased process.

It also culminated the process of renewing formal links
between the two, which were severed after the United States'
humiliating exit from the Vietnam War in 1973.

Then president Bill Clinton initiated the healing process in
1994 when he lifted a trade embargo against the communist-ruled
country. The following year diplomatic relations were
established.

Tu said the financial benefits of the trade deal had been
clearly felt.

"According to our statistics, direct trade over the last 10
months has increased by US$500-$600 million compared to the same
period last year," he told reporters.

Vietnamese exports to the United States are estimated to have
increased by $600-$800 million this year to $1.8 billion, while
U.S. exports to Vietnam are anticipated to have risen $100
million to $500 million, according to U.S. trade figures.

However, Tu said a dumping action initiated in June by U.S.
catfish farmers against their Vietnamese counterparts had marred
the first anniversary of the historic pact.

"The consistent standpoint of the Vietnamese government is
that this is an unreasonable case," Tu said. "This goes against
all principles of fair trade."

He denied that frozen catfish fillets were being dumped on the
U.S. market, saying production costs in Vietnam were far lower
than in the United States.

"We hope the U.S. government will understand that they are not
being dumped and that the low prices are because of Vietnam's
advantage in producing this kind of fish."

The issue was exacerbated last month when the U.S. Commerce
Department, as part of its investigation into the charges,
declared Vietnam a "non-market economy".

The decision could have an impact on the level of any punitive
tariffs levied against Vietnamese catfish imports, should the
dumping allegations be upheld.

A preliminary determination into the anti-dumping
investigation is expected on Jan. 24, with the final conclusion
due in April.