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.