Mixed Reaction On Vietnam Trade Deal

Even though the U.S. and Vietnam have signed a historic trade agreement, it’s not a done deal until the legislatures in both countries approve it.

The AFL-CIO, the largest labor federation in the U.S., is not happy with the agreement and vowed Friday to fight it on grounds that it is a threat to labor standards and human rights.

The market-opening pact, signed Thursday after more than four years of negotiations, would reduce tariffs on goods and services, protect intellectual property and improve investment relations between the two countries, former combatants in the Vietnam War which ended in 1975.

But labor unions have clout with their traditional Democratic allies in congress.

“It (the Vietnam pact) is missing what we've been championing -- core labor standards, human rights and environmental protection,”AFL-CIO President John Sweeney said. “We'll be lobbying against it, that's for sure.”

On the other hand, Peter Ryder, chairman of the American Chamber of Commerce in Hanoi, believes the pact would be a big boost for local business and U.S. firms that have struggled with market barriers.

“We're ecstatic,” he said. “It's going to be something that's going to help everybody. Not just the U.S., not just the Vietnamese -- everybody who is active as an investor in whatever business form in Vietnam.”

But Vietnam's Trade Minister Vu Khoan does not believe it will be easy to win congressional approval of the agreement. He said some U.S. groups, still obsessed with “Vietnam Syndrome”, were trying to prevent normalization.

“The signing of the agreement is an important event, but only a beginning,” he said. “However, I hope the spirit of cooperation will prevail.”

Congressional approval would win Hanoi Washington's coveted Normal Trade Relations (NTR) status and in terms of commerce, the pact initially would mean more for Vietnam than the United States.

Vietnamese exporters would benefit almost immediately, with tariff rates averaging 40 percent being cut to less than 3 percent. However, Hanoi's NTR status would be subject to annual congressional reviews with human rights an issue.

Le Quoc An, chairman of state-run Vietnam National Textile and Garment Corp., the country's biggest garment maker, said the pact should boost exports.

“We will enter a level playing field,” he said, but warned that Vietnam must prepare for tough competition, words echoed by Khai and other ministers.

Vietnamese business analysts say the pact could almost double Vietnamese exports to the United States from about $600 million last year to more than $1 billion in one or two years.

For its part, Vietnam would lower tariffs and undertake a broad range of measures to open its market gradually to U.S. goods, services and investment.

This could boost significantly foreig investment, which has dwindled to some $500 million a year from peaks of $2.8 billion in the 1990s when Vietnam was seen as Asia's next dynamic tiger economy.

A U.S. firm with more than 25 years of experience working with Vietnam called for rapid Congressional approval of the trade agreement.

John McAuliff, executive director of the Fund for Reconciliation and Development and coordinator of the Forum on Cambodia, Laos and Vietnam urged approval for political, strategic and development reasons.

“Normal Trade Relations is very important as a symbol,” said McAuliff. “By ending war-generated economic discrimination against Vietnam, the missing element in a normal bilateral relationship will be put in place. Regional stability will be strengthened as the US moves closer to a multi-dimensional engagement with Vietnam equivalent to that with neighboring countries,” he added.

"Economically NTR places Vietnam on a level playing field with its neighbors for the first time. It can sell competitively to the US a wide variety of agricultural and manufactured goods, both handicraft and mass-produced. This can benefit greatly the lives of average people as well as the national economy.

"Also for the first time U.S. business will find itself on a level playing field with competitors from Europe and Asia whose governments already have normal trade relations,”McAuliff said.

More than 100 American not-for-profit organizations work in Vietnam. These include relief and development agencies, foundations and universities. The Forum on Cambodia, Laos and Vietnam is an informal network of U.S. and Canadian not-for-profit organizations working in Indochina and does not take positions on policy issues.