The fact that Vietnam officially signed Wednesday in Ho Chi Minh City a deal with the United States, the last out of 28 partners requiring bilateral talks on the former's entry to the WTO, indicates that the country is about to join the global club before the end of 2006, after 11 years of bilateral and multilateral negotiations.

The U.S. side also has positive signals for granting Vietnam the Permanent Normal Trade Relations (PNTR) status, a fact conducive to Vietnam's entry to the global club.

"There will be three closely-related events this autumn. They are Vietnam's accession to the World Trade Organization (WTO), U.S. President Bush's visit to Vietnam, and the APEC Summit (slated for November in Hanoi capital). I don't think the events will take place after the conclusion of the Doha round," Vietnamese Trade Minister Truong Dinh Tuyen told reporters after Vietnamese Deputy Trade Minister Luong Van Tu and U.S. Deputy Trade Representative Karan Bhatia inked the deal on concluding bilateral negotiations on Vietnam's entry to the organization.

The WTO has set target of making some progresses in the Doha multilateral trade talks in June and July so that the negotiations could wrap up by the end of this year. WTO members kicked off the negotiations in Doha, Qatar, in 2001, aiming to slash subsidies, tariffs and other barriers to global commerce.

The signing of the deal is "accelerating Vietnam's process of joining the WTO," Tuyen said, noting that his country now needs to obtain the PNTR status to be granted by the U.S. Congress, and finish the 13th round of multilateral negotiations about Vietnam's entry to the WTO, hopefully the last round of bilateral talks, slated for mid-July in Switzerland.

During a recent visit to the United States, "I met 13 U.S. congressmen. The main atmosphere is that they support the future U. S. Congressional approval for the PNTR for us," Tuyen said, adding that the U.S. business community has also shown their strong support for the issue.

"When I came to the United States (mainly to instruct Vietnamese negotiators in the last round of bilateral talks with the United States in May), 40 U.S. firms joined the U.S-Vietnam WTO Coalition (the lead coordinating body to support the completion of Vietnam's entry to the WTO and the U.S. granting of the PNTR status to the country). When I left the United States, the number increased to over 100," Tuyen noted.

After the signing ceremony, U.S. Deputy Trade Representative Karan Bhatia said he was optimistic about the granting, since the U.S. business community, and both the Democratic and Republic parties, have "good signals."

"I look forward to working with other senators to pass PNTR for Vietnam this summer, with an eye toward Vietnam joining the WTO by the time of President Bush's visit to Hanoi in November," Senator John McCain said in a statement released in the United States on May 15.

However, many challenges are waiting for Vietnam to be addressed seriously, Tuyen said after the signing ceremony.

"The biggest difficulty lies in competitiveness. After joining the WTO, Vietnamese enterprises, both goods producers and services providers, not only have to compete more fiercely in foreign markets but also the domestic market. At that time, import taxes are slashed, while many local industries are opened up to foreign investors," he noted.

To reap bigger gains from the WTO membership, Vietnam, both the state and the business community, especially state-owned enterprises, have to work hard to overcome the short-term hardship, "maybe three or four years after the entry like the case of China and many other countries," Tuyen said, noting that the private and foreign-invested sectors have made good preparations to cope with the challenges, while farmers will benefit less from, but be negatively affected much by the membership in the early stage.

According to the Office of the U.S. Trade Representative, Vietnam, under the freshly-inked bilateral deal, will impose import taxes of 15 percent or less on roughly three-fourths of U.S. agricultural exports, including cotton, selected beef, pork, whey, grapes, apples, pears and soybeans. Vietnam's current average applied tariff on agricultural products is 27 percent.

Regarding manufactured goods, about 94 percent of Vietnam's import from the United States will face duties of 15 percent or less. Duties for key products in the construction equipment, pharmaceuticals and aircraft sectors are 0-5 percent.

Under the deal, Vietnam has made substantial commitments to open up such key services as telecommunications (including satellite services), distribution, financial services, and energy services to foreign participation. The country, already providing for bank branching, has also offered to open up for branching in non-life insurance and securities, the office said.

Also according to the deal, Vietnam will reduce the role of state enterprises in commercial activities (including eliminating the role of the state as the sole importer of certain products), remove restrictions on imports that foreign-invested firms can import, and eliminate prohibited subsidies that it provides to its industries.

Nothing in the accession deal will change Vietnam's status as a non-market economy for U.S. trade remedy purposes. The United States will keep on using non-market methodology in anti-dumping cases until such time as Vietnam is no longer treated as a non- market economy or for 12 years after it becomes a WTO member, the office said.

Source: Xinhua