U.S.-Vietnam trade deal benefits both countries

June 13, 2006

Posted on Mon, Jun. 05, 2006


ECONOMIC INTEGRATION WILL FURTHER FREEDOMS WHILE HELPING WORKERS, FIRMS IN BOTH NATIONS

Mercury News Editorial
The reconciliation between the United States and Vietnam has been a long, painstaking process. It began with the end of an economic embargo in 1996, and continued with the establishment of diplomatic relations in 1995, the exchange of ambassadors in 1997 and a major bilateral trade agreement in 2001.

A new trade deal between the two countries signed last week in Ho Chi Minh City paves the way for America's former enemy to join the World Trade Organization and complete its integration into the world economy. It's a step that will benefit the people of Vietnam and the United States. Congress must move quickly to ratify the agreement and grant Vietnam so-called “permanent normal trading relations'' so it can gain full membership in the WTO.

Since the 2001 accord, trade between the two countries has soared from under $1 billion a year to $7.8 billion in 2005, helping to heal old wounds and bringing the two countries closer together. That first trade agreement allowed U.S. businesses large and small to tap Vietnam's talented pool of workers. Tech companies were among the trailblazers. This year, Intel announced plans to build a $300 million chip assembly plant in Vietnam, and Microsoft chief Bill Gates visited the country for the first time.

Vietnamese-American entrepreneurs from Silicon Valley have further bridged the gap, leveraging their language skills and cultural know-how to establish tech businesses that span the two countries. In Ho Chi Minh City alone there are an estimated 100 software companies with at least 50 employees, and Vietnam's middle class is growing rapidly.

The latest agreement will accelerate this process, by eliminating remaining trade barriers and ending both U.S. quotas on Vietnamese textiles and Vietnam's subsidies to its garment and textile industries. The agreement also would give U.S. companies greater access to Vietnam's market in key sectors such as telecommunications, financial services and energy.

But Vietnam's accession to the WTO would put it on the fast track to the kind of modernization that has transformed China since its entry into the global trade body in 2001.

Like the relationship with Beijing, Washington's rapport with Hanoi will not always be all handshakes and smiles. Issues such as official corruption and especially human rights will remain an irritant — and rightly so — until Vietnam embraces greater political freedoms.

But people-to-people contacts and the exchange of goods between the two nations is the best way to cement Vietnam's budding liberalization, while benefiting workers and businesses on both sides of the Pacific Rim.

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