Hopes for a Vietnam Trade Shift

A proposal to normalize relations would benefit U.S. importers. Critics fear another China.

By Evelyn Iritani, Times Staff Writer
July 24, 2006

When Nghia Van Phi first returned home to Vietnam in 2003, he still carried animosities toward the Communist government he had fled nearly three decades earlier.

But Phi, president of a Santa Ana discount home improvement outlet, has since become an enthusiastic supporter of the economic rebuilding of that country. His company, US HiFi Inc., a scaled-down version of Home Depot that caters to the Vietnamese American community, imports 70% of its ceramic tiles, solid oak entry doors and other home products from Vietnam.


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That’s why Phi hopes Congress will act soon on a bill that would establish “permanent normal trade relations” with Vietnam, the final step in freeing up trade and investment between the former adversaries. During the Cold War, most Communist countries were denied that trade status, which meant they paid higher tariffs on goods exported to the U.S.

Supporters hope to pass the legislation before Vietnam joins the World Trade Organization, the Geneva-based global trade group. Leaders in Hanoi want to finalize their WTO bid by November, when they host President Bush and Asian leaders for this year’s meeting of the Asia-Pacific Economic Cooperation forum.

Vietnam hopes to replicate the success of China, which saw its global prestige and trade volume soar after it joined the WTO in 2001. To secure the country’s membership, Hanoi officials have agreed to lower tariffs, remove barriers to foreign retailers and banks, strengthen the judicial system and crack down on corruption.

The U.S. Chamber of Commerce and other business leaders expect the Vietnam bill to be approved, given the bipartisan support from congressional leaders who served in the war, including Sens. John McCain (R-Ariz.), Chuck Hagel (R-Neb.) and John F. Kerry (D-Mass.). But it is unclear when the legislation can be squeezed into Congress’ crowded summer agenda.

Vietnam could still enter the WTO without the U.S. approval, but trade between the country and the U.S. would not be governed by global rules, putting U.S. firms at a disadvantage, the bill’s supporters say.

Passage of permanent normal trade relations with Vietnam wouldn’t have much of an immediate effect on Phi, because the goods he imports already have low tariffs and he hasn’t directly invested money there. But he says normalized relations would have the psychological benefit of clearing away the final barrier between the U.S. and Vietnam, plus it would encourage the Communist government to continue moving toward greater economic and political openness.

Phi also believes that full normalization between the two countries would lessen hostility among Vietnamese Americans toward the government of Vietnam, making it easier for them to do business with their homeland.

“The people in my country are very smart, very hardworking,” said Phi, 53, whose company imports as many as seven container loads a month from Vietnam. “If Americans give Vietnam the chance to open up and step into the WTO, the life of my people will change.”

Human rights groups, however, have raised concerns about Vietnam’s harsh treatment of political dissidents, ethnic minorities and Christians. Vietnam’s bid is also opposed by some U.S. textile and apparel makers, who contend that its entry into the WTO would reward another Asian exporting juggernaut that has used unfair trade practices to bolster its textile and apparel exports at the expense of U.S. competitors.

After the U.S. and Vietnam signed a bilateral treaty in 2001, two-way trade jumped from $1.5 billion to $7.8 billion. The biggest beneficiaries were Vietnamese textile and apparel makers, whose exports to the U.S. increased 6,000% over that period, according to the American Manufacturing Trade Action Coalition, a domestic lobbying group. Over the last year, Vietnam shipped $3.1 billion worth of textiles and apparel to the U.S.

“We’re talking about making the same mistake with Vietnam that we did with China,” said group spokesman Lloyd Wood in Washington.

But Virginia Foote, president of the U.S.-Vietnam Trade Council, a business lobbying group, said Vietnam wasn’t even close to having China’s clout in the U.S. marketplace. Even with its recent export spurt, Vietnam represents less than 4% of the U.S. textile and apparel market, she said.

The Vietnamese government has improved its business climate in anticipation of joining the WTO, said Walter Blocker, managing partner of Gannon Vietnam Ltd. and chairman of the American Chamber of Commerce in Ho Chi Minh City. That includes the passage of more than 50 laws since 2004.

Blocker predicted that U.S. investment in Vietnam would rise sharply once WTO membership was finalized, given the country’s attractive domestic market and low production costs. More than half of Vietnam’s 84 million people are younger than 30, and they are enthusiastic consumers of U.S. culture, including products as varied as movies and mascara.

Blocker, who distributes a number of top U.S. brands including Maybelline and L’Oreal cosmetics, said the Vietnamese spend $350 million to $400 million a year on “non-shampoo cosmetics,” a market that barely existed 12 years ago.

“Now we have 20% to 25% of the women coloring their hair,” said Blocker, who helped launch the country’s cosmetics revolution by setting up lipstick counters in Vietnamese markets more than a decade ago.

Vietnam’s 90% literacy rate and low labor costs (as low as half the cost of China) also make the country an appealing platform for regional production, Blocker said. And for U.S. firms worried about becoming entangled in political disputes between the U.S. and China, Vietnam offers a more stable location, he said.

After considering sites in China, India and Thailand, Intel Corp. announced this year that it would build a $300-million chip assembly and test facility in a government-owned industrial park on the outskirts of Ho Chi Minh City. Intel plans to begin construction on that plant by year-end and hopes to start commercial production in 2009.

Intel country manager Than Phuc said the Vietnamese government offered the Santa Clara, Calif.-based chip maker an attractive incentive package, including cheap land and power, tax incentives and training subsidies. But he said the clincher was the government’s willingness to address the company’s concerns, such as the delays caused by the country’s antiquated customs processing system.

“The thing that impressed our management the most was the open and frank way the government spoke with Intel,” he said.

Than said one of the Vietnamese government’s priorities was creating jobs for the 1 million-plus people entering its workforce every year, which is why it has focused on attracting large foreign companies. Intel has said its facility, which represents the largest investment in Vietnam by a U.S. company, will eventually create 1,200 jobs.

But Than, who is based in Ho Chi Minh City, hopes Vietnam’s entry into the WTO will encourage more Vietnamese Americans to bring their talents and money to the Asian nation. He pointed to the success of Highlands Coffee, a Starbucks-style chain of coffeehouses started by a Vietnamese American.

“The U.S. is my home, but I don’t have a return ticket,” said Than, whose family fled Vietnam in one of the last helicopters to lift off from the U.S. Embassy rooftop in 1975. “Someday I will have a home here and a home in the U.S. I think it is most Vietnamese Americans’ dream.”

Some Vietnamese American leaders remain strongly opposed to lifting the final trade barriers until their homeland is “free and democratic,” said Hieu T. Nguyen, president of First Vietnamese American Bank in Westminster, which was set up last year to serve the 300,000 Vietnamese Americans living in Southern California.

But Nguyen said he, like many other Vietnamese Americans, views Vietnam’s entry into the global economy as inevitable, and hopes that the government’s embrace of free markets will eventually result in greater political freedoms.

Of Vietnam’s WTO bid, Nguyen said: “No one can stop it.”

03:18′ 25/07/2006 (GMT+7)

Soạn: AM 845765 gi đến 996 để nhn ảnh này

VietnamNet – The Ho Chi Minh City’s Committee for Overseas Vietnamese recently submitted to the city authority a proposal asking to offer overseas Vietnamese full ownership of land and house, Vice Chairman of the Committee Nguyen Viet Thuan announced on July 24.

The proposal said overseas Vietnamese who were allowed to purchase and possess houses must have full rights of ownership in accordance with the laws. Accordingly, they must be allowed to trade in real estates in their homeland, transfer land use rights, and sell or rent land or houses instead of being allowed to buy houses only for living as under the existing regulations.

Currently, there are four groups of overseas Vietnamese allowed under the Land Law to purchase properties, effective since 2003. They are investors, who must obtain an investment license, scientists and experts, who must have invitations from Governmental agencies, and people having contributed to the country’s development, who must show certificates of merits signed by the Vietnamese Prime Minister.

The law pointed out in item 1 of clause 121 that the Standing Committee of the National Assembly (NA) will release criteria under which other overseas Vietnamese would be allowed to buy housing. However, there has not been any directive from the NA regarding this matter yet.

Thus, Mr. Thuan said that the proposal also included his request for a regulation from the NA that would allow other overseas Vietnamese individuals not included in these groups to purchase housing.

July 24, 2006, 10:41PM

Area businesses, many immigrants differ on support for WTO status



Exports of Harley-Davidson motorcycles, cattle and wine could soar if Vietnam joins the World Trade Organization, Karen Bhatia, the deputy U.S. trade representative, recently told the Senate Committee on Finance.

More than three decades after the U.S. withdrew from the bloody war in the communist-run Southeast Asian nation, Congress is considering granting Vietnam permanent normal trade relations status — a move that will help clear the path for the country to join the World Trade Organization.

The effort pleases officials at several Houston-based businesses but disappoints some Vietnamese immigrants in the Bayou City, the home of the nation’s largest Vietnamese community outside of California.

Supporters of the nation’s bid to join the global group are predicting increased sales for large companies and farmers in both countries, from Houston to Ho Chi Minh City and Hartford, Conn., to Hanoi.

Nations want to join the World Trade Organization because membership confers a special status and lets other nations know that they adhere to certain standards and are less risky to trade with, said Sheng Zeng, who is in charge of business development for the Asia Pacific region for Shaw Stone & Webster, a Houston-based division of Baton Rouge’s Shaw Group.

“The Vietnamese market is a hot market right now — one of the best emerging markets in the world,” said Andrew Tran, president of Asia Link, which helps facilitate corporate investment in Asia. “Maybe with the entrance of the WTO and agreement with the U.S., in five more years it will be a much different Vietnam, a much better Vietnam.”

Corporate benefits

He may be right, if China’s experience is any indication.U.S. agricultural exports to China soared to $5.2 billion in 2005 from $1.9 billion in 2001, when the nation joined the World Trade Organization, according to the Agricultural Coalition for U.S.-Vietnam Trade, and supporters expect similar increases if Vietnam joins the global trade organization.

“This legislation represents another milestone in a process that began over 15 years ago, when the United States restored diplomatic relations with Vietnam,” Bhatia told Senate members. “We believe that WTO accession for Vietnam will benefit the United States economically, will promote reform in Vietnam, and will support broader American interests in Vietnam and in Southeast Asia as a whole.”

Energy companies, retailers and technology firms were some of the 135 U.S. businesses, associations and farm groups that recently signed a letter urging Congress to grant the nation permanent normal trade relations, stating that the nation is “one of the fastest growing economies in the world and is the fastest growing market for U.S. products in Asia.”

ConocoPhillips, Chevron and BP America are some of the companies that support the move.

“We believe these actions will further strengthen the excellent relationship between the U.S. and Vietnam and will provide benefits for U.S. companies and workers,” said a spokesperson for ConocoPhillips, which has invested more than $1 billion in Vietnam in the past decade.

Immigrants’ hesitation

But textile groups such as the American Manufacturing Trade Action Coalition, National Council of Textile Organizations and National Textile Association urge Congress to ensure there are textile safeguards before endorsing Vietnam’s bid to join the WTO. The textile industry faces competition from clothing made by low-paid Vietnamese workers if import quotas are dropped.In Houston’s new Chinatown district, some Vietnamese immigrants are quietly grumbling that their homeland should not be allowed to join the international organization until they stop committing what they view as human rights violations.

“There’s a group of us a while ago who lobbied against Vietnam joining the WTO unless they stop repression of religious freedom and freedom of speech,” said Binh Nguyen, a community activist and news producer for the Saigon Broadcasting Television Network in Houston.

More than 55,000 Vietnamese immigrants live in Houston, although leaders believe the figures are closer to 80,000. Vietnamese restaurants, coffee shops and grocery stores line Bellaire Boulevard, catering to the burgeoning community.

Immigrants began to settle here because the hot weather was reminiscent of Vietnam’s climate, and because they could work as shrimpers, as many did in their native land, said Tran, who is also president of the Vietnamese Chamber of Commerce.

“Because of the background they have, it’s very, very hard for them to accept anything that enhances the strength of the Vietnamese government,” said Tran Van Hien, director of Vietnam Programs at the University of Houston’s Clear Lake campus. “It makes it difficult for them to accept a new Vietnam.”


the film is Khoa Do's second feature.No dummy run: the film is Khoa Do’s second feature.
Photo: Bob Pearce


Garry Maddox
July 26, 2006
THE list of Australian sports films is short. Fresh from winning Young Australian of the Year, director Khoa Do and his comedian brother Anh decided to add to it.

Not only did they want to tell a rugby league story, they wanted to set it where they came from, in the western suburbs of Sydney. And, unashamedly, they wanted to make it a positive film.

Footy Legends premiered last night, before its release next week. It’s a feelgood drama about six battling friends who enter a footie comp to get some respect in their lives.

Among them is Luc, a Vietnamese-Australian played by Anh Do, who is trying to find a job while bringing up his little sister alone.

The film also features Claudia Karvan playing a social worker and Peter Phelps as a coach, as well as cameos from such former rugby league stars as Brett Kenny, Brad Clyde, Cliff Lyons and Matthew Johns.

“It’s kind of an antidote to negative headlines about rugby league, about Sydney’s west, about people from different backgrounds,” said Khoa Do yesterday. “We live in a sports-mad country yet we don’t have many sports films.”

How the 27-year-old came to make Footy Legends is a feelgood story in itself.

Brought up in Yagoona by parents who fled to Australia from Vietnam, Do was an unknown actor and director whose life changed when he went to teach filmmaking to troubled youths in Cabramatta.

One was facing a jail sentence for armed robbery, another was on parole, a third was making daily visits to a methadone clinic. “I thought the best way for me to teach filmmaking was to go out and make a film together,” he said.

Without a script, crew or money at that stage, they collaborated to make The Finished People. It was such a raw account of life on the streets that it was released in cinemas and nominated for two Australian Film Institute awards.

“Guys who had not finished high school were now all AFI award nominees,” said Do. “I still remember walking the red carpet with these guys, next to people like Geoffrey Rush and Cate Blanchett.”

The film’s success led to Do being named Young Australian of the Year last year.

“Lleyton Hewitt or Ian Thorpe – really well-known people – normally receive the award, so you’d never think someone like myself could receive it,” he said. “I spent the entire year travelling around the country and met a lot of young people – a lot of guys who’ve gone through tough times …

“That was one of the best things of the award – having the opportunity to travel round Australia and kind of inspire young kids.”

When it came time to make a film with a real budget – $2.9 million instead of $20,000 for The Finished People – the Do brothers drew on their experience playing junior rugby league for a perpetually hopeless team.

“I hope every kid from Yagoona to Penrith to Kalgoorlie will watch this film and think that all his hopes and his dreams are possible,” Do said.