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Some Express Concern with US-Vietnam WTO Deal


The Vietnamese government has welcomed an agreement with the United States guaranteeing American support for Vietnam's accession to the World Trade Organization. But some observers say Vietnam got a raw deal.

Vietnam has been negotiating for years to win American approval for its bid to join the World Trade Organization, and on May 13, that effort finally bore fruit. Vietnamese and U.S. negotiators reached agreement on a series of thorny issues, including opening up Vietnam's financial sector and reining in its booming garment exports.

Vietnamese officials were delighted. State Bank Governor Le Duc Thuy expressed the general feeling. Thuy called the agreement a great success for both the U.S. and Vietnam.

Even Le Kha Phieu, the former Communist Party general-secretary who was known as a hardliner in his day, was happy. Phieu said there was no reason to worry that W.T.O. rules will affect Vietnam's policy of a "market economy with a socialist orientation". In trade, Phieu says, there is no difference between communism and capitalism.

The United States was the final country whose support Vietnam needed, and an official W.T.O. vote to accept Vietnam could take place later this year. Joining the organization is seen as a necessity if Vietnam's export-oriented economy is to compete against W.T.O. members like China.

But Trade Minister Truong Dinh Tuyen expressed some misgivings about the deal during a press conference Monday.

Tuyen said neither he nor the U.S. trade representative was entirely happy. He said Vietnam had to agree to let the US continue to designate it as a "non-market economy".

That designation is applied to state-run Communist economies such as Cuba's and North Korea's, and to some transitional countries like Vietnam and China, whose economies still have a large state sector. The "non-market economy" designation makes it easier for the U.S. to impose anti-dumping tariffs against Vietnamese products, as it already has with catfish and shrimp.

Until now, Vietnam has insisted it is a market economy. More than half of the economy is private, the government says it no longer sets prices or heavily subsidizes commodities. But under the W.T.O. deal, the U.S. will consider Vietnam a non-market economy for the next 12 years.

State Bank governor Thuy said the 12-year timetable was reasonable.

Other countries have spent hundreds of years building a market economy, he said.

Some observers were more critical of the deal. Bui Kien Thanh, a senior adviser at the U.S.-based construction consultancy K.H.M., says Vietnamese negotiators made many mistakes, including failing to understand the sensitive politics of the U.S. textile industry.

Thanh says the Vietnamese negotiators had difficulty responding to American attacks on Vietnam's four-billion-dollar government investment in textile manufacturing.

The textile investments were a ten-year government program that began in 2001. The Vietnamese were forced during the negotiations to cancel the program. Thanh called the concession a "loss of face".

The British organization Oxfam-UK has long claimed that W.T.O. negotiations are biased against poor applicants like Vietnam. Le Kim

Dung, program director of Oxfam-UK's Hanoi office, explains.

Dung says the U.S. imposed double standards on Vietnam. She says the U.S. pressured Vietnam to give up rice subsidies, although the U.S. massively subsidizes its own corn farmers.

But according to Trade Minister Tuyen, Vietnam could not afford to drag the negotiations out any longer.

Tuyen said the longer the country waits to join the W.T.O., the tougher the conditions will be for joining.

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