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But much remains to be done to create a better environment for global business, says Zoellick

HO CHI MINH CITY, Vietnam - 05/11/05 - Since the US-Vietnam Bilateral Trade Agreement (BTA) took effect in December 2001, trade relations between the two countries have expanded considerably, according to Deputy Secretary of State Robert Zoellick.

Speaking at a recent press conference after a meeting with business owners in Ho Chi Minh City, Vietnam, Zoellick said that the country's exports to the US have grown to between $4 billion and $5 billion per year, while US exports to Vietnam stand at about $1.3 billion per year. 

In addition, US investment in the Southeast Asian nation has also increased "significantly," he said.

Zoellick - who served until recently as the US Trade Representative - said the US is working with Vietnam "to create a better environment to draw investment," noting that "there are still issues to work out relating to regulation, rule of law and corruption."

According to Zoellick, one of the key items affecting investment in Vietnam's high-tech sector is protection of intellectual property.

"The better the reputation of a country in intellectual property protection, the more likely it is to draw some of those industries," he said.

He noted that Singapore strengthened its intellectual property laws as part of its free-trade agreement with the US, and, as a result, several US pharmaceutical companies and creative arts firms "have been drawn to Singapore," he said.

"If Vietnam undertakes the legal reforms necessary to secure membership in the World Trade Organization, it could attract even more trade and investment," said the former USTR.

Economic reform has been at the top of the list of priorities as Hanoi has put a tremendous amount of effort into improving its trade relations with as many global players as it can - all in an effort to drum up support for the country's desire to become an active member of the World Trade Organization.

In March, Vietnamese government representatives visited Washington to start bilateral negotiations with the US on joining the World Trade Organization (WTO).

Following the Washington consultations, the Vietnamese met in Ho Chi Minh City with their Japanese counterparts with both sides reaching agreement on tariff, intellectual property, services liberalization, banking, transportation, and goods distribution issues.

The Washington meetings were preceded by bilateral negotiations between Vietnam and eight other WTO members - Canada, Switzerland, Australia, Japan, Colombia, India, Iceland, and Paraguay - in Geneva.

At those meetings, Vietnamese negotiators, including representatives of the Ministries of Trade, Finance, Post and Telematics, and Construction, as well as the State Bank of Vietnam, and the National Committee for International Economic Cooperation made numerous concessions to further open the country's goods and service market.

Officials at those negotiations reportedly said that "the differences between the positions of Viet Nam and its foreign partners are not great" expressing hope that Vietnam would be admitted to the WTO at its economic ministerial meeting in Hong Kong later this year.

Just last week, the government in Hanoi expressly vowed to push for final talks on its accession to the WTO by showing "appropriate flexibility" in the ongoing negotiations.

Though Vietnam formally lodged its WTO application in January 1995, actual formal negotiations didn't begin until 2002.

"The workload of talks on WTO entry is huge and complicated," said Deputy Prime Minister Nguyen Tan Dung in a report issued to the summer session of the country's National Assembly.

In the report, Dung outlined the government's goals to "quickly finalize plans for talks, increasing the number of staff essential for the negotiation teams and actively pushing negotiations, bilaterally and multilaterally, by maintaining our principles while having appropriate flexibility to end the talks soon."

Dung didn't set a specific target date for WTO entry, but he say that Hanoi has made accession by the end of this year its goal.

Acknowledging that the country is facing a daunting task in satisfying the WTO's qualifications for admission, Dung said Vietnam "would quickly finalize 19 laws and three ordinances to facilitate international economic integration."

National Assembly Chairman Nguyen Van An noted at the same time that Vietnam must pass at least 800 different laws, "but there are only 200 on the table so far."

According to press reports, Prime Minister Phan Van Khai had asked "every ministry and sector to have specific programs on international economic integration" before leaving on a recent trade promotion mission to Australia and New Zealand.

Former WTO Director General Mike Moore, who was in Hanoi recently, has been quoted as saying that overall accession talks were "actually getting harder not easier" than in the past as candidates for membership are now being vetted "more carefully since China's accession in 2001."

Commenting on Vietnam's efforts at reformation, he said, "This is very difficult, this is not a done deal."

A complete on-line country profile on Vietnam is available at  www.state.gov/r/pa/ei/bgn/4130.htm

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