GENEVA — The World Trade Organization on Tuesday approved Vietnam as its 150th member, heralding a new era for one of the fastest-growing economies in Asia.
The decision culminates about 12 years of negotiations. Vietnam will formally become a member 30 days after it informs the WTO that its national assembly has signed off on entry.
“It is our sincere hope that WTO membership would open up new opportunities for Vietnam to expand its market [and] attract more foreign investment,” Vietnam’s Deputy Prime Minister, Pham Gia Khiem, told a session of the WTO’s ruling general council. “We consider this an event of great significance, marking an important step for Vietnam’s participation in the global trading system on an equal footing with all other WTO members.”
Dorothy Dwoskin, the chief U.S. negotiator in the Vietnam entry talks, said, “Accession will mean even greater opportunities. Our exports to Vietnam have increased 150 percent in the last five years. Our overall trade with Vietnam has expanded to $7.8 billion, an increase of 400 percent, over the last five years. It is clear that American companies recognize the potential of this new market, and are moving aggressively not only to offer their goods and services, but to invest in Vietnam, as well.”
As part of its entry terms, Vietnam’s tariffs will range between zero and 35 percent, with some reductions phased out through 2014, the WTO said.
WTO director general Pascal Lamy told reporters that Vietnam is “a dynamic, powerful economy.” He said, in 2005, Vietnam’s economic growth topped 8 percent, foreign direct investment rose by $6 billion and exports surged more than 20 percent.
One hurdle Vietnam still faces is that the U.S. Senate still has to grant the country permanent normal trade relations status that would eliminate quotas between the two countries and set preferential tariff rates.
The Bush administration is pressing for passage of the legislation before the president travels to Hanoi next week for the Asia-Pacific Economic Cooperation summit. That’s a tall order, considering the limited time Congress would have to act. The outcome of the midterm elections could influence the timing of the vote during the lame duck session slated to begin next week.
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The legislation has run into a few roadblocks in the Senate, despite having broad bipartisan support. In the latest snag, Sens. Gordon Smith (R., Ore.) and Dianne Feinstein (D., Calif.) called on U.S. Trade Representative Susan Schwab and Commerce Secretary Carlos Gutierrez to clarify aspects of a deal made with Sens. Lindsey Graham (R., S.C.) and Elizabeth Dole (R., N.C.) that committed to launching a comprehensive monitoring program of Vietnamese imports and to self-initiate antidumping cases where appropriate, which did not sit well with importers.
Smith and Feinstein are seeking assurances from Schwab and Gutierrez that the proposed program will not establish any additional requirements or “altered standards” for importers and exporters of Vietnamese textiles and apparel.