HANOI — Twenty-four years after the end of the Vietnam War, an agreement establishing fully normalized trade relations between the United States and Vietnam is within reach and could be signed within days, officials on both sides say.
The accord, known as the Bilateral Trade Agreement, has been the subject of three years of negotiations in Washington and Hanoi. It appeared doomed to failure as recently as 10 months ago. But concessions on both sides led to a breakthrough last month, and negotiators meeting in Hanoi say major differences have been resolved. Only "small, knotty" issues remain, said one.
"We have narrowed the existing problems . . . and have reason to be optimistic," said Phan Thuy Thanh, spokeswoman for Vietnam's Foreign Affairs Ministry.
An American close to the negotiations agreed, saying, "We're within an eyelash of getting an agreement."
The accord--a key element of normal relations with any country--would eliminate the last commercial vestige of the war. As such, it would open markets in this nation of 77 million people to U.S. businesses, particularly in the areas of telecommunications, banking, insurance and trade, by establishing trade and investment standards that are practiced in almost every country.
Although the trade agreement's ultimate effect is difficult to quantify, it would sharply lower tariffs between the two nations and make it easier to invest and do business in Vietnam. This in turn could encourage U.S. manufacturers to open plants or increase their investments in existing facilities.
By removing trade and investment barriers, it would enable Vietnam to increase its exports to the U.S. of manufactured goods such as shoes, garments and toys and agricultural products such as rice, coffee and cashew nuts.
The state-run Lixeha company, for example, exports to the U.S. each year 300 bicycles made of bamboo that are popular collectors' items.
"If we get a trade agreement, we could increase our sales tenfold," said Do Thi Nga, Lixeha's general director. Under the trade agreement, he estimates, tariffs would drop to 20% from 100%.
Nike manufactures 20 million pairs of shoes a year at its five plants in Vietnam. With a trade agreement in place, its duties on exports to the U.S. would drop to 8.5% from 20%, a decrease that would increase exports--earning Vietnam more foreign currency while saving U.S. consumers money.
