US supports Vietnam's WTO bid but says more reforms needed now

HANOI (AFP) - The United States has said it strongly supports Vietnam's accession to the World Trade Organization (news - web sites) (WTO) by 2005 but has warned that the communist nation needs to do more and quicker to realize its ambitious goal.

Robert Porter, US charge d'affaires in Vietnam, told a two-day seminar which ended Wednesday in Hanoi, that the success of the US-Vietnam bilateral trade agreement (BTA) has demonstrated the benefits of trade liberalization.

He warned, however, that the pace of reform in response to the trade pact was "not fast enough to meet Vietnam's WTO accession goal".

Porter cited Vietnam's need to extend under WTO rules its BTA tariff commitments on 261 items to 100 percent of its imported products.

Hanoi's Most Favoured Nation bilateral commitments must also be extended to all 146 WTO member countries, he said.

Most economists view Vietnam's 2005 target date as overly optimistic, saying 2006-2007 is a more realistic entry point.

Rapid reforms were also needed to protect intellectual property rights, improve government transparency and open up the service sector to foreign investment, Porter added.

"Without faster liberalisation, Vietnam will continue to lag behind its neighbours," he said. "Vietnam needs to look at the BTA as a starting point -- not an end point -- for its multilateral negotiations."

Billed as a precursor for Vietnam's entry into the WTO, the BTA was signed in July 2000 after six years of tortuous negotiations, but only came into force on December 10, 2001.

For Vietnam, the deal triggered the immediate slashing of punitive US tariffs on Vietnamese exports, while US investors were promised a loosening of the country's tightly controlled markets in a phased process.

Porter predicted that negotiations for Vietnam to join the global trade body would, like those for the BTA, be challenging, but the focus, he said, needed to remain on the long-term benefits of accession.

"We all understand that this is not an easy process. Some decisions in the short run will be very difficult to make and will bring about difficult adjustments.

"But these decisions should be kept in the context of the long-term benefits that WTO membership will bring," he said.

Porter stressed that "the US government will continue its strong support throughout this process".

The pledge of support is likely to come as welcome relief to Hanoi following a turbulent period of bilateral trade relations characterised by an acrimonious dispute over Vietnamese catfish exports to the United States.

Formal US-Vietnam relations were only established in 1995, a year after then-president Bill Clinton (news - web sites) lifted a trade embargo on the Southeast Asian nation.

Vietnam has received considerable international support in its bid to join the WTO. Last month, Asian and European economic ministers meeting in China said they supported accelerating Vietnam's application for membership.

In June, however, business leaders and donor representatives meeting in Hanoi said Vietnam needed to make a "quantum leap" in regulatory and market reforms to meet its target date.