HANOI, Vietnam (AP) _ Vietnam praised the U.S. Senate's passage of a historic trade agreement that will give this small communist nation access to the world's largest market.
By removing the last commercial vestige of the Vietnam War, the pact also completes the process of normalization that started six years ago with the establishment of diplomatic ties between the former foes.
``We welcome the U.S. Senate's ratification of the Vietnam-U.S. trade agreement and consider this an encouraging point in the normalization of bilateral relations,'' said Foreign Ministry spokeswoman Phan Thuy Thanh.
Under the agreement passed by the Senate on Wednesday, Vietnamese goods and services will be given the same low tariffs enjoyed by most nations _ dropping from an average of 40 percent to about 4 percent.
In return, Hanoi is to implement wide-ranging measures to open up its state-controlled markets to U.S. companies, introducing an unprecedented level of competition and financial openness.
A flood of U.S. investment is unlikely in the near future, however, and some worry that economic gains for Vietnam _ chiefly in the export of manufactured goods _ will be curtailed by the effects of the terrorist attacks in the United States.
Vietnamese exports are already taking a hit. The year's overall export target of $16.6 billion has been revised to $16.1 billion, according to the Ministry of Planning and Investment.
The World Bank had originally estimated that the trade pact could double Hanoi's annual export revenues to the United States, now $800 million, in the first year alone. However, that is unlikely because of the U.S. economic slowdown and the terror attacks, said Kazi Matin, the bank's chief economist in Vietnam.
``We'll get some growth _ mainly in manufactured goods _ but nowhere near what we might have expected. Still, we believe that Vietnam is highly competitive. It can do well if it finds a niche market,'' Matin said.
``Even with the world situation, Vietnam will still see some growth because most of the products we export will have much lower tariffs,'' said Do Duc Dinh of the Institute for World Economy in Hanoi.
The trade agreement still needs to be ratified by Vietnam's National Assembly, scheduled to meet in November. Recent tensions had surfaced over a proposed human rights bill, which Hanoi had felt was linked to the trade bill.
``In our opinion the fact that the U.S. Senate did not bring to vote the so-called `Vietnam Human Rights Act' was a positive step,'' said Thanh.
For many, the trade deal is a symbolic move away from the past.
``For those who want to see the pain of the past wiped away, this offers us a clean sheet to write a new relationship,'' said Chuck Searcy, a Vietnam veteran who heads a nonprofit organization in Hanoi.
The U.S. business community also expressed satisfaction that the deal was finally ratified.
``We feel this is a big step in moving forward relations between the two countries,'' said Adam Sitkoff, director of the American Chamber of Commerce in Hanoi. ``It does present a framework that makes it a more favorable climate for American businesses to come to Vietnam.''
Economist Dinh said it could be a few years before the full economic benefits of the market-liberalization pack kicks in.
``You'll see a lot of preparation rather than actual action. American companies have been exploring the market, but not acting. A lot has to be done before actual trade takes place,'' he said.
Still, ratification could not have come soon enough for some Vietnamese companies that have waited for years to cash in on the world's largest market.
Phan Dinh Do, chairman of Vietnam Leather and Footwear Association, said he expects to see exports to the U.S. double within the first year. Currently, Vietnam only ships $120 million a year in shoes to the U.S.
Footwear giants such as Nike, which employs about 45,000 people at its five subcontractor factories, have indicated that they would increase orders from Vietnam once the trade agreement is implemented, Do said.