Trade Benefit to Vietnam is financial; to some in U.S., emotional

Friday, July 14th 2000, 12:00 am

By: News On 6

WASHINGTON â€“ Vietnamese coffee, seafood, cotton gloves and other small consumer items are spread thinly across the American economy today. But a trade agreement signed Thursday in Washington could soon give a significant boost to the Vietnamese economy through much greater access to the U.S. market.

Vietnam sold $600 million worth of goods to the United States last year. If Congress approves Thursday's agreement, that amount could double within a year, said Virginia Foote, president of the U.S.-Vietnam Business Council.

"Apparel, footwear, low-end consumer goods, food products â€“ it will start there," she said. "This should make Vietnam much more attractive for foreign investors, and not just U.S. investors."

The trade agreement announced by a somber President Clinton in the White House Rose Garden carries more immediate emotional than commercial content for the United States.

"And so from the bitter past, we plant seeds of a better future," Mr. Clinton said, flanked by members of Congress who are veterans of the Vietnam War. He said he hoped to take "the energy I feel here" from the trade agreement with him back to Camp David, Md., where Israel and the Palestinians are trying to reach a final peace settlement.

The U.S.-Vietnam trade pact will promote a stable, law-based economy in which U.S. investors can challenge regulations and demand intellectual property rights, said U.S. Deputy Trade Representative Richard Fisher, the former Dallas businessman who did much of the negotiating on the agreement.

It also requires Vietnam to allow all Vietnamese companies the right to trade, whether they are state-owned enterprises or individual entrepreneurs. Mr. Fisher called that "a huge, significant step."

"This means we put to bed once and for all the war with Vietnam," Mr. Fisher said. "What we tried to do through warfare we are accomplishing through peaceful means."

Rep. Silvestre Reyes, D-El Paso, a combat veteran from the Vietnam War, stood with Mr. Clinton and Vietnamese officials Thursday.

"I know of no better way to spread democracy than engagement," Mr. Reyes said.

Sen. John McCain, R-Ariz., who despite major differences with Mr. Clinton's foreign policy has been a strong ally on normalizing the relationship with Vietnam, offered his endorsement of the trade pact as well.

He said the agreement was "in the best interests of the United States of America and Vietnam and will bring about further much-needed reforms in Vietnamese society."

Rep. Sam Johnson, R-Plano, disagrees. He was not at the Rose Garden and does not support trade with a former enemy that has not yet given a full accounting of Americans missing in action.

"I would question almost anything this president does on Vietnam," Mr. Johnson said. "It's a little disturbing to me the president made promises he would give the American people a full accounting of our missing in action and he hasn't done that. ... I don't think there's been a full accounting, and I don't feel the Vietnamese, who are still communists, are going to deal straight with us."

About 58,000 U.S. servicemen and women were killed in the Vietnam War, and an additional 2,000 are still listed as missing in action. Mr. Clinton did not serve in Vietnam and his efforts to avoid the military were an issue in the 1992 presidential campaign.

Mr. Clinton said Thursday that progress was being made on the MIA issue, with 135 U.S. identities established and 150 additional sets of remains being examined to determine if they are American.

Investors flocked to Vietnam in the mid-1990s when Mr. Clinton ended the U.S. trade embargo and normalized relations with Hanoi. But Vietnam has stood on the sidelines since then, as the rest of Asia became a gigantic platform for exporting consumer goods to the United States. Last year's U.S. trade deficit exceeded $300 billion, with most of the import bulge coming from China, Japan and other Asian nations.

Without the trade agreement signed Thursday, Vietnam faces tariffs averaging 40 percent on goods exported to the United States. Tariffs on Vietnamese textiles and apparel can exceed 100 percent, while U.S. imports of similar goods from China and other Asian nations are as low as 3 percent.

U.S. Trade Representative Charlene Barshefsky and Vietnamese Trade Minister Vu Khoan signed the agreement. A similar pact was initialed in Hanoi last year by Mr. Fisher and his Vietnamese counterpart, but it fell apart once Vietnamese officials within the government and state-owned industries began to realize how much it could transform their economy, trade officials said.

Ms. Barshefsky said Vietnam came back to the agreement after seeing Washington and Beijing reach a sweeping trade deal aimed at gaining China's admission to the World Trade Organization.

Congressional approval, while considered likely even by foes such as Mr. Johnson, may not come this year. "We have an exceedingly short legislative window. There just may not be the time," said Sen. John Kerry, D-Mass., another Vietnam War veteran who supports the trade agreement.

U.S. telecommunications companies are hoping the agreement wins approval this year. While there are just 2.5 telephone lines for every 100 Vietnamese today, the Hanoi government is investing heavily in digital telecommunications infrastructure and trying to double the number of phone lines by the end of this year.

"All that equipment is Japanese and European right now," said Christine Keck, director of Asia-Pacific programs with the Telecommunications Industry Association.

"There's tremendous potential. Who's to say? It's not China, but with 78 million people in Vietnam, the sky's the limit," she said.

Trade in computers and industrial machinery represents the fastest-growing field for Texas companies exporting to Vietnam. Texas exports in 1998 were $12 million, while last year's exports were $21.1 million.

Overall, Texas firms and farmers sold $36.3 million to Vietnam last year, a tiny share of the state's $91 billion in exports.