Socialist Republic of Vietnam

(12/12/2003 -- 18:29GMT+7)

Washington, Dec. 12 (VNA) - Viet Nam and the United States were unanimous in the need to build a long-term relationship as the basis for developing normal relations between the two nations, said Deputy Prime Minister Vu Khoan

Khoan granted an interview to a Washington-based Vietnam News Agency correspondent during his visit to the US from Dec. 3-12. Following is the full text of the interview:

Q: What would you say was the aim of the visit and its results?

A: The visit is aimed at discussing with the US political leaders measures to form a framework for a stable and long-term partnership. There has been progress in the Viet Nam-US relationship in recent years. The two countries established normal ties in 1995. However, the relationship is unstable because of differences in many fields.

The visit also creates opportunities for us to meet with US businesses to promote trade and investment between the two countries as well as to find measures to resolve outstanding issues in bilateral relations. As you know, some people in the US have caused obstacles in trading with Viet Nam, for example the lawsuit against Viet Nam's "tra" and "basa" catfish farmers. At present, US farmers are attempting to file another case on shrimp dumping against some countries, including Viet Nam. That is why, we need to discuss with the US ways to work out appropriate measures to solve such issues.

We wanted to introduce Viet Nam's situation and foreign policy of openness, diversification and multilateralisation for peace, cooperation and development in Southeast Asia and the world.

On the results of the visit, the Vietnamese delegation met with many US leaders. The US leaders recognised strong development in bilateral relations in the recent past. The two sides agreed that the visit took place at the right time and it is necessary to build a framework for a longer relationship. They also agreed to increase talks between the two countries' sectors and levels to better understand each other and boost economic, commercial and investment cooperation.

Both sides were unanimous in seeking the same viewpoints through dialogues in order to solve differences between the two nations. They agreed to continue cooperating in humanitarian issues relating to the search of American servicemen reported missing in action during the war, landmine clearance and Agent Orange aid. They also agreed to exchange visits by military delegations after a recent visit to the US by Defence Minister Pham Van Tra, and discussed regional and international issues of mutual concern.

The US expressed their support for Viet Nam's joining the World Trade Organisation (WTO).

The second outcome of the visit is that it helped to get US businesses interested in cooperating with us. Big corporations like Conoco, Unocal, major financial and insurance services companies, namely City Group, New York Life and ACE, high-tech companies, and textile and garment importers met with Vietnamese business delegations to discuss specific measures to increase trade and investment.

The third outcome is the two sides officially inked three important documents, namely the Viet nam-US Air Transport Agreement, the letter of Commitment for the "Viet Nam Competitive Initiative" which aims at raising the competitiveness of Viet Nam's small and medium-size enterprises, and an anti-drug cooperation agreement.

The fourth outcome is the visit provided us with an opportunity to express our attitudes towards some issues of concern, including the resolution adopted by the House of Representatives (H.R 427) on the religious situation in Viet Nam. Also discussed were some US cities' recognition of the flag of the former Sai Gon regime, on the exports of shrimp, textiles and garment.

Q: In an exclusive interview with the "Washington Times" on Dec. 5, you mentioned Viet Nam's proposal for the US's cooperation in counterterrorism, especially in stopping terrorist behaviours of extremist Vietnamese expatriates in the US. Did the US commit anything on this matter?

A: At present, the concept of terrorism is broad. To some extent, we are the victims of these terrorist acts. We heard about bomb attacks on Vietnamese embassies in Thailand and the Philippines, or Ly Tong's attempts. Those who took part in these mentioned cases are all living in the US and they have tried this or that ways to sneak into Viet Nam or other countries to carry out terrorist activities.

In 2001, a Vietnamese government delegation led by Deputy Prime Minister Nguyen Tan Dung faced this kind of terrorism during a visit to San Fransisco.

From these facts, it is clear that there were forces in the US trying to undertake terrorist activities against Viet Nam.

We have raised this issue with the US. On the one hand, we have sincerely been cooperating with other countries, including the US, in the fight against terrorism. On the other hand, we have also asked the US to work with us in this fight. The US side was committed not to supporting such activities and also showed its attitudes towards those who were involved in these terrorist activities. We hope that the US Government will take steps to prevent terrorism-driven acts against Viet Nam or any other country.

Q: The intense presence of entrepreneurs in the delegation proves that Vietnamese business places their high hopes on the US market. What can you say about the prospects of developing economic and investment relations with the US?

A: The US is the largest market in the world, annually importing 1,200 billion USD worth of goods and services. Aware of this market's potential, we signed a bilateral trade agreement in 2000 and in 2001 it was ratified. Within just two years, trade between the two countries has increased from 2.1 billion USD in 2001 to 5 billion USD at present. From a low starting point, the US has risen to become Viet Nam's largest trade partner. This speaks to the potential of the US market.

Vietnamese businesses are interested in this large market as an outlet for their products and as a source of job creation and profit. Over the past two years, our garment exports to the US have increased exponentially from 50 million USD previously to nearly 2 billion USD this year although quotas for US-bound garment exports were just 1.7 billion USD (the difference was the advanced quotas from 2004). The US has also absorbed most of Viet Nam's handicraft exports, which have seen rapid growth recently.

The US is the world's No.1 country in scientific and technological terms. One of the visit's aims was to seek cooperation with American scientific and technological firms. Participating in the delegation were leaders from Viet Nam's two hi-tech zones in Ha Noi and HCM City.

Q: As the largest trade partner of Viet Nam, however, the US ranks only 11th or 12th among foreign investors? Is there any contradiction here?

A: It is true that the bilateral trade between the two countries increased sharply but investment remained slow. The US has poured around 1.6 billion USD in projects in Viet Nam, ranking 11th among the 12 foreign investors in the country. What is the cause of this?

I supposed that originally, Viet Nam and the US signed the Bilateral Trade Agreement (BTA) when the latter's economy experienced disadvantages. Foreign investment in the US dropped and so did the US's investment overseas, including to Southeast Asia.

Secondly, there remain disadvantages in Viet Nam's investment environment, especially in the areas of US interest such as the high-tech and service industries.

Thirdly, the US's investment orientation is different from other countries' and different from what it once was. For instance, the country does not make direct investment in garments but does it through partners in Asia such as the Republic of Korea (RoK) and Taiwan. Nike is a trademark of the US. However, almost all enterprises making products of this trademark are from Taiwan and the RoK. The service sector has developed in the US but in Viet Nam, it is an area that is gradually opening under the BTA roadmap. This is also an obstacle to the US's investment into Viet Nam.

Q: After the catfish lawsuit, some US enterprises are preparing to sue Viet Nam and some other countries for dumping shrimp. US officials said trade lawsuits are common in international trade activities and such lawsuits do not affect bilateral relations. What do you think about this?

A: This kind of lawsuit is not rare in international trade relations. It is an objective reality. Every year, the world witnesses hundreds of such lawsuits. Trade suits happen not only to our country but also to the US's allies. They also frequently occur between the US and Japan, and the US and Europe. This reflects a reality that in the international market there exist fierce competition and struggle.

However, economic experts agreed that the trade protectionism trend in the US is increasing. The recent "basa " catfish case or the alleged charges of Viet Nam dumping prawn on the US market reflects American trade protectionism and political trends. Due to these mixed factors, the "basa" catfish case was groundless and was not handled fairly. This situation is placing other countries, especially developing nations, in a disadvantaged and unfair position.

Q: Many say Viet Nam's target to join the World Trade Organisation is ambitious, what do you think?

A: To define what "ambitious" is remains difficult. However, Viet Nam's accession to the WTO is a practical need. Viet Nam's economy largely depends on the world economy. The country's export revenues are estimated at 20 billion USD this year, almost half the GDP. This is a relatively high proportion, considering the US's rate standing at a mere 10 percent. The ODA and FDI account for more than 30 percent of the total investment, also a high rate. So Viet Nam depends on the world economy in terms of both input and output. Therefore, the need for the country to join the WTO is necessary, regardless of ambition.

Besides, WTO members have pledged to remove quotas by 2005. Not being a WTO member, Viet Nam will face numerous difficulties as it will still have quotas imposed. That's why, the WTO admission is not the Government's ambition or who else, but an objective need. Viet Nam should accelerate the negotiation process.

However, WTO accession is challenging. We have to open up the market and face tought competition. The question is how to maximise the gains and minimise the losses.