Who Will Pay The Price If Vietnam Joins The WTO
Monday, July 10, 2006SUSIE GHARIB: The Senate Finance Committee begins considering this week a trade deal clearing the way for Vietnam to join the World Trade Organization. The U.S. already exports over a billion dollars in goods to Vietnam and WTO membership could increase that number. But critics of the deal worry it would create another tough competitor for U.S. manufacturers. Darren Gersh reports.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Vietnam is a fast-growing country in a fast-growing part of the world. It is also a young country. Most of its 80 million people are under the age of 30. No wonder U.S. businesses are so eager to get Vietnam into the World Trade Organization.
VIRGINIA FOOTE, PRESIDENT, US VIETNAM TRADE COUNCIL: There is a real hustle and bustle going on in Vietnam that people visiting, companies going to look at the market, are quite impressed with the entrepreneurial zeal, really, of the people of Vietnam.
GERSH: If Congress approves a U.S.-Vietnamese trade deal clearing the way for WTO membership, tariffs on most U.S. goods would fall to 15 percent or less. It would also secure Vietnam`s status as a cheap manufacturing platform. The U.S. trade official who negotiated the agreement says U.S. manufacturers want to hedge their bets in east Asia.
KARAN BHATIA, DEPUTY U.S. TRADE REPRESENTATIVE: Increasingly that region is becoming integrated and finding alternative bases for production to China, which many of our companies are looking for, not that they have a problem with China, but you want to diversify out. Vietnam looks like a very attractive option for many of them.
GERSH: It is Vietnam`s similarities to China that worry U.S. textile makers. They say Vietnamese production is dominated by state-run companies and the currency is tightly controlled. It`s the same problem the U.S. faces competing with China.
AUGGIE TANTILLO, EXECUTIVE DIRECTOR, AMERICAN MANUFACTURING TRADE ACTION COALITION: We are about to replicate that exact same scenario. Once we allow Vietnam to join the WTO, our leverage to force them to deal with their manipulated currency, force them to deal with their subsidies in an earnest and expeditious way, really goes out the window.
GERSH: As a condition of WTO membership, the U.S. insisted Vietnam eliminate subsidies the day it joins the WTO. The U.S. also has the right to re-impose quotas if Vietnam fails to live up to the deal.
BHATIA: That`s real security, I think, for our textile manufacturers who`ve all along said that they just want to be able to compete on a level playing field.
GERSH: Textile safeguards would only last a year; not enough say critics.
TANTILLO: And it will be very easy for them to repackage their structure, their system to say that, well this is no longer an export subsidy; it`s a production subsidy, which is allowable under the agreement.
GERSH: If Congress approves, Vietnam could join the World Trade Organization this fall, in time to host President Bush and other world leaders for the Asia Pacific Economic Cooperation summit in November. Darren Gersh, NIGHTLY BUSINESS REPORT. Washington.
