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Vietnam Sees WTO Entry Next Year After `Encouraging' Talks

June 17 (Bloomberg) -- Vietnam's government said it may be able to join the World Trade Organization in 2005, after making what it termed a ``breakthrough'' offer this week at talks in Switzerland.

Vietnam and the working party on its accession to the WTO held their first talks since December this week in Geneva. The Southeast Asian nation offered a bigger cut in average import tariffs and the elimination of agricultural export subsidies in its latest offer, according to a summary of the talks provided by the WTO.

``It depends on our partners, but we have quite encouraging information from Geneva,'' Deputy Prime Minister Vu Khoan told journalists today on the sidelines of a conference in the Vietnamese city of Vinh. ``Our determination is to join the WTO by 2005.''

The date is critical for Vietnam because the country will be subject to quotas on its garment shipments -- its number two export -- until it joins the global trading club, while the quota system for WTO members will end next year.

Vietnamese apparel exports rose at the fastest pace last year among the top 25 shippers of clothing to the U.S., pushing Vietnam past 17 others to become the fifth-biggest apparel source for the U.S., following a tariff-slashing 2001 trade agreement between the two countries.

The expansion trend has reversed this year. Vietnam's garment exports to the U.S. fell 8 percent in the first four months of 2004 compared with the same period a year earlier, after a U.S.- Vietnamese textile accord last year set quotas on Vietnam's clothing shipments to the U.S.

`Growing Concern'

``There is growing concern about the cost of non-membership in the WTO,'' said Fred Burke, a partner in the Ho Chi Minh City office of the law firm Baker & McKenzie, speaking at a conference in Vietnam's capital city of Hanoi. ``This is already threatening many, many jobs in the garment sector.''

Vietnam, which applied for entry into the WTO in 1995, views its latest offer as a ``true breakthrough,'' Khoan told the Vinh conference.

``We have received support not only in statements but also in very concrete actions taken by our trading partners to accelerate Vietnam's accession,'' Khoan said. ``We have seen new movement and new progress on the part of the EU and the U.S. and other partners, showing their support.''

While Vietnam's government has said in the past that it hopes to join the global trading club by next year, U.S. Ambassador to Vietnam Raymond Burghardt told the National Press Club in Washington this week that ``we wonder whether 2005 is still absolutely the goal.''

There had been little progress in negotiations until recently, the World Bank said in a summary of Vietnam's economy prepared for the conference.

``At stake were the relatively high trade barriers protecting several sectors deemed strategic, such as automobiles, cement, chemicals, fertilizers, steel and sugar, and obstacles to entry in service sectors dominated by the state, banking and telecommunications in particular,'' the World Bank said.

The impact of the U.S. trade agreement, which has turned Vietnam into one of the U.S.' top 40 trading partners, helped convince Vietnam of the value of joining the WTO, according to the World Bank report.