To: jmhollen who wrote (6533 ) 7/2/2000 1:02:13 PM From: dkgross Read Replies (1) | Respond to of 7209 Cautious Optimism Over U.S.-Vietnam Trade Deal July 2, 2000 12:00 pm EST By David Brunnstrom HANOI, Vietnam (Reuters) - Vietnam and the United States resume trade talks Monday amid cautious optimism from both sides that a landmark deal could finally be signed. But after years of haggling between the former foes on the market-opening pact, nobody will be staking their life savings on the outcome, least of all those in the business community. "I am moderately optimistic," Le Dang Doanh, director of Vietnam's Central Institute for Economic Management, a state think-tank, and an adviser to Premier Phan Van Khai, told Reuters. "It could lead to a signing of a trade agreement if both sides are flexible. I am more optimistic than ever before." Doanh said he understood Vietnam's Trade Minister Vu Khoan had been given "carte blanche" to sign an agreement in Washington with U.S. Trade Representative Charlene Barshefsky if the talks, due to start at working level on Monday, went well. On Friday, U.S. Ambassador to Vietnam Pete Peterson said he was "somewhat optimistic" the pact could be completed. But he added: "I am no longer predicting outcomes from these talks because we've had a number of disappointments in the past." Vietnam and the United States reached agreement in principle on the comprehensive trade pact last year but Hanoi subsequently backed away from signing the deal, arguing that provisions were unfair. Analysts also believe the pact fell victim to fears among Vietnam's communist leadership that too much exposure to world markets could undermine party control. STICKING POINTS Both sides have declined to detail sticking points, although Vietnam is known to have objected to a provision requiring annual renegotiation of its Normal Trade Relations (NTR) status. The United States has made clear it is not willing to "negotiate," only to "clarify" points of the agreement in principle. One well-informed foreign observer said Washington was willing to take up issues not in the initial pact. The source said Barshefsky had eased some of Hanoi's upset over NTR by saying in a May letter inviting Vu Khoan to Washington that the United States would be supportive of Hanoi's bid to join the Word Trade Organization. Asked to forecast the talks' outcome, the foreign observer said: "If I had to put money on it, I would say it's going to go through, but it's going to be messy -- both sides have a tendency the agree things, then be unhappy about the outcome." Analysts say concluding the trade deal would give a fillip to dwindling foreign investor confidence in Vietnam and also help clear the way for a historic visit to Hanoi by President Clinton later in the year. HANOI UNDER PRESSURE Carl Thayer, a Vietnam expert at the Asia Pacific Center for Security Studies in Hawaii, said Hanoi was under pressure to complete the agreement with a change of administration coming in Washington and the recent China-U.S. trade pact. "There is absolutely no room for slippage on Vietnam's part," he said, adding that if a pact were delayed further it could mean the deal would have to be completely renegotiated. "The ball's in Vietnam's court. They're behind China and I think that's what's driving them. They're worried that if China gets a hefty place in the U.S. market it'll block out Vietnam." Foreign business executives in Vietnam remain pessimistic, not least members of the American Chamber of Commerce (AMCHAM). "I think the majority of our membership is probably not terribly optimistic that it will be signed," Chad Bolick, AMCHAM's executive director in Hanoi, told Reuters. "Vietnam does seem to watch China, but generally they watch China and they see what happens for a few years and then they act to see if they can improve on it."