Vietnam Rapidly Ups Capacity- Viet Tien To Invest $5.3M in Expansion

Garment maker The Vie Tien Garment Company (Vietnam) plans to spend %5.28 million expanding production and improving its competitiveness this year, up 66 percent over last year, said General Director Nguyen Dinh Truong. Truong said his company would focus on renewing equipment, building workshops and implementing sales promotions in Vietnam and abroad. He also said Viet Tien would pay greater attention to non-quota markets. 

"We are preparing to open a point of sales in each of five regional countries and boosting exports to Japan, a non-quota market," he said. The company's export target for this year is $138 million, up 15 percent on 2003. Ho Chi Minh City-based Viet Tien is set to increase sales to the European Union to 20 percent of its total exports from 15 percent last year and Asia to 25 percent from 17 percent. The company is looking to raise domestic sales to 15 percent of the total from 10 percent last year, in which Viet Tien's local sales reached $8.5 million.

It now has sale agents in 30 cities and provinces. Formed in 1976, Viet Tien has 17 factories nationwide and employs 16,700 people, who have an average monthly income of $230 per person. $6.3M Complex Under Development. Construction of garment-textile complex has started in southern Binh Duong province as part of a textile and garment development strategy.

The 30-ha, $6.3 million complex, called Binh An, is expected to accommodate textile and garment facilities moved from Ho Chi Minh City. The complex is likely to employ 15,000 workers when it becomes operational.

The Vietnam Textile and Garment Corporation (Vinatex's) 2010 strategy aims for high-quality and technology-intensive products, said Chairman Le Quoc An. The strategy also aims to build five textile complexes in or around Hung Yen and Nam Dinh provinces in the north, Da Nang-Hue an dNha Trang Cities in central Vietnam and Ho Chi Minh City in the south. Cotton factories will be built in the central provinces where there are large cotton farms. Export-oriented garment factories will be placed at convenient points along highways close to ports in Hai Phong, Ho Chi Minh Cithy and Da Nang City.

Garment exports see highest growth
Vietnam in the first half of this year earned about US$9.4 billion, up 29.5% over the same period of last year. Among main export goods, garment and textile exports posted the highest growth of 58.7%, bringing in US$1.57 billion, according to the Ministry of Industry.

Other sectors seeing considerable increases in exports include footwear with 25% obtaining US$1.13 billion; electronics and computer parts with 19.2% earning US$270 million; and handicrafts with 8.8% gaining US$185 million. Crude oil alone, despite of limited output, posted an export turnover of US$1.98 billion, an increase of 33.8% on the same period last year.

In related news, Vietnam has more than ten commodities items with export earnings of more than US$100 million in the first six months of the year, including four items with earnings of more than US$500 million.

The highest ranking is crude oil, US$1.98 billion, followed by textiles and garments, US$1.57 billion.

With more markets in the world becoming less stable, many items were sold according to quotas. The above-mentioned earnings were very encouraging, reflecting the efforts of both exporters and producers.

Garment corp. to maintain 14 SOEs by 2005
The Vietnam Garment and Textile Corporation (Vinatex) aims to speed up the restructuring of its state-owned enterprises (SOEs) to maintain only 14 SOEs by 2005.

The 14 SOEs include the March 8 Garment Co., Garment Co. No.10, Garment Financing Co., Thang Loi Garment Co., Nha Trang Textile Co., Viet Thang Textile Co., Nam Dinh Textile Co., Thanh Cong Garment and Textile Co., Vietnam Cotton Co., Phong Phu Textile Co., Nha Be Garment Co., Duc Giang Garment Co., Hoa Tho Garment and Textile Co. and Garment and Textile Service Co..

Vinatex's masterplan on equitization of SOEs for the 2003-05 period has just been approved by Prime Minister Phan Van Khai. Under the plan, Vinatex will equitize nine SOEs in 2003 with a view to bringing the total number to 31 by 2005.

Its administrative council was required to instruct the Viet Tien and Hanoi garment companies to build experimental parent company models under the Vinatex structure. The administrative council was also asked to devise a project on developing the corporation into a business group to submit to the government for approval.

Garment companies offered quota-bridging loans
Garment enterprises that have signed large contracts to export to the U.S. but lack quotas this year to fulfill them will be allowed to bring forward next year's quotas to do so.

According to instructions from the ministries of Trade, Planning and Investment and Industry on June 23, these enterprises will be granted export certificates provided that their consignments are ready for shipment in the latter half of June.

However, the volume permitted will depend on the size of the enterprise and will be deducted from their 2004 quotas.

If the enterprises have quotas under one category, but need other categories to honour their contracts, they can convert these quotas, also on the basis of size.

This provision will be applicable until July 1.




Clothing sector sees impressive growth due to BTA (23/06/2003)
Vietnam's clothing exporters were the big winners in the first year of the Vietnam-U.S. Bilateral Trade Agreement (BTA), exporting US$900 million of clothes - 18 times more than in 2001.

The impressive growth was recorded by the Central Institute for Economic Management and the USAID-funded STAR-Vietnam who last week released their initial assessments of Vietnam's progress under the BTA.

The institute found there had been substantial growth in other industries; for example, exports of electrical app1iances rose by 270% and furniture by 499%.

U.S.' exports to Vietnam increased by 26% compared to last year. With the spectre of high U.S. tariffs removed under the BTA, exports to the U.S. have been able to grow significantly, the institute's report said.

The institute's chief consultant, Steye Parker, said the growth in exports to the U.S. was 90% of the total growth in Vietnamese exports last year.

"The implementation of the BTA has led to an initial surge in Vietnamese exports to the U.S. market, growing by 128% compared to previous year while over the same time exports to the world as a whole increased by only 10%," Parker said.

The boom in U.S. exports has challenged those who said Vietnamese businesses would find it difficult to export to such a competitive and complicated market.

Many Vietnamese firms said they planned to invest in new factories to meet the increasing foreign demand. An economics professor from the International University of John Hopkins, James Riedel, said: "The explosion of U.S. goods to Vietnam was not predicted since the U.S. was granted Most Favoured Nation status by Vietnam before the BTA was signed."

American businesses surveyed by the institute were optimistic about the future of the BTA. Some 83% shared the view that the successful implementation of the BTA would eventually have a positive effect on their business in Vietnam.

Half of Vietnamese businesses said they did not perceive any immediate positive effect on their revenue or business operations in the BTA's first year. The other half said they perceived some positive effect.

But while export statistics give a glowing picture of market opportunities in the U.S. since the BTA, there is still pessimism among Vietnamese business people about the treaty's first year.

The ill feeling stems largely from the U.S. anti-dumping case against Vietnamese catfish and the negotiations with the U.S. on clothing and textile export quotas.

If anti-dumping duties are imposed on Vietnamese fish, they may constrain the industry.

It is also possible that the growth in clothing export may be limited by the U.S. export quotas when they come into effect.


Vietnam completes 1st stage in US apparel quota grant

Vietnam had granted 80% of the country's quotas for U.S.-bound textile and apparel exports to 366 enterprises. The quotas in allocated in the first stage were set at 5.95 million products belonging to 38 categories. The allocation was implemented 10 days later over the schedule.

The quota allocation will be extended into the second stage, scheduled at the end of June, to enterprises who have not finalized procedures in the first stage, said the ministry.

Those who were not included in the exporters' list last year and in the first three months of this year but have strong production capability and US export contracts for 2003 will also be granted export quotas in the second stage, the ministry added.

Vietnam won't impose quotas on cotton imports this year

Vietnam won't impose quotas to control imports of cotton products beginning in July as earlier planned, an industry executive said Wednesday.

The executive with Vietnam Textile & Garment Corp., or Vinatex, said the ministries of Industry and Trade have agreed to allow local textile firms to import freely as much cotton as they need.

"There will be no restrictions on cotton import this year," she said.

Vietnam imported 37,000 metric tonnes of cotton valued at US$44 million in the first five months of this year, a 15% decrease in volume, but a 1% increase in value on year.

Vietnam is expected to import around 90,000 metric tonnes of cotton this year, down from 94,000 tonnes imported last year, according to figures provided by the state-owned Vietnam Cotton Co.

Vietnam imported 94,000 tonnes of cotton valued at US$93 million last year, down 17% in terms of volume and 29% in value from 2001, government figures show.


U.S. apparel quotas to be allocated to enterprises

Ministries of Planning and Investment, Industry and Trade have recently issued instructions on granting and implementing quotas for garment and textile exports to the U.S. market for 2003.

Accordingly, 65-70% of this year's quotas will be allocated to enterprises on the basis of their export performance in 2002 and first three months of 2003; 23-28% to firms having big export and production capacity but participating in exports only in late 2002 or early 2003 or those having not yet taken part in exports but singing export contracts in 2003; and the remaining 7% to companies using local materials or being located in difficult areas.

The allocation time will be divided into two stages. At the first stage, 80% of quotas will b e allocated in late May to firms, which have been exporting to U.S. and have full documents required by Ministry of Trade; and in late June to those, who have not had full documents. At the second stage, the remaining 20% will be granted after getting the examination results.

Vietnam plans to triple cotton plantation area by 2010

Vietnam plans to nearly triple the amount of hectares of its cotton plantations by 2010, an official from Vietnam's Cotton Corporation said Thursday.

Currently, Vietnam has 35,000 hectares of cotton plantations, which yield around 12,950 metric tonnes of cotton fiber for the textile industry, said the official from the state-run company.

The company plans to increase the amount of hectares planted with cotton to 60,000 hectares by 2005 and 100,000 hectares by 2010, the official said.

The cotton grown in Vietnam only meets 10% of domestic demand for cotton fiber, and the country must import around 100,000 tonnes of cotton fiber annually, the official said.

The main growing areas are in the Central Highland provinces of Dak Lak and Gia Lai, situated in the middle of the country. Cotton is also grown in the southern provinces of Dong Nai, Binh Phuoc, Binh Thuan and Phu Yen.




Mechanism of granting U.S. apparel quotas to be announced before Sept.

The Prime Minister issued instructions on Wednesday guiding concerned ministries to implement the Vietnam-U.S. Agreement on Garments and Textiles, asking for a mechanism of granting quotas for garment and textile exports to the U.S. market to be announced before Sept. 1, 2003.

The Ministry of Trade was instructed to coordinate with the Ministries of Industry, Planning and Investment, Finance, the Vietnam Textiles and Garments Association, and the Vietnam Chamber of Commerce and Industry (VCCI), to build a mechanism of granting quotas for garment and textile exports to the U.S. market. The mechanism will be submitted to the PM for implementation as from January 1, 2004.

Concerned agencies have to ensure that no quotas are purchased or transferred and no quotas are granted to the businesses, which do not have garment and textile production workshops.

The PM agreed to establish an inter-ministerial supervision team to prevent negative phenomena in quota granting.


All companies equal in accessing to US apparel quotas (20/05/2003)
The Ministry of Trade has begun allocating quotas for U.S.-bound garment and textile exports. To get deeper insight into the allocation, the Saigon Times Daily talked with Bui Xuan Khu, Deputy Minister of Industry, which has cooperated with the Ministry of Trade to carry out the allocation. Following are excerpts.

The SGT Daily: Are there any differences between local and foreign-invested companies in accessing to the quotas?

Mr. Bui Xuan Khu: The underlying principle of allocating quotas for stateside apparel exports is to create opportunities for all companies in different economic sectors to get quotas on an equitable manner. The Ministry of Trade will determine quota values for this year based on companies' export revenue from February 2002 to May 4, 2003.

What will be taken into account to evaluate their export performance?

In order to get quota values, companies must submit to the ministry papers and documents demonstrating their exports to the U.S. in the period. The address for submission is the Ministry of Trade head quarter at 31 Trang Tien street in Hanoi and the HCM City office at 35-37 Ben Chuong Duong street. Companies are also required to prove their production capacity by declaring the number of workers and machines. Companies will get quotas if their declared export performance is seen as matching the capacity.

Therefore, companies which have yet to send shipments to the U.S. previously will not be given quotas?

There are still opportunities for the companies as the Ministry of Trade has decided to earmark 20% of the total quota value for those which are assessed to have export capacity in the coming time. Furthermore, some 5-10% of the total value has been set aside as bonuses to exporters for using 100% local materials.

The U.S. government has applied quotas on Vietnamese apparel exports since May 1. When will local companies get quota values?

Allocation of 70% of the total quota fixed at US$1.7 billion is scheduled to finish on Tuesday. The remainder will be given to companies in September. Exports as of early this month will be counted in a company's quota value to be allocated on Tuesday.

Do you think the 70% of the total quota value is comparable to export revenues that local companies earned last year?

By our calculations, the 70% rate in the first stage is proportional to U.S-bound exports of local companies last year.

Would you please estimate the number of exporters that will be given quotas in the stage?

A total of 800 companies exported apparels to the U.S. last year with 30% being foreign-invested. The number of companies sending shipments stateside so far this year is estimated at 620 which all can register for quotas.


Bidding for U.S. apparel quotas improbable: Minister of Trade

The Ministry of Trade has shown a preference of allocating performance quotas for U.S.-bound textile and apparel exports, instead of putting them up for tender.

The U.S. quotas for textile and apparel imports from Vietnam this year, which were set at US$1.7 billion, may be allocated to local producers based on their performance in 2002 and the first quarter of 2003, said Deputy Minister Mai Van Dau. He said, "Bidding would prove to be a complicated and time-consuming job while there is only one month left for companies to get visas for their shipments."

This is just the ministry's bias regarding the allocation of performance quotas, he said, adding a final decision on whether or not bidding was chosen would rest on the government and other ministries.

The Ministry of Trade has yet to receive a government directive concerning quota bidding, he said.

Speaking on the sidelines of the National Assembly session last week, Deputy Prime Minister Vu Khoan said he wanted the quotas to go through competitive tenders rather than allocations under administrative decisions.

Southern economic hub eyes textile profits

Ho Chi Minh City's garment and textile sector expects to reel in US$2.5 billion from exports by 2005. The target was set as part of the sector's development goals for 2005, which have been approved by the HCM City People's Committee.

Under the programme, 40% of materials used for exports to developed countries and 70% of materials used in exports to ASEAN countries will be produced domestically.

According to economic experts, garment and textile exports in the first four months of the year gained the highest value out of nine other key Vietnamese export goods. Vietnamese companies in the sector are multiplying contracts with partners around the world.

The Vietnam Textile and Garment Corporation has reached an agreement with Japan's Mitsui Group to open a representative office in Japan, in a bid to create business opportunities for Vietnamese enterprises.

The Vietnam Textile and Garment Association plans to boost trade promotion in South Africa. The Vietnam Trade Office there said South Africa does not apply the quota system for garment imports.

Allocation of garment quota to U.S. to be discussed

The government will meet with businesses and concerned ministries to decide formulae to allocate US$1.7 billion worth of garment quotas to the United States this year. The meeting will be held after the end of the third session of the 11th National Assembly in early June, said Deputy Prime Minister Vu Khoan during a recent talk with pressmen on the sidelines of the NA's current session in Hanoi.

Khoan said the allocation would be based on public bidding in order to avoid application-supply and decentralization mechanisms and asked for all businesses to make known their capacities. With the target of US$1.7 billion offered by the U.S. market and a quota increase of 40% by the European Union (EU), the garment markets are open widely to all businesses, Khoan said.

The Ministries of Industry and Trade are considering enterprises' proposals for the setting up of inspection groups to assess enterprise capacity, which will serve as a basis for a fair allocation of quotas in a bid to raise the popularity of Vietnamese garment products.

Stateside apparel export requires ministry's permit

Vietnam's garment and textile exporters are required to seek permission from the Ministry of Trade for sending apparel shipments to the American market, according to a ministerial instruction issued last week.

The instruction signed by Deputy Minister Mai Van Dau has designated regional import-export management offices as licensing agencies, and in HCM City, one such office is located at 35-37 Ben Chuong Duong street in District 1.

"Local exporters must get permits to complete customs procedures," said Le Van Thang, deputy head of the ministry's import-export department.

The instruction, which has been forwarded to the General Department of Customs, is aimed to help local companies fulfill signed contracts with American partners.

The instruction's validity will last until end-June, as the ministry will start allocating quotas to garment exporters at the beginning of July in accordance with the apparel agreement signed between Vietnam and the United States, Thang said.

Quota deal caps Vietnam exports to U.S.
An agreement to limit Vietnamese textile exports to the United States threatens to the sector's efforts to achieve export targets and indeed its very growth in Vietnam.

The deal to set quotas on 38 categories of garments and clothes from May 1, signed in Washington on Saturday by Vietnam's Ministry of Trade and US Trade Representative, came after more than two weeks of negotiations, following talks in Hanoi two months ago.

The quotas, on everything from yarn to underwear, seeks to limit annual growth in Vietnamese textile exports to the U.S. to 7%. However, woollen products would have a limit of 2%.

The quotas would limit Vietnam's total textile exports to well below its target of US$1.7 billion besides putting paid to its hopes of rapid growth, lamented Le Quoc An, chairman of Vietnam Textile and Garment Corporation, and president of the Vietnam Textile and Apparel Association.

The repercussions would also be felt on many jobs in an industry, which after crude, fetches the highest foreign exchange earnings, An said.

An also revealed to other sources that the U.S. would have unilaterally imposed the quotas if Vietnam turned down the proposals.

The country had exported more than US$900 million-worth textiles to the U.S. last year after, in 2001, the exports were a mere US$48 million. The surge followed the signing of the BTA in December 2001.

The industry now hopes to export around US$1.5 billion-worth textiles following strong growth in the first quarter, when exports reached US$850 million, and a whopping US$500 million to the U.S. alone.

An said Vietnamese enterprises now have to find ways to tackle the new hurdle, focusing on items that fall outside the quotas and moving from sub-contracts to FOB exports.

Before the talks between the two countries, US companies had urged their government not to impose t garment quotas, calling such a move "very troubling" for American importers. Several US retail and manufacturing giants, including Nike, Liz Claiborne, Sears Roebuck, Gap, K-Mart and Target, in a letter in February to Trade Representative Robert Zoellick, had argued that quotas could result in supply shortages.

"Vietnam constitutes an extremely important sourcing opportunity for us, especially in light of the continuing uncertain economy, shifting security conditions and upcoming termination of the international quota system."

Despite the quotas, however, the sector plans to produce goods worth US$3.2 billion for export this year, almost half of it to the U.S.

The agreement will run from May 1 this year to December 31, 2004 but could continue on an annual basis until Vietnam enters the World Trade Organization.


VN-US garment pact still awaits signing
Vietnam and the United States have yet to seal a textile and garment agreement as expected after the second round of talks over the agreement, according to Vietnam's Ministry of Industry.

"The two sides are still at odds over some issues, especially the date for introducing the quota regime on Vietnamese garment and textile exports to the U.S.," said Deputy Minister Bui Xuan Khu.

The U.S. wants the agreement to take effect on April 1 while Vietnamese negotiators insisted on July 1 as the day of commencement.

The Vietnamese delegation returned home Tuesday, and the U.S. will send a team to Vietnam to resolve the remaining issues in the time ahead, Khu said. He added the signing was likely to take place in Vietnam.

Quota for US-bound garments fixed at $1.7mil
The value of Vietnam's textile and garment exports to the United States has been capped at US$1.7 billion this year and will increase by 10% each year, Deputy Minister of Industry Bui Xuan Khu said.

"Until Saturday afternoon, the two sides have yet to officially seal the Vietnam-U.S. garment and textile pact but the inking is likely to take place on tomorrow," Khu said on Monday, adding that the U.S. had decided to apply the new quota from July.

He said the quota value for this year was a reasonable amount but Vietnamese negotiators were not satisfied with the imposition of quotas for the following years.

"The U.S. has agreed to raise the quota value by 10% annually," he said. "The quota increase is small compared to the development of Vietnam's garment industry," he commented.

Until Sunday afternoon, no information has come out about quotas allocated for specific categories. However, Khu said those categories of high demand on the US market would be given higher quota values.

EU urged to implement amended garment pact soon
Vietnam has proposed the European Union (EU) put the amended textile and garment agreement on fast track as any delay to quota allocations will cause big losses for local producers, said a Ministry of Trade official. The official said that pending the official signing of the amended agreement, scheduled for early next month, some local producers had been unable to sign new contracts with European companies.

The amended agreement, which increases the EU's textile and garment import quotas for Vietnam by 50- 75% on last year, was approved on principle by the Vietnamese government and the European Union in mid-February 2003.

The official said the agreement would bring more opportunities for Vietnam's textile and garment products to enter the EU market in 2003-2005. He said the EU had shown support for the proposal and that they would consider it in a way that allowed Vietnamese exporters to receive the additional quotas before May.

Vinatex growth beats off world gloom
Despite worldwide economic troubles, the Vietnam National Textile and Garment Corporation (Vinatex) has posted solid growth with an estimated profit of VND22 billion (US$1.5 million) in the first quarter.

Vinatex's revenue has increased by 45% over the same period last year. In particular, export turnover has increased by 69%, its director Mai Hoang An said.

Several affiliated companies, such as Viet Tien, Nha Be, Thang Long and Phong Phu, have also recorded high profits. This can be attributed to large export shipments to the United States. However, some companies such as Duc Giang, Dong Phuong, Ninh Binh and Hoa Tho did not reach their export targets due to not shipping goods to the Middle East, An added.

US senators protest restriction on VN textile & garment exports
Twenty-three US senators have recently sent a letter to US Trade Representative Robert Zoellick to protest the U.S.'s restriction in Vietnam's textile and garment exports, a US source reported.

The senators confirmed that textile and garment imports from Vietnam would not create instabilities in the US market and not affect job opportunities of American labourers in the industry as well.

Also in the letter, the US senators pointed out clearly that liberalization for Vietnam's textile and garments is an important substitution source for the U.S market in the context of unstable supply in some regions, especially in the final year of the ATC/WTO Agreement on Textiles and Clothing. Meanwhile, the US market's demand is extremely high and the quota is limited.

According to Vietnam's experts, the current voice against the U.S.'s trade restriction toward Vietnam's textile & garment products is an advantage for enterprises to push exports to that huge market. In reality, one year after the Bilateral Trade Agreement came into effect, out of US$2.75 billion in Vietnam's total export turnover last year, US$975 million came from the US-bound textile and garment exports.

Foreign textile machinery on display in HCM City
Almost 270 domestic and foreign companies from nearly 20 countries and territories are displaying their products at the 13th exhibition for garment and textile equipment, which opened on Tuesday at Ho Chi Minh City's International Exhibition and Convention Centre.

According to the organizers, the number of expected exhibitors fell by around 20% as a result of Severe Acute Respiratory Syndrome (SARS), which caused a number of companies from mainland China and Hong Kong to cancel their registration.

During the four-day exhibition, seminars on quota distribution by the Ministry of Trade and promotion of trade and investment in Vietnam of European businesses will be held.

Garment quotas proportionate to real exports
The Ministry of Trade (MoT) will allocate quotas for enterprises exporting textiles and garments to the United States proportionate to their U.S.-bound exports last year, but said this scheme is dependent on the forthcoming talks with the U.S.

Deputy Minister Mai Van Dau said beneficiaries would include all local and foreign-invested garment exporters, and the plan would only be applied if the quotas granted to Vietnam by the US side are comparable to the exported volume last year. This, however, is tentative as the Prime Minister will have a final say on the matter, Dau said.

"Quotas will be allocated to the exporters of garments and textiles bound for the U.S. depending on the earnings they posted last year, either they are local or foreign-invested concerns," Dau said. He also unveiled that the MoT would consider more quotas for foreign-invested enterprises if the garment and textile quotas given by the U.S. were more than last year's export volume.

U.S., VN to begin 2nd round on garment pact
A delegation representing three Vietnamese ministries will arrive in Washington D.C. next week to begin the second round of talks on the U.S.-Vietnam garment pact scheduled to last three days from Wednesday, an official said on Apr. 2.

The second round will focus on tariffs for import of garment materials into Vietnam from the U.S. among other topics, said an official with the Ministry of Trade.

The delegation will include officials from the ministries of Trade, Industry, and Planning and Investment.

He refused to mention other topics to be discussed, though the frequently-asked question these days is how the quota regime will be imposed by the U.S. side on Vietnamese garments. But the source insisted garment imports from Vietnam have not harmed the U.S.'s garment industry and is unlikely to be so in the future.

The Vietnam-US bilateral trade agreement (BTA) will pave the way for greater two-way trade between the two countries and help boost US investment in Vietnam, according to Ho Chi Minh City American Chamber of Commerce (AmCham) chairman Walter Blocker.

"As a result of the agreement, trade between the two countries is expected to increase significantly over the next few years, with a sizeable increase in the first year," Blocker said after the pact was ratified by the Vietnam's National Assembly last week.

"The greatest beneficiary will be Vietnam, as access to the US market will be much easier given the reduction of most import duties from an average of 40 per cent to only 2 per cent."

Blocker said that Vietnamese garment and textile producers will initially be the biggest winners, because of the new preferential tariff schedules.

Though the US is now one of Vietnam's top 10 trade partners, the great potential for trade between the two countries has not been fully tapped.

Trade Ministry figures show that Vietnam's exports to the US in the first three quarters of 2001 amounted to US$778 million, a year-on-year increase of 40 per cent.

The reduction of most import duties from the current 40-50 per cent to 2-3 per cent after the BTA comes into effect will certainly trigger a boom in exports from Vietnam to the US.

According to an estimate by the World Bank, Vietnam's exports to this huge market will rise from US$820 million last year to US$3 billion in 2005, and US$8 billion in 2010.

The implementation of the BTA will also help bring more US investors to Vietnam.

"The US will not receive an immediate reduction in import duties for exports to Vietnam, but current US investors in Vietnam will benefit from what is sure to be an increase in activity in the market as a result of the agreement," Blocker said.

The BTA was mapped out in mid-1995 after diplomatic relations were established between Vietnam and the US.

Since then, Vietnam has welcomed 129 US investment projects worth over US$1 billion.

US direct investment focuses chiefly on industry, with 82 projects accounting for 58.6 per cent of the total.

Investment in the agricultural, food processing and consumer goods sectors follows, with 16 projects accounting for 13.5 per cent of the total investment.

At present the US ranks as Vietnam's 12th largest investor.

In reality, US investment in Vietnam is much higher than this. Many US projects have not been included in the above list because the investment took place via multinational groups.

According to an incomplete report by the Ministry of Planning and Investment, US investors have poured US$1,234 million into 31 projects in Vietnam through 24 US-invested multinational groups.

But Vietnamese business people have said Vietnam needs more investment from the US, especially in high-tech industries like IT and telecommunications.

The country's entrepreneurs are pinning their hopes on Deputy Prime Minister Nguyen Tan Dung's upcoming visit to the US.