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February 12, 2003

Vietnam's Deputy PM Discusses World Trade Complexities

HANOI (Associated Press) -Catfish exports, textile quotas and a possible war in Iraq are just three touchy areas Vietnam will have to tackle as it struggles to find its place in the world economy, Deputy Prime Minister Vu Khoan said Wednesday.

In a rare interview with members of the foreign press, Khoan joked that perhaps the media should eat more catfish to help minimize the surplus following last month's preliminary ruling by the U.S. Department of Commerce. The decision found that Vietnamese farmers were illegally dumping fish on the U.S. market.

"The fish farmers may have had one dumping, but they could not dump the price all the time," Khoan said. "This (bilateral trade act) has sent the wrong signal to enterprises and farmers in Vietnam. Therefore, the act will not be good promotion for trade and economic relations."

The trade agreement went into effect more than a year ago, and the catfish controversy is the first major ripple in relations between the former enemies. The ruling recommended immediate punitive tariffs of 38% to 64% on catfish exports, forcing many U.S. importers to abandon Vietnamese products. A final decision is expected this summer.

In spite of that trade disappointment, Khoan said he's not giving up on working with the U.S. He said he's hopeful negotiations will go well next week regarding quotas being placed on Vietnam's textile exports.

"We hope during the negotiations that there's an understanding on the U.S. side about the Vietnamese market," Khoan said.

In order for Vietnam and other developing countries to open new markets, he said they must be permitted to utilize cheap labor to produce and export goods without restrictions. Khoan noted that several large U.S. companies also are lobbying against the establishment of textile quotas.

Khoan said Vietnam also expects a financial hit if war erupts in Iraq, which was the communist country's largest rice importer last year. Vietnam exports about $500 million annually to Iraq, including tea and vegetable oil.

War will make those shipments nearly impossible because of expensive insurance needed for boats to travel into a war zone. Khoan said Vietnam must diversify its international markets and also work harder to sell products domestically.

"If the war on Iraq breaks out, then international relations will be more complicated," Khoan said. "Such complexity will have impacts on all countries."

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