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US, Vietnam eye free trade, investment deals

ForexApr 14, 2010 02:12PM ET
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* U.S.-Vietnamese trade has grown sharply since 2001

* Two countries negotiating regional free trade deal

By Doug Palmer

WASHINGTON, April 14 (Reuters) - Vietnamese Prime Minister Nguyen Tan Dung said on Wednesday his country was eager to take the next step in expanding trade with the United States by concluding a regional free trade pact.

"I (also) want the U.S. to become the top foreign investor in Vietnam," Dung said in a speech to U.S. business groups.

Trade between the former enemies has grown more than 700 percent in value under a bilateral trade pact that went into force in late 2001. It totaled nearly $16 billion last year.

The United States is Vietnam's largest trade partner after China, according to the U.S. State Department.

But many trade barriers remain between the two countries. They could be eliminated under the proposed Trans-Pacific Partnership (TPP) agreement, which would group the United States, Vietnam and six other nations in a free trade bloc.

"We have found willing and able partners in Vietnam. And we will continue to undertake a robust agenda to strengthen and deepen the relationship," U.S. Trade Representative Ron Kirk told the same business groups in Washington.

Robert Hormats, the U.S. Under Secretary of State for Economic, Energy and Agricultural Affairs, said earlier this week in Hanoi that Vietnam was a priority market for the United States as it strives to double exports.

"With a thriving market of 86 million, a track record of healthy trade and stable growth, it is no wonder that Vietnam has been at the center of some of our most recent economic initiatives," Hormats said.

The first round of talks on the TPP was held in March and the eight countries will meet for the second round in June.

President Barack Obama's administration is aiming for a "21st Century" agreement that would include stronger provisions on workers rights and the environment than in previous trade pacts.

However, some Democratic lawmakers are concerned that Vietnam's participation might weaken the importance of such measures because of the Communist-ruled nation's lower level of development and its human rights record.

Similar concerns have delayed completion of a bilateral investment treaty between Washington and Hanoi that would give U.S. companies increased protection for investments they make in Vietnam.

The two countries held a second round of talks on the proposed treaty in 2009, while the Obama administration mulled changes sought by labor groups.

Even without the treaty, the United States was Vietnam's largest source of new foreign investment in 2009 and sixth in terms of total foreign investment, Dung said.

Dung, who was in Washington to attend a nuclear security summit and met with U.S. Secretary of State Hillary Clinton on Tuesday, faced protests by Vietnamese-Americans outside the hotel where he spoke.

(Reporting by Doug Palmer; Editing by Paul Simao)

US, Vietnam eye free trade, investment deals

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