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News
November 22, 2002
Indonesia
wants Vietnam to join in coffee pricing
(ABC Radio
Australia News) - Indonesia will reportedly propose to Vietnam that they
jointly reduce coffee exports to help prop up world prices.
The Indonesian director for exports Ferry Yachya has been quoted by the Bisnis
Indonesia daily newspaper as saying Indonesia's Trade Minister would propose the
scheme during a meeting with her Vietnamese counterpart in Bali on Thursday.
The scheme, if agreed to by both sides, would be part of a memorandum of
understanding to be signed by both countries at the end of December or early
January.
They would also work together on promotions, efforts to boost domestic coffee
consumption and improving the quality of beans.
Indonesia and Vietnam are two of Asia's leading producers, along with India.
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Vietnamese banks
receive upgraded ratings
(ABC Radio
Australia News) - The international credit rating agency, Standard and
Poor's, has upgraded its ratings for three state-owned Vietnamese banks.
It follows an assessment of the government's capacity for extending support to
them.
The Bank for Foreign Trade of Vietnam; the Bank for Investment and Development
of Vietnam; and the Industrial and Commercial Bank of Vietnam were increased to
"B" from "triple-C".
The ratings agency says the upgrade, was also the result of the recent release
of the banks' financial statement for the fiscal year ending December, 2001.
It warned about the quality of the banks' assets, saying the state-owned
institutions were subject to public policy lending and could be required to
finance projects that are not commercially viable.
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Vietnam-U.S. fish
fight exposes trade fissures
By Christina Toh-Pantin
HANOI (Reuters) - Dinh Duc Huu has invested
$10 million in fish and shrimp farms in communist-ruled Vietnam and he's worried
about the future of his businesses.
In early November, the United States moved closer to imposing anti-dumping
duties on Vietnam's catfish exports when the Department of Commerce ruled the
Southeast Asian country is a "non-market economy" in which the government has a
pervasive hand.
That means Hanoi -- despite 15 years of economic reforms -- is seen to be
controlling costs and prices, allowing the frozen fish fillets to be sold to
Americans at less than fair value, hurting American catfish farmers.
The dispute with the world's largest economy is the first big glitch since the
former Vietnam war enemies signed a historic bilateral trade pact in December,
permitting competition on equal terms for Vietnam's exporters.
Vietnam, which is steering away from a centrally planned economy to a
socialist-orientated market economy, aspires to enter the World Trade
Organisation (WTO) by 2005.
Its economy is set to grow by about seven percent annually in the next few years
and it earned about $15 billion in exports in 2001 while spending $16 billion on
imports.
But it's finding integration into the global community is not without its bumps.
"Regionally, Vietnam has the potential to be a player," said Susan Adams, chief
representative of the International Monetary Fund in Hanoi. "It is coming under
serious consideration for WTO accession and the issue now would be to watch its
follow-through on various trade commitments."
MARKET OR NON-MARKET?
The distinction between a market and non-market economy may seem academic to
some, given that Asia's fastest growing economy China is considered non-market
but has joined the World Trade Organisation and Russia just became known as a
market economy this spring.
But for Huu and thousands of others in the catfish sector, the name counts.
"If I didn't feel this was an open market I would not be here," said the
47-year-old naturalised U.S. citizen, who returned to the land of his birth in
1997.
"I've invested a lot of money in Vietnam now... Of course Vietnam's economy is
in transformation, but it's not overnight."
The non-market designation -- based on six factors including the privatisation
of enterprises, land rights and government control on prices and resources --
means that Vietnam's catfish exports could face duties of up to 190 percent
starting from next year.
Huu, who runs the diversified American Technologies Inc. which he founded in
1990, says 60 percent of his annual $7 million revenues in Vietnam come from his
eight shrimp and fish farms in the country. About 700 people are employed on the
farms.
In some ways, catfish seem an unlikely target. Its sales are but a small part of
the strongly improved trade links with the United States which overall should
amount to $2 billion for Vietnam this year from over $800 million in 2000.
Vietnam's textiles association alone expects to sell $800 million worth of
garments and textiles to the United States this year.
UNREASONABLE, UNFAIR
The Economist Intelligence Unit estimates Vietnam's catfish -- called "tra" and
"basa" fish and raised mostly in the southern Mekong Delta in cages -- have
captured 20 percent of the $590 million domestic U.S. market.
The fish fight has raised vociferous protests from Hanoi, which calls the
"non-market" decision unreasonable and unfair.
The Commerce Department is expected to issue a final calculation of anti-dumping
duties in February and the U.S. International Trade Commission will vote in
early April on whether the imports have injured U.S. producers.
A U.S. catfish group filed a petition for an anti-dumping probe against Vietnam
in June.
The European Union, which is aiding Vietnam in its application to join the WTO,
doesn't see the non-market ruling as an impediment. It has classified Vietnam,
along with China, as a "transitional" economy, caught between non-market and
full market.
What the spat has exposed, however, are the challenges that lie ahead for the
emerging economy despite its impressive growth statistics and success in freeing
up the private sector from the shackles of government control.
"This is a foretaste of how the world works," said a Hanoi-based trade expert.
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