Executives from eighteen major U.S. corporations are in Vietnam, meeting with senior government officials at a conference sponsored by the US-ASEAN Business Council. As Matt Steinglass reports from Hanoi, they are looking for ways to take advantage of Vietnam's recent entry into the World Trade Organization.

Vietnamese farmers work field under giant billboards advertising for US shipping company, Federal Express and Boeing aircraft (file)

The United States granted Vietnam permanent normal trade relations in October, and the country joined the World Trade Organization in January. Since then, it has seen $3.5 billion in new foreign investment pledges, an increase of more than 50 percent from last year.

IBM's vice president for governmental operations, Stephen Braim, said the company plans major expansions in software development and services in Vietnam.

"We're talking about managing major transformational projects that happen both in Vietnam and around the world," he said. "For a country like Vietnam, with the skills base they have and what we're trying to attract here, we are looking more at the high-value-added services: the applications maintenance services, the development services, building of web portals, building of back-office operations."

Braim said Vietnam's accession to the WTO was key to IBM's optimism. As one of the terms of its membership, the country removed almost all trade barriers for computers.

"For us, the big win was in computer and related services. And we got that, and we're very, very happy with it," he admitted.

Express mail company UPS said the WTO agreement will eventually allow it to operate directly in Vietnam, rather than through local partners, as under current law.

But UPS Vice President Steven Okun said Vietnam must still improve both its inadequate highways and sometimes outdated regulations.

"Every shipment that comes into Vietnam you have to pay duties and tariffs on. It slows down the process," he said.

The garment industry was not represented at the meeting. As part of last year's trade agreement the U.S. declared it would monitor for dumping of garments at below-cost prices, and might impose retroactive tariffs.

U.S. clothing retailers say the uncertainty is driving them to other countries. Virginia Foote is president of the US-Vietnam Trade Council.

"I think there is some concern that the garment industry has been hurt in Vietnam by the US government action," she said. "There was great hope for growth in the garment and apparel industry in Vietnam. Is that growth going to be realized, or is it going to be postponed?"

The garment industry was one shadow on an otherwise bright picture. With Vietnam's economy growing at over eight percent a year, U.S. businesses appear eager to join the action.