LOS ANGELES — The Senate may have moved to normalize trade relations between this country and Vietnam, but lingering hostility and the current state of trade with the Asian nation may block any windfalls for California firms looking to cash in on the agreement.
Last year, California companies exported just $78.8 million in products to the nation of 80 million people, said Bruce Smith, principal economist for the state Department of Finance.
That represents less than one-tenth of 1 percent of the state’s total exports.
Those products mostly included heavy equipment and agricultural items — commodities that are unlikely to increase dramatically even though the agreement calls for Vietnam to reduce tariffs and remove other trade barriers.
“It’s not one of the glamour markets,” said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. “And there’s still a lot of hostility in this country toward the government in Vietnam.”
The Senate on Wednesday approved the plan to normalize trade between the two former enemies. The House endorsed the measure last month, and President Bush said he will sign it.
The flip side of the trade equation doesn’t appear much more lucrative.
Detailed import numbers for California firms involved in trade with Vietnam were not immediately available. But Smith said total imports from Vietnam passing through California totaled just $436 million last year and included mostly agricultural commodities like coffee and rice.
That’s less than 1 percent of total imports passing through the state.
California has the largest population of Vietnamese people outside of that nation. The Little Saigon area of Orange County is home to 300,000 Vietnamese. Nearly 79,000 live in San Jose. Statewide, the Vietnamese population grew 60 percent during the past decade.
Kyser believes a critical impediment to increased trade will be the “legacy of hostility” between Vietnamese-Americans and the communist regime in their homeland.
“That may make it difficult to get trade going,” Kyser said. “After a year or so, we may see a change in those attitudes.”
Not everyone believes those sentiments will hamper trade.
Co Pham, chairman of the Vietnamese-American Chamber of Commerce, believes many of the group’s 400 statewide members will move quickly to do business with the Asian nation after prohibitive U.S. tariffs are reduced.
He expects those firms can easily cash in on the market among Vietnamese immigrants for seafood, fruit and other commodities from their native country.
As Vietnam prospers from such exports, he believes it will be able to afford expensive tech and manufacturing equipment from this country to rebuild its infrastructure.
“Vietnam has lots of resources — coal, gas and diamond mines — but needs machinery to get it,” he said. “I think with this trade agreement it will have a good chance to rebuild.”