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sectors to open the door to increased foreign competition. At present, Vietnam has established diplomatic relationship with over 179 countries all over the world (The World & Vietnam Report Ministry of Foreign Affairs). Although Vietnams economy, which continues to expand at an annual rate in excess of 7 percent, is one of the fastest growing in the world, the economy is growing from an extremely low base, reflecting the crippling effect of the Vietnam War (195475) and austerity measures introduced in its aftermath.
Modern times
Japan invaded Vietnam in September 22, 1940 and began constructing military bases to strike against the Allies in South East Asia. Japanese troops remained in Vietnam until they surrendered to the Allies in 1945 when World War II officially ended.
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Japan had consistently encouraged a negotiated settlement at the earliest possible date during the Vietnam War of the 1960s and 1970s. Before the hostilities ended, Japan had made contact with the North Vietnam and had reached an agreement to establish diplomatic relations in September 1973. Following the unification of North Vietnam and South Vietnam into the Socialist Republic of Vietnam, Japan opened an embassy in Hanoi. When the Vietnam War ended on April 30, 1975, in accordance with the treaty, the Japanese government began to provide Official Development Assistance (ODA) in 1977. Unfortunately, the rise of problems with Cambodia saw a freeze in this support over a 14-year period from 1978 1991. Vietnam then became isolated in the international community. However, the ASEAN nations, Australia, and France as well as Japan continued diplomatic efforts. A resolution to the Cambodian conflict would be found with the involvement of the United Nations. Vietnams stance during the long period of negotiations for the resolution to this Cambodian conflict was extremely important. Resolution of shifting to Doi Moi policies which was passed at the 6th National Meeting of the communist party of Vietnam in December 1986, was decisive. Following the October 23, 1991 Final Act of the International Paris Conference on Cambodia among the Cambodian parties, Indonesia (as co-chair with France), and the five permanent members of the United Nations Security Council, Japan promptly established diplomatic relations and ended economic restrictions with Cambodia and Vietnam. In November 1992, Tokyo offered Vietnam US$370 million in aid. Later, Vietnam joined ASEAN in 1995 and the establishment of the ASEAN Plus Three consultations in 1997, which include China, Japan, and South Korea. These nations share a place in the Southeast Asian economy and security framework. Today, Japan is Vietnams top economic partner, annual ODA to Vietnam exceeds 100 billion yen, despite the weakening of the Japanese economy and growing tensions over the budget. Since 1995, among countries around the world providing support to the developing countries, Japan provides to Vietnam the greatest amount of support being given to a single country. The two countries have granted each other the MFN status since 1999 and Japan has become one of the biggest trading partners of Vietnam. With regard to foreign direct investment, Japan now ranks third among countries and territories investing in Vietnam. In 2002, the two sides high level leaders agreed to build the Vietnam-Japan relations along the line of reliable partnership and long-term stability. The two sides have set up a dialogue mechanism at various levels in all political, economic, security and defense areas. The two countries concluded the Agreement on Investment Promotion and Protection in November 2003. Japan is the largest ODA donor of Vietnam in the 1992-2006 periods. In 2007, it pledged $US890 million in aid for the country, a 6.5 percent increase from the 2006 level of $US835.6 million. Japans long-term assistance program for Vietnam focuses on five key areas of human resource development and institutional building, building and upgrading of transportation and electricity projects; agriculture and rural infrastructure development; development of education, training and healthcare; and environment protection.
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Summary
An FTA is an agreement between two countries or regional groupings to eliminate or reduce tariffs and other barriers on trade in goods and services. Exports from non-members will find out that they will be discriminated against. The pursuit of FTAs is occurring worldwide and Japan is not an exception. Japan hopes to energize its economy by freeing up trade in goods and services, as well as to better compete with China for influence in Asia objectives that seem to support U.S. interests. However, Japans FTA program to date has not been robust enough to have much impact. The biggest constraint on moving forward on FTAs of Japan is agriculture. While some progress is being made in cutting tariffs on food items that serve small markets, highly protected rice and beef markets are not being offered for liberalization. Moreover, in the absence of a substantial farm reform program that would make liberalization of these products easier, many Japanese decision-makers hope protectionist pressures will go away over time with an aging farmer population that is shrinking and increasingly part-time. Japans FTA program, assuming the current cautious and defensive course persists, is likely to have varied effects on U.S. interests. On the one hand, it is likely to provide a positive, yet small, boost to increasing Japans role in the economics and political economy of East Asia.
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References
Communist party of Vietnam (1986) 6th National Congress Documents, Thegioi Publishers, Hanoi. The 2008 world factbook, Vietnam people 2008http://www.theodora.com/wfbcurrent/vietnam/vietnam_people.html Owen, Norman G., Chandler, David The emergence of modern Southeast Asia (p. 107). University of Hawaii Press, 2005. ISBN 0824828410, Japan early trade coin and the commercial trade between Vietnam and Japan in the 17th century. Luc, Thuan. Retrieved on May 08, 2009 - http://www.charm.ru/coins/vn/nagasaki.shtml Agreement between Japan and the Socialist Republic of Viet Nam for an Economic Partnership Ministry Foreign of Affairs of Japan http://www.mofa.go.jp/region/asiapaci/vietnam/epa0812/index.html Asia Regional Trading Center, Trade and Investment Japan- Vietnam Economic Partnership Agreement http://aric.adb.org/fta.php?id=146&ssid=3&title=JapanVietnam%20Economic%20Partnership%20Agree ment%20
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