Vietnam reportedly reaches trade deal with the United States(updated 11:21 a.m.)

Vietnam has reached an agreement with the United States that paves the way for the communist country to join the World Trade Organization, state-controlled media reported Sunday.

The two sides have "reached agreements in principle," Vietnamese Trade Minister Truong Dinh Tuyen told Tuoi Tre (Youth) newspaper after four days of talks in Washington. "The official signing will be conducted soon, probably in Ho Chi Minh City."

The newspaper quoted Vu Dang Dung, an official at the embassy in Washington as saying the two countries are expected to officially sign the agreement in early June when U.S. Trade Representative-designate Susan Schwab attends the Asia Pacific Economic Cooperation (APEC) Trade Minister Meeting in Ho Chi Minh City.

The newspaper did not give details of the agreement.

One of the most thorny issues, that dragged the talks longer than scheduled, was a Vietnamese government's decision to mobilize US$4 billion to accelerate the garment and textile industry, the newspaper said.

The two sides agreed that Vietnam will scrap this decision upon becoming a WTO member and immediately stop subsidizing local garment and textile companies when the two countries officially sign the agreement, it said.

The U.S. Congress needs to grant Vietnam Permanent Normal Trade Relations, the last step before the communist country can become a member of the Geneva-based world trade body.

The newspaper said Tuyen, in the capacity as special envoy of Prime Minister Phan Van Khai, has received strong commitments from the U.S. House of Representatives and Senate in giving Vietnam PNTR.

Last month, Vietnam concluded talks with Mexico, leaving its former enemy, the United States, the only country it needs to conclude bilateral negotiations.

Vietnam wants to join the world trade body before hosting an APEC summit in Hanoi in November which U.S. President George W. Bush is expected to attend.

The bilateral trade volume has steadily increased since the two countries signed the Bilateral Trade Agreement in 2001, reaching nearly US$8 billion last year, heavily in favor of Vietnam.