More than three decades after American troops pulled out of Saigon, Vietnam is about to usher in a new era.

In January, the Southeast Asian nation is expected to join the World Trade Organization, a move welcomed by foreign companies eager to do business in the Communist country.

It should boost trade and provide U.S. companies with better access to a pool of cheap labor outside of China. Though only slightly larger than New Mexico, Vietnam is home to 84 million people.

"It may help reduce some of the cost of doing business there," said Bob Davis, director of global sales and marketing at Dallas-based Marlow Industries Inc. A year ago, the company, which makes thermoelectric coolers, opened a factory outside Ho Chi Minh City.

Interest in Vietnam is heating up as it nears admittance to the WTO, the 149-member international organization that administers trade agreements and handles trade disputes.

Last week, two U.S. venture capital divisions belonging to Intel Corp. and Texas Pacific Group announced a $36.5 million investment in FPT Corp., Vietnam's largest information technology provider.

To date, 157 companies and organizations have signed on as members of the U.S.-Vietnam Coalition, a group lobbying for Vietnam's WTO membership. The list includes Fortune 500 giants such as Boeing Co., General Electric Co. and Procter & Gamble Co. in addition to local companies Exxon Mobil Corp., J.C. Penney Co. and Fluor Corp.

"Vietnam provides U.S. businesses with a low-cost source of very high-quality workers," said Richard Fisher, president of the Federal Reserve Bank of Dallas. In an earlier job, he helped negotiate the United States' first postwar trade agreement with Vietnam that was signed in 2001.

"Vietnam gives U.S. companies an alternate source should something happen in China," Mr. Fisher said. And the trade agreement "opens new markets for our people to sell things into."

Besides the prospect of working together at the WTO, Vietnam and the U.S. are expected to improve their trade relations in another way.

Before President Bush's trip to Vietnam in mid-November, Congress is likely to vote on granting the country permanent normal trading relations status. The move would end the current system of annual reviews of Vietnamese imports by the U.S. government.

For nearly two decades, unresolved issues involving prisoners of war and missing soldiers kept the U.S. from forging closer business ties with Vietnam. But in 1994, the U.S. lifted its embargo on trade with the country. Today commerce between the two nations has reached nearly $8 billion, though most of it consists of imports of clothes, shoes and furniture from Vietnam.

Exports to Vietnam from Texas remain tiny, totaling only $130 million last year. But that's more than triple the amount in 2000. Key exports include chemicals, machinery and agricultural crops.

To gain WTO membership, Vietnam is offering to lower tariffs and improve intellectual property protection. The country will also eliminate rules that prevented U.S. companies from competing on a level playing field with Vietnam's state-owned firms.

The changes, which begin before the country is admitted to the WTO and continue afterward, are expected to benefit a variety of manufacturers and service industries, including insurance, banking and express package delivery, said Virginia Foote, president of the U.S.-Vietnam Trade Council.

"Vietnam has lowered all of its tariffs," she said. "It is an attractive market for companies to look at."

Marlow Industries was enticed by the country's low-cost labor. It imports materials to its Vietnam factory and then exports finished products – thermoelectric coolers used in everything from DNA tests to small refrigerators and wine coolers.

"We're hoping for some ease in the flow of getting materials in and out of the country," Mr. Davis said of the advantages of Vietnam's joining the WTO.

Large companies aren't the only ones that could profit. Phat Tran, a Dallas wholesaler of Vietnamese-made silk handbags, pillows and other goods, will benefit from lower duties on imported merchandise.

"Joining the WTO gives Vietnam an opportunity to increase its income, efficiency and government reforms, and creates better trading conditions," said Phat V. Tran, the firm's managing partner and a 36-year-old Vietnamese immigrant.

"It gives us more options – better products and competitive pricing," he added.

But not all Americans view increased trade and investment with Vietnam as a good thing.

"This is just another inclusion of tens of millions of cheap labor into the world market," said William Hawkins, a senior fellow at the U.S. Business & Industry Council, which represents nearly a thousand mostly small and medium-size manufacturing companies.

The organization is lobbying against granting Vietnam permanent normal trading relations status.

"Vietnam is not a good place to do business that would expand the U.S. economy," Mr. Hawkins said, noting that the country suffers from an extremely low per capita income, widespread corruption and weak protection of human rights.

Selling products made in Vietnam can also be challenging. Bitter feelings left over from a divisive war has led some Americans to shun these goods, Mr. Tran said.

"There is hesitation to use products from Vietnam," he said. "But a lot more people are becoming aware of them."

Advocates of improved ties with Vietnam insist that these obstacles can be overcome. Joining the WTO will force Vietnam to modernize its rapidly expanding economy, they say.

"A lot of domestic reform of laws related to trade and investment has to happen," said Sherman Katz, a senior associate in the trade, equity and development project at the Carnegie Endowment for International Peace.

China changed more than 3,000 of its laws and regulations before it joined the WTO, he added.

"We should never forget our POWs and all the pain and horror that comes from war," the Fed's Mr. Fisher said. But "it is in our interests to have a healthy, prosperous Vietnam."

E-mail kyung@dallasnews.com