The United States and Vietnam were earlier today expected to sign a historic trade agreement that promises to kick start stalled reforms and lift restrictions on Vietnamese exports. Agreement on the most significant development between the two former enemies since President Bill Clinton lifted a sweeping economic embargo in 1994 has been reached in principle, sources on both sides said. Final technical matters, such as translations, were being finessed ahead of a White House ceremony today. The deal is expected to lift stuttering trade between them now worth an estimated US$1 billion a year, with several large US multi-nationals such as Nike expected to expand manufacturing operations. It could also spark an array of wider changes, international analysts hope, creating a new wave of reforms in what is potentially the second largest market in South East Asia. The on-again, off-again deal ends some six years of talks which culminated in negotiations in Washington over the weekend involving US Trade Representative Charlene Barshefsky and Vietnamese Trade Minister Vu Khoan. It is understood Vietnam's Communist Party leadership has already given Mr Khoan full authority to sign. America's first ambassador to modern Vietnam, Pete Peterson, was last night on-route from Hanoi to Washington. The deal is expected to almost erode tariffs on Vietnamese exports - now running at more than 45 per cent on average - to the US. Hanoi has developed extensive textile, electronics and shoe manufacturing industries and is eager to compete for manufacturing jobs with its Chinese and South East Asian neighbours. Vietnam will also lower tariffs while opening up most of its markets to American products, services and distributors - a move which could prove a forerunner to eventual World Trade Organisation membership. Telecommunications and oil are expected to be included. Copyright protection will also be tightened. Vietnamese negotiators are understood to have been keen to ensure Hanoi is not disadvantaged compared to Beijing. The two parties came close to signing a deal last summer but Hanoi backed away, amid a host of fears across a mistrustful leadership wary of losing control and under-pressure from a vast, protected bureaucratic elite, including many military firms. Analysts are warning implementation of the deal could yet prove thorny - something foreign investors in Vietnam have long gotten used to as the early hype of the 1990s gave way to a corrupt and bureaucratic reality. Not even the US' biggest firms were immune from teething problems ranging from corruption to licencing snags. Firstly the deal must be approved by a US Congress that can still on occasion treat Vietnam with considerable suspicion. Then Vietnam's collective leadership must make good on its bureaucratic promises, opening markets long dominated by state firms and monopolistic practices that have propped up a grossly inefficient public sector. Wider social and political questions must be juggled by the leadership, too. Some huge monopolies in areas such as rice distribution sit at the core of the party's socialist control and management of the countryside, where most of Vietnam's 80 million people live. Reformers in the leadership are apparently desperate for it to work, especially once the mainland enters the WTO. They have watched fresh foreign investment commitments fall away drastically from a 1996 high of more than US$8 billion, helping a slide in double-digit growth to just four per cent last year - barely enough, some analysts believe, to ensure stability in what remains one of the world's poorest countries.