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Vietnam was formally invited to join the World Trade Organization after more than a decade of entry talks in which it steadily reduced its tariffs and pledged to open its banking sector.

But the Communist-run country still faces obstacles to expanding its trade: The world's major trading nations, for now, continue to consider it a "nonmarket economy." That means Hanoi is vulnerable to claims that it subsidizes its exports and dumps them on the world's markets, analysts say.

Vietnam, the fastest-growing Asian economy after China in recent years, has already concluded bilateral trade deals with major trading partners such as the European Union, Japan and Australia. Since the U.S. normalized trading relations with its former adversary in 2001, trade between the two has quadrupled to almost $8 billion a year.

Congress is expected to vote on whether to grant Vietnam "permanent normal trading relations" by year's end.

With 84 million people, Vietnam has been the second-largest economy, after Russia, that wasn't a member of the global trade group. The country is an increasingly attractive destination for foreign investment. Intel Corp., for instance, has begun work on a $300 million semiconductor factory in southern Vietnam and is considering increasing that investment, Vietnamese officials say. The Asian Development Bank expects Vietnam's economy to grow 7.8% this year.

As the WTO's 150th member, Vietnam will likely attract more foreign investment, analysts say. In particular, the country will benefit from the removal of quotas that limit its textile exports to Europe and the U.S.

But with WTO membership, which is expected around year's end, Hanoi will have to give up subsidies and tax breaks for domestic companies, as well as open up its markets to foreign competition.

Until Vietnam takes these steps -- something that could take years -- it will be regarded as a nonmarket economy, enabling rivals to accuse it of using state subsidies to give domestic companies an unfair advantage.

In the past few years, the U.S. has imposed antidumping tariffs on Vietnam's catfish and shrimp exports; in October, the EU decided to impose antidumping duties on Vietnamese shoe imports. Although joining the WTO won't necessarily remove those tariffs, Vietnam will have the option of challenging their legality within the WTO.

Vietnam suffers from other homegrown impediments to its continued strong economic growth. The quality of its infrastructure lags behind that of regional competitors such as China and Thailand. Corruption also is endemic, affecting nearly every aspect of life in the country.

Vietnam's human-rights record grates with some of its trading partners, too. On Friday, a court in Ho Chi Minh City will try seven people, including three Americans of Vietnamese descent, for an alleged attempt to take over state radio stations to call for a popular revolt against the country's Communist leaders. Penalties for conviction could range from 12 years in prison to execution by firing squad. Yesterday, the Bush administration urged Vietnam to give the three U.S. citizens a fair trial.

Sen. Mel Martinez (R., Fla.) has raised the case of one of the defendants in an attempt to block the latest trade bill on Vietnam, which President Bush hopes to sign before visiting the country during a summit of Asia and Pacific leaders in mid-November.

Prime Minister Nguyen Tan Dung told a visiting American business delegation in Hanoi yesterday that during Mr. Bush's visit, he would like Vietnam to be granted the status of a country with "permanent normal trade relations" with the U.S.

Certain issues continue to worry foreign investors. They are keeping a close watch on a government investigation into Dutch bank ABN Amro Holding NV. Vietnamese authorities allege ABN Amro employees illegally traded with officials from a state-owned bank, resulting in a loss of $5.4 million for the state bank. Two ABN Amro employees have been detained in jail pending charges, while two others are under house arrest.

ABN Amro officials have said the bank did nothing wrong and it stands by the trades, which took place over the course of three years and have already been settled. Other foreign banks have voiced concern about how Vietnamese authorities appear to be criminalizing normal trading practices, raising questions about whether Vietnam is ready to join the international trading community.

In a directive last week, Mr. Dung urged police to complete their investigation. He also indicated no one would be convicted if ABN Amro repays the state bank's foreign-exchange losses.