The United States and Vietnam agreed in principle yesterday to establish normal trade relations, taking a major step toward eliminating the last vestiges of enmity from a war that ended 24 years ago.

The agreement, if approved by Congress, would give Vietnam what is often called "most favored nation status" -- that is, the same low-tariff access to U.S. markets as the vast majority of other countries. Only a handful of nations, such as Cuba and North Korea, are denied such treatment.

Negotiating the deal took several years because of U.S. insistence that Vietnam's socialist government take steps to lower trade barriers and protect intellectual property. The Clinton administration ended the U.S. economic embargo of Vietnam in 1994 and diplomatic relations were established the following year, but Vietnamese exports have remained subject to high U.S. tariffs.

"This would represent the final chapter in the transformation of our relationship from adversaries to trading partners," Richard Fisher, a deputy U.S. trade representative, told reporters in Hanoi, according to wire service reports. "This agreement will assist in transforming and modernizing the Vietnamese economy."

As that statement suggests, the pact will mean far more economically to Vietnam than to the United States. Although Vietnam was touted a few years ago as the next Asian "tiger" and potentially a hot market for U.S. companies, its economy is tiny and poverty stricken, and multinational corporations regard it as a market that won't become significant for years or perhaps even decades.

Vietnam's annual per capita income is about $310, according to a recent estimate by the World Bank, and its total economic output is a bit less than Rhode Island's, despite a population of 77 million. After a growth spurt in the late 1980s and early 1990s, the economy has cooled markedly in the past couple of years, thanks in part to disenchantment among foreign firms with the Vietnamese government's heavy-handed regulation and reluctance to reform. Foreign investment fell 60 percent in 1998 from the year before.

Getting improved access to the vast U.S. market for Vietnam's exports, such as shoes and clothing, could help. Vietnam shipped about $450 million in goods to the United States last year, and sharply reduced tariffs could lead swiftly to a doubling of that amount, by some estimates.

In Washington, U.S. Trade Representative Charlene Barshefsky said a number of technical details remain to be ironed out but that she hopes a final agreement can be submitted to Congress in several months.