U.S.-Vietnam Relations in 2009: Current Issues
and Implications for U.S. Policy
Mark E. Manyin
Specialist in Asian Affairs
July 29, 2009
Congressional Research Service
7-5700
www.crs.gov
R40208
CRS Report for Congress
P
repared for Members and Committees of Congress

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U.S.-Vietnam Relations in 2009: Current Issues and Implications for U.S. Policy

Summary
After communist North Vietnam’s victory over U.S.-backed South Vietnam in 1975, U.S.-
Vietnam relations remained essentially frozen until the mid-1990s. Since then, bilateral ties have
expanded to the point where the relationship has been virtually normalized. Indeed, since 2002,
overlapping strategic and economic interests have compelled the United States and Vietnam to
improve relations across a wide spectrum of issues. Congress played a significant role in the
normalization process and continues to influence the state of bilateral relations.
In the United States, voices favoring improved relations have included those reflecting U.S.
business interests in Vietnam’s reforming economy and U.S. strategic interests in expanding
cooperation with a populous country—Vietnam has more than 85 million people—that has an
ambivalent relationship with China. Others argue that improvements in bilateral relations should
be conditioned upon Vietnam’s authoritarian government improving its record on human rights.
The population of more than 1 million Vietnamese-Americans, as well as legacies of the Vietnam
War, also drive continued U.S. interest.
Vietnamese leaders have sought to upgrade relations with the United States in part due to the
desire for continued access to the U.S. market and to worries about China’s expanding influence
in Southeast Asia. That said, Sino-Vietnam relations are Vietnam’s most important bilateral
relationship and Vietnamese leaders must tiptoe carefully along the tightrope between
Washington and Beijing, such that improved relations with one capital not be perceived as a
threat to the other. Also, some Vietnamese remain suspicious that the United States’ long-term
goal is to end the Vietnamese Communist Party’s (VCP) monopoly on power through a “peaceful
evolution” strategy.
Economic ties are the most mature aspect of the U.S.-Vietnam bilateral relationship. The United
States is Vietnam’s largest export market. Bilateral trade surpassed $14 billion in 2008 and has
been growing by double-digits every year since the United States extended “normal trade
relations” (NTR) treatment to Vietnam in 2001. Increased bilateral trade also has been fostered by
Vietnam’s market-oriented reforms and the resulting growth in its foreign-invested and privately
owned sectors. From 1987-2007, Vietnam’s annual gross domestic product (GDP) growth
averaged over 7%. Since late 2007, Vietnam’s economy has been buffeted by economic
difficulties that have lowered growth rates and increased social strife. Vietnam is one of the
largest recipients of U.S. assistance in East Asia; estimated U.S. aid in FY2008 surpassed $100
million, much of it for health-related activities. In 2008, the two countries launched bilateral
investment treaty (BIT) talks and the Bush Administration announced that it would explore
whether to add Vietnam to the Generalized System of Payments (GSP) program, which extends
duty-free treatment to certain products that are imported from designated developing countries.
For years, human rights have been the biggest thorn in the side of the relationship. Vietnam is a
one-party, authoritarian state ruled by the VCP, which appears to be following a strategy of
permitting most forms of personal and religious expression while selectively repressing
individuals and organizations that it deems a threat to the party’s monopoly on power. Since early
2007, a number of arrests of dissidents and other developments have led some to conclude that
Vietnam’s human rights situation is worsening.

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U.S.-Vietnam Relations in 2009: Current Issues and Implications for U.S. Policy

Contents
Recent Developments.................................................................................................................. 1
An Intensifying Crackdown on Dissent and Criticism of the Government ........................ 1
Bilateral Security Cooperation ........................................................................................ 2
New Initiative with Vietnam and Other Mekong River Countries..................................... 2
Developments in Sino-Vietnamese Relations................................................................... 2
Catfish ............................................................................................................................ 3
Introduction ................................................................................................................................ 3
U.S. Interests and Goals in the Bilateral Relationship ...................................................... 3
Vietnam’s Interests and Goals in the Bilateral Relationship ............................................. 4
A Ceiling on the Relationship? ........................................................................................ 4
Key Issues and Decisions ................................................................................................ 5
Brief History of the Normalization of U.S.-Vietnam Relations..................................................... 5
Major Issues in U.S.-Vietnam Relations ...................................................................................... 7
Diplomatic Ties..................................................................................................................... 7
June 2005 Summit .......................................................................................................... 8
June 2008 Summit .......................................................................................................... 8
Economic Ties ...................................................................................................................... 8
Trade Initiatives: GSP, TIFA, BIT, and TPP..................................................................... 9
Trade Friction ............................................................................................................... 10
U.S. Foreign Assistance to Vietnam..................................................................................... 13
Human Rights Issues........................................................................................................... 14
Overview ...................................................................................................................... 14
Religious Freedom ........................................................................................................ 15
The Vietnam Human Rights Act .................................................................................... 16
Refugees in Cambodia .................................................................................................. 17
Human Trafficking.............................................................................................................. 18
Security Issues .................................................................................................................... 18
Vietnam War “Legacy” Issues ............................................................................................. 19
Agent Orange................................................................................................................ 19
Vietnam War Resettlement Programs............................................................................. 20
POW/MIA Issues .......................................................................................................... 20
Conditions in Vietnam............................................................................................................... 21
Economic Developments..................................................................................................... 21
Vietnam’s Economic Troubles of 2007-2009 ................................................................. 21
Background .................................................................................................................. 22
Controversial Bauxite Plan for Central Highlands.......................................................... 23
Political Trends ................................................................................................................... 23
2008-2009: Shifting Political Winds in Hanoi? .............................................................. 23
Background .................................................................................................................. 24
The Tenth Party Congress ............................................................................................. 24
The National Assembly ................................................................................................. 25
Sino-Vietnam Relations....................................................................................................... 26
Selected Legislation in the 111th Congress ................................................................................. 27

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U.S.-Vietnam Relations in 2009: Current Issues and Implications for U.S. Policy

Figures
Figure 1. Map of Vietnam ......................................................................................................... 28

Tables
Table 1. U.S.-Vietnam Merchandise Trade, Selected Years .......................................................... 9

Contacts
Author Contact Information ...................................................................................................... 29

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U.S.-Vietnam Relations in 2009: Current Issues and Implications for U.S. Policy

Recent Developments1
An Intensifying Crackdown on Dissent and Criticism of the Government
Although most analysts observe that human rights conditions for most Vietnamese are markedly
better than they were a generation ago, some human rights activists and Vietnam-watchers believe
that the government has become more restrictive toward criticism of the government over the past
two to three years. Since early 2008, for instance, press freedoms reportedly have been curtailed
and prominent journalists arrested. For several years before then, the press—which is state-
controlled—had been given space to criticize the government on “safe” issues like corruption,
economic policy, nature conservation, and environmental pollution.
Events in 2009 have led some human rights groups and other observers to argue that the
Vietnamese government may be targeting bloggers as well as lawyers who represent human rights
and religious freedom activists, particularly those linked to a network of pro-democracy activists.
Many blogs have been a relatively free space for political discussion since they were introduced
into Vietnam in 2005. Authorities reportedly banned anti-government commentary on blogs in
January 2009, and there are reports that in recent months a number of prominent bloggers have
been arrested, several blogs with political commentary have been hacked and criticized by official
news outlets.2 In June 2009, Vietnamese authorities arrested human rights lawyer Le Cong Dinh,
reportedly for violating article 88 of Vietnam’s criminal code, “conducting propaganda against the
government,” which carries a sentence of up to 20 years. Dinh is best known for his defense of
Vietnamese bloggers, human rights defenders, and democracy and labor rights activists. Other
lawyers with similar clients, including religious freedom activists, reportedly have been subject to
threats and harassment.3
Many of the blogs, bloggers, and lawyers who have been targeted had criticized as too “soft”
Vietnam’s policy toward China and/or have links to pro-democracy activist groups such as Bloc
8406 or the banned Democratic Party of Vietnam. There are reports that these groups have
received help from expatriate Vietnamese, including some in the United States. Yahoo has been
accused of allowing Vietnamese authorities to embed monitoring and censoring devices on its
applications, particularly its blogging service, which are popular in Vietnam.4
Various human rights-related legislation has been introduced in Congress in 2009. These include
H.R. 1969 (C. Smith) and S. 1159, the Vietnam Human Rights Acts, which would link Vietnam’s
entry into the U.S. Generalized System of Preferences (GSP) program to improvements in
workers’ rights in Vietnam and would link increases in some non-humanitarian aid to
improvements in human rights conditions in Vietnam. H.R. 2410, the FY2010 Foreign Relations

1 For more details about U.S.-Vietnam relations in 2008, see CRS Report RL33316, U.S.-Vietnam Relations in 2008:
Background and Issues for Congress, by Mark E. Manyin.
2 Open Source Center Report, “Vietnamese Authorities Seek to Silence, Intimidate Cyber-Activists,”
FEA20090710868263, July 9, 2009.
3 Human Rights Watch, “Vietnam: Free Prominent Rights Lawyer Le Cong Dinh,” New York, June 16, 2009; Ian
Timberlake, “Vietnam Arrests Are Part of Long-Running Crackdown: Analysts,” Agence France Presse, July 14, 2009.
4 Open Source Center Report, “Vietnamese Bloggers Drop Local Yahoo Service Given Perceptions of Collusion With
Authorities,” FEA20090721872665, Jul 21, 2009.
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Authorization Act, contains a “sense of Congress” section stating that that the Secretary of State
should place Vietnam on the list of ‘Countries of Particular Concern’ for severe violations of
religious freedom. For more details, see “The Vietnam Human Rights Act” and “Selected
Legislation in the 111th Congress” sections below.
Bilateral Security Cooperation
In June 2009, the United States and Vietnam held their second Security Dialogue on Political,
Security, and Defense Issues, in Washington, DC. According to press releases and U.S.
participants in the talks, the most substantive issues appear to have been expanding cooperation in
peacekeeping operations and training, humanitarian assistance and disaster relief, including
search and rescue operations and training. As a symbol of the relatively small-scale and
incremental areas of improvement, one of the deliverable items from the meeting was that
Vietnam agreed to send a higher-level observer to the upcoming Garuda Shield capstone training
exercise for the Global Peace Operations Initiative (GPOI), to be held in Indonesia. Other topics
of discussion included maritime security, counterterrorism and counternarcotics cooperation,
border security, nonproliferation, and exchanges of high-level visits.5
New Initiative with Vietnam and Other Mekong River Countries
In late July 2009, on the sidelines of the ASEAN Regional Forum (ARF) Foreign Ministerial in
Phuket, Thailand, Secretary of State Hillary Clinton met with the foreign ministers of the lower
Mekong countries, excluding Burma (i.e. Vietnam, Cambodia, Laos, and Thailand), in the first-
ever U.S.-Lower Mekong Ministerial Meeting. The Ministers issued a joint statement outlining
the wide-ranging areas of discussion, which included responses to climate change; fighting
infectious disease; and education policy. They agreed to discuss follow-up meetings and
cooperation.6 Additionally, the Mekong River Commission and the Mississippi River
Commission recently agreed to pursue a “sister river” partnership to share expertise and best
practices in areas such as climate change adaptation, water resource management, and food
security. The Obama Administration is seeking Congressional approval for an additional $15
million in FY2010 for assistance related to improving food security in the Mekong countries.
Vietnam and Cambodia reportedly have urged the United States to become more active in
Mekong issues. They are partly motivated by the environmental impact of Chinese dams and
other projects on the Mekong that are now felt in the downriver countries.7
Developments in Sino-Vietnamese Relations
Vietnam reportedly has protested China’s imposition of a fishing ban, as well as an increase in
arrests and fines of Vietnamese fishermen by Chinese naval boats, in disputed waters of the South
China Sea. In the spring of 2009, opposition within Vietnam arose against a planned Vietnam-

5 State Department Press Release, “Joint Statement on U.S.-Vietnam Political, Security and Defense Dialogue,” June 8,
2009; June 2009 exchanges with U.S. participants.
6 State Department Press Release, “Joint Press Statement of the U.S.-Lower Mekong Ministerial Meeting,” July 23,
2009.
7 Catharin Dalpino, “Bureaucratic Suspense at Phuket,” Asia Security Initiative blog, Posted on July 17, 2009,
http://asiasecurity.macfound.org/.
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China joint venture to mine bauxite in the Central Highlands, which is the site of one of the
world’s largest deposits of the ore. Criticism has focused on the project’s expected environmental
impact, on fears of increased Chinese influence, and on worries that ethnic minorities and local
industries (such as coffee plantations) would be adversely affected. (For more, see “Controversial
Bauxite Plan for Central Highlands,” below.) The campaign against the project appears to have
brought together a disparate group of critics, including 97-year-old General Vo Nguyen Giap, the
military leader of communist North Vietnamese forces against France, South Vietnam, and the
United States from the 1940s through the 1970s. In response to the criticism, the government says
only two of the four planned mining projects will begin initially, to allow time to study their
impact.8
Catfish
In the first half of 2009, the U.S. International Trade Commission and International Trade
Administration announced punitive tariffs against some Vietnamese exporters of frozen catfish
would stand. The tariffs, which range up to nearly 64%, have been imposed since 2003, when a
number of Vietnamese companies were ruled to have dumped their products on the U.S. market.9
The 2009 announcements followed “sunset” reviews of whether to revoke the tariffs.
Vietnamese concerns had already been heightened by fears that the implementation of certain
provisions of the Food, Conservation, and Energy Act of 2008 (P.L. 110-246), passed in June
2008, may reduce catfish exports to the United States. The fish industry is an important sector in
Vietnam, and for many years, Vietnamese officials and fish farmers complained about perceived
discrimination against Vietnamese fish exports to the United States (for more, see “Trade
Friction,” below).
Introduction
Since 2002, overlapping strategic and economic interests have led the United States and Vietnam
to improve relations across a wide spectrum of issues.
U.S. Interests and Goals in the Bilateral Relationship
Currently, factors generating U.S. interest in the relationship include growing trade and
investment flows, the large ethnic Vietnamese community in the United States, the legacy of the
Vietnam War, increasing interaction through multilateral institutions (including the United
Nations Security Council), and shared concern over the rising strength of China. U.S. goals with
respect to Vietnam include developing more amicable relations, bringing the country more into
the mainstream of nations, opening markets for U.S. trade and investment, furthering human
rights and democracy within the country, countering China’s increasing regional influence, and
maintaining U.S. influence in Southeast Asia. The array of policy instruments the United States
employs in relations with Vietnam includes trade incentives and restrictions, foreign assistance,

8 Seth Mydans, “Lion of War Retakes Field in Mine Fight, International Herald Tribune, June 29, 2009.
9 In U.S. law, dumping is defined as the selling of a product by a foreign producer at a price that is below the product’s
sale price in the country of origin, or at a price that is lower than the cost of production.
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cooperation in international organizations, diplomatic pressures, educational outreach, and
security cooperation.
Vietnam’s Interests and Goals in the Bilateral Relationship
For Vietnam’s part, since the mid-1980s, Hanoi essentially has pursued a three-pronged national
strategy: (1) prioritize economic development through market-oriented reforms; (2) pursue good
relations with Southeast Asian neighbors that provide Vietnam with economic partners and
diplomatic friends; and (3) repair and deepen its relationship with China, while simultaneously
buttressing this by improving relations with the United States as a counterweight to Chinese
ambition.10 By virtue of its economic importance and great power status, the United States has
loomed large not only in Vietnam’s strategic calculations, but also in domestic developments. For
instance, Vietnam’s protracted decision from 1999-2001 to sign and ratify the landmark bilateral
trade agreement (BTA) with the United States helped to break the logjam that had effectively
paralyzed debate over the future direction and scope of economic reforms. Additionally,
notwithstanding the legacy of the Vietnam War era, the Vietnamese public appears to hold
overwhelmingly positive views of the United States.11
There are a number of strategic and tactical reasons behind Vietnam’s efforts to upgrade its
relationship with the United States. Some speculate that Vietnamese policymakers seek to counter
Chinese ambitions in Southeast Asia. Vietnam also needs a favorable international economic
environment—for which it sees U.S. support as critical—to enable the country’s economy to
continue to expand.
A Ceiling on the Relationship?
Ultimately, the pace and extent of the improvement in bilateral relations likely is limited by
several factors, including Hanoi’s concerns about upsetting Beijing, U.S. scrutiny of Vietnam’s
human rights record, Vietnamese conservatives’ wariness of working with the United States, and
conservative Vietnamese suspicions that the United States’ long-term goal is to end the
Vietnamese Communist Party’s (VCP) monopoly on power through a “peaceful evolution”
strategy.
Additionally, the momentum in U.S.-Vietnam relations during the Bush years was facilitated by
two external conditions that may change in the coming months. First, the relatively positive
relations between the United States and China under the Bush Administration provided Vietnam
with the space to expand ties with both powers. Second, the growing U.S. economy during this
time also helped; securing access to the U.S. market—Vietnam’s largest—was critical to
Vietnamese policymakers. Many Vietnamese officials and economists see a 7% annual increase in
the country’s gross domestic product (GDP) as critical to providing the jobs that help maintain
economic and social stability, as well as propelling Vietnam toward the government’s goal of
becoming a middle-income economy by 2020. As Vietnam has dropped its adherence to

10 Marvin Ott, “The Future of US-Vietnam Relations,” Paper presented at The Future of Relations Between Vietnam
and the United States, SAIS, Washington, DC, October 2-3, 2003.
11 State Department Office of Research, Vietnam: U.S. Image Gets a Boost, Opinion Analysis, Washington, DC,
September 9, 2008.
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communist orthodoxy, providing jobs and improving standards of living have become more
important to the VCP’s and the government’s legitimacy.
If this analysis is correct, the 2008-2009 global economic crisis could negatively affect U.S.-
Vietnam relations in at least three ways: (1) it could raise trade frictions with Vietnam if the
United States and/or Vietnam adopt trade-restricting measures; (2) it could reduce the United
States’ importance to Vietnam if U.S. imports from Vietnam decline; and (3) it could cause
overall Sino-U.S. relations to deteriorate if trade tensions between the two increase. Thus, in
2009, it may take more concerted leadership in both Washington and Hanoi to continue
expanding relations at the strategic level.
Key Issues and Decisions
Throughout the process of normalizing relations with Vietnam, Congress has played a significant
role. Not only has Congress provided oversight and guidance, but it has shaped the interaction by
imposing constraints, providing relevant funding, and through its approval process for
agreements.
This report provides an overview of U.S. relations with Vietnam, including policy issues, the
economic and political situation in Vietnam, and a list of pertinent legislation. Key issues
confronting the United States include:
• whether to continue the Bush Administration’s policy of pursuing high-level
contacts with Vietnam, including annual summits;
• how far to pursue strategic and military-to-military ties;
• whether to impose curbs on surges in imports of certain items from Vietnam
(particularly clothing);
• whether to admit Vietnam into the Generalized System of Payments program,
which extends duty-free treatment to certain products that are imported from
designated developing countries;
• how much and what types of bilateral economic assistance to provide;
• whether and how to try to improve the human rights situation in Vietnam; and
• how to clear up “legacy issues” from the Vietnam War, particularly the suffering
of Vietnamese who say they are victims of dioxin, a byproduct of the defoliant
Agent Orange that the United States used during the war.
Brief History of the Normalization of U.S.-Vietnam
Relations
The United States’ post-World War II military involvement in Vietnam began in the early 1960s,
with the dispatch of military advisers to assist the South Vietnamese government in its battles
with communist North Vietnam and indigenous (i.e. South Vietnamese) communist forces.
Thereafter, the U.S. presence escalated. By the time the Nixon Administration withdrew U.S.
forces in 1973, millions of U.S. troops had served in Vietnam, with more than 50,000 killed.
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U.S.-Vietnam diplomatic and economic relations were virtually nonexistent for more than 15
years following communist North Vietnam’s victory in 1975 over South Vietnam. The United
States maintained a trade embargo and suspended foreign assistance to unified Vietnam.
Obstacles to improved relations included U.S. demands that Vietnam withdraw from Cambodia
(which Vietnam invaded in 1978), U.S. insistence on the return of/information about U.S.
Prisoners of War/Missing in Action (POW/MIAs), and Vietnamese demands that the United
States provide several billion dollars in postwar reconstruction aid, which they claimed had been
promised by the Nixon Administration.
A series of actions by Vietnam in 1978 in particular had a long-term negative effect on U.S.-
Vietnamese relations. Vietnam expelled hundreds of thousands of its citizens (many of Chinese
origin) who then became refugees throughout Southeast Asia; aligned itself economically and
militarily with the Soviet Union; and invaded Cambodia, installing a puppet government backed
by 200,000 Vietnamese troops. China conducted a one-month military incursion along Vietnam’s
northern border in 1979, which led to nearly three decades of disputes over the land border, and
kept strong military pressure on Vietnam until 1990. U.S. policy toward Vietnam was also
influenced by the exodus of hundreds of thousands of Vietnamese “boat people,” including many
ethnic Chinese, who fled Vietnam’s harsh reunification program.
Developments in the mid- and late 1980s set the stage for the rapid normalization of ties in the
following decade. Inside Vietnam, disastrous economic conditions and virtual diplomatic
isolation led the Vietnamese Communist Party (VCP) to adopt (at its 6th National Party Congress
in 1986) a more pragmatic, less ideological, line. Hanoi adopted market-oriented economic
reforms (dubbed doi moi, or “renovation”), loosened many domestic political controls, and began
to seek ways to extract itself from Cambodia.
U.S.-Vietnam cooperation on the POW/MIA issue began to improve following a 1987 visit to
Vietnam by General John Vessey, President Reagan’s Special Emissary for POW-MIA Issues. As
Vietnam withdrew forces from Cambodia in 1989 and sought a compromise peace settlement
there, the George H.W. Bush Administration decided to improve relations with Hanoi, which was
also interested in restoring ties to the United States. In April 1991, the United States laid out a
detailed “road map” for normalization with Vietnam. Later that year, Vietnam allowed the United
States to open an office in Hanoi to handle POW/MIA affairs.
In 1993, President Clinton built on the thaw by signaling the end of U.S. opposition to Vietnam
receiving international financial assistance. In February 1994, President Clinton announced the
end of the U.S. trade embargo on Vietnam. Two months later, Congress passed the Foreign
Relations Authorization Act, Fiscal Years 1994 and 1995 (P.L. 103-236), which expressed the
Senate’s support for the normalization of relations with Vietnam. Despite congressional efforts to
tie normalization to the POW/MIA issue as well as to Vietnam’s human rights record, President
Clinton continued to advance U.S. relations with Vietnam by appointing the first post-war
ambassador to Vietnam in 1997 and signing the landmark U.S.-Vietnam bilateral trade agreement
(BTA) in 2000. Throughout this period, the normalization process was greased by Vietnam’s
strategic desire to improve relations with the United States, continued improvements in
POW/MIA cooperation, Vietnam’s ongoing reform efforts, and by Vietnam’s general cooperation
on refugee issues.
President Clinton visited Vietnam from November 16-20, 2000, the first trip by a U.S. President
since Richard Nixon went to Saigon (now Ho Chi Minh City) in 1969. The visit was notable for
the unexpected enthusiasm expressed by ordinary Vietnamese, who thronged by the thousands to
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greet or catch a glimpse of the President and the First Lady. These spontaneous outbursts,
combined with the President’s public and private remarks about human rights and
democratization, triggered rhetorical responses from conservative Vietnamese leaders. During the
visit, Vietnamese leaders pressed the U.S. for compensation for Agent Orange victims, for
assistance locating the remains of Vietnam’s soldiers still missing, and for an increase in the
United States’ bilateral economic assistance program.
Progress towards the resumption of normal bilateral relations continued under the George W.
Bush Administration. Despite growing concerns about the Vietnamese government’s human
rights record, Congress ratified the U.S.-Vietnam BTA in October 2001; the new agreement went
into effect on December 10, 2001. Under the BTA, the United States granted Vietnam conditional
normal trade relations (NTR), a move that significantly reduced U.S. tariffs on most imports from
Vietnam.12 In return, Hanoi agreed to undertake a wide range of market-liberalization measures.
Vietnam’s conditional NTR status was renewed every year until December 2006, when Congress
passed P.L. 109-432, a comprehensive trade and tax bill, that granted Vietnam permanent NTR
status as part of a wider agreement that saw Vietnam become a member of the World Trade
Organization (WTO) as of January 11, 2007.13
As discussed in the following section, during the Bush Administration, the United States and
Vietnam dramatically upgraded diplomatic and strategic aspects of their relationship to the point
where the two countries have all-but-normalized bilateral relations, at least from the U.S. point of
view. As discussed below, however, many Vietnamese still consider relations to not be completely
normalized until the United States provides more compensation for purported victims of “Agent
Orange” and/or drops its legal categorization of Vietnam as a “Vietnam’s “Non-Market
Economy” Status”.
Major Issues in U.S.-Vietnam Relations
Diplomatic Ties
At some point in the mid-2000s, leaders in both Hanoi and Washington, DC, sought new ways to
upgrade the bilateral relationship. One manifestation of this goal was four annual summits from
2005-08. The Bush Administration appeared to use these top-level meetings to encourage
economic and political reforms inside Vietnam. The 2005 and 2008 summits were particularly
noteworthy.

12 Vietnam’s NTR status was conditional because it was subject to annual Presidential and congressional review under
the U.S. Trade Act of 1974’s Jackson-Vanik provisions, which govern trade with non-market economies. Every year
between 1998 and 2006, Vietnam received a presidential waiver from the restrictions of the Jackson-Vanik provisions.
From 1998 to 2002, congressional resolutions disapproving the waivers failed in the House. Disapproval resolutions
were not introduced between 2003 and 2006, the last year of Vietnam’s conditional NTR status.
13 See CRS Report RL33490, Vietnam PNTR Status and WTO Accession: Issues and Implications for the United States,
by Mark E. Manyin, William H. Cooper, and Bernard A. Gelb.
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June 2005 Summit
Then-Vietnamese Prime Minister Phan Van Khai’s June 2005 trip to the United States was a
landmark in the improvement of relations between the two countries. Not only was the trip the
first such visit to the United States by a Vietnamese Prime Minister since the end of the Vietnam
War, but combined with President Bush’s November 2006 visit to Vietnam it also focused the
attention of the leaders in Washington and Hanoi upon how they could improve the overall
relationship. While Khai was in Washington, he and President Bush issued a joint statement
expressing their “intention to bring bilateral relations to a higher plane.” The two countries signed
an agreement on implementing a bilateral International Military Education Training (IMET)
program to send two Vietnamese officers to the United States for English language training. The
two sides also announced an agreement to resume U.S. adoptions of Vietnamese children, which
Hanoi had halted in 2002. Protesters, mainly Vietnamese-Americans, appeared at every stop on
Khai’s trip.
June 2008 Summit
The latest summit occurred between President Bush and Prime Minister Nguyen Tan Dung
(pronounced “Dzung”) in Washington, DC, in June 2008. Dung’s trip was notable for the number
and range of agreements the two governments reached, as well as new steps they took to deepen
their level of engagement. Major developments included the announcement of formal “political-
military talks,” a process that the United States has with four other Southeast Asian countries; the
launch of bilateral investment treaty (BIT) negotiations; the Bush Administration’s announcement
that it would begin the process of exploring whether to add Vietnam to the Generalized System of
Payments (GSP) program; the launch of a “high-level” bilateral Education Task Force; an
agreement in principle to introduce a Peace Corps program in Vietnam; and the announcement of
new initiatives on adoptions, nuclear safety, aviation, climate change, food safety. Dung also
became the highest-level Vietnamese official since the Vietnam War to visit the Pentagon, where
he met with Secretary of Defense Robert Gates.
Economic Ties
Economic ties are the most mature aspect of the bilateral relationship. In the past five years, the
United States has emerged as Vietnam’s largest export market and collectively U.S. firms have
become one of the country’s largest sources of foreign direct investment (FDI). U.S. companies’
cumulative FDI still lags behind many European and Asian competitors, which had a head start in
operating in Vietnam. Since 2002, Vietnam has run an overall current account deficit—one that
has grown rapidly—with the rest of the world.
Bilateral trade has soared since the early part of the decade. As shown in Table 1, trade flows
exceeded $15 billion in 2008, more than ten times the level in 2001, the year before Vietnam
received conditional NTR status. Increased bilateral trade also has been fostered by Vietnam’s
market-oriented reforms and the resulting growth in its foreign-invested and privately owned
sectors. Over 80% of the increase in U.S.-Vietnam trade since 2001 has come from the growth in
imports from Vietnam, particularly clothing items. For the first three months of 2009, imports
from Vietnam were up year-on-year by just over 3.5%, while U.S. exports fell by nearly 25%.
U.S.-Vietnam trade flows have maintained their strength much better during the global economic
slowdown than Vietnam’s trade with many of its other economic partners; from January-April,
Vietnam’s total exports (i.e. what the rest of the world imports from Vietnam) fell by 0.1% against
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the same period in 2008, while its year-on-year imports (i.e. exports from the rest of the world to
Vietnam) fell by over 40%.14
Table 1. U.S.-Vietnam Merchandise Trade, Selected Years
(millions of dollars)

Total Trade
U.S. Imports from
U.S. Exports to
Change from
Trade
Vietnam
Vietnam
Volume
prior yr.
Balance
1994 (trade
embargo ended)
50.5 172.2 222.7
— 121.7
2001 1,026.4
393.8
1,420.2
23%
-632.6
2002 (NTR
extended)a
2,391.7 551.9
2,943.6
107%
-1,839.8
2005 6,522.3
1,151.3
7,673.6
22%
-5,371.0
2006 8,463.4
988.4
9,451.8
23%
-7,475.0
2007 (PNTR
extended)a
10,541.2 1,823.3
12,364.5
31%
-8,717.9
2008
12,610.9
2,673.0
15,283.9
24%
-9,937.9
Jan-May 2008
4,616.2
1,322.9
5,939.1
—
-3,293.3
Jan-May 2009
4,721.3
1,061.5
5,782.8
-3%
-3,659.8
Major Imports
clothing, wooden furniture, footwear, fish and prepared fish products, petroleum products,
from Vietnam
electrical machinery, coffee, cashew nuts
Major Exports to
passenger cars, machinery and mechanical equipment, meat, cotton, plastics, iron and steel,
Vietnam
electrical machinery
Source: U.S. International Trade Commission. Data are for merchandise trade on a customs basis.
a. Normal trade relations (NTR) status was extended to Vietnam in December 2001, when the U.S.-Vietnam
bilateral trade agreement went into effect. Thus, 2002 was the first full year in which Vietnam benefitted
from NTR status. Likewise, 2007 was the first full year Vietnam received permanent normal trade relations
(PNTR) status, which was extended to Vietnam in December 2006.
Trade Initiatives: GSP, TIFA, BIT, and TPP
Obtaining GSP status from the United States has become a major objective for Vietnam. The
week before Prime Minister Dung’s June 2008 visit to Washington, the Bush Administration
announced it would begin a review of whether Vietnam meets the eligibility criteria for
designation as a beneficiary country under the GSP program. The primary purpose of the
program, which the United States and other industrial countries initiated in the 1970s, is to
promote economic growth and development in developing countries by stimulating their
exports.15 H.R. 1969, the Vietnam Human Rights Act, would prohibit Vietnam’s entry into the
GSP program unless Vietnam’s labor rights regime were certified as making improvements in

14 General Statistics Office of Vietnam, “Social-economic Situation in 4 Beginning Months of 2009,”
http://www.gso.gov.vn/.
15For more, see CRS Report RL34702, Potential Trade Effects of Adding Vietnam to the Generalized System of
Preferences Program, by Michael F. Martin and Vivian C. Jones.
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certain areas, particularly the right of association. In the 110th Congress, similar language was
included in S. 3678 the Senate version of the Vietnam Human Rights Act. The Obama
Administration has yet to make a decision about entering Vietnam into the GSP program.
In April 2009, working level U.S. and Vietnamese trade officials held a meeting in Washington,
DC, under the bilateral Trade and Investment Framework Agreement (TIFA) that was signed in
June 2007. TIFAs are often viewed as a stepping stone toward an eventual free trade agreement
(FTA).
As mentioned earlier, during their June 2008 meeting, President Bush and Prime Minister Dung
announced the launch of talks to establish a bilateral investment treaty (BIT). BITs are designed
to improve the climate for foreign investors—typically by committing the signatories to prohibit
discrimination against foreign investors—by establishing dispute settlement procedures and by
protecting foreign investors from performance requirements, restrictions on transferring funds,
and arbitrary expropriation. The United States has signed over 30 BITs, primarily with countries
undergoing significant economic reforms. U.S. and Vietnamese BIT negotiators reportedly will
continue their “technical discussions” while the Obama Administration reviews the current
United States model for BITs. The Administration is particularly interested in examining the
portions of BITs dealing with environment, labor, and financial regulation.16
Vietnam reportedly is studying whether to join the Trans-Pacific Strategic Economic Partnership
Agreement (TPP), a multilateral free trade agreement among Brunei, Chile, New Zealand, and
Singapore.17 In September 2008, the Bush Administration announced its intent to enter into
negotiations with the TPP countries. It is unclear whether the Obama Administration will pursue
the TPP. In May 2009, USTR Ron Kirk reportedly said that the Administration would seek to join
the agreement, which he said represents the “baseline” for the Administration’s economic goals in
Asia. He also hinted that the Administration plans to expand its bilateral and multilateral trade
initiatives in Asia.18 The United States already has FTAs with Singapore and Chile. If both the
United States and Vietnam ultimately seek to join the TPP, it would mean that the two countries
would enter into an FTA with one another.
Trade Friction
As bilateral economic relations have expanded, so have trade disputes. Significant areas of
friction include clothing trade, fish (particularly catfish), the United States’ designation of
Vietnam as a “non-market economy” (NME), Vietnam’s record on protecting intellectual rights,
and concerns over Vietnam’s currency policies. Vietnamese officials are particularly concerned
about the first three issues. In general, while bilateral trade disputes have been irritants, as of
early 2009 they have not spilled over to affect the course or tone of bilateral relations. In March
2009, the first countervailing duty case was filed against Vietnam, for allegedly providing unfair
government benefits to exporters of plastic shopping bags.

16 “State Dept. Appoints New Panel To Review Model BIT, FTA Chapters,” Inside U.S. Trade, May 15, 2009. For
more on the TPP, see CRS Report R40502, The Trans-Pacific Strategic Economic Partnership Agreement, by Ian F.
Fergusson and Bruce Vaughn.
17 “Baucus Links Vietnam Worker Rights To GSP, Seeks Beef Access,” Inside US Trade, December 26, 2008. For
more on the TPP, see CRS Report RL33463, Trade Negotiations During the 110th Congress, by Ian F. Fergusson.
18 World Trade Online, “Kirk: USTR Wants To Continue TPP Negotiations,” Daily News, May 18, 2009.
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Imports of Vietnamese Clothing and the U.S. Import Monitoring Program19
Much of the increase in U.S.-Vietnam trade since 2001 has come from a sharp rise in clothing
imports from Vietnam, which were about $4.3 billion in 2007, up from the $45 million-$50
million range that Vietnam recorded in 2000 and 2001.20 By dollar value, clothing is the largest
item the United States imports from Vietnam. In 2008, Vietnam was the United States’ second-
biggest source (after China) of clothing imports, providing nearly 6% of the total (up from about
1.4% in 2002 and 0.1% in 2001, before the BTA went into effect). In that year, clothing and
textile products were Vietnam’s second-largest export item by value (after crude oil), generating
around $9.1 billion.21
Many Vietnamese are concerned about reports that the United States will renew its “import
monitoring program” for certain clothing and textiles from Vietnam that allows the Commerce
Department to self-initiate antidumping investigations when warranted. The current program was
scheduled to expire on January 20, 2009. There have been congressional calls to renew the
program.22
Catfish
Catfish exports account for about one-quarter of the exports by Vietnam’s aquatic industry, an
important sector in Vietnam. In 2007, Vietnamese fish farmers exported approximately 21,200
MT of catfish (worth about $67.6 million) to the United States, up from 14,800 MT ($35.3
million) in 2005.23
Vietnamese officials are concerned that the implementation of certain provisions of the Food,
Conservation, and Energy Act of 2008 (P.L. 110-246), passed in June 2008, may reduce catfish
exports to the United States. Among other measures, the law will effectively transfer catfish
inspection from the Food and Drug Administration to the U.S. Department of Agriculture
(USDA), which currently is drafting regulations to implement the provision. These regulations
conceivably could require a formal USDA determination that Vietnamese safety standards are
equivalent to U.S. standards before such catfish could be imported into the United States, which
might disrupt shipments. Vietnamese have complained that this and other changes the United
States has made in its catfish regulation have been designed to discriminate against Vietnamese
catfish imports.
Since 2003, when the U.S. Commerce Department and International Trade Commission ruled that
Vietnamese companies were dumping their products on the U.S. market, the United States has

19 For more, see CRS Report RL34262, U.S. Clothing Imports from Vietnam: Trade Policies and Performance, by
Michael F. Martin.
20 For purposes of this report, clothing imports include all products imported under chapters 61 and 62 of the
Harmonized Tariff System.
21 “Socio-economic Statistical Data, 2008,” General Statistics Office of Vietnam Press Release, January 5, 2009.
22 For instance, the House Appropriations Committee in its report (H.Rept. 110-919) accompanying the Commerce,
Justice, Science, And Related Agencies Appropriations Bill, 2009, said that the Committee “expects” the Commerce
Department to continue monitoring Vietnamese and Chinese apparel exports to determine whether their industries are
illegally pricing products and dumping in the U.S. market.
23 Nguyen Thi Huong and Tran Quoc Quan, Vietnam Fishery Products Annual Report 2008, USDA Foreign
Agricultural Service Global Agriculture Information Network (GAIN) Report VM8045, June 30, 2008; “US Farm Bill
May Block Tra, Basa Catfish Imports,” Thai News Service, November 4, 2008.
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imposed punitive tariffs ranging from 37% and 64% on frozen catfish fillets from many
Vietnamese exporters. In the first half of 2009, the U.S. International Trade Commission and
International Trade Administration announced the punitive tariffs against some Vietnamese
exporters of frozen catfish would not expire.
Vietnam’s “Non-Market Economy” Status
Under the terms of its entry into the WTO, Vietnam will retain its designation as a “nonmarket
economy” (NME) until 2019, making it procedurally easier in many cases for U.S. companies to
initiate and succeed in bringing anti-dumping cases against Vietnamese exports. Vietnamese
officials would like the United States to recognize Vietnam as a market economy.
Intellectual Property Rights
From 2002-2009, the USTR has placed Vietnam on its “Special 301 watch list” for poor
protection of intellectual property rights (IPR), particularly in the areas of music recordings and
Internet piracy.24 USTR also has consistently praised the Vietnamese government’s gradual
increase in attention and efforts to protect IPR. The BTA required Vietnam to make its IPR regime
WTO-consistent in 2003, and as part of its efforts to accede to the WTO, Vietnam passed a new
IPR law in late 2005. Despite this and other legal and regulatory changes, the Vietnamese
government’s IPR enforcement has been widely faulted. The International Intellectual Property
Alliance (IIPA), a private sector coalition, has estimated that trade losses due to piracy amounted
to over $100 million in 2008, primarily due to rampant piracy of business software.25
Currency Concerns
Some in the United States have complained about Vietnam’s currency policies, under which the
Vietnamese dong does not float freely against the U.S. dollar and other currencies. Instead, the
State Bank of Vietnam maintains a “managed float” via a daily trading band limiting the
fluctuation of the dong to plus or minus 5%, a spread that is up from the 0.1% that was
maintained in 2001. Vietnam’s central bank widened the spread three times in 2008 and once in
March 2009, in moves widely interpreted as attempts to manage a gradual depreciation of the
dong. In each case, the dong depreciated to the lowest permissible level after the loosening. In
2008, the dong fell by around 9% against the U.S. dollar, and many analysts expect it to
depreciate further in the months ahead.

24 “Special 301” refers to Section 182 of the Trade Act of 1974. Since the start of the Special 301 provision in 1989, the
USTR has issued annually a three-tier list of countries judged to have inadequate regimes for IPR protection, or to deny
access: (1) priority foreign countries are deemed to be the worst violators, and are subject to special investigations and
possible trade sanctions; (2) priority watch list countries are considered to have major deficiencies in their IPR regime,
but do not currently warrant a Section 301 investigation; and (3) watch list countries, which maintain IPR practices that
are of particular concern, but do not yet warrant higher-level designations. See CRS Report 98-454, Section 301 of The
Trade Act of 1974, As Amended: Its Operation and Issues Involving its Use by the United States, by Wayne M.
Morrison.
25 International Intellectual Property Alliance, 2009 Special 301 Report Vietnam.
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U.S. Foreign Assistance to Vietnam
As the normalization process has proceeded, the U.S. has eliminated most of the Cold War-era
restrictions on aid to Vietnam, and U.S. assistance has increased markedly from the provision of
about $1 million when assistance was resumed in 1991. Estimated U.S. aid in FY2008 was
around $120 million, about six times the level in FY2000, making Vietnam one of the largest
recipients of U.S. aid in East Asia. For FY2009, the Bush Administration requested
approximately $110 million.
The U.S. bilateral aid program is dominated by health-related assistance, which is projected to
have totaled more than $100 million in FY2008. In particular, spending on HIV/AIDS treatment
and prevention in Vietnam has risen since President Bush designated Vietnam as a “focus
country” eligible to receive increased funding to combat HIV/AIDS in June 2004 under the
President’s Emergency Plan for AIDS Relief (PEPFAR).26 Some Vietnamese, as well as some
Western aid providers, have questioned the wisdom of allocating these sums of money for
Vietnam, which does not appear to have a severe HIV/AIDS problem. Other sizeable U.S.
assistance items include programs assisting Vietnam’s economic reform efforts and governance,
programs to combat trafficking in persons, and de-mining programs. In both 2007 and 2009, $3
million was appropriated for cleaning up dioxin storage sites. (See the “Agent Orange” section.)
In recent years, some Members of Congress have attempted to link increases in non-humanitarian
aid to progress in Vietnam’s human rights record. (See the “Human Rights Issues” section.)
In May 2004, Vietnam was not selected as one of the first 16 countries eligible for the
Millennium Challenge Account (MCA), President Bush’s foreign aid initiative that links U.S.
assistance to governance as well as economic and political freedoms. After 2004, Vietnam
consistently was deemed ineligible for the MCA despite meeting the technical requirements
because it scored very low on some of the indicators used to measure political freedom.
Education Exchanges
The governments of the United States and Vietnam run a number of educational exchange
programs. These generally total around $10 million a year, a sum not included in the above
estimates of U.S. assistance. Bilateral educational exchanges are expected to increase once the
Education Task Force launched by President Bush and Prime Minister Dung in 2008 begins to
have an effect. H.R. 2410, the Foreign Relations Authorization Act for FY2010 and 2011, would
transfer control of the Vietnam Education Foundation (VEF), which administers a $5 million
educational exchange program, to the State Department as well as restructure the VEF.27 Similar
attempts (H.R. 6535 and S. 3097) were made in the 110th Congress.

26 Vietnam qualified for the designation in part because of its demonstrated commitment to fighting the epidemic on its
own and because of the competency of its medical institutions. Vietnam is estimated to have about 100,000 people
living with the HIV/AIDS virus, a number that is projected to grow significantly.
27 The VEF was created by the Vietnam Education Foundation Act of 2000 (Title II of P.L. 106-554). The act also
authorized the establishment of the Vietnam Debt Repayment Fund at the Treasury Department, into which all
payments made by the Government of Vietnam under the U.S.-Vietnam debt agreement, signed on April 7, 1997, are
deposited. Under the legislation, VEF receives $5 million from the Fund each fiscal year through 2018.
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Human Rights Issues
Overview
It is difficult to make country-wide generalizations about the state of human rights in Vietnam, a
one-party, authoritarian state ruled by the VCP. For more than a decade, the VCP appears to have
followed a strategy of permitting most forms of personal and religious expression while
selectively repressing individuals and organizations that it deems a threat to the party’s monopoly
on power. On the one hand, the gradual loosening of restrictions since Vietnam’s doi moi
(“renovation”) economic reforms were launched in 1986 has opened the door for Vietnamese to
engage in private enterprise and has permitted most Vietnamese to observe the religion of their
choice. Since 2004, according to several reports, there have been indications that human rights
conditions have improved for many if not most Vietnamese, including those in the Central
Highlands and Northwest Highlands regions, two regions whose heavy minority populations have
made them particular centers of human rights concerns.
On the other hand, the government cracks down harshly on anti-government activity, as shown by
the wave of arrests of political dissidents in the winter and spring of 2007 (see text box below).
Many contend that since early 2007 Vietnamese authorities have adopted a harsher policy of
cracking down upon signs of dissent more quickly and more aggressively than they had for much
of the mid-2000s. Since early 2008, press freedoms reportedly also have been curtailed and
prominent journalists arrested. For several years before then, the press—which is state-
controlled—had been given space to criticize the government on “safe” issues like corruption,
economic policy, nature conservation, and environmental pollution. Furthermore, in its effort to
control the Internet, the central government has tightened restrictions on blogs and has stepped up
repression of so-called “cyber dissidents” for alleged offenses such as criticizing the signing of
land-border agreements with China and calling for greater political accountability and political
competition. In January 2009, it was reported that the Ministry of Communication planned to ask
Google and Yahoo to regulate the content of Vietnamese blogs and websites.28
Various ethnic minority groups, most prominently the minorities known as Montagnards who live
in the country’s Central Highlands region, also report cases of discrimination and repression. 29
According to several sources, abuses in the Central Highlands appear to have fallen since the last
major anti-government protests in 2004, though restrictions on foreigners’ access to the region
and to Montagnards who have fled to Cambodia complicate accurate reporting. The State
Department and other groups have reported that in April 2008, police and soldiers forcibly
dispersed Montagnard Christians demonstrating in the Central Highlands, and arrested dozens of
protesters.30 Though these demonstrations appear to have been much smaller than the unrest in

28 Human Rights Watch, “Vietnam: Stop Muzzling the Messengers,” January 8, 2009.

29 “Montagnard” is a French term meaning “mountain people” that is often used to refer to the various indigenous
ethnic minorities in Vietnam’s central and northern mountain areas. According to Human Rights Watch, there are
approximately one million Montagnards in the Central Highlands, comprised of approximately six ethnic groups. Since
the end of the Vietnam War, millions of ethnic Kinh (Vietnam’s dominant ethnic group) from Vietnam’s lowlands have
migrated into the Central Highlands. Coffee and rubber plantations also have sprouted in the region. The ensuing land
pressures have resulted the loss of ancestral homeland by many Montagnards. Hundreds of thousands of Central
Highlands Montagnards are thought to follow evangelical Protestantism. For more, see Human Rights Watch,
Repression Of Montagnards, Conflicts over Land and Religion in Vietnam’s Central Highlands, April 2002.
30 State Department, “2008 Human Rights Reports: Vietnam,” February 25, 2009.
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2004, they were the largest in years. (For the location of the Central Highlands region, see Figure
1 at the end of this report.) Some human rights advocates have criticized the U.S. government for
failing to advocate sufficiently for the release of the scores, if not hundreds, of Montagnards who
have been imprisoned since 2001.
In sum, many analysts recognize positive changes in Vietnam’s human rights situation and in
Vietnamese government officials’ willingness to discuss human rights issues. However, given
continued reports of repression and harassment, and expectations that deteriorating economic
conditions will lead to increased social unrest, there is considerable disagreement about how
significant and how pervasive the improvements are, not to mention how lasting they will be.
Indeed, some human rights activists and Vietnam-watchers believe that the government has
become more restrictive over the past two to three years.

A Wave of Arrests of Vietnamese Dissidents
In 2006, a number of dissident groups appeared and publicly called for peaceful democratic
change, including two new groups called the People’s Democracy Party of Vietnam (PDPV) and
the 8406 Bloc. The government responded by arresting many participants, with estimates of the
number ranging from dozens to hundreds. The arrests, which appear to have peaked between
March and April 2007, may have been part of a strategy to decapitate the dissident organizations,
some of which have connections to Vietnamese Americans. It is unclear how much support these
groups have within the broader population or to what extent the groups reflect and influence
ongoing debates that are believed to be taking place within the VCP. According to some human
rights organizations, as of September 2008, dissidents linked to the 2006 groups continue to be
arrested and/or harassed.
In the spring of 2007, the White House and the State Department criticized the arrests, most
notably President Bush and Vice President Cheney’s 45-minute meeting in late May 2007 with a
group of Vietnamese-American human rights activists. Many Members of Congress also spoke
out, including through the House’s passage (by a vote of 404-0) of H.Res. 243, calling on Hanoi
to release political prisoners. To protest the arrests, Congressman Earl Blumenauer resigned his
position as chairman of the U.S.-Vietnam Congressional Caucus in May 2007.31

Religious Freedom
According to a variety of reports, most Vietnamese now are able to observe the religion of their
choice. However, while the freedom to worship generally exists in Vietnam, the government
strictly regulates and monitors the activities of religious organizations. Periodically, authorities
have increased restrictions on certain groups. Although the constitution provides for freedom of
religion, Vietnamese law requires religious groups to join one of the officially recognized
religious organizations or denominations. According to many reports, the government uses this
process to monitor and restrict religious organizations’ operations. Additionally, many groups

31 “Blumenauer quits the US - Vietnam Caucus,” OregonLive.com, May 27, 2007.
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either refuse to join one of the official religious orders or are denied permission to do so, meaning
that these groups’ activities technically are illegal.
In 2004, the State Department designated Vietnam as a “country of particular concern” (CPC),
principally because of reports of worsening harassment of certain ethnic minority Protestants and
Buddhists. When the Vietnamese responded by negotiating with the Bush Administration and
adopting internal changes, the two sides reached an agreement on religious freedom, in which
Hanoi agreed to take steps to improve conditions for people of faith, particularly in the Central
Highlands. The May 2005 agreement enabled Vietnam to avoid punitive consequences, such as
sanctions, associated with its CPC designation. The agreement was faulted by human rights
groups on a number of grounds, including the charge that religious persecution continues in the
Central Highlands. Vietnam was redesignated a CPC in the 2005 and 2006 Religious Freedom
Reports.
In November 2006, the State Department announced that because of “many positive steps” taken
by the Vietnamese government since 2004, the country was no longer a “severe violator of
religious freedom” and had been removed from the CPC list. The announcement, which came two
days before President Bush was due to depart to Hanoi for the APEC summit, cited a dramatic
decline in forced renunciations of faith, the release of religious prisoners, an expansion of
freedom to organize by many religious groups, and the issuance of new laws and regulations, and
stepped up enforcement mechanisms. Over the course of 2006, as part of the bilateral U.S.-
Vietnam human rights dialogue, Vietnam released a number of prominent dissidents the Bush
Administration had identified as “prisoners of concern.” Vietnam also reportedly told the United
States that it would repeal its administrative decree allowing detention without trial. The U.S.
Committee on International Religious Freedom, among others, has disputed the Administration’s
factual basis for the decision to remove Vietnam from the CPC list, arguing that abuses continue
and that lifting the CPC label removes an incentive for Vietnam to make further improvements.
The Vietnam Human Rights Act
Since the 107th Congress, when Members of Congress became concerned with Vietnamese
government crackdowns against protestors in the Central Highlands region, various legislative
attempts have been made to link U.S. assistance to the human rights situation in Vietnam. A
number of measures entitled “The Vietnam Human Rights Act” have been introduced, with most
proposing to cap existing non-humanitarian U.S. assistance programs to the Vietnamese
government at existing levels if the President does not certify that Vietnam is making “substantial
progress” in human rights.32 The 110th Congress was the first that saw standalone bills introduced
in both the House and Senate.

32 The Vietnam Human Rights Act was first introduced in the 107th Congress as H.R. 2833, which was passed by the
House, 410-1 (roll call 335) on September 6, 2001 and did not receive action in the Senate. In the 108th Congress, H.R.
1587/S. 2784 were introduced. House passed H.R. 1587 by a vote of 323-45 (roll call 391). In the Senate, the bill was
not reported out of committee, and attempts to include an abbreviated version in an omnibus appropriation bill did not
succeed. In the 109th Congress, another stripped-down version of the act (H.R. 3190) was included in the House-passed
version of the Foreign Relations Authorization Act of FY2006/FY2007 (H.R. 2601), which did not receive action in the
Senate. In the 110th Congress, the House passed H.R. 3096 on September 18, 2007 (414-3, roll no. 877). The bill did
not see action in the Senate. Also in the 110th, a competing version of the Vietnam Human Rights Act, S. 3678, was
introduced in the Senate.
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As introduced, the most recent versions of the Vietnam Human Rights Act (H.R. 1969 and S.
1159 in the 111th Congress) are highly similar. Perhaps most significantly, they would prohibit
Vietnam’s entry into the GSP program unless Vietnam’s labor rights regime is certified as making
certain improvements. Both would prohibit increases in many forms of U.S. non-humanitarian
assistance to Vietnam unless (1) such increases are matched by additional funding for human
rights programming, and (2) Vietnam’s human rights conditions are certified as improving. The
bills would grant the President waiver authority that allows him to exempt any programs that are
deemed to promote the goals of the act and/or to be in the national interests of the United States.
H.R. 1969 and S. 1159 would authorize the increase of RFA anti-jamming funding programming,
would require the submission of a stand-alone human rights report for Vietnam, and would call
for the expansion of education, cultural, and legislative exchanges with Vietnam.
Proponents of the Vietnam Human Rights Act argue that additional pressure should be placed on
the Vietnamese government to improve its human rights record. Critics have argued that the bill
could chill the recent warming of bilateral political and security ties and could weaken economic
reformers in ongoing domestic battles inside Vietnam.
Refugees in Cambodia
Since 2001, hundreds of Montagnards have crossed into Cambodia to escape continuing unrest in
the Central Highlands region. In 2002, Cambodia accepted an offer from the United States to
resettle the more than 900 Montagnards who remained following the 2001 protests and
crackdown. More than 700 Montagnards have fled to Cambodia since then, particularly after a
wave of unrest in April 2004. The United Nations High Commissioner for Refugees (UNHCR)
has found the majority of the border-crossers to be political refugees and therefore entitled to
asylum. While most of these are being resettled in the United States, Canada, or Finland, others
have returned to Vietnam following a January 2005 agreement between UNHCR, Cambodia, and
Vietnam in which Hanoi agreed that those returning to Vietnam would not be punished,
discriminated against, or prosecuted for fleeing to Cambodia. Vietnam also agreed to drop its
refusal to allow UNHCR to monitor the returnees’ well-being, though some human rights groups
have criticized UNHCR’s monitoring visits, as well as its process for screening border crossers in
Cambodia. More than 200 individuals, including many who have been recognized as refugees by
UNHCR, refused offers to be resettled in third countries outside Southeast Asia. In the past,
Cambodia has been accused of abiding by Vietnamese requests to close its borders and repatriate
individuals forcibly.
In May 2007, the United States adopted a new policy toward the Montagnards in Cambodia, in
which individuals UNHCR deems not to be refugees will not be considered for resettlement in the
United States. The move appeared to indicate the United States’ official acceptance that Vietnam
was honoring its commitments in the January 2005 tripartite agreement. In the year following the
policy shift, the United States accepted approximately 100 Montagnards for resettlement.
The Senate Appropriations Committee’s report accompanying H.R. 2764, the FY2008
Department of State, Foreign Operations, and Related Programs Appropriations Act, requested
the Secretary of State to submit a report on the estimated number of Montagnards who are
refugees in Cambodia. The language was not included in the final legislation that was included in
the omnibus Consolidated Appropriations Act, 2008 (H.R. 2764), which President Bush signed
into law on December 26, 2007.
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Human Trafficking
In June 2008, the State Department issued its 8th annual report on human trafficking, Trafficking
in Persons Report. Vietnam was listed as a “Tier 2” country that “does not fully comply with the
minimum standards for the elimination of trafficking.” As recently as 2004, it was included on the
“Tier 2 Watch-list,” but was upgraded to “Tier 2” in the 2005 report. The 2008 report judged the
government to be making “significant efforts” to combat trafficking, including establishing
partnerships with Cambodia, China, Laos, and Thailand. However, the report criticized the
Vietnamese government for lax investigation of complaints of the exploitation of Vietnamese
workers in officially sanctioned export labor programs.
Security Issues
Vietnam and the United States gradually have been expanding their political and security ties,
though these have lagged far behind the economic aspect of the relationship. Most dramatically,
in 2005 the two countries signed an IMET agreement, which reportedly had been blocked for
years by the Vietnamese military. In June 2006, then-Secretary of Defense Donald Rumsfeld
visited Vietnam and agreed with Defense Minister Pham Van Tra to increase military-to-military
cooperation and exchanges.33 U.S. naval vessels regularly call on Vietnamese ports, and
Vietnamese military officers increasingly participate in U.S.-led conferences and academic
programs. Joint counter-narcotics training programs also have been established.
In April 2007, the United States modified International Traffic in Arms Regulations (ITAR)
regarding Vietnam by allowing licenses for trade in certain non-lethal defense items and services
to Vietnam. Such transactions are reviewed on a case-by-case basis. In FY2009, the United States
has provided $500,000 in foreign military financing (FMF) for Vietnam, the first time Hanoi has
been included in this program.
In October 2008, the United States and Vietnam held their first Security Dialogue on Political,
Security, and Defense Issues. At the Hanoi meeting, the Vietnamese military reportedly asked the
United States to supply spare parts for its American-made Huey helicopters that are leftovers
from the Vietnam War. The two governments also discussed integrating Vietnamese soldiers into
United Nations peacekeeping operations, and American military help with disaster relief in
Vietnam.34 As mentioned earlier, the second dialogue was held in Washington, DC, in June 2009.
(See “Bilateral Security Cooperation” in the Recent Developments section above.)
Thus far, the U.S. emphasis in the dialogue appears to be on process, rather than on immediate
results. State and Defense Department officials have viewed the dialogue as an opportunity to
engage with senior level Vietnamese officials (i.e. decision-makers) and to spur more cooperation
and communication among Vietnamese ministries, which are often “stove-piped” into self-
contained policy communities. In particular, many U.S. government and other observers have
expressed the hope that the Vietnamese Ministry of Foreign Affairs might encourage the more
cautious Ministry of Defense and Ministry of Public Security to expand Vietnam’s relations with
the U.S. and other countries’ militaries.

33 Office of the Assistant Secretary of Defense (Public Affairs), “Press Availability with Secretary Rumsfeld in
Vietnam,” June 5, 2006.
34 “US, Vietnam Hold First Political-Military Dialogue,” Voice of America, October 7, 2008.
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The Bush Administration’s FY2009 budget request included a request for $500,000 in foreign
military financing (FMF) for Vietnam, the first time Hanoi would be included in this program.
Vietnam War “Legacy” Issues
Agent Orange35
Vietnamese leaders have pressed the United States for assistance in cleaning up the dioxin left
from the spraying of Agent Orange during the Vietnam War, as well as providing medical care for
the estimated 3-5 million Vietnamese dioxin “victims.” Among the Vietnamese public, Agent
Orange has perhaps become the biggest problem facing the two countries.36 Many Vietnamese see
some inconsistencies between the U.S. government’s reluctance to provide aid to Vietnamese
victims of Agent Orange and its support programs for U.S. veterans who claim their medical
problems are Agent Orange related.37
The issue was discussed by Bush and Dung during their June 2008 summit, as well as during the
May 2008 human rights dialogue. Although the United States has resisted providing medical
assistance to the alleged Vietnamese “victims” of Agent Orange, since the middle of the decade it
has indicated a willingness to help with the containment and removal of the residual dioxin,
especially in identified “hot spots” near former U.S. military bases.
According to the State Department, U.S. assistance to victims of land mines over the years has
included $2 million in funding for Agent Orange related projects. The Iraq Accountability
Appropriations Act of 2007 (H.R. 2206/P.L. 110-28), signed into law by President Bush in May
2007, appropriated $3 million for assistance to Vietnam for environmental remediation of dioxin
storage sites and to support health programs in communities near those sites. According to
various sources, most of these funds have yet to be spent as of May 2009. However, in a sign of
forward momentum, USAID and the State Department in the first half of 2009 allocated the
monies. The clean-up of the Da Nang airbase is a joint operation involving the Vietnamese
Ministry of Defense, the U.S. Environmental Protection Agency (EPA), and a group called the
U.S.-Vietnam Dialogue Group on Agent Orange/Dioxin (Dialogue Group).38 More recently, the
111th Congress appropriated an additional $3 million in March 2009 “to continue environmental
remediation of dioxin contamination at the Da Nang Airport and related health activities in nearby
communities in Vietnam.”39

35 For more on the Agent Orange issue, see CRS Report RL34761, Vietnamese Victims of Agent Orange and U.S.-
Vietnam Relations, by Michael F. Martin.
36 State Department Office of Research, Vietnam: U.S. Image Gets a Boost, Opinion Analysis, Washington, DC,
September 9, 2008.
37 For more information about the U.S. assistance programs for U.S. veterans with medical problems associated with
exposure to Agent Orange, see CRS Report RL34370, Veterans Affairs: Health Care and Benefits for Veterans
Exposed to Agent Orange, by Sidath Viranga Panangala and Douglas Reid Weimer.
38 The Dialogue Group includes representatives from the American Academy for the Advancement of Science, the
Aspen Institute, the Ford Foundation, Ngoc Tam Hospital Corporation, Vietnam National University, and the World
Committee on Disability - as well as the Vietnamese government. There are no current U.S. government officials in the
Dialogue Group.
39 House Appropriations Committee Print, “Division H—Department Of State, Foreign Operations, and Related
Programs Appropriations Act, 2009,” Omnibus Appropriations Act, 2009 (P.L. 111-8).
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On May 15, 2008, and June 4, 2009, the House Subcommittee on Asia, the Pacific, and the
Global Environment held hearings on the issue of dioxin/Agent Orange in Vietnam.
Vietnam War Resettlement Programs
In November 2005, the United States and Vietnam announced the reopening of certain categories
of the Orderly Departure Program (ODP), under which over 550,000 Vietnamese were resettled in
the United States between 1979 and 1999. Also during this time, another 300,000 Vietnamese
came to the United States through other programs. The latest reopening is limited to those who
were unable to apply or who were unable to complete the application process before the ODP
closed in 1994. The omnibus Consolidated Appropriations Act, 2008 (H.R. 2764), which
President Bush signed into law on December 26, 2007, extended the application closing date from
the end of 2007 to the end of 2009. On a related matter, Section 7034(d) of P.L. 111-8, the
Omnibus Appropriations Act of FY2009, which was signed into law on March 11, 2009, extended
to the end of 2010 the deadline for certain adult sons and daughters of former Vietnamese re-
education camp detainees who wish to apply for resettlement into the United States. The previous
closing date had been September 30, 2009.
POW/MIA Issues40
Since the 1990s, the annual State Department appropriations act has included language
prohibiting the use of funds to expand the United States diplomatic presence in Vietnam beyond
the level in effect July 11, 1995 (when the two countries opened embassies in the other’s capitol),
unless the President makes a certification that several conditions have been met regarding
Vietnam’s cooperation with the United States on POW/MIA issues. That certification has been
issued every year since the requirement was put in place, though President Bush listed specific
steps for how cooperation could be improved.
Officially, more than 2,000 Americans who served in Indochina during the Vietnam War era are
still unaccounted for.41 Hundreds of thousands of Vietnamese remain missing. From 1975 through
the late 1990s, obtaining a full accounting of the U.S. POW/MIA cases was one of the dominant
issues in bilateral relations. Beginning in the early 1990s, cooperation between the two sides
increased. By 1998, a substantial permanent U.S. staff in Vietnam was deeply involved in
frequent searches of aircraft crash sites and discussions with local Vietnamese witnesses
throughout the country. The Vietnamese authorities also have allowed U.S. analysts access to
numerous POW/MIA-related archives and records. The U.S. Defense Department has
reciprocated by allowing Vietnamese officials access to U.S. records and maps to assist their
search for Vietnamese MIAs. The increased efforts have led to substantial understanding about
the fate of several hundred U.S. POW/MIA cases, though the United States continues to press
Vietnam to provide more cooperation in specific areas. During Secretary of Defense Rumsfeld’s
June 2006 trip to Vietnam, the two countries discussed expanding their cooperation on recovering
remains, including the possibility of using more advanced technology to locate, recover, and
identify remains located under water.42

40 For more on the POW/MIA issue, see CRS Report RL33452, POWs and MIAs: Status and Accounting Issues, by
Charles A. Henning.
41 Official U.S. policy does not remove a name from the rolls of those unaccounted for unless remains are identified.
42 Office of the Assistant Secretary of Defense (Public Affairs), “Press Availability with Secretary Rumsfeld in
(continued...)
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In February 2009, H.Res. 111 (King, R-NY) was introduced. It would establish a Select
Committee on POW and MIA Affairs to conduct a full investigation of all unresolved matters
relating to any United States personnel unaccounted for from the Vietnam War and several other
conflicts. In the 110th Congress, on July 10, 2008, the House Armed Service Subcommittee on
Military Personnel held a hearing on oversight and status of POW/MIA activities. Additionally, in
May 2008, the House passed H.Res. 986 (roll no. 366), stating that the House “will not forget”
and “will continue to press for a full accounting of” U.S. military and civilian personnel who
remain unaccounted for from the Vietnam conflict.
Conditions in Vietnam
For the first decade after reunification in 1975, Vietnamese leaders placed a high priority on
ideological purity and rigid government controls. By the mid-1980s, disastrous economic
conditions and diplomatic isolation led the country to adopt a more pragmatic line, enshrined in
the doi moi (renovation) economic reforms of 1986. Under doi moi, the government gave farmers
greater control over what they produce, abandoned many aspects of central state planning, cut
subsidies to state enterprises, reformed the price system, and opened the country to foreign direct
investment (FDI). After stalling somewhat in the late 1990s, economic reforms were accelerated
in the early 2000s, as Vietnam made sweeping changes that were necessary to enter the WTO.
Politically and socially, the country became much less repressive, even tolerating some
expressions of dissent in certain areas that had been considered sensitive.
In 2008, there were some signs that the consensus around pursuing an open market liberalization
strategy had begun to fray, as more conservative-minded forces began to push against reformist
elements. Vietnam’s economic troubles in 2008 and 2009 may be contributing to this possible
shift in policy momentum.
Economic Developments
Vietnam’s Economic Troubles of 2007-2009
Since late 2007, Vietnam’s economy has been buffeted by economic difficulties that have
increased social strife and raised concerns about the country’s economic stability. In 2007 and the
first half of 2008, the country experienced soaring inflation and acute, downward pressure on the
country’s currency, the dong. The problems caused by inflation were particularly onerous, as the
prices of some food items rose by over 50%, leading workers in a number of factories to go on
strike demanding higher wages. By late 2008, the rapid increase in the inflation rate had halted,
allowing the government to shift its priority to shift their focus to spurring growth as the global
financial crisis’ effects began to hit Vietnam. The global slowdown has hurt Vietnam’s trade,
particularly its imports, which decreased by over 40% in the first four months of 2009 compared
with the same period a year earlier. In response to the crisis, Hanoi unveiled a stimulus package
that the International Monetary Fund has estimated to be worth roughly $4 billion. Some

(...continued)
Vietnam,” June 5, 2006.
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economists have said Vietnam’s still-developing institutional and financial infrastructure has
contributed to or even caused many of the country’s economic problems.
Although restrictions on international financial transactions have limited Vietnam’s direct
exposure to the global financial and credit crises, the secondary effects have created new
pressures on Vietnam, which is heavily dependent on trade and foreign direct investment inflows.
Some selected figures illustrate Vietnam’s vulnerability to the global slowdown and collapse in
commodity prices: exports are equivalent to 80% of GDP; about 60% of Vietnamese exports go
to the United States, the European Union, and Japan; and oil revenue accounts for 30% of the
government’s revenue.43
For 2008, GDP growth is expected to have been just over 6%. Many forecasters expect growth to
be even lower in 2009, perhaps in the 4%-6% level. Nominal GDP growth of 7% is a key
threshold in the minds of many Vietnamese policymakers for creating the jobs necessary for the
VCP and the government to maintain social stability. To spur economic growth, the Vietnamese
government took a number of steps in the fall and winter of 2008, including announcing a $6
billion stimulus package, lowering some corporate tax rates, cutting interest rates, and allowing
the dong to depreciate against the U.S. dollar.
Background
For most of the past twenty years since the doi moi reforms were launched, Vietnam has been one
of the world’s fastest-growing countries, generally averaging around 7%-8% annual gross
domestic product (GDP) growth until the economy began to slow in 2008. Agricultural
production has soared, transforming Vietnam from a net food importer into the world’s second-
largest exporter of rice and the second-largest producer of coffee. The move away from a
command economy also helped reduce poverty levels from 58% of the population in 1992 to less
than 30% in 2002, and the government has set a goal of becoming a middle-income country by
2020. A substantial portion of the country’s growth was driven by foreign investment, much of
which the government channeled into the country’s state-owned sector.
Economic growth and the reform movement, however, have not always advanced smoothly. In
the mid-1990s, the momentum behind continued economic reforms stalled, as disagreement
between reformers and conservatives paralyzed economic decision-making. The economy slowed
markedly after the 1997 Asian financial crisis, as real GDP growth fell to less than 5% in 1999.
The decision in 2000 to sign the BTA with the United States appears to have broken the
policymaking logjam by fashioning a new reformist consensus that was effectively endorsed by
leadership changes in the 2001, during the VCP’s Ninth Party Congress. After signing the BTA,
the government enacted a series of measures, including passing a new Enterprise Law, passing a
constitutional amendment giving legal status to the private sector, reducing red tape, and creating
unprecedented transparency rules requiring the publication of many types of new rules and
regulations before they are implemented. Adhering to the BTA’s implementation deadlines and
achieving the government’s goal of joining the WTO have helped galvanize the Vietnamese
bureaucracy toward implementing many of these steps. Demographic pressure is a major impetus
for the renewed emphasis on economic reforms; with more than half of the population under the
age of 25, Vietnamese leaders must find a way to provide jobs for an estimated 1 million new
entrants to the workforce annually.

43 Economist Intelligence Unit, Vietnam Country Report, May 2008.
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Rapid growth has transformed Vietnam’s economy, which has come to be loosely divided into
three sectors: the state-owned, the foreign-invested, and the privately owned, which make up
roughly 50%, 30%, and 20% of industrial output, respectively. For much of the 1990s, Vietnam’s
foreign-invested enterprises (FIEs) were among the country’s most dynamic. Since the 1997
Asian financial crisis, the private sector has also made impressive gains, to the point where
domestically-owned private firms employ around a quarter of the workforce.
Despite the impressive macroeconomic advances, Vietnam remains a poor country; the World
Bank in 2005 estimated that about one-third of Vietnamese children under five years of age
suffered from malnutrition.44 Per capita GDP in 2006 was just over $3,000 when measured on a
purchasing power parity basis. Economists point to Vietnam’s failure to tackle its remaining
structural economic problems—including unprofitable state-owned enterprises (SOEs), a weak
banking sector, massive red tape, and bureaucratic corruption—as major impediments to
continued growth. Some economists have criticized the government’s latest five year
development plan, issued in 2005, that focuses on the development of heavy industries such as
electricity, energy, steel, and mining. The previous plan emphasized lighter industries such as
foodstuffs, textiles, and electronics. According to some sources, many if not most of Vietnam’s
SOEs are functionally bankrupt, and require significant government subsidies and assistance to
continue operating. Although more than 2,500 SOEs officially have been partially privatized
since 1990 under the government’s “equitization” program, most of these are small and medium-
sized firms, and the government still owns substantial stakes in them. Other SOE reform
measures are being discussed.
Controversial Bauxite Plan for Central Highlands
In the spring of 2009, the Vietnamese government announced that state-run Vietnam National
Coal & Mineral Industries Group was forming a $460 million joint venture with Aluminum Corp.
of China Ltd to mine bauxite in Vietnam’s Central Highlands.45 The venture appears to be part of
a larger Vietnamese government plan to dramatically expand the exploitation of the Highlands’
bauxite reserves, which reportedly contains the world’s third-largest reserve of the ore. Bauxite is
used as a raw material to make aluminum. Inside Vietnam, the announcement has triggered
opposition. Criticism has focused on the project’s expected environmental impact, on fears of
increased Chinese influence, and on worries that ethnic minorities and local industries (such as
coffee plantations) would be adversely affected.
Political Trends
2008-2009: Shifting Political Winds in Hanoi?
Over the past several months, some Vietnam watchers have seen signs that Prime Minister Dung
and other reform-minded leaders may be losing ground in the ongoing battles they reputedly have
with more conservative-minded officials.46 The reformers are generally thought to have been

44 World Bank, “Vietnam at a Glance,” September 12, 2005.
45 James Hookway, “Once Enemies, Vietnam Now Fights for China Funds,” Asia Wall Street Journal, May 2, 2009.
46 See, for instance, Carlyle Thayer, “Hanoi Party Tricks,” The Wall Street Journal Asia, June 19, 2008; Economist
Intelligence Unit (EIU), Vietnam Country Report, October 2008.
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ascendant since 2000, when a prolonged logjam over the future of economic reform was broken
in favor of a new consensus to deepen Vietnam’s integration with the global economy and to push
through a new series of market-oriented economic reforms. Additionally, the ascendancy of the
reformers has coincided with Hanoi’s moves to upgrade relations with the United States, its
increased willingness to discuss human rights disagreements, its loosening of restrictions on the
Vietnamese press, and its more aggressive drive to root out corruption, which the Vietnamese
Communist Party (VCP) sees as one of the greatest threats to its legitimacy.
Among the indicators that the conservatives may be pushing back: the 2008 arrest and sentencing
of Thanh Nien journalist Nguyen Viet Chien for “abusing” his position by reporting on corruption
at high levels in the government; the government-instigated firing of a number of newspaper
editors, most prominently the December 2008 firing of the editors of Thanh Nien and Tuoi Tre,
two newspapers that have aggressively investigated corruption cases; a decision by the 160-
person VCP Central Committee in May 2008 to give greater authority over the economy to the
14-member Politburo (presumably diminishing the prime minister’s role); and an escalating land
dispute between the Catholic archdiocese of Hanoi and the Hanoi People’s Committee (Hanoi’s
communist party organ), in which the Hanoi authorities have broken up sit-ins by Catholics
protesting the city’s plans to redevelop land that the church was forced to turn over to the
government decades ago.47 Much Western speculation has pitted supporters of growth-oriented
reforms against conservative forces who place a higher priority on social and political stability.
Background
Vietnam’s experiments with political reform have lagged behind its economic changes. A new
constitution promulgated in 1992, for instance, reaffirmed the central role of the Vietnamese
Communist Party (VCP) in politics and society, and Vietnam remains a one-party state. In
practice, the VCP sets the general direction for policy while the details of implementation
generally are left to the four lesser pillars of the Vietnamese polity: the state bureaucracy, the
legislature (the National Assembly), the Vietnamese People’s Army (VPA), and the officially
sanctioned associations and organizations that exist under the Vietnamese Fatherland Front
umbrella. The Party’s major decision-making bodies are the Central Committee, which has 150
members, and the Politburo, which in recent years has had 15 members. Membership on the
Politburo generally is decided based upon maintaining a rough geographic (north, south, and
central) and factional (conservatives and reformers) balance. The three top leadership posts are, in
order of influence, the VCP General Secretary, followed by the Prime Minister, and the President.
Since the death in 1986 of Vietnam’s last “strong man,” Le Duan, decision-making on major
policy issues typically has been arrived at through consensus within the Politburo, a practice that
often leads to protracted delays on contentious issues.
The Tenth Party Congress
In the spring of 2006, Vietnam’s ruling Communist Party held its 10th Party Congress. These
events, held every five years, are often occasions for major leadership realignments and set the
direction for Vietnam’s economic, diplomatic, and social policies. At the 9th Party Congress in
2001, for instance, the VCP endorsed the acceleration of economic reforms that apparently had

47 In the 110th Congress, S. 3678, the Vietnam Human Rights Act, would have established the return of such property
as a condition for expanding some forms of U.S. non-humanitarian assistance to Vietnam.
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been stalled by policymaking paralysis. The former VCP general secretary, an ideological
conservative, was ousted in favor of the current secretary, Nong Duc Manh, who generally is
considered a more pragmatic figure. Significantly, Manh’s selection reportedly was made possible
when the Party’s Central Committee rejected the Politburo’s decision to endorse Manh’s
predecessor, an unprecedented move. Manh is an ethnic minority, not an ethnic Kinh (Viet). Many
consider his authority to be somewhat limited.
The 10th Party Congress reportedly resulted in few if any major changes to current policy
direction of the country—an indication that the economic reformers remained in the
ascendency—with the ultimate goal remaining creating a “socialist-oriented market economy.”
During his opening address, Manh outlined the party’s five-year development strategy, including
accelerating the doi moi reforms, further integrating Vietnam into the world economy, and laying
the foundations for becoming an industrialized country by 2020. The Congress also outlined
specific targets, such as maintaining average annual GDP growth of 7.5-8%, creating 8 million
jobs, and reducing urban unemployment to below 5%.48
There were some major personnel changes. As expected, the sitting Prime Minister (Phan Van
Khai) and President (Tran Duc Luong) resigned their Politburo positions, effectively ending their
official political careers. Both had served two terms. Khai was succeeded by Nguyen Tan Dung,
a southerner and widely considered to be an economic reformer. During the 10th Party Congress,
he was elevated to the third-highest post in the Politburo. Luong’s successor as President was
another southerner, Nguyen Minh Triet, formerly the party secretary in Ho Chi Minh City. Triet
also is widely considered an economic reformer and is known for fighting corruption and criminal
gangs in Ho Chi Minh City.
Vietnam’s leadership is trying to confront the problem of how to reverse the Communist Party’s
declining legitimacy. Attracting new recruits into the Party has become increasingly difficult,
particularly among young Vietnamese, though there are some signs this may be changing. A key
issue for the VCP leadership is combating official corruption, which was a major topic during the
Party Congress. Vietnam regularly is ranked near the bottom of surveys of foreign executives on
corruption in various countries.
The National Assembly
Over the past 10 years, Vietnam’s legislative organ, the National Assembly, has slowly and subtly
increased its influence to the point where it is no longer a rubber stamp. Although more than 80%
of parliamentarians are VCP members and the VCP carefully screens all candidates before
elections are held, in recent years the Assembly has vetoed Cabinet appointments, forced the
government to revise major commercial legislation, and successfully demanded an increase in its
powers. These include the right to review each line of the government’s budget, the right to hold
no-confidence votes against the government, and the right to dismiss the president and prime
minister (though not the VCP general secretary).

48“Party Faces the Future,” Economist Intelligence Unit - Business Asia, May 1, 2006.
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Sino-Vietnam Relations
Since the late 1990s, when China began espousing its “new security concept” of cooperation with
its neighbors, improvements in Sino-Vietnamese relations have accelerated, most notably with the
signings of a land border treaty in 1999 and a sea border treaty for the Gulf of Tonkin in 2000.
For Vietnamese leaders, this process has been fraught with ambivalence. On the one hand,
maintaining stable, friendly relations with its northern neighbor is critical for Vietnam’s economic
development, and Hanoi does not undertake large-scale diplomatic moves without first
calculating Beijing’s likely reaction. China’s ruling communist party is an ideological bedfellow,
as well as a role model for a country that seeks to marketize its economy without threatening the
communist party’s dominance. China also is Vietnam’s largest trading partner.
On the other hand, many Vietnamese are wary of China’s increased influence in Southeast Asia.
Beijing’s outreach to Cambodia and Laos in recent years has rekindled internal battles between
pro-Hanoi and pro-Beijing camps in both countries, and has spurred counter-moves by Hanoi.
Vietnam and China still have overlapping claims to the Spratly Island chain in the South China
Sea, differences that led to military clashes in the late 1980s. In 2002, ASEAN and China signed a
Declaration on the Conduct of Parties in the South China Sea, a non-binding agreement to resolve
disputes diplomatically, exercise restraint, and respect the freedom of navigation and overflight.
Significantly, Vietnam did not succeed in its efforts to have the agreement specifically include the
Paracel Islands, claimed by both Vietnam and China. Instead, the declaration is vague on its
geographic scope. Like other countries in the dispute, Vietnam has continued to expand its
presence in the island chain. China also represents an economic rival, as both countries compete
for foreign direct investment and for markets in many of the same low-cost manufacturing
products. Vietnamese leaders periodically express concern about Vietnam’s rising trade deficit
with China, which was around $11 billion in 2008. Many Vietnamese worry that China is
increasing its economic influence over and within Vietnam, as shown by the criticisms that
followed the spring 2009 announcement of a bauxite mining joint venture between a Vietnamese
and Chinese entity. (See “Controversial Bauxite Plan for Central Highlands,” above.)
Events over the last two years reflect the conflicting dynamics in Sino-Vietnamese relations. In
late May 2008, VCP General Secretary Manh made a four-day visit to China. In October, Prime
Minister Dung made a week-long trip. In March 2009, Chinese state councilor Dai Bingguo
visited Vietnam. The summitry and meetings led to agreements to set up a hotline, to complete
the demarcation of their land border (a task that was accomplished in late December 2008), and
Beijing’s pledge to provide a $300 million line of preferential credit for Vietnam.
Hanoi and Beijing continue to deal with resurfacing disputes over the Paracel and Spratly Islands.
Most notably, in December 2007, the Vietnamese government allowed anti-Chinese
demonstrations outside the Chinese embassy in Hanoi and consulate in Ho Chi Minh City. The
protestors were angered by reports that Beijing had created a new municipality in Hainan
Province that would have jurisdiction over three islets claimed by Vietnam. China also has told
international oil companies – including ExxonMobil – they will be excluded from the Chinese
market if they fulfill contracts to participate in Vietnamese exploration projects in or near the
disputed waters. During Dung’s visit to China in October and Dai’s visit to Vietnam in March, the
two sides agreed to try to resolve their maritime disputes. However, diplomatic flare-ups over
competing maritime claims continue.
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Selected Legislation in the 111th Congress
H.Res. 20 (Royce). Calls on the State Department to list the Socialist Republic of Vietnam as a
“Country of Particular Concern” with respect to religious freedom. Introduced January 6, 2009.
Referred to House Foreign Affairs Committee.
H.Res. 111 (King). Establishes a Select Committee on POW and MIA Affairs to conduct a full
investigation of all unresolved matters relating to any United States personnel unaccounted for
from the Vietnam War and several other conflicts. Introduced February 3, 2009. Referred to
House Rules Committee.
H.Res. 334 (Loretta Sanchez). Calls on the Government of Vietnam to release from prison, end
the detention without trial, and cease the harassment and house arrest of the individuals who
signed the 2006 Manifesto on Freedom and Democracy for Vietnam. Calls on the Secretary of
State to establish a Countries of Particular Concern list to condemn countries like that engage in
“particularly severe violations” of human rights. Introduced April 21, 2009. Referred to House
Foreign Affairs Committee.
H.Res. 672 (Sanchez). Calls on the Vietnamese government to release specific imprisoned
bloggers and respect Internet freedom. Introduced July 23, 2009; referred to the House
Committee on Foreign Affairs.
H.R. 1105 (Obey). Omnibus Appropriations Act, 2009. Appropriated an additional $3 million “to
continue environmental remediation of dioxin contamination at the Da Nang Airport and related
health activities in nearby communities in Vietnam. Introduced February 23, 2009; signed into
law March 11, 2009 (P.L. 111-8).
H.R. 1969 (C. Smith) and S. 1159 (Boxer). Vietnam Human Rights Acts of 2009. Both bills
prohibit Vietnam’s entry into the GSP program unless Vietnam’s labor rights regime is certified as
making certain improvements; and prohibit increases in many forms of U.S. non-humanitarian
assistance to Vietnam unless (a) such increases are matched by additional funding for human
rights programming, (b) Vietnam’s human rights conditions are certified as improving, or (c) the
President issues a waiver. House bill introduced April 2, 2009, and referred to House Foreign
Affairs Committee and Ways and Means Committees. Senate bill introduced May 21, 2009, and
referred to Senate Foreign Relations Committee.
H.R. 2410 (Berman). Foreign Relations Authorization Act, FY2010 and 2011. Section 226
transfers the Vietnam Education Foundation to the Department of State. Section 1126 states that it
is the sense of Congress that the Secretary of State should place Vietnam on the list of ‘Countries
of Particular Concern’ for severe violations of religious freedom. Introduced May 14, 2009. The
House passed the bill on June 10 by a vote of 235 - 187 (Roll no. 328).
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Figure 1. Map of Vietnam

Source: Map Resources. Adapted by CRS.

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Author Contact Information

Mark E. Manyin

Specialist in Asian Affairs
mmanyin@crs.loc.gov, 7-7653




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