U.S.-Vietnam Relations in 2011: Current Issues
and Implications for U.S. Policy
Mark E. Manyin
Specialist in Asian Affairs
July 26, 2011
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 2011: Current Issues and Implications for U.S. Policy

Summary
After communist North Vietnam’s victory over U.S.-backed South Vietnam in 1975, the United
States and Vietnam had minimal relations until the mid-1990s. Since the establishment of
diplomatic relations in 1995, overlapping security and economic interests have led the two sides
to begin to form a strategic partnership of sorts. In 2010, the Obama Administration indicated its
intent to take relations to “the next level,” and cooperated with Vietnam to coordinate a multi-
country diplomatic push back against perceived Chinese encroachment in the South China Sea.
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 88 million people—that has an ambivalent
relationship with China and that is asserting itself on the regional stage. 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 erode the Vietnamese Communist Party’s (VCP) monopoly on power.
The United States is Vietnam’s largest export market and in some years its largest source of
foreign direct investment. Bilateral trade in 2010 was over $15 billion, a tenfold increase since
the United States extended “normal trade relations” (NTR) treatment to Vietnam in 2001.
Increased trade also has been fostered by Vietnam’s market-oriented reforms. From 1987-2007,
Vietnam’s annual gross domestic product (GDP) growth averaged over 7%. Since then, Vietnam’s
economy has been buffeted by economic difficulties that have lowered growth rates and raised
inflation. Vietnam is one of the largest recipients of U.S. assistance in East Asia; since the late
2000s, annual U.S. aid typically surpasses $100 million, much of it for health-related activities.
The United States and Vietnam are two of nine countries negotiating a Trans-Pacific Strategic and
Economic Partnership (TPP) regional free trade agreement (FTA).
Human rights are the biggest thorn in the side of the relationship. Vietnam is a one-party,
authoritarian state ruled by the Vietnamese Communist Party (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. Most observers argue that the government, which already had tightened restrictions on
dissent and criticism since 2007, intensified its suppression in 2010.
In January 2011, the VCP held a Party Congress that selected Nguyen Phu Trong to become the
new VCP general secretary, Vietnam’s top post. Vietnam’s prime minister, Nguyen Tan Dung,
was endorsed to continue his tenure as head of the government. Many Western analysts regard the
Congress’s results as a sign that steady, incremental improvements in relations with the United
States will continue. However, Dung’s power base within the VCP appears to have been
weakened, which could make bilateral cooperation more difficult on some issues.
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U.S.-Vietnam Relations in 2011: Current Issues and Implications for U.S. Policy

Contents
Major Developments in the First Half of 2011 ............................................................................. 1
U.S. Ambassador Nominee Held Up over International Adoption Cases ................................ 1
Sino-Vietnamese Tensions Ebb and Flow over Maritime Claims............................................ 1
Incremental Developments in the Lower Mekong Initiative ................................................... 2
Human Rights—Repression Against Dissent Continues......................................................... 2
Vietnamese Victory in WTO Anti-Dumping Case .................................................................. 3
Vietnam’s Economic Difficulties Persist................................................................................ 3
Introduction ................................................................................................................................ 3
U.S. Interests and Goals in the Bilateral Relationship ............................................................ 4
Vietnam’s Interests and Goals in the Bilateral Relationship ................................................... 4
A Ceiling on the Relationship? .............................................................................................. 4
Congress’s Role .................................................................................................................... 5
Brief History of the Normalization of U.S.-Vietnam Relations..................................................... 5
Major Issues in U.S.-Vietnam Relations ...................................................................................... 7
Diplomatic Ties..................................................................................................................... 7
High Level Visits: Taking Relations to a New Level ........................................................ 7
The United States Increases Its Involvement in the South China Sea Dispute................... 8
The Lower Mekong Initiative.......................................................................................... 9
Nuclear Diplomacy ......................................................................................................... 9
Economic Ties .................................................................................................................... 10
Trade Initiatives: GSP, TIFA, BIT, and TPP................................................................... 12
Trade Friction ............................................................................................................... 12
U.S. Foreign Assistance to Vietnam..................................................................................... 12
Human Rights Issues........................................................................................................... 13
Overview ...................................................................................................................... 13
The Obama Administration’s Approach to Human Rights in Vietnam ............................ 14
Background .................................................................................................................. 14
Religious Freedom ........................................................................................................ 15
Workers’ Rights ............................................................................................................ 16
The Vietnam Human Rights Act .................................................................................... 17
Refugees in Cambodia .................................................................................................. 18
Human Trafficking.............................................................................................................. 19
Military-to-Military Ties ..................................................................................................... 19
Military Assistance........................................................................................................ 20
Background .................................................................................................................. 20
Vietnam War “Legacy” Issues ............................................................................................. 21
Agent Orange................................................................................................................ 21
Vietnam War Resettlement Programs............................................................................. 22
POW/MIA Issues .......................................................................................................... 22
Conditions in Vietnam............................................................................................................... 23
Economic Developments..................................................................................................... 24
Vietnam’s Economic Troubles of 2007-2011 ................................................................. 24
Background .................................................................................................................. 24
Controversial Bauxite Plan for Central Highlands.......................................................... 26
Vietnam’s Politics and Political Structure ............................................................................ 26
Leadership Team Selected at the 11th Party Congress ..................................................... 26
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U.S.-Vietnam Relations in 2011: Current Issues and Implications for U.S. Policy

The National Assembly ................................................................................................. 27
Sino-Vietnam Relations....................................................................................................... 28
The Environment .......................................................................................................... 29
Selected Legislation in the 112th Congress ................................................................................. 29

Figures
Figure 1. Map of Vietnam ......................................................................................................... 31

Tables
Table 1. U.S.-Vietnam Merchandise Trade, Selected Years ........................................................ 11

Contacts
Author Contact Information ...................................................................................................... 32

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U.S.-Vietnam Relations in 2011: Current Issues and Implications for U.S. Policy

Major Developments in the First Half of 2011
U.S. Ambassador Nominee Held Up over International Adoption
Cases
In January 2011, President Obama nominated David Shear to be U.S. Ambassador to Vietnam.
More than one Senator reportedly has placed a “hold” on Shear’s nomination due to concerns that
the State Department has provided inadequate help to resolve several U.S. families who were
matched with Vietnamese orphans but have not been able to bring the children to the United
States due to changing requirements in the United States and Vietnam. In 2008, the two countries
halted international adoptions due to revelations of improprieties such as forged documents,
child-buying, and child abduction.
Sino-Vietnamese Tensions Ebb and Flow over Maritime Claims
In recent years, tensions between Vietnam and China have intensified over competing territorial
claims in the South China Sea, particularly over the Spratly Islands. Since at least early 2010,
Vietnam’s strategy has been to try to internationalize the dispute, both by encouraging outside
powers (particularly the United States) to raise the issue with China and by pressuring China to
enter multilateral talks with the other disputants, if not with ASEAN as a whole. China’s preferred
approach is to deal with the disputes bilaterally and separately with each country that disputes its
claims. One factor influencing leaders in Hanoi is a significant anti-Chinese constituency inside
Vietnam.
Sino-Vietnamese tensions over the South China Sea flared most recently in May and June 2011.
According to Vietnamese authorities, Chinese fishing vessels—in the presence of Chinese naval
ships—twice severed cables being used by Vietnamese boats exploring for energy deposits in
waters claimed by both countries. The disputes were heightened by over a month of anti-Chinese
protests inside Vietnam and by a simultaneous flare-up in tensions between the Philippines and
China over their own competing maritime claims. Throughout the first half of 2011, some
Members of Congress expressed concern about the disputes generally, and about China’s actions
in particular.
In late June, Vietnam and China appeared to agree to tamp down tensions during a visit to Beijing
by a special envoy, Vietnamese Deputy Foreign Minister Ho Xuan Son. After Son met with
China’s top foreign policy officials, the two countries issued a joint statement saying they agreed
to “peacefully solving the two countries’ disputes at sea through negotiations and friendly
consultation,” and on the “the need to steer public opinion in the correct direction, avoiding
comments and deeds that could harm the friendship and trust of the peoples of the two
countries.”1 Since early June, the Vietnamese government has broken up a number of domestic
protests against China’s actions in the South China Sea, though a few other protests have been
allowed to occur. When asked about Son’s visit, China’s Foreign Ministry spokesman said that
the two countries also agreed to “oppose the involvement of outside powers in the ... dispute,” an

1 “VN, China Vow to Resolve East Sea Issue Peacefully,” Viet Nam News, updated June 27, 2011.
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item that did not appear in the Vietnamese account.2 The tenor of the dispute also appeared to be
toned done—at least momentarily—in late July, when China and the 10 members of the
Association of Southeast Asian Nations (ASEAN) agreed to a set of guidelines to facilitate
confidence building measures and joint projects in the South China Sea. The guidelines are part
of the process of moving from the 2002 non-binding Declaration of Conduct to an actual Code of
Conduct.
As discussed below, since early 2010, the United States has become more involved in the South
China Sea disputes, partly in response to requests from Vietnam and other Southeast Asian
countries which feel China has become more assertive in the region. In multilateral meetings
during the late spring and early summer of 2011, Obama Administration officials appeared to be
adopting a less confrontational tone toward China when addressing the South China Sea dispute
than they had in 2010. This may be due to a number of factors, including an improvement in
overall U.S.-China relations, China’s willingness to participate in multilateral Code of Conduct
talks, and a feeling in the Administration and in other Southeast Asian governments that a heavy
U.S. intervention in the dispute could provoke China. Moreover, whereas in 2010 Obama
Administration officials broke new ground, in 2011 they were reiterating and reinforcing
positions they had enunciated the previous year: that freedom of navigation in South China sea is
a U.S. “national interest,” that the United States opposes the use or threat of force by any
claimant, and that claims in the South China Sea should be derived from “legitimate claims to
land features,” which many interpret as an attack on the basis for China’s claims to the entire sea.3
Relatedly, the Obama Administration also has continued its policy of upgrading its defense ties
with and the capacities of many Southeast Asian militaries, particularly with Vietnamese security
forces.
Incremental Developments in the Lower Mekong Initiative
Another Obama Administration program designed to increase the U.S. presence in Southeast Asia
is the Lower Mekong Initiative (LMI), comprised of the United States, Vietnam, Cambodia, Laos,
and Thailand. On the sidelines of the July 2011 ASEAN Regional Forum Foreign Ministerial in
Bali, Indonesia, the LMI foreign ministers held their fourth meeting. The LMI’s broad agenda is
to foster cooperation and capacity building among the four Southeast Asian participants in the
areas of education, health, environment, and infrastructure. During the 2011 meeting, the five
foreign ministers continued to expand the forum’s institutional capacity and that any new dam
construction along the Mekong should be preceded by, in the State Department’s words,
“thorough assessments” of their potential impact. The United States expects to spend over $220
for various LMI-related programs in 2011.4
Human Rights—Repression Against Dissent Continues
Repression against dissenters and protestors appeared to continue, and in some cases worsen, in
the first half of 2011. In one prominent case, lawyer Cu Huy Ha Vu was sentenced to seven years

2 “Transcript of PRC FM Spokesman News Conference on 28 Jun 11,” translated by Open Source Center,
CPP20110628364001.
3 See, for instance, Press Statement by Hillary Rodham Clinton, “The South China Sea,” July 22, 2011.
4 State Department Press Release, “Lower Mekong Initiative Progress 2010/2011,” July 22, 2011; State Department
Press Release, “Statement of the Fourth Lower Mekong Initiative Ministerial Meeting,” July 22, 2011.
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in prison for violating article 88, a national security provision of Vietnam’s criminal code that
prohibits distribution of propaganda against the state. Among other activities, Vu has sued
Vietnamese Prime Minister Nguyen Tan Dung twice for allowing Chinese companies to mine
bauxite in the Central Highlands region and for issuing a decree that restricted complaints against
the government. Vu is notable because he is a former Foreign Ministry official whose father, Cu
Huy Can, was one of Vietnam’s most famous poets who served as Agriculture Minister and
Minister of Culture under Ho Chi Minh. Other dissidents, journalists, and critics were arrested,
detained, or reportedly harassed, some as part of the aforementioned clamp-down on anti-Chinese
protests in the summer of 2011. Vietnamese authorities also reportedly forcibly suppressed
protests by ethnic Hmong in the Northwest Highlands region, the first such unrest in that region
in years.
Vietnamese Victory in WTO Anti-Dumping Case
In July, a World Trade Organization (WTO) dispute settlement panel ruled that the United States
was violating WTO rules by using a controversial methodology—called “zeroing”—to calculate
punitive anti-dumping tariffs against Vietnamese shrimp exporters. The United States has
imposed anti-dumping duties on certain types of Vietnamese shrimp since 2005, when the
International Trade Administration (ITA) determined that they were being sold in the United
States at “less than fair market value.” In November 2010, the United States extended the anti-
dumping duties for another five years. Vietnam requested WTO dispute settlement proceedings in
early 2010.
Vietnam’s Economic Difficulties Persist
While the Vietnamese economy continues to record steady growth of over 5%, concerns about
Vietnam’s economic imbalances persist. Specifically, many worry about rising inflation and
financial problems in Vietnam’s state-owned enterprises. There is also some concern that
continued economic instability, combined with Vietnam’s dwindling foreign exchange reserves,
could make it difficult for the government to finance its growing trade deficit in the future.
Introduction
Since 2002, overlapping strategic and economic interests have led the United States and Vietnam
to improve relations across a wide spectrum of issues. In 2010, the two countries accelerated this
process, effectively forming a partnership on several fronts. Many Obama Administration
officials appear to regard Vietnam as a natural strategic partner in Southeast Asia, as indicated by
a number of developments. Perhaps most prominently, the two countries mobilized a
multinational response to China’s perceived attempts to boost its claims to disputed waters and
islands in the South China Sea. Additionally, the Obama Administration encouraged Vietnam to
be a “full partner” in the ongoing Trans Pacific Strategic Economic Partnership (TPP) free trade
agreement negotiations and has given a higher priority to cleaning up sites contaminated by Agent
Orange/dioxin used by U.S. troops during the Vietnam War. The two sides also have signed a new
agreement on civilian nuclear cooperation and have increased their non-proliferation cooperation.
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U.S.-Vietnam Relations in 2011: Current Issues and Implications for U.S. Policy

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, the perception that Vietnam
is becoming a “middle power” with commensurate influence in Southeast Asia, 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, cooperation in international
organizations, diplomatic pressures, educational outreach, and security cooperation. Secretary
Clinton’s two visits to Hanoi in 2010, in addition to Secretary of Defense Robert Gates’ own trip
to Vietnam the same year, appear to signal that strategic concerns about China are taking on a
larger role in the Obama Administration’s formulation of U.S. policy toward Vietnam.
Vietnam’s Interests and Goals in the Bilateral Relationship
For Vietnam’s part, since the mid-1980s, Hanoi essentially has pursued a four-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 (4)
simultaneously buttressing this by improving relations with the United States as a counterweight
to Chinese ambition.5 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 in Hanoi 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.6
There are a number of strategic and tactical reasons behind Vietnam’s efforts to upgrade its
relationship with the United States. Many Vietnamese policymakers seek to counter Chinese
ambitions in Southeast Asia by encouraging a greater U.S. presence in the region. 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 so it can achieve its goal of
becoming an industrialized country by 2020.
A Ceiling on the Relationship?
Ultimately, the pace and extent of the improvement in bilateral relations is limited by several
factors, including Hanoi’s wariness of upsetting Beijing, U.S. scrutiny of Vietnam’s human rights

5 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.
6 State Department Office of Research, Vietnam: U.S. Image Gets a Boost, Opinion Analysis, Washington, DC,
September 9, 2008.
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record, and Vietnamese conservatives’ 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. However, it is possible that these concerns could be lessened, and the possibilities for
strategic cooperation increased, if the United States and Vietnam both believe China is becoming
unduly assertive in Southeast Asia.
Congress’s Role
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 and providing relevant funding, as well as through its approval process for
agreements. Many Members have been at the forefront of efforts to highlight human rights
conditions in Vietnam, as well as “legacy issues” of the Vietnam War such as recovering the
remains of missing U.S. troops. In the 1990s and early 2000s, many Members of Congress who
favored improved bilateral relations provided the Clinton and George W. Bush Administrations
with political backing for their policies of upgrading relations with Vietnam.
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.
U.S.-Vietnam diplomatic and economic relations were virtually nonexistent for more than 15
years following 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 aligned itself economically and militarily with the Soviet Union
and invaded Cambodia, installing a 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 or were
expelled under 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 VCP to adopt (at its 6th National Party Congress in 1986) a more pragmatic, less
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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 contained a
“Sense of the Senate” section expressing that chamber’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 made possible 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. All of these issues remain on
Vietnam’s bilateral agenda.
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
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.7 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

7 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.
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status as part of a wider agreement that saw Vietnam become a member of the World Trade
Organization (WTO) as of January 11, 2007.8
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 non-market economy.
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. Two manifestations of this goal were the U.S. extending
Permanent Normal Trade Relations (PNTR) status to Vietnam in 2007 and four annual summits
from 2005-2008. The Bush Administration appeared to use these top-level meetings to encourage
economic and political reforms inside Vietnam. In 2010, the two countries took a variety of steps
indicating that they may be poised to enter a new level of cooperation, particularly on strategic
issues.
High Level Visits: Taking Relations to a New Level
During 2010, Secretary of State Hillary Rodham Clinton visited Vietnam in July and October, and
Secretary of Defense Robert Gates visited in October. The trips were partly due to Vietnam’s one-
year stint as chair of the Association of Southeast Asian Nations (ASEAN), during which time the
country served as host for a number of multilateral gatherings. The Obama Administration also
used them as occasions to signal its determination to increase its presence in Southeast Asia
generally, and upgrade its strategic relationship with Vietnam in particular. Of particular note,
during the July ASEAN Regional Forum (ARF) meeting, Vietnamese and U.S. officials
orchestrated a multilateral diplomatic push-back against perceived Chinese assertiveness in the
South China Sea. In October, Vietnam then convened and secured U.S. attendance in the first-
ever ASEAN Defense Ministers’ Meeting + 8 (ADMM Plus, a gathering of the ministers of
defense from the 10 ASEAN countries accompanied by their counterparts from Australia, China,
India, Japan, Korea, New Zealand, and Russia), in which Secretary Gates participated and
reiterated U.S. concerns about China’s actions in the South China Sea. Later that same month,
Secretary Clinton traveled back to Hanoi to join in the East Asia Summit (EAS), the first time the
United States officially participated in the five-year old gathering.
During one of her visits, Secretary Clinton summed up the new emphasis on Vietnam when she
stated that “the Obama Administration is prepared to take the U.S.-Vietnam relationship to the
next level…. We see this relationship not only as important on its own merits, but as part of a
strategy aimed at enhancing American engagement in the Asia Pacific and in particular Southeast

8 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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Asia.”9 Many Vietnamese officials would like to arrange a bilateral summit, an event the Obama
Administration appears to be reluctant to schedule due in part to concerns about a deterioration in
Vietnam’s human rights conditions.
The United States Increases Its Involvement in the South China Sea Dispute
Since 2007, even as official Sino-Vietnamese relations have expanded, bilateral tensions have
intensified over competing territorial claims in the South China Sea. China has increased seizures
of Vietnamese fishing boats, has reportedly warned Western energy companies not to work with
Vietnam to explore or drill in the disputed waters, and has announced plans to develop the
disputed islands as tourist destinations. Vietnam used its chairmanship of ASEAN in 2010 to
“internationalize” the disputes by forming a multi-country negotiation forum, which would force
China to negotiate in a multilateral setting.
A primary target of the Vietnamese campaign was the United States, which has followed a policy
of neutrality on the claims by the parties, which also include Brunei, Indonesia, Malaysia, the
Philippines, and Taiwan. Throughout 2009 and early 2010, some Vietnamese said that while they
do not expect the United States to take sides in the dispute, it would be helpful if the United
States did more to emphasize, through language or actions, that all parties to the dispute should
adhere to common principles, such as promoting transparency, adhering to the rule of law,
refraining from undertaking unilateral actions, and committing to the freedom of the seas and
navigation.
Obama Administration officials proved receptive to Vietnam’s outreach. Bilateral cooperation
was symbolized during the July 2010 ARF Foreign Ministerial meeting in Hanoi. Secretary of
State Clinton, Vietnamese Foreign Minister Khiem and counterparts from 10 other nations,
including several ASEAN members, raised the issue of the South China Sea. At the meeting,
Secretary Clinton said that freedom of navigation on the sea is a U.S. “national interest” and that
the United States opposes the use or threat of force by any claimant. In a departure from the
heretofore policy of the United States standing on the sidelines of the dispute, she offered to
“facilitate initiatives and confidence building measures” consistent with the 2002 Declaration on
the Conduct of Parties in the South China Sea. Finally, Clinton stated that “legitimate claims to
maritime space in the South China Sea should be derived solely from legitimate claims to land
features,” which many interpreted as an attack on the basis for China’s claims to the entire sea.10
China has declared the South China Sea to be an area of “indisputable sovereignty” and Chinese
Foreign Minister Yang Jiechi reportedly verbally attacked those who raised the issue during the
meeting.11 Secretary Gates and other defense ministers also raised the issue during the ADMM
Plus meeting in Hanoi and October.
In the months after the ARF meeting, China dropped its previous resistance to meet in a
multilateral setting to discuss a multilateral Code of Conduct. Preparatory discussions were held
in late 2010 and early 2011.

9 U.S. Department of State, “Secretary of State Hillary Rodham Clinton Remarks With Vietnam Deputy Prime Minister
And Foreign Minister Pham Gia Khiem,” Government Guest House, Hanoi, Vietnam, July 22, 2010.
10 U.S. Department of State, “Secretary of State Hillary Rodham Clinton Remarks at Press Availability,” National
Convention Center, Hanoi, Vietnam, July 23, 2010.
11 John Pomfret, “U.S. Takes a Tougher Tone with China,” Washington Post, July 30, 2010.
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The Lower Mekong Initiative
One aspect of the Obama Administration’s upgrading its relationship with Vietnam appears to be
forming partnerships in multilateral fora. One new such group, created in 2009, is the Lower
Mekong Initiative (LMI), comprised of the United States and the lower Mekong countries,
excluding Burma (i.e. Vietnam, Cambodia, Laos, and Thailand). Foreign ministers from the five
countries have held three meetings, the last during Secretary Clinton’s October 2010 visit to
Vietnam. The LMI’s agenda appears to be broad, covering areas such as responses to climate
change, fighting infectious disease, education policy, and information-sharing about river
management. Under the rubric of the LMI, the Obama Administration as of early 2011 had
pledged over $170 million to support health, environment, and education programs in the region.
Also as part of the LMI, the Mekong River Commission and the Mississippi River Commission
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. Another motivation for
the LMI is to monitor and coordinate responses to the construction of dams – particularly but not
exclusively those being built in China – and other projects on the upper portions of the Mekong
that are affecting the downriver countries.12
Nuclear Diplomacy13
As its economy has grown, so have Vietnam’s energy demands, which according to one source
grew by 15% annually in the first decade of the 2000s.14 To help keep pace, Vietnam plans to
build its first nuclear power plants in the coming decades. The U.S. Department of Energy (DoE)
and the Nuclear Regulatory Commission train Vietnamese officials on nonproliferation and
nuclear safety best practices related to power plant operation, and assisted with the drafting of
Vietnam’s Atomic Energy Law, passed in June 2008. The U.S. State Department’s Export Control
and Border Security Program (EXBS) has provided assistance to Vietnam to strengthen export
controls in the country. An effective export control regime is considered a key prerequisite to
establishing a nuclear power program in a country.
In a related development, in March 2010, the United States and Vietnam signed a Memorandum
of Understanding Concerning Cooperation in the Civil Nuclear Field that is designed to increase
cooperation in a number of areas. Then-U.S. Ambassador to Vietnam Michael Michalak said he
anticipates the agreement will be a “stepping stone” to a bilateral nuclear energy cooperation
agreement, which, under section 123 of the Atomic Energy Act, would be subject to
congressional review.15
In early August 2010, the Wall Street Journal reported that the United States and Vietnam had
discussed a proposed nuclear cooperation agreement that would not specifically commit Hanoi to
refrain from enriching uranium.16 The State Department spokesman has said that the United

12 Catharin Dalpino, “Bureaucratic Suspense at Phuket,” Asia Security Initiative blog, Posted on July 17, 2009,
http://asiasecurity.macfound.org/.
13 For more, see CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and
Mary Beth Nikitin.
14 Economist Intelligence Unit, Vietnam: Energy Report, December 16, 2009.
15 U.S. Embassy Hanoi, “Ambassador’s Speech Remarks at the Signing Ceremony for Nuclear Cooperation MOU,”
March 30, 2010.
16 Jay Solomon, “U.S., Hanoi in Nuclear Talks,” The Wall Street Journal, August 5, 2010. Uranium enrichment
(continued...)
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States would welcome a commitment by Vietnam not to pursue enrichment, but that this would be
Vietnam’s sovereign decision, and Vietnam does have a right to pursue enrichment under the
Non-Proliferation Treaty.17 A commitment to forego enrichment is not required for bilateral
nuclear cooperation agreements under U.S. law, and most past 123 agreements, including ones
negotiated with Japan, Australia, and India, have not included such a pledge. The recent
agreement with the United Arab Emirates included a provision that would preclude enrichment or
reprocessing in the UAE, and the United States has pursued similar pledges from other states in
the Middle East. However, how this policy would apply to other regions of the world is under
interagency review. A senior DOE official said in September 2010, that it would be
“inappropriate” at this stage to ask Vietnam to foreswear its fuel cycle options as part of a nuclear
energy cooperation agreement.18 The Vietnamese Atomic Energy Institute Director Vuong Huu
Tan has said that Vietnam does not plan to pursue enrichment.19
Vietnam has also supported U.S. nonproliferation initiatives. With DoE assistance under the
Global Threat Reduction Initiative, Vietnam has been converting its Soviet/Russian-supplied
research reactor in Dalat from highly enriched uranium (HEU) to low enriched uranium fuel, and
returning the HEU fuel to Russia. Attending the April 2010 nuclear security summit in
Washington, DC, Vietnamese Prime Minister Dung pledged to continue to convert the Dalat
research reactor, as well as to join the Global Initiative to Combat Nuclear Terrorism. In
December 2010, the United States and Vietnam established a legal framework for U.S.-Vietnam
cooperation for full conversion of the research reactor and the return of HEU spent fuel from
Dalat to Russia.20
Economic Ties21
Economic ties are the most mature aspect of the bilateral relationship, as symbolized by the two
countries’ participation in the nine-country Trans Pacific Strategic Economic Partnership (TPP)
free trade agreement negotiations. Since the mid-2000s, the United States has been Vietnam’s
largest export market, to the point where in 2010, exports to the United States represented about
18% of Vietnam’s total exports. According to the U.S. Embassy in Hanoi, in 2009, U.S. firms
were Vietnam’s single-largest source of foreign investment.22 China is Vietnam’s single-largest
trading partner, and its economic importance—particularly as a source of imports—to Vietnam
has been growing in recent years. 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 with the rest of the world.

(...continued)
facilities can produce fuel for nuclear reactors, as well as fissile material for nuclear weapons. Highly enriched uranium
and plutonium are the types of fissile material used in nuclear weapons.
17 State Department Briefing, August 5, 2010.
18 Daniel Horner, “Lawmakers Eye Fixes to Law on Nuclear Pacts,” Arms Control Today, October 2010.
19 “US-Vietnam nuke deal will likely allow enrichment,” Associated Press, August 7, 2010.
20 U.S. Embassy Hanoi, “U.S. and Vietnam Cooperation on Nuclear Non-Proliferation in Dalat,” December 8, 2010.
21 For more, see CRS Report R40755, U.S.-Vietnam Economic and Trade Relations: Issues for the 111th Congress, by
Michael F. Martin.
22 U.S. Embassy Hanoi website, “U.S.-Vietnam Relations 15th Anniversary,” http://vietnam.usembassy.gov/15th-
anniversary.html.
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U.S.-Vietnam trade has soared since the early 2000s. As shown in Table 1, trade flows exceeded
$18 billion in 2010, more than 12 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. Indeed, Vietnam has emerged as the United States’
second-largest source of imported clothing, after China.
Table 1. U.S.-Vietnam Merchandise Trade, Selected Years
(millions of dollars)
Total Trade

Change
U.S. Imports
U.S. Exports
from
from Vietnam
to Vietnam
Volume
prior yr.
Trade Balance
1994 50.5
172.2
222.7
—
121.7
2000 827.4
330.5
1,157.9
—
-496.9
2001 1,026.4
393.8
1,420.2
23%
-632.6
2002 (NTR
2,391.70 551.9
2,943.60
107%
-1,839.8
extended)a
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
10,541.2 1,823.3
12,364.5
31%
-8,717.9
Extended)a
2008 12,610.9
2,673.0
15,283.9
24%
-9,937.9
2009 12,366.8
2,966.6
15,333.4
0.3%
-9,400.2
2010 14,784.4
3,539.5
18,323.9
19.5%
-11,244.9
Jan-May 2010
5,296.0
1,391.1
6,687.1
—
-3,904.9
Jan-May 2011
6,449.5
1,725.5
8,175.0
22%
-4,724.0
Major
clothing, footwear, wooden furniture, electrical machinery, coffee, fish and prepared fish products,
Imports
printers/copiers/faxes
from
Vietnam
Major
cotton, passenger cars, machinery and mechanical equipment, meat, plastics, concentrated milk &
Exports to
cream
Vietnam
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.

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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.23 The Obama Administration has yet to make a decision about entering Vietnam into the
GSP program. Legislation submitted in the 111th Congress, H.R. 1969 and S. 1159 (the Vietnam
Human Rights Act), would have prohibited Vietnam’s entry into the GSP program unless
Vietnam’s labor rights regime were certified as making improvements in certain areas,
particularly the right of association.
Working level U.S. and Vietnamese trade officials hold regular meetings 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). The two countries are
also continuing to hold “technical discussions” about establishing a bilateral investment treaty
(BIT). Substantive negotiations are on hold, pending the Obama Administration’s review of a
United States model for BITs.24 The most ambitious trade initiative with Vietnam involves
negotiating a multilateral free trade agreement under the Trans-Pacific Partnership (TPP).
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.25 Vietnamese officials are particularly concerned
about the first three issues, and about the number of anti-dumping suits that have been initiated
against Vietnamese exporters for allegedly selling products in the U.S. at prices below their
“normal value.” In general, while bilateral trade disputes have been irritants, as of early 2011 they
have not spilled over to affect the course or tone of bilateral relations. The regular TIFA talks
appear to have become the main forum for the two sides to discuss and manage trade disputes.
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. Since the late 2000s, estimated U.S. aid
has surpassed $100 million, about five times the level in FY2000, making Vietnam one of the

23For more, see CRS Report RL34702, Potential Trade Effects of Adding Vietnam to the Generalized System of
Preferences Program, by Vivian C. Jones and Michael F. Martin.
24 “Hormats: BIT To Balance Business Needs With Labor, Environment Goals,” World Trade Online Daily News,
March 10, 2010.
25 Under the terms of its entry into the WTO, Vietnam will retain its designation as a “non-market 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.
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largest recipients of U.S. aid in East Asia. Estimated U.S. assistance to Vietnam in FY2010 was
around $140 million. For FY2011, the Obama Administration expects to spend over $120 million
on aid programs in Vietnam.
The U.S. bilateral aid program is dominated by health-related assistance. 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. Cumulatively,
the 110th and 111th Congress appropriated $9 million for cleaning up dioxin storage sites as of
April 2010 (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).
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. In the 111th Congress, H.R. 2410, the Foreign Relations
Authorization Act for FY2010 and 2011, would have transferred 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 The House passed the bill on June 10,
2009. It did not receive action in the Senate. Similar attempts (H.R. 6535 and S. 3097) were made
in the 110th Congress.
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. For more than a decade, the Vietnamese Communist Party 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

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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conditions have improved for many if not most Vietnamese, including those in the Central
Highlands and Northwest Highlands regions, two regions whose large minority populations have
made them particular centers of human rights concerns.
On the other hand, the government cracks down harshly on anti-government activity. Indeed,
according to numerous accounts, since at least early 2007 the Vietnamese government’s
suppression of dissent has intensified and its tolerance for criticism has lessened markedly.
Furthermore, according to numerous accounts, the government’s suppression increased in 2010.
Some of the shift may have been associated with political jockeying ahead of the VCP’s January
2011 Party Congress. As opposed to a massive suppression, the Vietnamese government’s actions
appear to be selective, targeting specific individuals and organizations who have called for the
institution of democratic reforms and/or publicly criticized government policy on sensitive issues,
such as policy toward China. More dissident groups began to publicly appear beginning in 2006.
It is unclear to what extent these groups or their various goals are supported by the broader
Vietnamese public.
The Obama Administration’s Approach to Human Rights in Vietnam
Although Obama Administration officials have continuously expressed concerns—including via
public criticisms—about human rights incidents, these concerns did not prevent the two countries
from significantly improving relations in 2010. Barring a dramatic downturn in Vietnam’s human
rights situation, Administration officials appear to see Vietnam’s human rights situation not as a
barrier that will impede short-term cooperation on various issues, but rather as a ceiling on what
might be accomplished between the two countries. For instance, congressional criticisms of
Vietnam’s human rights record appear to be causing the Administration to respond coolly to
Vietnamese requests for a leadership summit in 2011.
Background
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.
Beginning in 2009, the government began increasingly targeting bloggers as well as lawyers who
represent human rights and religious freedom activists, particularly those linked to a network of
pro-democracy activists. Previously, many blogs had been a relatively free space for political
discussion. In 2009, authorities reportedly banned anti-government commentary on blogs, a
number of prominent bloggers were arrested, and several blogs with political commentary
reportedly were hacked and criticized by official news outlets.28 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

28 Open Source Center Report, “Vietnamese Authorities Seek to Silence, Intimidate Cyber-Activists,”
FEA20090710868263, July 9, 2009.
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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.29
Many of the targeted blogs, bloggers, and lawyers had criticized Vietnam’s policy toward China
and/or have links to pro-democracy activist groups such as Bloc 8406, the banned Democratic
Party of Vietnam, or the banned Independent Workers’ Union of Vietnam. There are reports that
these groups have received help from expatriate Vietnamese, including some in the United States,
a charge that Vietnamese officials often make in conversations with their U.S. counterparts.
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.30
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.31
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.32 Though these demonstrations appear to have been much smaller than the unrest in
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.
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
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.

29 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.
30 Open Source Center Report, “Vietnamese Bloggers Drop Local Yahoo Service Given Perceptions of Collusion With
Authorities,” FEA20090721872665, July 21, 2009.
31 “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.
32 State Department, “2008 Human Rights Reports: Vietnam,” February 25, 2009.
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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 was 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.
On December 17, 2010, the House passed H.Res. 20, calling on the State Department to list
Vietnam as a CPC.
Workers’ Rights
Vietnam’s application to join the GSP program and participation in the TPP trade negotiations
have focused attention on labor conditions in Vietnam. The government and the VCP’s efforts to
maintain one-party rule while adapting to rapid social and economic changes may help to explain
the often contradictory trends that can be observed in Vietnam’s evolving labor rights regime.
On the one hand, Vietnamese workers are not free to form their own independent unions. All
unions must belong to the Vietnam General Confederation of Labor (VGCL), an organ of the
VCP that approves and manages subsidiary unions. According to the State Department’s 2009
Country Report on Vietnam’s human rights practices, “only” 85% of state-owned enterprises,
60% of foreign-invested enterprises, and 30% of private enterprises were unionized.33 The
advocacy group Human Rights Watch has raised concern about the ability of Vietnamese workers
to call an official strike, especially at state-owned enterprises (SOEs).34 Vietnamese authorities
reportedly have arrested, harassed, and intimidated leaders of independent unions, such as the
United Workers-Farmers Organization of Vietnam, a group formed in 2006 that publicly calls for
the right to form independent unions. Analysts have observed that the absence of a true right of
association in Vietnam has impeded the improvement of labor rights in other areas. Collective

33 Bureau of Democracy, Human Rights, and Labor, 2009 Country Reports on Human Rights Practices, 2009 Human
Rights Reports: Vietnam, U.S. Department of State, Washington, DC, March 11, 2010.
34 Human Rights Watch, Not Yet a Workers’ Paradise, New York, NY, May 2009.
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bargaining agreements remain the exception rather than the rule. Rapid economic expansion,
corruption, and shortages of funds, training, and personnel reportedly have made it extremely
difficult for government authorities to enforce Vietnam’s labor laws.
On the other hand, many conclude that since the launch of the doi moi reforms, worker rights
have made progress despite the restrictions on the right to organize. A comprehensive and
detailed Labor Code was passed in 1994 and was revised in 2002 and in 2006. Among other
advances, the original 1994 code recognized workers’ right to strike, albeit under prescribed
conditions. The 2006 amendments, prompted in part by a surge in strikes, for the first time
allowed workers to choose their own representatives to negotiate disputes at the thousands of
enterprises where no union exists. In the past, the VGCL had been the only organization allowed
to represent workers. Additionally, the government for the most part has not moved against
strikes, despite the fact that most have been technically illegal (because they were organized by
“labor associations,” and not officially sanctioned unions). It may also help that most strikes
appear to be at foreign-invested enterprises.
The Vietnamese government appears to tacitly accept that it has problems with the enforcement
of its labor laws. In 2008 and 2009, Vietnam’s official news agencies—Thanhnien News, Vietnam
Net, and Voice of Vietnam News—ran a series of reports in 2008 and 2009 describing problems
with Vietnam’s protection of worker’s rights, the flaws of the VGCL, and efforts to improve
working conditions in Vietnam.35 A new Labor Code and Trade Union Law, drafted with
assistance from the International Labor Organization (ILO), is expected to be submitted to
Vietnam’s National Assembly for consideration later in 2010.
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.36
As introduced, the most recent version of the Vietnam Human Rights Act (H.R. 1410 in the 112th
Congress) would prohibit increases in many forms of U.S. non-humanitarian assistance to

35 Among these articles are: “Impotent Labour Unions Don't Help Workers,” Thanhnien News, June 22, 2008;
“Government Units to Tackle Labour Disputes,” Vietnam Net, February 21, 2009; “Vietnam Works for Harmonious
Labour Relations,” Voice of Vietnam News, March 18, 2009; Minh Nam, “Flouting of Labor Laws Rife in HCMC:
Report,” Thanhnien News, December 2, 2008; and Minh Nam, “HCMC Officials call to Strengthen Unions, Tighten
Labor Laws,” Thanhnien News, February 12, 2009.
36 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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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 bill
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. 1410 also declares it U.S. policy to increase Radio Free Asia’s anti-jamming funding, would
require the submission of a stand-alone human rights report for Vietnam, and callsfor the
expansion of education, cultural, and legislative exchanges with Vietnam.37
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 political battles inside Vietnam.
Additionally, in the 112th Congress, H.R. 156 (Royce), the Vietnam Human Rights Sanctions Act
was introduced, which would impose financial and immigration/entry sanctions on listed
Vietnamese who are deemed to be complicit in human rights abuses.
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.

37 Unlike versions of the bill submitted in the 111th Congress (H.R. 1969 and S. 1159), H.R. 1410 contains no
authorizations to implement the bill’s provisions, nor does it prohibit Vietnam’s entry into the U.S. Generalized System
of Preferences (GSP) program. The GSP program expired at the end of 2010, though there are efforts in the 112th
Congress to re-authorize its funding.
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Human Trafficking
Vietnam is both a source and destination for people trafficked for forced labor and commercial
sexual exploitation. Additionally, state-owned and private labor export companies send tens of
thousands of Vietnamese construction, fishing, and manufacturing workers overseas, where many
are vulnerable to abuse and/or exploitation. In June 2009, the State Department issued its 9th
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 2009 report estimated that there are 500,000 Vietnamese workers
outside of Vietnam. It judged the government to be making “significant efforts” to combat
trafficking, particularly the cross-border sex trade. However, the report criticized the Vietnamese
government for an insufficient focus on domestic trafficking, law enforcement, victim protection,
and safeguards on officially sanctioned export labor programs.38
Military-to-Military Ties
In the late 2000s, the United States and Vietnam began significantly upgrading their military-to-
military relationship, driven in large measure by Vietnam’s increased concerns about China and
enabled by over a decade of smaller, trust-building programs between the two military
bureaucracies. In August 2010, the United States and Vietnam held their inaugural Defense Policy
Dialogue, a high-level channel for direct military-to-military discussions. Previously, the main
formal vehicle for the two militaries to hold regular annual dialogues had been through the U.S.-
Vietnam Security Dialogue on Political, Security, and Defense Issues, a forum that is run by the
U.S. State Department and Vietnamese Ministry of Foreign Affairs and includes officials from the
two countries’ militaries. Other signs of a deepening military-military relationship include:
• the first U.S.-Vietnam joint naval engagement, involving noncombat training
(e.g. damage control, a search and rescue drill, and exchange of cooking skills)
on board the USS John S. McCain in August 2010 while it was berthed at
DaNang;
• also in 2010, Vietnamese shipyards repaired two U.S. Military Sealift Command
ships;
• in 2011, Vietnam’s Ministry of Defense will for the first time send Vietnamese
officers to U.S. staff colleges and other military institutions.39
As has been written by Carlyle Thayer, an expert who follows Vietnamese military matters
closely, the two militaries appear to be working out “a program of practical activities that will
enhance the professionalism of the Vietnamese military,” including peacekeeping activities,
environmental security, multilateral search and rescue coordination and regional disaster
response.40

38 State Department, Trafficking in Persons Report, June 2009.
39 According to Secretary Gates, Vietnam plans to send one officer to the U.S. National War College and one officer to
the Naval Staff College. U.S. Department of Defense, “Vietnam National University,” Speech as Delivered by
Secretary of Defense Robert M. Gates, Hanoi, Vietnam, Monday, October 11, 2010.
40 Carlyle A. Thayer, “Vietnam’s Defensive Diplomacy,” Wall Street Journal, August 19, 2010.
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In a sign of the degree to which Vietnamese leaders calibrate their ties to the United States with
Sino-Vietnamese relations, 2010 also represented the first year that the Vietnamese navy made its
port call to China, and the first time China and Vietnam held their first seaborne joint search and
rescue exercise. 41
Military Assistance
The United States and Vietnam have had an IMET agreement in place since 2005, allowing
Vietnamese officers to receive English language training in the United States. In 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 provided foreign military
financing (FMF) for Vietnam for the first time. $500,000 was made available in that fiscal year,
with another $1.35 million requested in FY2010. The Obama Administration requested $1.1
million in FMF for Vietnam in FY2011.42
One issue that some Members of Congress track is whether the Obama Administration accedes to
the reported Vietnamese military requests for spare parts for its American-made Huey helicopters
that are leftovers from the Vietnam War.
The Vietnamese government has long sought U.S. assistance in locating and identifying remains
for the hundreds of thousands of Vietnamese soldiers who remain missing in action (MIA) from
the Vietnam War era. In November 2010, the United States Agency for International Development
and Vietnam’s Ministry of Labor and Social Affairs reached an agreement on a two-year, $1
million program of technical assistance to help Vietnam with its MIAs.43
Background
Since the United States and Vietnam normalized relations in the mid-1990s, a growing perception
of shared strategic interests has compelled and enabled the two countries’ militaries to cautiously
establish and expand ties with one another.44 Vietnamese concerns about rising Chinese power in
the region appear have made Vietnamese policy-makers, particularly civilian leaders, interested in
upgrading their security relations with the United States. However, the process of deepening
military-to-military cooperation has been slow and incremental, with the United States generally
suggesting that more be done, and the Vietnamese side responding cautiously.45
In the 1990s, the bulk of military-to-military cooperation consisted of programs dealing with
“legacy” issues from the Vietnam War era. The two militaries developed an increasingly
cooperative relationship in locating the remains of U.S. missing servicemen.46 By the late 1990s,

41 Carlyle A. Thayer, “Vietnam’s Defensive Diplomacy,” Wall Street Journal, August 19, 2010.
42 January 2010 e-mail exchange with Defense Department official.
43 US Embassy Hanoi, “The U.S. Provides $1 Million in Technical Assistance to Help Vietnam Locate and Identify
Soldiers Missing in Action,” November 19, 2010.
44 For more on the evolution of bilateral military ties, see Lewis M. Stern, “U.S.-Vietnam Defense Relations:
Deepening Ties, Adding Relevance,” Strategic Forum, no. 246 (September 2009).
45 Stern, “U.S.-Vietnam Defense Relations;” Carlyle A. Thayer, “Background Briefing: Vietnam’s Defence Minister
Visits Washington,” December 18, 2009, Thayer Consultancy, ABN # 65 648 097 123.
46 Officially, more than 2,000 Americans who served in Indochina during the Vietnam War era are still unaccounted
(continued...)
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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 U.S.
Defense Department reciprocated by allowing Vietnamese officials access to U.S. records and
maps to assist their search for Vietnamese MIAs. Additionally, the United States spent millions of
dollars annually in demining assistance in Vietnam, through the State Department’s NADR
account, which includes non-proliferation, counterterrorism, demining, and related activities. The
United States continues to fund many of these demining programs in Vietnam.
Since at least the early 2000s, the Pentagon and State Department have sought to expand and
deepen security relations and military ties with Vietnam. A decade later, many of these efforts
have borne fruit, albeit slowly and incrementally. An IMET agreement was signed in 2005,
followed two years later by the United States allowing sales of non-lethal defense items to
Vietnam. Additionally, U.S. naval vessels now 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. The military-to-
military relationship has a developed a multilateral dimension, in part due to Vietnam’s policy of
seeking a more visible role in international organizations.
Vietnam War “Legacy” Issues
Agent Orange47
One major legacy of the Vietnam War that remains unresolved is the damage that Agent Orange,
and its accompanying dioxin, have done to the people and the environment of Vietnam. For the
last 30 years, this issue has generally been pushed to the background of bilateral discussions by
other issues considered more important by the United States and/or Vietnam. As the relationship
has improved and matured, and with most other wartime “legacy” issues presently resolved, the
issue of Agent Orange/dioxin has emerged as a regular topic in bilateral discussions.
In the last few years, the people of Vietnam and the Vietnamese government have become
increasingly concerned about the issue of Agent Orange. According to various estimates, the U.S.
military sprayed approximately 11 million-12 million gallons of Agent Orange over nearly 10%
of then-South Vietnam between 1961 and 1971. One scientific study estimated that between 2.1
million and 4.8 million Vietnamese were directly exposed to Agent Orange. Vietnamese advocacy
groups claim that there are over three million Vietnamese suffering from serious health problems
caused by exposure to the dioxin in Agent Orange.
Recently, the U.S. government has shown a greater willingness to cooperate on some aspects of
the issue. Since 2007, Congress has appropriated $21 million for dioxin removal and health care
facilities in DaNang. However, the Vietnamese government and people would like to see the
United States do more to remove dioxin from their country and provide help for victims of Agent
Orange.

(...continued)
for. Hundreds of thousands of Vietnamese remain missing.
47 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.
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In June 2010, the U.S.-Vietnam Dialogue Group on Agent Orange/Dioxin (Dialogue Group), a bi-
national committee of individuals and organizations involved in this issue, released a proposed
10-year, $300 million “action plan” designed to provide “a significant part of the long-term
solution to the Agent Orange/dioxin legacy in Vietnam.”48 While the Dialogue Group does not
make specific recommendations on how to fund the plan, it does state, “The U.S. government
should play a key role in meeting these costs, along with other public and private donors,
supplementing an appropriate continuing investment from the government and the people of
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 Issues49
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 each others’
capitols), unless the President makes a certification that several conditions have been met
regarding Vietnam’s cooperation with the United States on Prisoner of War/Missing in Action
(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.50 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

48 U.S.-Vietnam Dialogue Group on Agent Orange/Dioxin, “Declaration and Plan of Action: Addressing the Legacy of
Agent Orange in Vietnam,” Aspen Institute, June 2010.
49 For more on the POW/MIA issue, see CRS Report RL33452, POWs and MIAs: Status and Accounting Issues, by
Charles A. Henning.
50 Official U.S. policy does not remove a name from the rolls of those unaccounted for unless remains are identified.
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reciprocated by allowing Vietnamese officials access to U.S. records and maps to assist their
search for Vietnamese MIAs, a topic that continues to be of interest to the Vietnamese
government. 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.51 Congress continues to take an interest in the POW/MIA issue.52
Hundreds of thousands of Vietnamese remain missing from the Vietnam War period. For years,
Vietnam has expressed in interest in receiving U.S. help in locating and identifying the remains of
these MIAs. In November 2010, the U.S. Agency for International Development (USAID) and
Vietnam’s Ministry of Labor and Social Affairs (MOLISA) agreed to a two-year program under
which the United States will spend $1 million to help Vietnam locate and recover the remains of
the hundreds of thousands of Vietnamese soldiers missing from the Vietnam War.
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.
Beginning 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 have contributed
to this possible shift in policy momentum.

51 Office of the Assistant Secretary of Defense (Public Affairs), “Press Availability with Secretary Rumsfeld in
Vietnam,” June 5, 2006.
52 For instance, 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 the 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.
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Economic Developments
Vietnam’s Economic Troubles of 2007-2011
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 first soaring inflation and then 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 spurring growth as the global
financial crisis’ effects began to hit Vietnam.
Although restrictions on international financial transactions limited Vietnam’s direct exposure to
the global financial and credit crises, the secondary effects created new pressures on Vietnam,
which is heavily dependent on trade and foreign direct investment inflows. In response to the
crisis, Hanoi lowered corporate tax rates, cut interest rates, allowed the dong to depreciate against
the U.S. dollar, and unveiled a stimulus package that the International Monetary Fund estimated
to be worth roughly $4 billion. 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.53 In 2009, Vietnam’s exports fell by
around 10% compared with 2008 levels, and its imports decreased by around 13%. However, like
many Asian developing countries, Vietnam’s economy avoided some of the harsher effects of the
slowdown. Real GDP growth for 2009 was 5.3% and 6.8% for 2010. The Vietnamese government
estimates that the economy grew by around 5.6% in the first six months of 2011.54
Nonetheless, 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. Thus, compared to the 8% growth rates Vietnam experienced for much of the 2000s, the
2008-2011 period likely has felt like a recession to many in Vietnam. Compounding the challenge
of whether to prioritize spurring growth or fighting inflation prices are signs that the latter is
recurring; Vietnam’s consumer price index rose by over 9% in 2010 and over 16% in the first six
months of 2011.55
Background
During the 25 years since the doi moi reforms were launched, Vietnam was one of the world’s
fastest-growing countries. 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

53 Economist Intelligence Unit, Vietnam Country Report, May 2008.
54 General Statistics Office of Vietnam Press Release, “Socio-Economic Statistics for 1st Half of 2011,” July 1, 2011.
55 Ibid. 2010 data from General Statistics Office of Vietnam Press Release, “Socio-Economic Statistics for 2010,”
January 4, 2011.
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becoming a middle-income country by 2020. A substantial portion of the country’s growth was
driven by foreign investment.
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 9th 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.
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.56 Per capita GDP in 2009 was just under $3,000 when measured on a
purchasing power parity basis.57 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 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.

56 World Bank, “Vietnam at a Glance,” September 12, 2005.
57 Central Intelligence Agency, World Factbook, April 1, 2010.
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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.58 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. 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 North Vietnamese
forces against France, South Vietnam, and the United States from the 1940s through the 1970s.59
Vietnam’s Politics and Political Structure
In general, 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
VCP in politics and society, and Vietnam remains a one-party state. In practice, the Communist
Party 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 175 members,
and the Politburo, which has 14 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.
Leadership Team Selected at the 11th Party Congress
Vietnam is undergoing a leadership transition. In mid-January 2011, the ruling Vietnamese
Communist Party (VCP) held a weeklong National Congress, the 11th since the Party was
founded. Party Congresses, 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 11th Party Congress, delegates selected Nguyen Phu Trong (66 years old), formerly the
chairman of Vietnam’s National Assembly, to serve as the next VCP general secretary, Vietnam’s
top post. Prime Minister Nguyen Tan Dung (61, pronounced “zung”) retained his membership in

58 James Hookway, “Once Enemies, Vietnam Now Fights for China Funds,” Asia Wall Street Journal, May 2, 2009.
59 Seth Mydans, “Lion of War Retakes Field in Mine Fight, International Herald Tribune, June 29, 2009.
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the 14-member Politburo, a move that virtually all analysts agree ensures the National Assembly
will reappoint him to the post when it convenes in May. Likewise the Assembly is expected to
ratify the Congress’ decision to select Truong Tan Sang (61) as Vietnam’s next president, a largely
ceremonial position.60 Dung and Sang are both believed to have sought to become general
secretary. Vietnam’s foreign minister, Pham Gia Khiem, was not re-elected to the Party’s Central
Committee, which means that he will likely step down at or before the National Assembly’s
summer session.
Many Western analysts regard Vietnam’s ruling triumvirate as pragmatic and in favor of
continuing steady, incremental improvements in relations with the United States. The Party
Congress also is believed to have endorsed continuity in Vietnam’s economic policy, particularly
the pursuit of a high GDP growth strategy, and strong support for state-owned enterprises, which
are to be reformed and restructured in order that they can be more competitive in a market
socialist economy.61 There appears to have been a near-consensus that Vietnam should continue to
pursue its goal of become a “modernity-oriented industrialized nation by 2020,” as articulated by
General Secretary Trong in his closing remarks to the Congress.62
Throughout 2010, there were rumors that Prime Minister Dung, who has served since 2006,
would be replaced at the Congress, particularly because of his connection to the financially
troubled state-owned enterprise, Vinashin, and public outcries against his plans to allow Chinese
and other mining companies to dramatically expand bauxite mines in the country’s Central
Highlands region. Despite his apparent re-appointment, Dung’s power base is believed to have
been reduced at the Congress. Trong and Sang are both believed to be assertive rivals. In
November 2010, for instance, Trong called for the National Assembly to hold a vote of no
confidence in Dung over his role in Vinashin’s financial troubles.
The National Assembly63
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. 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).
• Over the past year, the legislature has blocked government plans to build an
expensive high-speed rail project and has questioned the prime minister over his
role in the Vinashin debacle, prompting him to apologise to it.
• At the 2011 election only 42 of the 500 people elected to the NA were non-CPV
members, compared with 43 out of 493 in the 2007 election. (fn EIU July 2011)

60 The former president and VCP general secretary had both served two, five-year terms, and—in keeping with recent
tradition—had stepped down for age and health reasons.
61 For instance, in a January 2011 article, Dung stated that the state sector, including state-owned enterprises, play “the
leading role” in the economy. Nguyen Tan Dung, “PM Highlights Development Strategy for 2011-2020,” Vietnam
News Agency Online, January 3, 2011.
62 Vietnamese News Agency, “Closing Speech by New Party General Secretary,” January 19, 2011.
63 CRS Research Associate Lam Van Phan contributed to this section.
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During its 7th session held in June 2010, the National Assembly amended several bills introduced
by various Ministries (including a controversial law on mining), and questioned the merits of
plans to build a high-speed passenger rail line from Hanoi to Ho Chi Minh City. On June 19,
2010, the Vietnamese National Assembly (VNA) voted to reject a resolution to build a high speed
rail connecting Hanoi and Ho Chi Minh City. The project is estimated to cost $56 billion dollars
(USD), approximately 60.5% of Vietnam’s GDP in 2009. Prime Minister Nguyen Tan Dung
supported the project as a necessary investment in the infrastructure of the country. It is unclear
whether this is an exercise in power by an increasingly independent National Assembly or
whether it is a public expression resulting from internal political maneuverings between the
conservative and reformist elements within the Vietnamese Communist Party.
It remains to be seen how much influence the Assembly will ultimately have over policymaking,
given the VCP’s dominant role and the centralization of decision-making in Vietnam. More than
85% of parliamentarians are Party members, and the VCP carefully screens all candidates before
elections are held. Moreover, the Communist Party and the central government generally have
encouraged the National Assembly’s evolution into a more robust body, to help create the legal
system and culture most Vietnamese leaders feel are necessary to support a modern, middle-
income state. The next elections for National Assembly members will occur in May 2011.
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 security, 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.
Imports from China have soared over the past decade, as the two countries’ infrastructures have
become increasingly intertwined. Power plants in southeastern China, for instance, provide
electricity for parts of northern Vietnam. Many of Prime Minister Nguyen Van Dung’s economic
policies have relied on Chinese economic support, including investments in Vietnamese natural
resources.
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. In moves widely interpreted as related to increased tensions in the
South China Sea, Vietnam in 2009 signed contracts to purchase billions of dollars of new military
equipment from Russia, including six Kilo-class submarines. According to Vietnam’s 2009
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Defense White Paper, Vietnam’s defense budget increased by nearly 70% between 2005 and
2008.64
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, such as clothing.
Vietnamese leaders periodically express concern about Vietnam’s rising trade deficit with China,
which was around $16 billion in 2010. In 2009, Chinese imports represented nearly a quarter of
Vietnam’s total imports by value, up from 9% in 2000. 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).
The Environment
In climate modeling exercises, Vietnam is often listed as one of the world’s most vulnerable
countries to the possible effects of climate change, due among other factors to its climate, long
coastline, and topography (particularly the extent of low-lying coastal areas with high population
concentrations). Rising sea levels, increased frequency and intensity of storms, as well as drought
and salt-water intrusion could have a severe impact on the country, particularly its poorer
communities. Additionally, the flow of the Mekong River, which reaches its terminus in Vietnam,
is being affected by the extensive damming of the river’s upper reaches. In China, four dams have
been built along the Lancang (as the Mekong is called in China) and four more are planned. Nine
additional dams along the Mekong are planned in Laos and two in Cambodia.
For a number of reasons, Vietnam is considered ripe for developing projects to adapt to
anticipated climatic changes. Many organs of the Vietnamese government appear to have
recognized and gathered data on the problems that could arise from climate change, and Vietnam
has reached out to the international community for advice and assistance. According to
information provided by the U.S. Agency for International Development, from the early 1990s
through 2009 the United States spent a cumulative total of around $7 million-$10 million for
environmental programs, including those directly related to climate change issues.
Despite the steps Vietnam has taken, it is not clear to what extent the country has reconciled
expected environmental changes with its overriding domestic priority: achieving its goal of
becoming a middle-income economy by 2020. Additionally, while many governmental
institutions have begun to incorporate climate change’s effects into their planning, it is unclear to
what extent this has been done by the Vietnamese Communist Party, the institution that sets
Vietnam’s broad policy priorities.
Selected Legislation in the 112th Congress
H.R. 156 (Royce) and S. 1051 (Cornyn). The Vietnam Human Rights Sanctions Act. Would
require the President to (a) compile and submit to Congress a list of Vietnamese deemed to be
complicit in human rights abuses, (b) prohibit these individuals from entering the United States,
and (c) impose financial sanctions on these individuals. Authorize the President to waive

64 Vietnam, Ministry of Defense, White Paper, 2009, p. 38.
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sanctions to comply with international agreements or if in the U.S. national interest. S. 1051
expresses the sense of Congress that the Secretary of State should designate Vietnam as a country
of particular concern (CPC) with respect to religious freedom. H.R. 156 introduced January 5,
2011; referred to the House Committees on Foreign Affairs, Judiciary, Ways and Means, and
Financial Services. S. 1051 introduced May 24, 2011; referred to the Senate Committee on
Foreign Relations.
H.Res. 16 (Royce). “Strongly encourages” the State Department to list the Socialist Republic of
Vietnam as a “Country of Particular Concern” with respect to religious freedom. Introduced
January 5, 2011; referred to House Foreign Affairs Committee.
H.Res. 29 (Loretta Sanchez). Calls on Vietnam to repeal a statute that restricts use of the
Internet to respect individuals’ freedom of speech, freedom of press, and freedom of political
association. Introduced January 7, 2011; referred to House Foreign Affairs Committee.
H.R. 1410 (Christopher Smith). The Vietnam Human Rights Act of 2011. Prohibits 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. Unlike versions of the
bill submitted in the 111th Congress (H.R. 1969 and S. 1159), H.R. 1410 contains no
authorizations to implement the bill’s provisions, nor does it prohibit Vietnam’s entry into the
U.S. Generalized System of Preferences (GSP) program. (The GSP program expired at the end of
2010, though there are efforts in the 112th Congress to re-authorize its funding.) Introduced April
7, 2011; referred to House Foreign Affairs Committee.
S. 537 (Webb). The Mekong River Protection Act of 2011. Would require the Secretary of the
Treasury to oppose any World Bank or Asian Development Bank assistance for the construction
of hydroelectric dams or electricity transmission systems in the Mekong River Basin unless the
Secretary submits to Congress a report providing assurances regarding environmental protection,
public health, economic effect, and resettlement concerns to Congress. Introduced March 9, 2011;
referred to Senate Committee on Foreign Relations.
S.Res. 227 (Webb). Calls for protection of the Mekong River basin and for increased United
States support for delaying the construction of mainstream dams along the Mekong River.
Introduced July 7, 2011; referred to the Committee on Foreign Relations.

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Figure 1. Map of Vietnam

Source: 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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