The Vietnam-U.S. Normalization Process
Order Code IB98033
CRS Issue Brief for Congress
Received through the CRS Web
The Vietnam-U.S. Normalization Process
Updated October 18, 2005
Mark E. Manyin
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress
CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
U.S.-Vietnam Relations, 1975-1998
Policy Initiatives During the Carter Administration
Developments During the Reagan and Bush Administrations
Developments During the Clinton Administration
Recent U.S.-Vietnam Relations
Prime Minister’s Trip to the United States
Economic Ties — The Bilateral Trade Agreement
Implementation of the BTA
U.S.-Vietnam Trade Flows
Imports of Vietnamese Clothing
Vietnam’s Bid to Join the World Trade Organization (WTO)
Intellectual Property Rights (IPR)
U.S. Bilateral Economic Assistance to Vietnam
Bird Flu
Human Rights and Religious Freedom
Political and Security Ties
Agent Orange
Human Trafficking
Vietnam War Resettlement Programs
POW/MIA Issues
Vietnam’s Situation
Economic Developments
Political Trends
The Ninth and Tenth Party Congresses
Unrest in the Central Highlands Region
Refugees in Cambodia
Foreign and Defense Policy
LEGISLATION
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The Vietnam-U.S. Normalization Process
SUMMARY
U.S.-Vietnam diplomatic and economic
the existing East Asian order. The next, and
relations remained essentially frozen for more
final, step toward full normalization would be
than a decade after the 1975 communist vic-
granting permanent normal trade relations
tory in South Vietnam. Relations took major
status to Vietnam. This step, which would
steps forward in the mid-1990s, particularly in
require congressional approval, almost cer-
1995, when the two sides opened embassies in
tainly will be considered in the context of
each other’s capitals. Since then, the normal-
negotiating Vietnam’s accession to the World
ization process has accelerated and bilateral
Trade Organization (WTO). Vietnam hopes
ties have expanded. Congress has played a
to join the WTO in 2005, though some ana-
significant role in the normalization process.
lysts believe this is an overly optimistic time
frame.
The most important step toward normal-
ization since 1995 was the signing of a sweep-
Recently, clashes over Vietnam’s human
ing bilateral trade agreement (BTA), which
rights record and trade friction over shrimp,
was approved by Congress and signed by
catfish, and textiles have soured relations
President Bush in 2001. Under the BTA, the
somewhat since the heady days after the BTA
U.S. extended conditional normal trade rela-
was signed. At the same time, some U.S.
tions (NTR) to Vietnam. In return, Hanoi
analysts have suggested that the Bush Admin-
agreed to a range of trade liberalization mea-
istration seek to expand the as yet embryonic
sures and market-oriented reforms. Trade —
security relations between Hanoi and Wash-
primarily imports from Vietnam — has surged
ington, arguing that Vietnam and the United
since the BTA was signed. The United States
States share suspicions of China’s expanding
is now Vietnam’s largest trading partner.
influence in Southeast Asia. Other observers,
however, have argued there is little evidence
Until recently, each step in improving
that Hanoi seeks to balance Beijing’s rising
bilateral ties has brought controversy, albeit at
power. Regardless of motivation, since 2003
diminishing levels. U.S. opponents in Con-
the two sides slowly have expanded military-
gress and elsewhere have argued that Vietnam
to-military ties, albeit primarily in symbolic
maintains a poor record on human, religious,
rather than substantive ways.
and labor rights. Opposition has also come
from groups arguing that Vietnam has not
Vietnam and the United States gradually
done enough to account for U.S. Prisoners of
have been expanding their political and secu-
War/Missing in Action (POW/MIAs) from the
rity ties, symbolized by the Vietnamese Prime
Vietnam War, though this argument has di-
Minister’s visit to the United States in June
minished markedly in recent years.
2005, the first such trip by a Vietnamese head
of state. President Bush spoke of his desire to
Forces favoring normalization have
move bilateral relations to “a higher plane,”
included those in Congress and elsewhere
backed Vietnam’s bid to enter the WTO, and
reflecting a strong U.S. business interest in
the two countries signed an international
Vietnam’s reforming economy and American
military education training (IMET) agreement.
strategic interests in working with U.S. friends
The two countries share a strategic interest in
and allies to promote stability and develop-
offsetting China’s increased economic, politi-
ment by integrating Vietnam more fully into
cal, and cultural influence in Southeast Asia.
Congressional Research Service ˜ The Library of Congress
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MOST RECENT DEVELOPMENTS
Health and Human Services Secretary Michael Leavitt visited Vietnam in mid-October
as part of his tour of Southeast Asian countries that have experienced outbreaks of the H5N1
avian influenza. During his visit, the two countries signed a bilateral health cooperation
agreement. Vietnam also agreed with a number of U.N. agencies to conduct a joint
prevention program. Since late December 2003, there have been over 90 confirmed cases
— including over 40 deaths — of avian influenza in Vietnam.
BACKGROUND AND ANALYSIS
U.S.-Vietnam Relations, 1975-1998
U.S.-Vietnam diplomatic and economic relations remained essentially frozen for over
a decade after the 1975 communist victory in South Vietnam, despite a few U.S. overtures
during the Carter Administration that were controversial domestically and were ultimately
thwarted by Vietnamese actions.
Policy Initiatives During the Carter Administration
In March 1977, President Carter sent a commission to Vietnam. The United States no
longer vetoed Vietnam’s application for U.N. membership, paving the way for the July 20,
1977 U.N. Security Council recommendation — undertaken by consensus, without formal
vote — that Vietnam be admitted to the United Nations. The United States proposed that
diplomatic relations quickly be established between the United States and Vietnam, after
which the United States would lift export and asset controls on Vietnam. The Vietnamese
responded that they would neither agree to establish relations nor furnish information on U.S.
POW/MIAs until the United States pledged to provide several billion dollars in postwar
reconstruction aid. Subsequently, they modified this position and provided some limited
information on MIAs, even though the United States provided no aid. The U.S. Congress
responded unfavorably to the Carter Administration initiatives and the Vietnamese reaction.
In 1977, both houses of Congress went on record as strongly opposing U.S. aid to Vietnam.
Vietnamese actions in 1978 in particular had a long-term negative effect on
U.S.-Vietnamese relations. Vietnam expelled hundreds of thousands of its citizens (many
of Chinese origin) who then became refugees throughout Southeast Asia; aligned itself
economically and militarily with the USSR; and invaded Cambodia, deposing the
pro-Chinese Khmer Rouge regime and imposing a puppet Cambodian government backed
by 200,000 Vietnamese troops. China conducted a one month military incursion along
Vietnam’s northern border in 1979 and kept strong military pressure on the North until 1990.
In the face of these developments, the Carter Administration halted consideration of
improved relations with Vietnam. It worked closely with the members of the Association
of Southeast Asian Nations (ASEAN — then made up of Indonesia, Malaysia, the
Philippines, Singapore and Thailand) to condemn and contain the Vietnamese expansion and
to cope with the influx of refugees from Indochina.
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Developments During the Reagan and Bush Administrations
The Reagan Administration opposed normal relations with Hanoi until there was a
verified withdrawal of Vietnamese forces from Cambodia, a position amended in 1985 to
include a verified withdrawal in the context of a comprehensive settlement. Administration
officials also noted that progress toward normal relations depended on Vietnam fully
cooperating in obtaining the fullest possible accounting for U.S. personnel listed as prisoners
of war/missing in action (POW/MIAs).
As Vietnam withdrew forces from Cambodia in 1989 and sought a compromise peace
settlement there, the Bush Administration decided on July 18, 1990, to seek contacts with
Hanoi in order to assist international efforts to reach a peace agreement in Cambodia.
Regarding the issue of the POW/MIAs, following a visit to Hanoi by a U.S. presidential
delegation in 1987, Vietnam returned hundreds of sets of remains said to be those of U.S.
MIAs. Some, but not most, were confirmed as American. Altogether, from 1974 to 1992,
Vietnam returned the remains of over 300 Americans. Virtually all U.S. analysts agree that
the Vietnamese “warehoused” several hundred remains and tactically released them in
increments. The number of such remains and whether any are still held, is not known with
any certainty. (For details, see CRS Issue Brief IB92101, POWs and MIAs: Status and
Accounting Issues.)
In April 1991, the United States laid out a detailed “road map” for normalization with
Vietnam, welcomed Vietnam’s willingness to host a U.S. office in Hanoi to handle
POW/MIA affairs, and pledged $1 million for humanitarian aid (mainly prosthetics) to
Vietnam. The U.S. office began operation in mid-1991, and the aid was transferred by the
end of FY1991. Also in 1991, the United States eased travel restrictions on Vietnamese
diplomats stationed at the United Nations in New York and on U.S. organized travel to
Vietnam.
In 1992, Vietnamese cooperation on POW/MIA matters improved, especially in the area
of allowing U.S. investigators access to pursue “live sightings” reports. Important
developments encouraged U.S. officials, armed with evidence (including photographs of
extensive Vietnamese archival information on U.S. POW/MIAs) to request greater access
to such data. Vietnamese representatives agreed. The United States pledged, and
subsequently paid out, $3 million of humanitarian aid (mainly prosthetics and aid to
abandoned or orphaned children) for Vietnam; agreed to restore direct telecommunications
with Vietnam; agreed to allow U.S. commercial sales to meet basic human needs in Vietnam;
and lifted restrictions on projects in Vietnam by U.S. nongovernmental organizations. The
United States pledged and provided a disaster assistance grant to Vietnamese flood victims
and provided additional aid to help Vietnam with malaria problems. In November 1992, the
United States lifted restrictions on U.S. telephone service to Vietnam, allowing direct service
between the two countries. In December, the United States eased some restrictions on U.S.
companies doing business in Vietnam.
Coinciding with these developments, the Senate Select Committee on POW/MIA affairs
conducted what many consider the most extensive independent investigation of the
POW/MIA issue undertaken. The committee, chaired by John Kerry and vice-chaired by
Bob Smith, operated from August 1991 to December 1992. In early 1993, the committee
issued its report, which concluded that there was “no compelling evidence” that POWs were
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alive after the U.S. withdrawal from Vietnam, and that although there was no “conspiracy”
in Washington to cover up live POWs, the U.S. government had seriously neglected and
mismanaged the issue, particularly in the 1970s. The committee’s televised hearings played
a major role in defusing much of the passion that had surrounded the POW issue.
Apart from Cambodia and the POW/MIA matter, the Reagan and Bush Administrations
concerned themselves with a third problem — humanitarian issues. Major progress in
negotiations with Vietnam resulted in plans to (1) facilitate emigration from Vietnam of
relatives of Vietnamese-Americans or permanent Vietnamese residents of the United States;
(2) regulate the flow of Vietnamese immigrants to the United States and other countries
under the so-called Orderly Departure Program managed by the U.N. High Commissioner
for Refugees; (3) resolve the issue of the estimated several thousand Amerasians (whose
fathers are Americans and whose mothers are Vietnamese) who reportedly wish to emigrate
from Vietnam to the United States; and (4) obtain release from Vietnamese prison camps and
the opportunity to immigrate to the United States of thousands of Vietnamese who worked
for the United States in South Vietnam or were otherwise associated with the U.S. war effort.
Meanwhile, U.S. officials in Congress and the Administration expressed repeatedly their
concern about the large numbers of political prisoners said to be in Vietnam.
Developments During the Clinton Administration
Early moves to improve relations during the Clinton Administration included the
President’s announcement on July 2, 1993, that the United States would no longer oppose
arrangements supported by France, Japan, and others allowing for resumed international
financial institution aid to Vietnam; however, he said the U.S. economic embargo on
Vietnam would remain in effect. A high-level U.S. delegation visited Hanoi in mid-July to
press for progress on POW/MIAs; the delegation gave the Vietnamese leaders U.S.
documentary evidence that would help settle Vietnamese MIA cases; the delegation also
disclosed that U.S. consular officials would henceforth be stationed in Hanoi. Individual
Members of Congress played an important behind-the-scenes role in encouraging the Clinton
Administration to take many of these, and subsequent, steps.
President Clinton’s September 13, 1993, renewal of his authority to maintain trade
embargoes included an eased version of the one on Vietnam that allowed U.S. companies to
bid on development projects funded by international financial institutions in Vietnam. Also
in September, 1993, the Administration approved $3.5 million in U.S. aid to extend two
humanitarian programs (prostheses and orphans) in Vietnam. On February 3, 1994,
President Clinton ordered an end to the U.S. trade embargo on Vietnam. The action came
after many months of high-level U.S. interaction with Vietnam in resolving POW/MIA cases,
and a January 27, 1994 vote in the Senate urging that the embargo be lifted, language that
was attached to broad authorizing legislation (H.R. 2333). The language was controversial
in the House, but H.R. 2333 passed Congress; it was signed into law (P.L. 103-236) on April
30, 1994.
On January 25, 1995, the United States and Vietnam settled bilateral diplomatic and
property claims and opened liaison offices in Washington and Hanoi on February 1, and
February 3, 1995, respectively. The Treasury Department announced on March 9, 1995, that
it was unblocking accounts in which Vietnam or its nationals had an interest. On July 11,
1995, President Clinton announced that he would establish ambassadorial-level relations
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with Vietnam. The FY1996 State Department Appropriations bill (H.R. 2076) included
language barring funding for full diplomatic relations with Vietnam until more progress was
made on POW/MIA issues. President Clinton vetoed H.R. 2076 on December 19, 1995. On
August 6, 1995, Secretary of State Christopher opened the U.S. Embassy in Hanoi, and
Vietnam’s embassy in Washington opened on August 5, 1995. An attempt in the Senate to
restrict trade ties with Vietnam failed on September 20, 1995.
Controversy continued in 1995 and 1996 over provisions in legislation (H.R. 1561) that
would place conditions on upgrading U.S. relations with Vietnam, and that would admit
additional boat people from camps in Hong Kong and elsewhere to the United States. H.R.
1561 passed Congress in March 1996, but was vetoed by the President, and the veto was
sustained on April 30, 1996. A modified version of the Vietnam provisions in H.R. 2076
was signed by President Clinton on April 26, 1996, as part of H.R. 3019, the Omnibus
Appropriations bill (P.L. 104-134). To comply with the provisions, President Clinton issued
Presidential Determination 96-28 on May 30, 1996, saying that Vietnam is cooperating in
full faith with the United States on POW/MIA issues. On April 10, 1997, the Senate
approved former Vietnam War POW and Member of Congress Pete Peterson as U.S.
Ambassador to Vietnam.
Economic relations steadily improved over the next several years, culminating in the
signing of a bilateral trade agreement in 2000 (see below). While in Vietnam in late June
1997, Secretary of State Albright urged greater economic reform and better human rights;
she signed a bilateral agreement on copyrights and said that the U.S. Trade and Development
Program would conduct business in Vietnam. On December 18, 1997, National Security
Adviser Sandy Berger said the Administration was consulting with Congress on granting
Vietnam a waiver from the Jackson-Vanik amendment that would smooth the way for
Overseas Private Investment Corporation (OPIC) and Export-Import Bank to support U.S.
business activities in Vietnam. On March 11, 1998, President Clinton granted the waiver,
and a formal agreement on OPIC was signed eight days later. In November 1999, OPIC
signed its first financing agreement — a $2.3 million loan to Caterpillar Inc.’s authorized
dealership in Vietnam — for American business in Vietnam since the end of the Vietnam
War. The U.S. Export-Import Bank announced on April 10, 1998 that it was ready to finance
sales to Vietnam. On December 9, 1999, the Ex-Im Bank signed two framework agreements
with the State Bank of Vietnam to facilitate project financing cooperation between the two
agencies.
Recent U.S.-Vietnam Relations
Prime Minister’s Trip to the United States
Vietnamese Prime Minister Phan Van Khai traveled to the United States in June 2005,
the first such visit to the United States by a Vietnamese prime minister since the end of the
Vietnam War. Following their meeting, President Bush and the Prime Minister issued a joint
statement expressing their “intention to bring bilateral relations to a higher plane.” The
President expressed “strong support” for Vietnam’s accession to the WTO and welcomed
Vietnam’s efforts on human rights and religious freedom issues, about which the two leaders
agreed to continue “an open and candid dialogue.” Khai also signed an agreement on
implementing a bilateral International Military Education Training (IMET) program to send
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two Vietnamese officers to the United States for training, reportedly in English or medical
procedures. The two sides also announced an agreement to resume U.S. adoptions of
Vietnamese children, which Hanoi halted in 2002. Protesters criticizing the Vietnamese
government appeared at every stop on his trip.
Economic Ties — The Bilateral Trade Agreement
On December 10, 2001, a sweeping bilateral trade agreement (BTA) between the United
States and Vietnam entered into force. (See CRS Report RL30416, The Vietnam-U.S.
Bilateral Trade Agreement.) Under the BTA, which by law required congressional approval,
the U.S. extended conditional normal trade relations (NTR) status to Vietnam, a move that
significantly reduced U.S. tariffs on most imports from Vietnam. In return, Hanoi agreed to
undertake a wide range of market-liberalization measures, including extending NTR
treatment to U.S. exports, reducing tariffs on goods, easing barriers to U.S. services (such
as banking and telecommunications), committing to protect certain intellectual property
rights, and providing additional inducements and protections for foreign direct investment.
The agreement paved the way for President Bush to extend conditional NTR treatment
to Vietnam. NTR treatment is conditional because Vietnam’s trade status is still subject to
annual Congressional review under the U.S. Trade Act of 1974’s Jackson-Vanik provisions,
which govern trade with non-market economies. On June 1, 2005, President Bush renewed
Vietnam’s year-long waiver of Jackson-Vanik amendment restrictions on bilateral economic
activities. Vietnam has received a presidential waiver every year since 1998. From 1998 to
2002, resolutions disapproving the waivers failed in the House. Disapproval resolutions
were not introduced in 2003 and 2004. In addition to granting Vietnam conditional NTR
treatment, the Jackson-Vanik waiver also allows the U.S. Overseas Private Investment
Corporation (OPIC) and the U.S. Export-Import Bank to support U.S. businesses exporting
to and/or operating in Vietnam.
Table 1. U.S.-Vietnam Trade
(millions of dollars)
U.S. Imports
U.S. Exports to
Total Trade
Trade Balance
from Vietnam
Vietnam
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
-632.6
2002
2,391.7
551.9
2,943.6
-1,839.8
2003
4,472.0
1,291.1a
5,763.1
-3,180.9
2004
5,161.1
1121.9
6,283.0
-4,039.2
Jan - Aug 2004
3,368.1
624.1
3,992.2
(2,744.0)
Jan - Aug 2005
4,111.3
717.9
4,829.2
(3,393.4)
Major Imports
clothing, footwear, wooden furniture, frozen shrimp, petroleum products,
from Vietnam
cashew nuts, coffee
Major Exports to
aircraft, mining equipment, electronic machinery, steel wire, raw cotton,
Vietnam
plastics
Source: U.S. International Trade Commission. Data are for merchandise trade on a customs basis.
a. U.S. exports from 2003 include Vietnam Airlines’ $700 million purchase of several Boeing 777s. U.S.
aircraft exports totaled over $360 million in 2004 and nearly $170 million in the first half of 2005.
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Implementation of the BTA. In the first three years after the BTA was signed,
Hanoi apparently implemented most of its initial commitments. Some observers have
expressed concern that the government has not implemented in law and/or in practice many
of the concessions that were due to be phased in by December 2004, particularly in the
services sector, though many critics tend to accept the argument that the slippages often are
due more to weak capacity rather than to protectionist intentions. This belief may also
explain why the Bush Administration appears not to have harshly criticized Vietnam in those
areas where implementation has been poor or incomplete, with the exception of intellectual
property rights (see below).
U.S.-Vietnam Trade Flows. The BTA led to a sharp rise in U.S.-Vietnam trade,
which in 2004 was worth over $6.2 billion, more than four times the level in 2001 (see Table
1), and nearly thirty times the level when relations were normalized in 1994. The United
States is now Vietnam’s largest trading partner.
Imports of Vietnamese Clothing. Most of the increase in U.S.-Vietnam trade since
2001 has come from a sharp rise in clothing imports from Vietnam, which were over $2.6
billion in 2004, up from the $45 million-$50 million range that Vietnam recorded in 2000
and 2001. By dollar value, clothing is now the largest item the United States imports from
Vietnam. In 2003 and 2004, Vietnam has provided about 3.5% of total U.S. clothing imports
(up from 1.4% in 2002 and 0.1% in 2001, before the BTA went into effect). The BTA
contains no restrictions on Vietnamese textile exports to the United States, but a safeguard
provision would allow the U.S. to impose quotas on textile imports in the event of a surge
of imports. During the congressional debate over the BTA, many Members urged the Bush
Administration to negotiate a bilateral textile agreement soon after the BTA came into effect.
On April 25, 2003, the United States and Vietnam completed nearly three weeks of intense
negotiations by signing a bilateral textile agreement that places quotas on 38 categories of
Vietnam’s clothing exports, including cotton pants and cotton knit shirts/blouses, the two
most important items. The deal was reached after the U.S. side threatened to unilaterally
impose more restrictive quotas if the Vietnamese did not agree to U.S. demands.
Vietnam’s Bid to Join the World Trade Organization (WTO). The final step
toward full legal normalization between the United States and Vietnam would be granting
permanent NTR (PNTR) status to Vietnam. This step, which would require congressional
approval, is likely to be considered in the context of negotiating Vietnam’s accession to the
World Trade Organization (WTO), a goal the United States has supported. January 1, 2005
saw the expiration of the global system of import quotas on textile and apparel products for
WTO members. Because Vietnam is not a WTO member, its clothing industry generally is
a severe disadvantage compared with its competitors that operate under quota-free trade in
textiles and apparel.1 For this reason, after the BTA was signed, Vietnamese leaders set a
goal of joining the WTO by the beginning of 2005. Steadily, Vietnamese leaders have
moved the time frame backward, to the end of 2005 and now to mid-2006. Vietnam has
concluded bilateral accession agreements with several WTO members, including the
European Union, Japan, and China, and currently is negotiating agreements with a number
of countries, including the United States. To avoid a repeat of the experience with China,
which allegedly has not passed the legal instruments to implement many parts of its WTO
1 For the first half of 2005, imports of Vietnamese clothing were up around 2% over the same period
a year earlier, despite Vietnam’s exclusion from the global phase-out of quotas on the textile trade.
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accession agreements, the United States and other trading partners are insisting that Vietnam
show progress on and present drafts of implementing legislation. Vietnam’s National
Assembly is scheduled in 2005 to consider 30 laws, codes, and ordinances affecting nearly
every aspect of commercial life. The full Assembly holds two month-long legislative
sessions, in May and October. Vietnam’s accession to the WTO almost certainly would
require Congress to decide whether or not to extend permanent normal trade relations
(PNTR) status to Vietnam.
Intellectual Property Rights (IPR). Since 2002, the Bush Administration has
placed Vietnam on its “Special 301 watch list” for allegedly poor protection of intellectual
property rights, particularly in the areas of music recordings and trademark protection.2 The
BTA requires Vietnam to make its IPR regime WTO-consistent in 2003. Although it has
made numerous regulatory and legal changes to this end, the Vietnamese government’s IPR
enforcement has been widely faulted.
U.S. Bilateral Economic Assistance to Vietnam. (For more on U.S. aid to
Vietnam, see CRS Report RL32636, U.S. Assistance to Vietnam, by Mark Manyin) As the
normalization process has proceeded, the U.S. has eliminated most of the Cold War-era
restrictions on U.S. aid to Vietnam, and U.S. assistance has increased markedly from around
$1 million when assistance was resumed in 1991 to over $55 million anticipated in FY2005.
The level of assistance has more than doubled since FY2000. By far the two largest
components of the U.S. bilateral aid program are food assistance and health-related
assistance, which together comprised about 60% of the nearly $200 million in aid the United
States has provided to Vietnam since U.S. assistance began to increase substantially in
FY1999. Spending on HIV/AIDS treatment and prevention in Vietnam has risen, especially
since President Bush’s June 2004 designation of Vietnam as a “focus country” eligible to
receive increased funding to combat HIV-AIDS under the President’s Emergency Plan for
AIDS Relief (PEPFAR).3 The United States provided $10 million in PEPFAR funds in
FY2004, and over $27 million for FY2005 through the end of April. Other sizeable
assistance items include de-mining activities, educational exchanges, and programs assisting
Vietnam’s economic reform efforts. 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 and Religious Freedom” section.)
2 “Special 301” refers to Section 182 of the Trade Act of 1974. Since the start of the Special 301
provision in 1989, the USTR has issued annually a three-tier list of countries judged to have
inadequate regimes for IPR protection, or to deny access: (1) priority foreign countries are deemed
to be the worst violators, and are subject to special investigations and possible trade sanctions; (2)
priority watch list countries are considered to have major deficiencies in their IPR regime, but do
not currently warrant a Section 301 investigation; and (3) watch list countries, which maintain IPR
practices that are of particular concern, but do not yet warrant higher-level designations. See CRS
Report 98-454, Section 301 of the Trade Act of 1974, As Amended: Its Operation and Issues
Involving Its Use by the United States, by Wayne Morrison.
3 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.
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The Vietnamese government has asked for increased U.S. aid, and in 2004 invited the
U.S. Peace Corps to visit Vietnam to discuss opening programs in Vietnam. In May 2004,
Vietnam was not selected as one of the first 16 countries eligible for the Millennium
Challenge Account (MCA), President Bush’s major new foreign aid initiative. Vietnam was
deemed ineligible despite meeting the technical requirements for MCA eligibility because
it scored very low on some of the indicators used to measure political freedom. In September
2004, Vietnam again received low scores on the indicators of political and civil liberties
maintained by the Millennium Challenge Corporation to determine eligibility for the MCA.
Bird Flu. Since late December 2003, there have been over 90 confirmed cases —
including over 40 deaths — of avian influenza in Vietnam. According to USAID, the H5N1
virus is believed to be endemic in Vietnam’s waterfowl population, which is estimated to be
around 250 million birds, including 20 million to 60 million ducks and geese. In 2005, the
Vietnamese government began intensifying its response to the disease, including expanded
cooperation with international health agencies and foreign aid donors. Vietnam has begun
a mass poultry vaccination program to try to halt the disease’s spread. The wartime and
tsunami supplemental, H.R. 1268, which was passed by the House on May 5 and the Senate
on May 10, 2005, includes $25 million to help combat the disease, including approximately
$7 million to be used in Vietnam.
Human Rights and Religious Freedom
In recent years, tensions between the United States and Vietnam over human rights
issues have increased. The United States and Vietnam did not hold their annual human rights
dialogue in 2003 and 2004 “due to insufficient progress” on key human rights issues. In his
first major speech after assuming his post in 2005, U.S. Ambassador Michael Marine said
that there must be “tangible progress from Vietnam in the areas of human rights and religious
freedom...if relations between our two countries are to continue to blossom.”
It is difficult to make country-wide generalizations about the state of human rights in
Vietnam, a one-party, authoritarian state ruled by the Vietnamese Communist Party (VCP).
For the past several years, the VCP appears to have followed a strategy of permitting most
forms of personal and religious expression while selectively repressing individuals and
organizations that it deems a threat to the party’s monopoly. On 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. It also
has permitted most Vietnamese to observe the religion of their choice and has allowed a
moderately vibrant press to sprout, so long as it keeps criticism of the government to “safe”
issues like corruption, economic policy, nature conservation and environmental pollution,
and the trafficking of women and children.
On the other hand, the government in recent years reportedly has cracked down harshly
on anti-government protests by various ethnic minority groups, most prominently the
Montagnards in the country’s Central Highlands and the Hmong in the Northwest Highlands,
sending hundreds fleeing across the border into Cambodia. In his briefing to accompany the
State Department’s 2004 religious freedom report, Ambassador-at-Large for International
Religious Freedom John Hanford placed particular emphasis on the “widespread,”
“systematic,” “government-sponsored” closing of churches and forced renunciations of faith
in these regions. Reportedly, the minority groups’ complaints mainly have been against local
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government corruption and encroachment of ancestral lands by ethnic Vietnamese settlers.
Furthermore, in its effort to control the Internet, the central government has stepped up
repression of so-called cyber dissidents for alleged offenses such as criticizing the signing
of land-border agreements with China and calling for greater political accountability and
political competition. During his meeting with Prime Minister Khai in June 2005, President
Bush reportedly raised human-rights concerns, particularly Hanoi’s controls over religious
groups and repression of ethnic groups in the Central Highlands.
“Country of Particular Concern” Designation. In September 2004, for the first
time Vietnam was designated as a “country of particular concern” (CPC) in the State
Department’s International Religious Freedom Report. On May 5, 2005, the State
Department announced it had reached an agreement on religious freedom with Vietnam. The
agreement, which has not been released, enabled Vietnam to avoid punitive consequences,
such as sanctions, associated with its CPC designation. According to a public briefing by
Ambassador Hanford, under the agreement, the Vietnamese government committed to fully
implement new legislation on religious freedom and render previous contradictory
regulations obsolete, instruct local authorities to strictly and completely adhere to the new
legislation and ensure their compliance, facilitate the process by which religious
congregations are able to open houses of worship, and give special consideration to prisoners
and cases of concern raised by the United States during the granting of prisoner amnesties.
The State Department’s announcement noted a number of steps recently taken by the
Vietnamese government, notably the release of several prominent religious prisoners, the
issuance of a new law streamlining the application process for religious groups registering
with the government, and the issuance of prime ministerial directives prohibiting forced
renunciations of faith and allowing Protestant “house churches” in ethnic minority provinces
to operate if they renounce connections to certain expatriate groups, particularly the
Montagnard Foundation, which is based in the United States. According to information
provided by the State Department, the agreement does not appear to carve out new ground
but instead focuses on committing Vietnam to fully implementing its new laws and
regulations and to ensuring the compliance of local officials, a goal that often has proved
elusive in the past. Vietnam will remain a CPC, at least until the next religious freedom
report is released in the fall of 2005. The agreement has been faulted by human rights groups
on a number of grounds, including the following: the Vietnamese government still retains
for itself the right to decide which religious organizations and activities are legal; the
government’s recent announcements do not list punishments for violators of religious
freedoms; the agreement does not deal with issues concerning non-Christian groups that
claim to have been repressed by the government; and religious persecution continues in the
Central Highlands despite the agreement.
The Vietnam Human Rights Act. In large measure due to Vietnam’s crackdowns
in the Central Highlands, attempts have been made in the 107th and 108th Congresses to link
U.S. aid to the human rights situation in Vietnam. The most prominent example, the
Vietnam Human Rights Act (H.R. 1587/S. 2784 in the 108th Congress, H.R. 3190 in the
109th Congress), proposes capping existing non-humanitarian U.S. assistance programs to
the Vietnamese government at FY2005 levels (FY2004 for H.R. 1587) if the President does
not certify that Vietnam is making “substantial progress” in human rights, including religious
freedom. At present, the newly signed bilateral IMET agreement is the only current aid
program that would be affected, because it is the only U.S. non-humanitarian assistance that
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is given directly to the government of Vietnam. The act also would require the executive
branch to produce annual reports on Vietnam’s human rights situation and would authorize
funds to promote democracy in Vietnam and to overcome the jamming of Radio Free Asia.
Critics argue that the bill could chill the warming of bilateral political and security ties that
has been taking place slowly over the past several months. The Vietnamese government has
strongly condemned the bill as an interference in its internal affairs. Proponents of the
measure argued that it would have pressured the Vietnamese government to improve the
country’s human rights situation. On July 19, 2004, by a vote of 323-45, the House passed
H.R. 1587. Attempts to include stripped-down versions of H.R. 1587 in the FY2005
Consolidated Appropriations Act (H.R. 4818) did not succeed. In the 109th Congress, H.R.
3190 has not yet received committee action. Another stripped-down version of the act was
included in the House-passed version of the Foreign Relations Authorization Act of FY2006
and 2007 (H.R. 2601), which has yet to receive action in the Senate. Unlike previous
versions of the Vietnam human rights act, the language in H.R. 2601 does not contain
provisions for a Presidential waiver. The act also authorizes $2 million to assist
organizations that promote democracy and human rights in Vietnam.
Political and Security Ties
Vietnam and the United States gradually have been expanding their political and
security ties, though these have lagged far behind the economic aspect of the relationship.
In the past two years, however, Vietnam’s leadership appears to have decided to expand their
country’s ties to the United States, as shown by a number of indicators:
! since late 2004 the Vietnamese government has responded positively to
many U.S. human rights demands;
! In August 2004, drug enforcement officials from various U.S. agencies held
a week-long training session in Vietnam, the first such joint counternarcotics
training session;
! three U.S. naval vessels have made calls in Vietnamese ports since
November 2003;
! there have been several meetings between senior military officials, including
Vietnamese Defense Minister Pham Van Tra’s visit to Washington in
November 2003;
! Vietnamese military officers increasingly participate in U.S.-led conferences
and academic programs; and
! during Prime Minister Khai’s visit to the United States, the two countries
announced a bilateral agreement to implement an International Military
Education and Training (IMET) program will be announced during his visit.
Since FY2002, the Bush Administration has requested funds for Expanded
International Military Education and Training (E-IMET) courses to enhance
English language proficiency among Vietnamese military officers. No funds
have been disbursed, however, because Vietnam and the United States have
not yet signed an IMET agreement, reportedly due to the Vietnamese
Ministry of Defense’s concerns about outside scrutiny of its officers for
human rights abuses.
Two congressional caucuses on Vietnam have been formed in recent years, one calling for
more attention to be paid to the human rights situation in Vietnam and the other working to
promote bilateral relations.
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There are a number of possible reasons Vietnam seeks to upgrade its relationship with
the United States. Vietnam has an interest in facilitating its application to join the World
Trade Organization (WTO), a move that would require U.S. (and congressional) approval
and could occur in 2005 or 2006. At the strategic level, Vietnam may be seeking to offset
China’s increased economic, political, and cultural influence in Southeast Asia.
Additionally, the Vietnamese hope to smooth the way for President Bush’s expected trip to
Hanoi in 2006, when Vietnam hosts the Asia-Pacific Economic Cooperation (APEC) forum
summit.
Agent Orange. Vietnamese leaders have pressed the U.S. for compensation for Agent
Orange victims, and for assistance locating the remains of Vietnam’s soldiers who are still
missing from fighting with the United States. During President Bill Clinton’s five-day trip
to Vietnam in 2000, the United States took some small steps toward meeting these demands,
including agreeing to set up a joint research study on the effects of dioxin/Agent Orange and
the provision of materials to help locate the estimated 300,000 Vietnamese troops missing
from the Vietnam War. Over three million Vietnamese suffering from the alleged effects of
Agent Orange were part of a class action suit filed in U.S. Federal District Court in Brooklyn
against the chemical companies that manufactured the defoliant. The case was dismissed in
March 2005, in a ruling that was widely publicized in Vietnam. In April 2005, the Bush
Administration discontinued funding of a grant to conduct research in Vietnam on the
possible relationship between Agent Orange and birth defects. The justification for the
decision was that the Vietnamese Ministry of Health had not given its approval for the study.
Human Trafficking. On June 3, 2005, the State Department issued its fifth 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;,” however, it was removed from its 2004 listing as a “Tier 2 Watch-list” country
because “it is making significant efforts” to combat trafficking. The State Department issues
interim reports on the countries included on the watch list.
Vietnam War Resettlement Programs. In 2005, the United States and Vietnam
plan to announce the reopening of certain categories of the Orderly Departure Program, under
which over 550,000 Vietnamese were resettled in the United States between 1979 and 1999.
During this time, another 300,000 Vietnamese came to the United States through other
resettlement programs.
POW/MIA Issues
In recent years, the United States and Vietnam have devoted increased resources to
POW/MIA research and analysis. By 1998 a substantial permanent 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 had allowed
U.S. analysts access to numerous POW/MIA-related archives and records. The U.S. Defense
Department has reciprocated by allowing Vietnamese officials access to U.S. records and
maps to assist their search for Vietnamese MIAs. The increased efforts have led to
substantial understanding about the fate of several hundred of the over 2,000 Americans still
unaccounted for in Indochina. On September 21, 1998, U.S. Ambassador to Vietnam
Peterson told the media in reference to Americans still listed as missing from the Vietnam
War that “it is very, very, very unlikely that you would expect to see any live Americans
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discovered in Vietnam, Cambodia, or Laos.” Official U.S. policy, however, does not remove
a name from the rolls of those unaccounted for unless remains are identified. (For more on
the POW/MIA issue, see CRS Issue Brief IB92101, POWs and MIAs: Status and Accounting
Issues.)
Vietnam’s Situation
Ever since communist North Vietnamese forces defeated U.S.-backed South Vietnam
in 1975, reunified Vietnam has been struggling with how to maintain a balance between two
often contradictory goals — maintaining ideological purity and promoting economic
development. For the first decade after reunification, the emphasis was on the former. By
the mid-1980s, disastrous economic conditions 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 central state
planning, cut subsidies to state enterprises, reformed the price system, and opened the
country to foreign direct investment.
Economic Developments
For the first decade after the doi moi reforms were launched, Vietnam became one of
the world’s fastest-growing countries, averaging around 8% annual GDP growth from 1990
to 1997. Agricultural production doubled, transforming Vietnam from a net food importer
into the world’s second-largest exporter of rice and third-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. A substantial portion of the country’s growth
was driven by foreign investment, primarily from Southeast Asian sources, most of which
the government channeled into the country’s state-owned sector.
By the mid-1990s, however, the economic reform movement had stalled, as
disagreement between reformers and conservatives paralyzed economic decision-making.
The economy staggered after the 1997 Asian financial crisis, as real GDP growth fell to 5.8%
in 1998, and 4.8% in 1999. Foreign direct investment (FDI) plummeted to $600 million in
1999, the lowest level since 1992.
Vietnam’s economic situation has improved since the financial crisis. In 2000, GDP
growth rebounded to the 7% level — one of the highest in Asia — and has remained there
since. FDI commitments have increased, to around 8% of GDP in 2003. However, Vietnam
remains a poor country; about one-third of Vietnamese children under five years of age suffer
from malnutrition. Per capita gross domestic product (GDP) is estimated at just over $410,
equivalent to $2,300 when measured on a purchasing power parity basis. Growth continues
to be impeded by Vietnam’s failure to tackle its remaining structural economic problems —
including unprofitable state-owned enterprises, a weak banking sector, massive red tape, and
bureaucratic corruption — as major impediments to continued growth. In recent months,
there have been signs that the government has redoubled its commitment to economic
reforms.
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,
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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 privately owned firms employ nearly a quarter of the workforce.
Most of the giant state-owned enterprises (SOEs), meanwhile, are functionally bankrupt, and
require significant government subsidies and assistance to continue operating. In 1990, 2.5
million people were employed by state firms. In 2001, this figure was down to 1.6 million.
Political Trends
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
Communist Party in politics and society, and Vietnam remains a one-party state. Although
personal freedoms have increased dramatically, Hanoi still does not tolerate signs of
organized political dissent. In subtle ways, however, the decision to prioritize economic
development above ideological orthodoxy has led the Party to slowly loosen its former
stranglehold on political power. Recognizing that Party cadres often were ill-suited to
administering its own policy directives, for instance, the Party created a more powerful and
professionalized executive branch in the 1992 constitution. The new constitution also gave
more influence to the legislative branch, the National Assembly, in part because the Party
realized it needed to make the organs of government more responsive at the grass-roots level.
Over the past decade, the Assembly has slowly and subtly increased its influence. In
December 2001, constitutional amendments were passed allowing the Assembly to hold no-
confidence votes against the government, and to dismiss the president and prime minister
(though not the general secretary of the Party).
Rapid economic growth, increased integration with the global economy, and weak domestic
institutions have caused a rise in corruption and a decline in the Vietnamese Communist Party’s
(VCP) authority, alarming many Party hard-liners. As a result, Vietnamese policy-making in the
late 1990s was virtually paralyzed, as reformist and conservative elements within the Party
battled to a stalemate over how to deal with the major economic and demographic forces
transforming the country. The former group called for a steady roll-out of new reforms and
increased integration into the global economy. The latter feared that economic reform will lead
to the loss of government control over the economic means of production and financial and
monetary levers; they also fear the possible infiltration of heterodox outside ideas. Vietnam’s
consensus-based decision-making style, combined with the absence of any paramount leader, has
meant that these divisions produced only piecemeal economic reforms, though implementing the
BTA may force more significant changes.
The Ninth and Tenth Party Congresses. The decision to sign the BTA appears to have
broken the policymaking logjam by fashioning a new consensus in favor of a reformist push that was
effectively endorsed by the leadership changes at Ninth Party Congress in April 2001. Vietnamese
Communist Party Congresses, which are held every five years, often are the occasions for major
leadership realignments and set the direction for Vietnam’s economic, diplomatic, and social policies.
At its Ninth Party Congress, Vietnam’s Communist Party selected Nong Duc Manh as its Secretary
General, the Party’s top post. Manh (b. September 11, 1940) is generally considered to be more
moderate than his predecessor, Le Kha Phieu (b. December 27, 1931), a conservative who was
ousted after a heated struggle. Significantly, Manh’s selection was made possible when the Party’s
Central Committee rejected — an unprecedented move — the Politburo’s decision to endorse Phieu
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for another term. Manh, the former speaker of Vietnam’s National Assembly, is an ethnic Tay,
making him the first member of an ethnic minority to head Vietnam’s Communist Party. In other
significant moves, the Ninth Party Congress reduced the size of the Politburo (from 19 to 15
members), retired seven Politburo members, and shrunk the Central Committee from 170 to 150
members.
Looking ahead to the 10th Party Congress in 2006, Vietnam’s leadership is trying to confront
the problem of how to reverse the Communist Party’s declining legitimacy. Attracting new
recruits into the Party has become increasingly difficult, particularly among young Vietnamese
— a major problem since more than half of the population is under the age of 25. Some
prominent retired military leaders, including war hero General Vo Nguyen Giap, have publicly
called for the Party to become more democratic. A key issue for the VCP leadership is
combating official corruption. Vietnam regularly is ranked near the bottom of surveys of foreign
executives on corruption in various countries.
Unrest in the Central Highlands Region. Additionally, over the past several
years, there have been reports of protests and riots by peasants in the Central Highlands
provinces against local government corruption and by ethnic minorities against encroachment
on their ancestral lands by recent settlers, many of whom moved under government-
sponsored resettlement programs. In February 2001, thousands of minorities, primarily from
Montagnard groups, protested in the Central Highlands, the largest-scale social unrest in
years. The Vietnamese government dispatched military troops and local police to quell the
unrest, and in the spring of 2001 launched a crackdown against the protesters. There are
reports that the government has continued its crackdown, and in April 2004, thousands of
protesting Montagnards reportedly clashed violently with police and local authorities.
Speaking before Vietnam’s National Assembly, a deputy prime minister accused the
Montagnard Foundation, a U.S.-based group of Montagnard exiles, for organizing the
demonstrations, but acknowledged that the government’s “inefficiency and weaknesses”
have contributed to the continued protests in the Central Highlands. In August 2004, the
government reportedly decided it temporarily will stop sending people to resettle in new
economic zones in the Central Highlands. There have been reports — denied by Hanoi
officials — that the Vietnamese government arrested scores of Montagnard Christians in the
Central Highlands in December 2004, at the same time that Cambodia reportedly closed its
border to asylum seekers from Vietnam. In February 2005, the government declared it would
allow outlawed “house churches” to operate provided they have no connection to FULRO,
the United Front for the Liberation of Oppressed Races, the Montagnard guerrilla group that
fought alongside the United States during the Vietnam War. A former FULRO leader, Kok
Ksor, is the president and founder of the Montagnard Foundation.
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. Over seven hundred 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 refugees and therefore entitled to asylum. While most of these are
being resettled in the United States, Canada, or Finland, over thirty have returned to Vietnam
following a January 25, 2005 agreement between UNHCR, Cambodia, and Vietnam in which
Hanoi agreed that those returning to Vietnam would not be punished, discriminated against,
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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. Over 200 individuals, including many who have been recognized as refugees
by UNHCR, have 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.
Foreign and Defense Policy
For many years, a major impediment to Vietnam’s development was the strong
international sanctions imposed in response to Vietnam’s 1978 invasion and subsequent 11-
year occupation of Cambodia. Faced with a cutoff of much aid from the Soviet bloc, the
Vietnamese in the early 1990s increased their flexibility on a Cambodian settlement, moved
to accommodate China on sensitive issues, and stepped up action on the POW/MIA and
other humanitarian issues with the United States. In the mid-1990s, Hanoi continued its
“omnidirectional” policy of rejoining the world political community by joining the regional
political group, the Association of Southeast Asian Nations (ASEAN), the regional security
forum, the ASEAN Regional Forum (ARF), and the regional economic group, the Asian
Pacific Economic Cooperation (APEC) forum. An issue that may be considered in the 10th
Party Congress in 2006 is how much continued utility Vietnam gains from its
omnidirectional foreign policy, which has successfully restored cordial relations with the rest
of the world, but has left Vietnam without truly warm relations with any one country or
grouping of countries.
In recent years, Hanoi has improved ties with many of its neighbors. Most significantly,
Vietnam has moved to fully normalize relations with mainland China. Following Chinese
Prime Minister Zhu Rongji’s four-day visit to Vietnam in early December, for instance, the
two sides signed a long-elusive land border treaty on December 30, 1999. In late December
2000, Beijing and Hanoi signed an agreement establishing the two countries’ sea border in
the Gulf of Tonkin. The two countries, however, still have overlapping claims to the Spratly
Island chain in the South China Sea, differences that led to military clashes in the late 1980s.
Vietnam reportedly joined other ASEAN countries in opposing China’s efforts to make the
December 2005 “East Asia Summit” meeting exclusive to ASEAN, China, Japan, and the
Koreas. Instead, Australia, New Zealand, and India have been invited to attend.
LEGISLATION
H.R. 967 (Saxton). Prohibits normal trade relations (NTR) treatment from being
extended to the products of any country the government of which engages in certain
violations of human rights. Introduced February 17, 2005; referred to House committee.
Referred to the House Committee on Ways and Means Subcommittee on Trade.
H.R. 1130 (Waters). The Jubilee Act of 2005. Provides for the cancellation of debts
owed to international financial institutions by poor countries, including Vietnam. Introduced
March 3, 2005; referred to the House Committee on Financial Services.
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H.R. 1450 (Tancredo). Requires additional tariffs be imposed on products of any
nonmarket economy country, including Vietnam, until the President certifies to the Congress
that the country is a market economy country. Introduced March 17, 2005; referred to the
House Committee on Ways and Means.
H.R. 2601 (C. Smith). The Foreign Relations Authorization Act of fiscal years 2006
and 2007. Section 946 links increases in non-humanitarian aid to the Vietnamese
government above the FY2005 level to Vietnam’s human rights situation. The language
does not provide for a Presidential waiver. $2 million is authorized to organizations that
promote democracy and human rights in Vietnam. Section 106 authorizes $9.1 million
overcome the jamming of Radio Free Asia by Vietnam. Introduced May 24, 2005; passed
by the House July 20, 2005 (351 - 78).
H.R. 2862 (Wolf). The Departments of Commerce, State, Justice, and Related
Agencies Appropriations Act of 2006. House Appropriations Committee report “urges the
Secretary of State to continue to monitor and promote religious freedom and human rights”
in Vietnam and expresses support for Radio Free Asia to increase Vietnamese language
broadcasts and overcome Vietnam’s anti-jamming activities. Introduced June 10, 2005;
passed by the House June 16, 2005 (418-7).
H.R. 3057 (Kolbe). FY2006 Foreign Operations Act. Senate version directs that $4
million be made available for programs and activities for the Central Highlands; condemns
Cambodia’s forcible repatriation of Vietnamese refugees and calls for UNHCR to be
permitted to review their cases. Introduced June 24, 2005; passed by the House June 28,
2005 (393-32); passed by the Senate July 20, 2005 (98-1); currently in conference.
H.R. 3190 (C. Smith). The Vietnam Human Rights Act of 2005. Bans increases (over
FY2005 levels) in non-humanitarian aid to the Vietnamese government if the President does
not certify that Vietnam is making “substantial progress” in human rights. Allows the
President to waive the cap on aid increases. Authorizes funds to promote democracy in
Vietnam and to overcome the jamming of Radio Free Asia. Introduced June 30, 2005;
referred to House International Relations Committee.
H.R. 3283(English)/S. 1421 (Collins). Amends Tariff Act of 1930 to make
countervailing duties applicable to actions by nonmarket economies. H.R. 3283 introduced
July 14, 2005; passed by the House July 27, 2005 (255 - 168); referred to Senate Finance
Committee. S. 1421 introduced July 19, 2005; referred to Senate Finance Committee.
H.Res. 415 (Sanchez). Expresses the sense of the House that Hanoi needs to do more
to resolve claims of property reportedly confiscated under the period of communist rule.
Introduced July 28, 2005; referred to House International Relations Committee.
S. 599 (Kerry)/H.R. 2816 (Neal). Eliminates tariffs on certain types of tuna imported
from ASEAN member countries (except Burma). S. 599 introduced March 10, 2005;
referred to Senate Committee on Finance. H.R. 2816 introduced June 8, 2005; referred to
House Ways and Means Committee.
CRS-16
CRS Issue Brief for Congress
Received through the CRS Web
The Vietnam-U.S. Normalization Process
Updated October 18, 2005
Mark E. Manyin
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress
CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
U.S.-Vietnam Relations, 1975-1998
Policy Initiatives During the Carter Administration
Developments During the Reagan and Bush Administrations
Developments During the Clinton Administration
Recent U.S.-Vietnam Relations
Prime Minister’s Trip to the United States
Economic Ties — The Bilateral Trade Agreement
Implementation of the BTA
U.S.-Vietnam Trade Flows
Imports of Vietnamese Clothing
Vietnam’s Bid to Join the World Trade Organization (WTO)
Intellectual Property Rights (IPR)
U.S. Bilateral Economic Assistance to Vietnam
Bird Flu
Human Rights and Religious Freedom
Political and Security Ties
Agent Orange
Human Trafficking
Vietnam War Resettlement Programs
POW/MIA Issues
Vietnam’s Situation
Economic Developments
Political Trends
The Ninth and Tenth Party Congresses
Unrest in the Central Highlands Region
Refugees in Cambodia
Foreign and Defense Policy
LEGISLATION
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The Vietnam-U.S. Normalization Process
SUMMARY
U.S.-Vietnam diplomatic and economic
the existing East Asian order. The next, and
relations remained essentially frozen for more
final, step toward full normalization would be
than a decade after the 1975 communist vic-
granting permanent normal trade relations
tory in South Vietnam. Relations took major
status to Vietnam. This step, which would
steps forward in the mid-1990s, particularly in
require congressional approval, almost cer-
1995, when the two sides opened embassies in
tainly will be considered in the context of
each other’s capitals. Since then, the normal-
negotiating Vietnam’s accession to the World
ization process has accelerated and bilateral
Trade Organization (WTO). Vietnam hopes
ties have expanded. Congress has played a
to join the WTO in 2005, though some ana-
significant role in the normalization process.
lysts believe this is an overly optimistic time
frame.
The most important step toward normal-
ization since 1995 was the signing of a sweep-
Recently, clashes over Vietnam’s human
ing bilateral trade agreement (BTA), which
rights record and trade friction over shrimp,
was approved by Congress and signed by
catfish, and textiles have soured relations
President Bush in 2001. Under the BTA, the
somewhat since the heady days after the BTA
U.S. extended conditional normal trade rela-
was signed. At the same time, some U.S.
tions (NTR) to Vietnam. In return, Hanoi
analysts have suggested that the Bush Admin-
agreed to a range of trade liberalization mea-
istration seek to expand the as yet embryonic
sures and market-oriented reforms. Trade —
security relations between Hanoi and Wash-
primarily imports from Vietnam — has surged
ington, arguing that Vietnam and the United
since the BTA was signed. The United States
States share suspicions of China’s expanding
is now Vietnam’s largest trading partner.
influence in Southeast Asia. Other observers,
however, have argued there is little evidence
Until recently, each step in improving
that Hanoi seeks to balance Beijing’s rising
bilateral ties has brought controversy, albeit at
power. Regardless of motivation, since 2003
diminishing levels. U.S. opponents in Con-
the two sides slowly have expanded military-
gress and elsewhere have argued that Vietnam
to-military ties, albeit primarily in symbolic
maintains a poor record on human, religious,
rather than substantive ways.
and labor rights. Opposition has also come
from groups arguing that Vietnam has not
Vietnam and the United States gradually
done enough to account for U.S. Prisoners of
have been expanding their political and secu-
War/Missing in Action (POW/MIAs) from the
rity ties, symbolized by the Vietnamese Prime
Vietnam War, though this argument has di-
Minister’s visit to the United States in June
minished markedly in recent years.
2005, the first such trip by a Vietnamese head
of state. President Bush spoke of his desire to
Forces favoring normalization have
move bilateral relations to “a higher plane,”
included those in Congress and elsewhere
backed Vietnam’s bid to enter the WTO, and
reflecting a strong U.S. business interest in
the two countries signed an international
Vietnam’s reforming economy and American
military education training (IMET) agreement.
strategic interests in working with U.S. friends
The two countries share a strategic interest in
and allies to promote stability and develop-
offsetting China’s increased economic, politi-
ment by integrating Vietnam more fully into
cal, and cultural influence in Southeast Asia.
Congressional Research Service ˜ The Library of Congress
IB98033
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MOST RECENT DEVELOPMENTS
Health and Human Services Secretary Michael Leavitt visited Vietnam in mid-October
as part of his tour of Southeast Asian countries that have experienced outbreaks of the H5N1
avian influenza. During his visit, the two countries signed a bilateral health cooperation
agreement. Vietnam also agreed with a number of U.N. agencies to conduct a joint
prevention program. Since late December 2003, there have been over 90 confirmed cases
— including over 40 deaths — of avian influenza in Vietnam.
BACKGROUND AND ANALYSIS
U.S.-Vietnam Relations, 1975-1998
U.S.-Vietnam diplomatic and economic relations remained essentially frozen for over
a decade after the 1975 communist victory in South Vietnam, despite a few U.S. overtures
during the Carter Administration that were controversial domestically and were ultimately
thwarted by Vietnamese actions.
Policy Initiatives During the Carter Administration
In March 1977, President Carter sent a commission to Vietnam. The United States no
longer vetoed Vietnam’s application for U.N. membership, paving the way for the July 20,
1977 U.N. Security Council recommendation — undertaken by consensus, without formal
vote — that Vietnam be admitted to the United Nations. The United States proposed that
diplomatic relations quickly be established between the United States and Vietnam, after
which the United States would lift export and asset controls on Vietnam. The Vietnamese
responded that they would neither agree to establish relations nor furnish information on U.S.
POW/MIAs until the United States pledged to provide several billion dollars in postwar
reconstruction aid. Subsequently, they modified this position and provided some limited
information on MIAs, even though the United States provided no aid. The U.S. Congress
responded unfavorably to the Carter Administration initiatives and the Vietnamese reaction.
In 1977, both houses of Congress went on record as strongly opposing U.S. aid to Vietnam.
Vietnamese actions in 1978 in particular had a long-term negative effect on
U.S.-Vietnamese relations. Vietnam expelled hundreds of thousands of its citizens (many
of Chinese origin) who then became refugees throughout Southeast Asia; aligned itself
economically and militarily with the USSR; and invaded Cambodia, deposing the
pro-Chinese Khmer Rouge regime and imposing a puppet Cambodian government backed
by 200,000 Vietnamese troops. China conducted a one month military incursion along
Vietnam’s northern border in 1979 and kept strong military pressure on the North until 1990.
In the face of these developments, the Carter Administration halted consideration of
improved relations with Vietnam. It worked closely with the members of the Association
of Southeast Asian Nations (ASEAN — then made up of Indonesia, Malaysia, the
Philippines, Singapore and Thailand) to condemn and contain the Vietnamese expansion and
to cope with the influx of refugees from Indochina.
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Developments During the Reagan and Bush Administrations
The Reagan Administration opposed normal relations with Hanoi until there was a
verified withdrawal of Vietnamese forces from Cambodia, a position amended in 1985 to
include a verified withdrawal in the context of a comprehensive settlement. Administration
officials also noted that progress toward normal relations depended on Vietnam fully
cooperating in obtaining the fullest possible accounting for U.S. personnel listed as prisoners
of war/missing in action (POW/MIAs).
As Vietnam withdrew forces from Cambodia in 1989 and sought a compromise peace
settlement there, the Bush Administration decided on July 18, 1990, to seek contacts with
Hanoi in order to assist international efforts to reach a peace agreement in Cambodia.
Regarding the issue of the POW/MIAs, following a visit to Hanoi by a U.S. presidential
delegation in 1987, Vietnam returned hundreds of sets of remains said to be those of U.S.
MIAs. Some, but not most, were confirmed as American. Altogether, from 1974 to 1992,
Vietnam returned the remains of over 300 Americans. Virtually all U.S. analysts agree that
the Vietnamese “warehoused” several hundred remains and tactically released them in
increments. The number of such remains and whether any are still held, is not known with
any certainty. (For details, see CRS Issue Brief IB92101, POWs and MIAs: Status and
Accounting Issues.)
In April 1991, the United States laid out a detailed “road map” for normalization with
Vietnam, welcomed Vietnam’s willingness to host a U.S. office in Hanoi to handle
POW/MIA affairs, and pledged $1 million for humanitarian aid (mainly prosthetics) to
Vietnam. The U.S. office began operation in mid-1991, and the aid was transferred by the
end of FY1991. Also in 1991, the United States eased travel restrictions on Vietnamese
diplomats stationed at the United Nations in New York and on U.S. organized travel to
Vietnam.
In 1992, Vietnamese cooperation on POW/MIA matters improved, especially in the area
of allowing U.S. investigators access to pursue “live sightings” reports. Important
developments encouraged U.S. officials, armed with evidence (including photographs of
extensive Vietnamese archival information on U.S. POW/MIAs) to request greater access
to such data. Vietnamese representatives agreed. The United States pledged, and
subsequently paid out, $3 million of humanitarian aid (mainly prosthetics and aid to
abandoned or orphaned children) for Vietnam; agreed to restore direct telecommunications
with Vietnam; agreed to allow U.S. commercial sales to meet basic human needs in Vietnam;
and lifted restrictions on projects in Vietnam by U.S. nongovernmental organizations. The
United States pledged and provided a disaster assistance grant to Vietnamese flood victims
and provided additional aid to help Vietnam with malaria problems. In November 1992, the
United States lifted restrictions on U.S. telephone service to Vietnam, allowing direct service
between the two countries. In December, the United States eased some restrictions on U.S.
companies doing business in Vietnam.
Coinciding with these developments, the Senate Select Committee on POW/MIA affairs
conducted what many consider the most extensive independent investigation of the
POW/MIA issue undertaken. The committee, chaired by John Kerry and vice-chaired by
Bob Smith, operated from August 1991 to December 1992. In early 1993, the committee
issued its report, which concluded that there was “no compelling evidence” that POWs were
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alive after the U.S. withdrawal from Vietnam, and that although there was no “conspiracy”
in Washington to cover up live POWs, the U.S. government had seriously neglected and
mismanaged the issue, particularly in the 1970s. The committee’s televised hearings played
a major role in defusing much of the passion that had surrounded the POW issue.
Apart from Cambodia and the POW/MIA matter, the Reagan and Bush Administrations
concerned themselves with a third problem — humanitarian issues. Major progress in
negotiations with Vietnam resulted in plans to (1) facilitate emigration from Vietnam of
relatives of Vietnamese-Americans or permanent Vietnamese residents of the United States;
(2) regulate the flow of Vietnamese immigrants to the United States and other countries
under the so-called Orderly Departure Program managed by the U.N. High Commissioner
for Refugees; (3) resolve the issue of the estimated several thousand Amerasians (whose
fathers are Americans and whose mothers are Vietnamese) who reportedly wish to emigrate
from Vietnam to the United States; and (4) obtain release from Vietnamese prison camps and
the opportunity to immigrate to the United States of thousands of Vietnamese who worked
for the United States in South Vietnam or were otherwise associated with the U.S. war effort.
Meanwhile, U.S. officials in Congress and the Administration expressed repeatedly their
concern about the large numbers of political prisoners said to be in Vietnam.
Developments During the Clinton Administration
Early moves to improve relations during the Clinton Administration included the
President’s announcement on July 2, 1993, that the United States would no longer oppose
arrangements supported by France, Japan, and others allowing for resumed international
financial institution aid to Vietnam; however, he said the U.S. economic embargo on
Vietnam would remain in effect. A high-level U.S. delegation visited Hanoi in mid-July to
press for progress on POW/MIAs; the delegation gave the Vietnamese leaders U.S.
documentary evidence that would help settle Vietnamese MIA cases; the delegation also
disclosed that U.S. consular officials would henceforth be stationed in Hanoi. Individual
Members of Congress played an important behind-the-scenes role in encouraging the Clinton
Administration to take many of these, and subsequent, steps.
President Clinton’s September 13, 1993, renewal of his authority to maintain trade
embargoes included an eased version of the one on Vietnam that allowed U.S. companies to
bid on development projects funded by international financial institutions in Vietnam. Also
in September, 1993, the Administration approved $3.5 million in U.S. aid to extend two
humanitarian programs (prostheses and orphans) in Vietnam. On February 3, 1994,
President Clinton ordered an end to the U.S. trade embargo on Vietnam. The action came
after many months of high-level U.S. interaction with Vietnam in resolving POW/MIA cases,
and a January 27, 1994 vote in the Senate urging that the embargo be lifted, language that
was attached to broad authorizing legislation (H.R. 2333). The language was controversial
in the House, but H.R. 2333 passed Congress; it was signed into law (P.L. 103-236) on April
30, 1994.
On January 25, 1995, the United States and Vietnam settled bilateral diplomatic and
property claims and opened liaison offices in Washington and Hanoi on February 1, and
February 3, 1995, respectively. The Treasury Department announced on March 9, 1995, that
it was unblocking accounts in which Vietnam or its nationals had an interest. On July 11,
1995, President Clinton announced that he would establish ambassadorial-level relations
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with Vietnam. The FY1996 State Department Appropriations bill (H.R. 2076) included
language barring funding for full diplomatic relations with Vietnam until more progress was
made on POW/MIA issues. President Clinton vetoed H.R. 2076 on December 19, 1995. On
August 6, 1995, Secretary of State Christopher opened the U.S. Embassy in Hanoi, and
Vietnam’s embassy in Washington opened on August 5, 1995. An attempt in the Senate to
restrict trade ties with Vietnam failed on September 20, 1995.
Controversy continued in 1995 and 1996 over provisions in legislation (H.R. 1561) that
would place conditions on upgrading U.S. relations with Vietnam, and that would admit
additional boat people from camps in Hong Kong and elsewhere to the United States. H.R.
1561 passed Congress in March 1996, but was vetoed by the President, and the veto was
sustained on April 30, 1996. A modified version of the Vietnam provisions in H.R. 2076
was signed by President Clinton on April 26, 1996, as part of H.R. 3019, the Omnibus
Appropriations bill (P.L. 104-134). To comply with the provisions, President Clinton issued
Presidential Determination 96-28 on May 30, 1996, saying that Vietnam is cooperating in
full faith with the United States on POW/MIA issues. On April 10, 1997, the Senate
approved former Vietnam War POW and Member of Congress Pete Peterson as U.S.
Ambassador to Vietnam.
Economic relations steadily improved over the next several years, culminating in the
signing of a bilateral trade agreement in 2000 (see below). While in Vietnam in late June
1997, Secretary of State Albright urged greater economic reform and better human rights;
she signed a bilateral agreement on copyrights and said that the U.S. Trade and Development
Program would conduct business in Vietnam. On December 18, 1997, National Security
Adviser Sandy Berger said the Administration was consulting with Congress on granting
Vietnam a waiver from the Jackson-Vanik amendment that would smooth the way for
Overseas Private Investment Corporation (OPIC) and Export-Import Bank to support U.S.
business activities in Vietnam. On March 11, 1998, President Clinton granted the waiver,
and a formal agreement on OPIC was signed eight days later. In November 1999, OPIC
signed its first financing agreement — a $2.3 million loan to Caterpillar Inc.’s authorized
dealership in Vietnam — for American business in Vietnam since the end of the Vietnam
War. The U.S. Export-Import Bank announced on April 10, 1998 that it was ready to finance
sales to Vietnam. On December 9, 1999, the Ex-Im Bank signed two framework agreements
with the State Bank of Vietnam to facilitate project financing cooperation between the two
agencies.
Recent U.S.-Vietnam Relations
Prime Minister’s Trip to the United States
Vietnamese Prime Minister Phan Van Khai traveled to the United States in June 2005,
the first such visit to the United States by a Vietnamese prime minister since the end of the
Vietnam War. Following their meeting, President Bush and the Prime Minister issued a joint
statement expressing their “intention to bring bilateral relations to a higher plane.” The
President expressed “strong support” for Vietnam’s accession to the WTO and welcomed
Vietnam’s efforts on human rights and religious freedom issues, about which the two leaders
agreed to continue “an open and candid dialogue.” Khai also signed an agreement on
implementing a bilateral International Military Education Training (IMET) program to send
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two Vietnamese officers to the United States for training, reportedly in English or medical
procedures. The two sides also announced an agreement to resume U.S. adoptions of
Vietnamese children, which Hanoi halted in 2002. Protesters criticizing the Vietnamese
government appeared at every stop on his trip.
Economic Ties — The Bilateral Trade Agreement
On December 10, 2001, a sweeping bilateral trade agreement (BTA) between the United
States and Vietnam entered into force. (See CRS Report RL30416, The Vietnam-U.S.
Bilateral Trade Agreement.) Under the BTA, which by law required congressional approval,
the U.S. extended conditional normal trade relations (NTR) status to Vietnam, a move that
significantly reduced U.S. tariffs on most imports from Vietnam. In return, Hanoi agreed to
undertake a wide range of market-liberalization measures, including extending NTR
treatment to U.S. exports, reducing tariffs on goods, easing barriers to U.S. services (such
as banking and telecommunications), committing to protect certain intellectual property
rights, and providing additional inducements and protections for foreign direct investment.
The agreement paved the way for President Bush to extend conditional NTR treatment
to Vietnam. NTR treatment is conditional because Vietnam’s trade status is still subject to
annual Congressional review under the U.S. Trade Act of 1974’s Jackson-Vanik provisions,
which govern trade with non-market economies. On June 1, 2005, President Bush renewed
Vietnam’s year-long waiver of Jackson-Vanik amendment restrictions on bilateral economic
activities. Vietnam has received a presidential waiver every year since 1998. From 1998 to
2002, resolutions disapproving the waivers failed in the House. Disapproval resolutions
were not introduced in 2003 and 2004. In addition to granting Vietnam conditional NTR
treatment, the Jackson-Vanik waiver also allows the U.S. Overseas Private Investment
Corporation (OPIC) and the U.S. Export-Import Bank to support U.S. businesses exporting
to and/or operating in Vietnam.
Table 1. U.S.-Vietnam Trade
(millions of dollars)
U.S. Imports
U.S. Exports to
Total Trade
Trade Balance
from Vietnam
Vietnam
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
-632.6
2002
2,391.7
551.9
2,943.6
-1,839.8
2003
4,472.0
1,291.1a
5,763.1
-3,180.9
2004
5,161.1
1121.9
6,283.0
-4,039.2
Jan - Aug 2004
3,368.1
624.1
3,992.2
(2,744.0)
Jan - Aug 2005
4,111.3
717.9
4,829.2
(3,393.4)
Major Imports
clothing, footwear, wooden furniture, frozen shrimp, petroleum products,
from Vietnam
cashew nuts, coffee
Major Exports to
aircraft, mining equipment, electronic machinery, steel wire, raw cotton,
Vietnam
plastics
Source: U.S. International Trade Commission. Data are for merchandise trade on a customs basis.
a. U.S. exports from 2003 include Vietnam Airlines’ $700 million purchase of several Boeing 777s. U.S.
aircraft exports totaled over $360 million in 2004 and nearly $170 million in the first half of 2005.
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Implementation of the BTA. In the first three years after the BTA was signed,
Hanoi apparently implemented most of its initial commitments. Some observers have
expressed concern that the government has not implemented in law and/or in practice many
of the concessions that were due to be phased in by December 2004, particularly in the
services sector, though many critics tend to accept the argument that the slippages often are
due more to weak capacity rather than to protectionist intentions. This belief may also
explain why the Bush Administration appears not to have harshly criticized Vietnam in those
areas where implementation has been poor or incomplete, with the exception of intellectual
property rights (see below).
U.S.-Vietnam Trade Flows. The BTA led to a sharp rise in U.S.-Vietnam trade,
which in 2004 was worth over $6.2 billion, more than four times the level in 2001 (see Table
1), and nearly thirty times the level when relations were normalized in 1994. The United
States is now Vietnam’s largest trading partner.
Imports of Vietnamese Clothing. Most of the increase in U.S.-Vietnam trade since
2001 has come from a sharp rise in clothing imports from Vietnam, which were over $2.6
billion in 2004, up from the $45 million-$50 million range that Vietnam recorded in 2000
and 2001. By dollar value, clothing is now the largest item the United States imports from
Vietnam. In 2003 and 2004, Vietnam has provided about 3.5% of total U.S. clothing imports
(up from 1.4% in 2002 and 0.1% in 2001, before the BTA went into effect). The BTA
contains no restrictions on Vietnamese textile exports to the United States, but a safeguard
provision would allow the U.S. to impose quotas on textile imports in the event of a surge
of imports. During the congressional debate over the BTA, many Members urged the Bush
Administration to negotiate a bilateral textile agreement soon after the BTA came into effect.
On April 25, 2003, the United States and Vietnam completed nearly three weeks of intense
negotiations by signing a bilateral textile agreement that places quotas on 38 categories of
Vietnam’s clothing exports, including cotton pants and cotton knit shirts/blouses, the two
most important items. The deal was reached after the U.S. side threatened to unilaterally
impose more restrictive quotas if the Vietnamese did not agree to U.S. demands.
Vietnam’s Bid to Join the World Trade Organization (WTO). The final step
toward full legal normalization between the United States and Vietnam would be granting
permanent NTR (PNTR) status to Vietnam. This step, which would require congressional
approval, is likely to be considered in the context of negotiating Vietnam’s accession to the
World Trade Organization (WTO), a goal the United States has supported. January 1, 2005
saw the expiration of the global system of import quotas on textile and apparel products for
WTO members. Because Vietnam is not a WTO member, its clothing industry generally is
a severe disadvantage compared with its competitors that operate under quota-free trade in
textiles and apparel.1 For this reason, after the BTA was signed, Vietnamese leaders set a
goal of joining the WTO by the beginning of 2005. Steadily, Vietnamese leaders have
moved the time frame backward, to the end of 2005 and now to mid-2006. Vietnam has
concluded bilateral accession agreements with several WTO members, including the
European Union, Japan, and China, and currently is negotiating agreements with a number
of countries, including the United States. To avoid a repeat of the experience with China,
which allegedly has not passed the legal instruments to implement many parts of its WTO
1 For the first half of 2005, imports of Vietnamese clothing were up around 2% over the same period
a year earlier, despite Vietnam’s exclusion from the global phase-out of quotas on the textile trade.
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accession agreements, the United States and other trading partners are insisting that Vietnam
show progress on and present drafts of implementing legislation. Vietnam’s National
Assembly is scheduled in 2005 to consider 30 laws, codes, and ordinances affecting nearly
every aspect of commercial life. The full Assembly holds two month-long legislative
sessions, in May and October. Vietnam’s accession to the WTO almost certainly would
require Congress to decide whether or not to extend permanent normal trade relations
(PNTR) status to Vietnam.
Intellectual Property Rights (IPR). Since 2002, the Bush Administration has
placed Vietnam on its “Special 301 watch list” for allegedly poor protection of intellectual
property rights, particularly in the areas of music recordings and trademark protection.2 The
BTA requires Vietnam to make its IPR regime WTO-consistent in 2003. Although it has
made numerous regulatory and legal changes to this end, the Vietnamese government’s IPR
enforcement has been widely faulted.
U.S. Bilateral Economic Assistance to Vietnam. (For more on U.S. aid to
Vietnam, see CRS Report RL32636, U.S. Assistance to Vietnam, by Mark Manyin) As the
normalization process has proceeded, the U.S. has eliminated most of the Cold War-era
restrictions on U.S. aid to Vietnam, and U.S. assistance has increased markedly from around
$1 million when assistance was resumed in 1991 to over $55 million anticipated in FY2005.
The level of assistance has more than doubled since FY2000. By far the two largest
components of the U.S. bilateral aid program are food assistance and health-related
assistance, which together comprised about 60% of the nearly $200 million in aid the United
States has provided to Vietnam since U.S. assistance began to increase substantially in
FY1999. Spending on HIV/AIDS treatment and prevention in Vietnam has risen, especially
since President Bush’s June 2004 designation of Vietnam as a “focus country” eligible to
receive increased funding to combat HIV-AIDS under the President’s Emergency Plan for
AIDS Relief (PEPFAR).3 The United States provided $10 million in PEPFAR funds in
FY2004, and over $27 million for FY2005 through the end of April. Other sizeable
assistance items include de-mining activities, educational exchanges, and programs assisting
Vietnam’s economic reform efforts. 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 and Religious Freedom” section.)
2 “Special 301” refers to Section 182 of the Trade Act of 1974. Since the start of the Special 301
provision in 1989, the USTR has issued annually a three-tier list of countries judged to have
inadequate regimes for IPR protection, or to deny access: (1) priority foreign countries are deemed
to be the worst violators, and are subject to special investigations and possible trade sanctions; (2)
priority watch list countries are considered to have major deficiencies in their IPR regime, but do
not currently warrant a Section 301 investigation; and (3) watch list countries, which maintain IPR
practices that are of particular concern, but do not yet warrant higher-level designations. See CRS
Report 98-454, Section 301 of the Trade Act of 1974, As Amended: Its Operation and Issues
Involving Its Use by the United States, by Wayne Morrison.
3 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.
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The Vietnamese government has asked for increased U.S. aid, and in 2004 invited the
U.S. Peace Corps to visit Vietnam to discuss opening programs in Vietnam. In May 2004,
Vietnam was not selected as one of the first 16 countries eligible for the Millennium
Challenge Account (MCA), President Bush’s major new foreign aid initiative. Vietnam was
deemed ineligible despite meeting the technical requirements for MCA eligibility because
it scored very low on some of the indicators used to measure political freedom. In September
2004, Vietnam again received low scores on the indicators of political and civil liberties
maintained by the Millennium Challenge Corporation to determine eligibility for the MCA.
Bird Flu. Since late December 2003, there have been over 90 confirmed cases —
including over 40 deaths — of avian influenza in Vietnam. According to USAID, the H5N1
virus is believed to be endemic in Vietnam’s waterfowl population, which is estimated to be
around 250 million birds, including 20 million to 60 million ducks and geese. In 2005, the
Vietnamese government began intensifying its response to the disease, including expanded
cooperation with international health agencies and foreign aid donors. Vietnam has begun
a mass poultry vaccination program to try to halt the disease’s spread. The wartime and
tsunami supplemental, H.R. 1268, which was passed by the House on May 5 and the Senate
on May 10, 2005, includes $25 million to help combat the disease, including approximately
$7 million to be used in Vietnam.
Human Rights and Religious Freedom
In recent years, tensions between the United States and Vietnam over human rights
issues have increased. The United States and Vietnam did not hold their annual human rights
dialogue in 2003 and 2004 “due to insufficient progress” on key human rights issues. In his
first major speech after assuming his post in 2005, U.S. Ambassador Michael Marine said
that there must be “tangible progress from Vietnam in the areas of human rights and religious
freedom...if relations between our two countries are to continue to blossom.”
It is difficult to make country-wide generalizations about the state of human rights in
Vietnam, a one-party, authoritarian state ruled by the Vietnamese Communist Party (VCP).
For the past several years, the VCP appears to have followed a strategy of permitting most
forms of personal and religious expression while selectively repressing individuals and
organizations that it deems a threat to the party’s monopoly. On 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. It also
has permitted most Vietnamese to observe the religion of their choice and has allowed a
moderately vibrant press to sprout, so long as it keeps criticism of the government to “safe”
issues like corruption, economic policy, nature conservation and environmental pollution,
and the trafficking of women and children.
On the other hand, the government in recent years reportedly has cracked down harshly
on anti-government protests by various ethnic minority groups, most prominently the
Montagnards in the country’s Central Highlands and the Hmong in the Northwest Highlands,
sending hundreds fleeing across the border into Cambodia. In his briefing to accompany the
State Department’s 2004 religious freedom report, Ambassador-at-Large for International
Religious Freedom John Hanford placed particular emphasis on the “widespread,”
“systematic,” “government-sponsored” closing of churches and forced renunciations of faith
in these regions. Reportedly, the minority groups’ complaints mainly have been against local
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government corruption and encroachment of ancestral lands by ethnic Vietnamese settlers.
Furthermore, in its effort to control the Internet, the central government has stepped up
repression of so-called cyber dissidents for alleged offenses such as criticizing the signing
of land-border agreements with China and calling for greater political accountability and
political competition. During his meeting with Prime Minister Khai in June 2005, President
Bush reportedly raised human-rights concerns, particularly Hanoi’s controls over religious
groups and repression of ethnic groups in the Central Highlands.
“Country of Particular Concern” Designation. In September 2004, for the first
time Vietnam was designated as a “country of particular concern” (CPC) in the State
Department’s International Religious Freedom Report. On May 5, 2005, the State
Department announced it had reached an agreement on religious freedom with Vietnam. The
agreement, which has not been released, enabled Vietnam to avoid punitive consequences,
such as sanctions, associated with its CPC designation. According to a public briefing by
Ambassador Hanford, under the agreement, the Vietnamese government committed to fully
implement new legislation on religious freedom and render previous contradictory
regulations obsolete, instruct local authorities to strictly and completely adhere to the new
legislation and ensure their compliance, facilitate the process by which religious
congregations are able to open houses of worship, and give special consideration to prisoners
and cases of concern raised by the United States during the granting of prisoner amnesties.
The State Department’s announcement noted a number of steps recently taken by the
Vietnamese government, notably the release of several prominent religious prisoners, the
issuance of a new law streamlining the application process for religious groups registering
with the government, and the issuance of prime ministerial directives prohibiting forced
renunciations of faith and allowing Protestant “house churches” in ethnic minority provinces
to operate if they renounce connections to certain expatriate groups, particularly the
Montagnard Foundation, which is based in the United States. According to information
provided by the State Department, the agreement does not appear to carve out new ground
but instead focuses on committing Vietnam to fully implementing its new laws and
regulations and to ensuring the compliance of local officials, a goal that often has proved
elusive in the past. Vietnam will remain a CPC, at least until the next religious freedom
report is released in the fall of 2005. The agreement has been faulted by human rights groups
on a number of grounds, including the following: the Vietnamese government still retains
for itself the right to decide which religious organizations and activities are legal; the
government’s recent announcements do not list punishments for violators of religious
freedoms; the agreement does not deal with issues concerning non-Christian groups that
claim to have been repressed by the government; and religious persecution continues in the
Central Highlands despite the agreement.
The Vietnam Human Rights Act. In large measure due to Vietnam’s crackdowns
in the Central Highlands, attempts have been made in the 107th and 108th Congresses to link
U.S. aid to the human rights situation in Vietnam. The most prominent example, the
Vietnam Human Rights Act (H.R. 1587/S. 2784 in the 108th Congress, H.R. 3190 in the
109th Congress), proposes capping existing non-humanitarian U.S. assistance programs to
the Vietnamese government at FY2005 levels (FY2004 for H.R. 1587) if the President does
not certify that Vietnam is making “substantial progress” in human rights, including religious
freedom. At present, the newly signed bilateral IMET agreement is the only current aid
program that would be affected, because it is the only U.S. non-humanitarian assistance that
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is given directly to the government of Vietnam. The act also would require the executive
branch to produce annual reports on Vietnam’s human rights situation and would authorize
funds to promote democracy in Vietnam and to overcome the jamming of Radio Free Asia.
Critics argue that the bill could chill the warming of bilateral political and security ties that
has been taking place slowly over the past several months. The Vietnamese government has
strongly condemned the bill as an interference in its internal affairs. Proponents of the
measure argued that it would have pressured the Vietnamese government to improve the
country’s human rights situation. On July 19, 2004, by a vote of 323-45, the House passed
H.R. 1587. Attempts to include stripped-down versions of H.R. 1587 in the FY2005
Consolidated Appropriations Act (H.R. 4818) did not succeed. In the 109th Congress, H.R.
3190 has not yet received committee action. Another stripped-down version of the act was
included in the House-passed version of the Foreign Relations Authorization Act of FY2006
and 2007 (H.R. 2601), which has yet to receive action in the Senate. Unlike previous
versions of the Vietnam human rights act, the language in H.R. 2601 does not contain
provisions for a Presidential waiver. The act also authorizes $2 million to assist
organizations that promote democracy and human rights in Vietnam.
Political and Security Ties
Vietnam and the United States gradually have been expanding their political and
security ties, though these have lagged far behind the economic aspect of the relationship.
In the past two years, however, Vietnam’s leadership appears to have decided to expand their
country’s ties to the United States, as shown by a number of indicators:
! since late 2004 the Vietnamese government has responded positively to
many U.S. human rights demands;
! In August 2004, drug enforcement officials from various U.S. agencies held
a week-long training session in Vietnam, the first such joint counternarcotics
training session;
! three U.S. naval vessels have made calls in Vietnamese ports since
November 2003;
! there have been several meetings between senior military officials, including
Vietnamese Defense Minister Pham Van Tra’s visit to Washington in
November 2003;
! Vietnamese military officers increasingly participate in U.S.-led conferences
and academic programs; and
! during Prime Minister Khai’s visit to the United States, the two countries
announced a bilateral agreement to implement an International Military
Education and Training (IMET) program will be announced during his visit.
Since FY2002, the Bush Administration has requested funds for Expanded
International Military Education and Training (E-IMET) courses to enhance
English language proficiency among Vietnamese military officers. No funds
have been disbursed, however, because Vietnam and the United States have
not yet signed an IMET agreement, reportedly due to the Vietnamese
Ministry of Defense’s concerns about outside scrutiny of its officers for
human rights abuses.
Two congressional caucuses on Vietnam have been formed in recent years, one calling for
more attention to be paid to the human rights situation in Vietnam and the other working to
promote bilateral relations.
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There are a number of possible reasons Vietnam seeks to upgrade its relationship with
the United States. Vietnam has an interest in facilitating its application to join the World
Trade Organization (WTO), a move that would require U.S. (and congressional) approval
and could occur in 2005 or 2006. At the strategic level, Vietnam may be seeking to offset
China’s increased economic, political, and cultural influence in Southeast Asia.
Additionally, the Vietnamese hope to smooth the way for President Bush’s expected trip to
Hanoi in 2006, when Vietnam hosts the Asia-Pacific Economic Cooperation (APEC) forum
summit.
Agent Orange. Vietnamese leaders have pressed the U.S. for compensation for Agent
Orange victims, and for assistance locating the remains of Vietnam’s soldiers who are still
missing from fighting with the United States. During President Bill Clinton’s five-day trip
to Vietnam in 2000, the United States took some small steps toward meeting these demands,
including agreeing to set up a joint research study on the effects of dioxin/Agent Orange and
the provision of materials to help locate the estimated 300,000 Vietnamese troops missing
from the Vietnam War. Over three million Vietnamese suffering from the alleged effects of
Agent Orange were part of a class action suit filed in U.S. Federal District Court in Brooklyn
against the chemical companies that manufactured the defoliant. The case was dismissed in
March 2005, in a ruling that was widely publicized in Vietnam. In April 2005, the Bush
Administration discontinued funding of a grant to conduct research in Vietnam on the
possible relationship between Agent Orange and birth defects. The justification for the
decision was that the Vietnamese Ministry of Health had not given its approval for the study.
Human Trafficking. On June 3, 2005, the State Department issued its fifth 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;,” however, it was removed from its 2004 listing as a “Tier 2 Watch-list” country
because “it is making significant efforts” to combat trafficking. The State Department issues
interim reports on the countries included on the watch list.
Vietnam War Resettlement Programs. In 2005, the United States and Vietnam
plan to announce the reopening of certain categories of the Orderly Departure Program, under
which over 550,000 Vietnamese were resettled in the United States between 1979 and 1999.
During this time, another 300,000 Vietnamese came to the United States through other
resettlement programs.
POW/MIA Issues
In recent years, the United States and Vietnam have devoted increased resources to
POW/MIA research and analysis. By 1998 a substantial permanent 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 had allowed
U.S. analysts access to numerous POW/MIA-related archives and records. The U.S. Defense
Department has reciprocated by allowing Vietnamese officials access to U.S. records and
maps to assist their search for Vietnamese MIAs. The increased efforts have led to
substantial understanding about the fate of several hundred of the over 2,000 Americans still
unaccounted for in Indochina. On September 21, 1998, U.S. Ambassador to Vietnam
Peterson told the media in reference to Americans still listed as missing from the Vietnam
War that “it is very, very, very unlikely that you would expect to see any live Americans
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discovered in Vietnam, Cambodia, or Laos.” Official U.S. policy, however, does not remove
a name from the rolls of those unaccounted for unless remains are identified. (For more on
the POW/MIA issue, see CRS Issue Brief IB92101, POWs and MIAs: Status and Accounting
Issues.)
Vietnam’s Situation
Ever since communist North Vietnamese forces defeated U.S.-backed South Vietnam
in 1975, reunified Vietnam has been struggling with how to maintain a balance between two
often contradictory goals — maintaining ideological purity and promoting economic
development. For the first decade after reunification, the emphasis was on the former. By
the mid-1980s, disastrous economic conditions 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 central state
planning, cut subsidies to state enterprises, reformed the price system, and opened the
country to foreign direct investment.
Economic Developments
For the first decade after the doi moi reforms were launched, Vietnam became one of
the world’s fastest-growing countries, averaging around 8% annual GDP growth from 1990
to 1997. Agricultural production doubled, transforming Vietnam from a net food importer
into the world’s second-largest exporter of rice and third-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. A substantial portion of the country’s growth
was driven by foreign investment, primarily from Southeast Asian sources, most of which
the government channeled into the country’s state-owned sector.
By the mid-1990s, however, the economic reform movement had stalled, as
disagreement between reformers and conservatives paralyzed economic decision-making.
The economy staggered after the 1997 Asian financial crisis, as real GDP growth fell to 5.8%
in 1998, and 4.8% in 1999. Foreign direct investment (FDI) plummeted to $600 million in
1999, the lowest level since 1992.
Vietnam’s economic situation has improved since the financial crisis. In 2000, GDP
growth rebounded to the 7% level — one of the highest in Asia — and has remained there
since. FDI commitments have increased, to around 8% of GDP in 2003. However, Vietnam
remains a poor country; about one-third of Vietnamese children under five years of age suffer
from malnutrition. Per capita gross domestic product (GDP) is estimated at just over $410,
equivalent to $2,300 when measured on a purchasing power parity basis. Growth continues
to be impeded by Vietnam’s failure to tackle its remaining structural economic problems —
including unprofitable state-owned enterprises, a weak banking sector, massive red tape, and
bureaucratic corruption — as major impediments to continued growth. In recent months,
there have been signs that the government has redoubled its commitment to economic
reforms.
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,
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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 privately owned firms employ nearly a quarter of the workforce.
Most of the giant state-owned enterprises (SOEs), meanwhile, are functionally bankrupt, and
require significant government subsidies and assistance to continue operating. In 1990, 2.5
million people were employed by state firms. In 2001, this figure was down to 1.6 million.
Political Trends
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
Communist Party in politics and society, and Vietnam remains a one-party state. Although
personal freedoms have increased dramatically, Hanoi still does not tolerate signs of
organized political dissent. In subtle ways, however, the decision to prioritize economic
development above ideological orthodoxy has led the Party to slowly loosen its former
stranglehold on political power. Recognizing that Party cadres often were ill-suited to
administering its own policy directives, for instance, the Party created a more powerful and
professionalized executive branch in the 1992 constitution. The new constitution also gave
more influence to the legislative branch, the National Assembly, in part because the Party
realized it needed to make the organs of government more responsive at the grass-roots level.
Over the past decade, the Assembly has slowly and subtly increased its influence. In
December 2001, constitutional amendments were passed allowing the Assembly to hold no-
confidence votes against the government, and to dismiss the president and prime minister
(though not the general secretary of the Party).
Rapid economic growth, increased integration with the global economy, and weak domestic
institutions have caused a rise in corruption and a decline in the Vietnamese Communist Party’s
(VCP) authority, alarming many Party hard-liners. As a result, Vietnamese policy-making in the
late 1990s was virtually paralyzed, as reformist and conservative elements within the Party
battled to a stalemate over how to deal with the major economic and demographic forces
transforming the country. The former group called for a steady roll-out of new reforms and
increased integration into the global economy. The latter feared that economic reform will lead
to the loss of government control over the economic means of production and financial and
monetary levers; they also fear the possible infiltration of heterodox outside ideas. Vietnam’s
consensus-based decision-making style, combined with the absence of any paramount leader, has
meant that these divisions produced only piecemeal economic reforms, though implementing the
BTA may force more significant changes.
The Ninth and Tenth Party Congresses. The decision to sign the BTA appears to have
broken the policymaking logjam by fashioning a new consensus in favor of a reformist push that was
effectively endorsed by the leadership changes at Ninth Party Congress in April 2001. Vietnamese
Communist Party Congresses, which are held every five years, often are the occasions for major
leadership realignments and set the direction for Vietnam’s economic, diplomatic, and social policies.
At its Ninth Party Congress, Vietnam’s Communist Party selected Nong Duc Manh as its Secretary
General, the Party’s top post. Manh (b. September 11, 1940) is generally considered to be more
moderate than his predecessor, Le Kha Phieu (b. December 27, 1931), a conservative who was
ousted after a heated struggle. Significantly, Manh’s selection was made possible when the Party’s
Central Committee rejected — an unprecedented move — the Politburo’s decision to endorse Phieu
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for another term. Manh, the former speaker of Vietnam’s National Assembly, is an ethnic Tay,
making him the first member of an ethnic minority to head Vietnam’s Communist Party. In other
significant moves, the Ninth Party Congress reduced the size of the Politburo (from 19 to 15
members), retired seven Politburo members, and shrunk the Central Committee from 170 to 150
members.
Looking ahead to the 10th Party Congress in 2006, Vietnam’s leadership is trying to confront
the problem of how to reverse the Communist Party’s declining legitimacy. Attracting new
recruits into the Party has become increasingly difficult, particularly among young Vietnamese
— a major problem since more than half of the population is under the age of 25. Some
prominent retired military leaders, including war hero General Vo Nguyen Giap, have publicly
called for the Party to become more democratic. A key issue for the VCP leadership is
combating official corruption. Vietnam regularly is ranked near the bottom of surveys of foreign
executives on corruption in various countries.
Unrest in the Central Highlands Region. Additionally, over the past several
years, there have been reports of protests and riots by peasants in the Central Highlands
provinces against local government corruption and by ethnic minorities against encroachment
on their ancestral lands by recent settlers, many of whom moved under government-
sponsored resettlement programs. In February 2001, thousands of minorities, primarily from
Montagnard groups, protested in the Central Highlands, the largest-scale social unrest in
years. The Vietnamese government dispatched military troops and local police to quell the
unrest, and in the spring of 2001 launched a crackdown against the protesters. There are
reports that the government has continued its crackdown, and in April 2004, thousands of
protesting Montagnards reportedly clashed violently with police and local authorities.
Speaking before Vietnam’s National Assembly, a deputy prime minister accused the
Montagnard Foundation, a U.S.-based group of Montagnard exiles, for organizing the
demonstrations, but acknowledged that the government’s “inefficiency and weaknesses”
have contributed to the continued protests in the Central Highlands. In August 2004, the
government reportedly decided it temporarily will stop sending people to resettle in new
economic zones in the Central Highlands. There have been reports — denied by Hanoi
officials — that the Vietnamese government arrested scores of Montagnard Christians in the
Central Highlands in December 2004, at the same time that Cambodia reportedly closed its
border to asylum seekers from Vietnam. In February 2005, the government declared it would
allow outlawed “house churches” to operate provided they have no connection to FULRO,
the United Front for the Liberation of Oppressed Races, the Montagnard guerrilla group that
fought alongside the United States during the Vietnam War. A former FULRO leader, Kok
Ksor, is the president and founder of the Montagnard Foundation.
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. Over seven hundred 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 refugees and therefore entitled to asylum. While most of these are
being resettled in the United States, Canada, or Finland, over thirty have returned to Vietnam
following a January 25, 2005 agreement between UNHCR, Cambodia, and Vietnam in which
Hanoi agreed that those returning to Vietnam would not be punished, discriminated against,
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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. Over 200 individuals, including many who have been recognized as refugees
by UNHCR, have 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.
Foreign and Defense Policy
For many years, a major impediment to Vietnam’s development was the strong
international sanctions imposed in response to Vietnam’s 1978 invasion and subsequent 11-
year occupation of Cambodia. Faced with a cutoff of much aid from the Soviet bloc, the
Vietnamese in the early 1990s increased their flexibility on a Cambodian settlement, moved
to accommodate China on sensitive issues, and stepped up action on the POW/MIA and
other humanitarian issues with the United States. In the mid-1990s, Hanoi continued its
“omnidirectional” policy of rejoining the world political community by joining the regional
political group, the Association of Southeast Asian Nations (ASEAN), the regional security
forum, the ASEAN Regional Forum (ARF), and the regional economic group, the Asian
Pacific Economic Cooperation (APEC) forum. An issue that may be considered in the 10th
Party Congress in 2006 is how much continued utility Vietnam gains from its
omnidirectional foreign policy, which has successfully restored cordial relations with the rest
of the world, but has left Vietnam without truly warm relations with any one country or
grouping of countries.
In recent years, Hanoi has improved ties with many of its neighbors. Most significantly,
Vietnam has moved to fully normalize relations with mainland China. Following Chinese
Prime Minister Zhu Rongji’s four-day visit to Vietnam in early December, for instance, the
two sides signed a long-elusive land border treaty on December 30, 1999. In late December
2000, Beijing and Hanoi signed an agreement establishing the two countries’ sea border in
the Gulf of Tonkin. The two countries, however, still have overlapping claims to the Spratly
Island chain in the South China Sea, differences that led to military clashes in the late 1980s.
Vietnam reportedly joined other ASEAN countries in opposing China’s efforts to make the
December 2005 “East Asia Summit” meeting exclusive to ASEAN, China, Japan, and the
Koreas. Instead, Australia, New Zealand, and India have been invited to attend.
LEGISLATION
H.R. 967 (Saxton). Prohibits normal trade relations (NTR) treatment from being
extended to the products of any country the government of which engages in certain
violations of human rights. Introduced February 17, 2005; referred to House committee.
Referred to the House Committee on Ways and Means Subcommittee on Trade.
H.R. 1130 (Waters). The Jubilee Act of 2005. Provides for the cancellation of debts
owed to international financial institutions by poor countries, including Vietnam. Introduced
March 3, 2005; referred to the House Committee on Financial Services.
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H.R. 1450 (Tancredo). Requires additional tariffs be imposed on products of any
nonmarket economy country, including Vietnam, until the President certifies to the Congress
that the country is a market economy country. Introduced March 17, 2005; referred to the
House Committee on Ways and Means.
H.R. 2601 (C. Smith). The Foreign Relations Authorization Act of fiscal years 2006
and 2007. Section 946 links increases in non-humanitarian aid to the Vietnamese
government above the FY2005 level to Vietnam’s human rights situation. The language
does not provide for a Presidential waiver. $2 million is authorized to organizations that
promote democracy and human rights in Vietnam. Section 106 authorizes $9.1 million
overcome the jamming of Radio Free Asia by Vietnam. Introduced May 24, 2005; passed
by the House July 20, 2005 (351 - 78).
H.R. 2862 (Wolf). The Departments of Commerce, State, Justice, and Related
Agencies Appropriations Act of 2006. House Appropriations Committee report “urges the
Secretary of State to continue to monitor and promote religious freedom and human rights”
in Vietnam and expresses support for Radio Free Asia to increase Vietnamese language
broadcasts and overcome Vietnam’s anti-jamming activities. Introduced June 10, 2005;
passed by the House June 16, 2005 (418-7).
H.R. 3057 (Kolbe). FY2006 Foreign Operations Act. Senate version directs that $4
million be made available for programs and activities for the Central Highlands; condemns
Cambodia’s forcible repatriation of Vietnamese refugees and calls for UNHCR to be
permitted to review their cases. Introduced June 24, 2005; passed by the House June 28,
2005 (393-32); passed by the Senate July 20, 2005 (98-1); currently in conference.
H.R. 3190 (C. Smith). The Vietnam Human Rights Act of 2005. Bans increases (over
FY2005 levels) in non-humanitarian aid to the Vietnamese government if the President does
not certify that Vietnam is making “substantial progress” in human rights. Allows the
President to waive the cap on aid increases. Authorizes funds to promote democracy in
Vietnam and to overcome the jamming of Radio Free Asia. Introduced June 30, 2005;
referred to House International Relations Committee.
H.R. 3283(English)/S. 1421 (Collins). Amends Tariff Act of 1930 to make
countervailing duties applicable to actions by nonmarket economies. H.R. 3283 introduced
July 14, 2005; passed by the House July 27, 2005 (255 - 168); referred to Senate Finance
Committee. S. 1421 introduced July 19, 2005; referred to Senate Finance Committee.
H.Res. 415 (Sanchez). Expresses the sense of the House that Hanoi needs to do more
to resolve claims of property reportedly confiscated under the period of communist rule.
Introduced July 28, 2005; referred to House International Relations Committee.
S. 599 (Kerry)/H.R. 2816 (Neal). Eliminates tariffs on certain types of tuna imported
from ASEAN member countries (except Burma). S. 599 introduced March 10, 2005;
referred to Senate Committee on Finance. H.R. 2816 introduced June 8, 2005; referred to
House Ways and Means Committee.
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