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Normalizing Trade Relations With Vietnam

A Vietnamese cyclist rides past a giant billboard advertising the American computer company Compaq along a highway on the outskirts of Hanoi on Sept. 3. The U.S.-Vietnamese relations moved to a new level last week with Senate approval of an agreement normalizing trade between the two former enemies. Photo by Associated Press.

By Associated Press

Congress completed work on an agreement normalizing trade between the United States and Vietnam, and President Bush is expected to sign the measure.

The Senate’s 88-12 vote on Oct. 3 “represents an important step in the healing process” between the two former enemies, said the Senate Finance Committee chairman, Sen. Max Baucus, D-Mont., “a step that has been a long time in coming.”

The House endorsed the measure last month, and Bush said he would sign it.

The trade agreement, negotiated by the Clinton administration last year, “will provide American companies with access to a large and growing market, and, through the reforms it promotes, will help create a more prosperous and engaged Vietnam,” Bush said in a statement after the Senate vote.

Vietnam would benefit from the same low tariffs the United States sets for its other trading partners. In return, Vietnam is to reduce its tariffs, eliminate non-tariff barriers, protect intellectual property rights and open its markets to American service and investment companies.

The United States and Vietnam had no formal relations and limited contacts in the two decades after U.S. troops left Vietnam in 1973. In 1994, President Clinton lifted the trade embargo and the next year he established diplomatic relations. In 1998, he issued the first waiver making commercial deals with Vietnam eligible for U.S. government loans and credit guarantees.

But Vietnam has remained one of only six nations denied normal trade relations, subjecting Vietnamese goods to far higher tariffs. The other countries are Afghanistan, Cuba, North Korea, Laos and former Yugoslavia.

Vietnam is the world’s 14th-most-populous nation, with 80 million people, but trade with the United States was only about $1.2 billion last year. Estimates are that Vietnam’s exports to the United States, mainly shrimp, coffee and light manufactured goods, could more than double with normal trade relations.

Opposition to the deal came mainly from lawmakers who asserted that Vietnam has not fully cooperated in accounting for MIAs from the Vietnam War and should not be entitled to normal trade because of its poor human rights record.

“If those who want to normalize relations with Vietnam choose to ignore the numerous human rights violations of that country, is that right?” asked Sen. Bob Smith, R-N.H.

Concerns were also raised by Mississippi Delta senators, who said the agreement lacked protections for the catfish industry. Vietnamese imports, said Sen. Tim Hutchinson, R-Ark., are “absolutely destroying our domestic catfish industry.”

Leading the effort to normalize ties with Vietnam were three senators who served in the Vietnam War: Sens. John Kerry, D-Mass., Chuck Hagel, R-Neb., and John McCain, R-Ariz., a former prisoner of war.

Because Vietnam is a communist state, its normal trade status will still be subject to annual review, requiring the president to waive the requirement that Vietnam allow free emigration.

Vietnam’s prime minister initiated the ratification process in Vietnam by sending the trade agreement to President Tran Duc Long.