[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
                      U.S.-VIETNAM TRADE RELATIONS

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON TRADE

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 18, 1998

                               __________

                             Serial 105-98

                               __________

         Printed for the use of the Committee on Ways and Means


                              


                     U.S. GOVERNMENT PRINTING OFFICE 
58-852 CC                    WASHINGTON : 2000




                      COMMITTEE ON WAYS AND MEANS

                      BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
BILL THOMAS, California              FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida           ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut        BARBARA B. KENNELLY, Connecticut
JIM BUNNING, Kentucky                WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York               SANDER M. LEVIN, Michigan
WALLY HERGER, California             BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia                 JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio                    XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania      KAREN L. THURMAN, Florida
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri

                     A.L. Singleton, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                         Subcommittee on Trade

                  PHILIP M. CRANE, Illinois, Chairman

BILL THOMAS, California              ROBERT T. MATSUI, California
E. CLAY SHAW, Jr., Florida           CHARLES B. RANGEL, New York
AMO HOUGHTON, New York               RICHARD E. NEAL, Massachusetts
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
WALLY HERGER, California
JIM NUSSLE, Iowa


Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.




                            C O N T E N T S

                               __________

                                                                   Page

Advisory of June 9, 1998, announcing the hearing.................     2

                               WITNESSES

U.S. Department of State, Hon. Douglas ``Pete'' Peterson, U.S. 
  Ambassador to Vietnam; accompanied by Chuck Kartman, Deputy 
  Assistant Secretary of State...................................    26

                                 ______

 American Chamber of Commerce in Vietnam-Hanoi Chapter, Thomas 
  O'Dore.........................................................    72
 American Legion, John F. Sommer, Jr.............................   108
Asia Pacific Council of American Chambers, Greig Craft...........    85
 Boat People S.O.S., Nguyen Dinh Thang...........................    51
 Burch, J. Thomas, Jr., National Vietnam & Gulf War Veterans 
  Coalition......................................................   103
CIGNA International, Thomas O'Dore...............................    72
 Coalition Against Jackson-Vanik Waiver, Diem Hoang Do...........   116
 Craft, Greig, Asia Pacific Council of American Chambers.........    85
 Do, Diem Hoang, Coalition Against Jackson-Vanik Waiver..........   116
 Duggins, George C., Vietnam Veterans of America.................    98
 Foote, Virginia B., U.S.-Vietnam Trade Council..................    77
 Griffiths, Ann Mills, National League of POW/MIA Families.......    46
Harder, Bruce, Veterans of Foreign Wars of the United States, 
  presenting statement of John E. Moon...........................    95
 Joseph, Joel D., Made in the USA Foundation.....................   124
Kerry, Hon. John F., a U.S. Senator from the State of 
  Massachusetts..................................................     5
 Lalonde, Bradley, Vietnam Citibank..............................    91
 Levan, Filong, Vietnamese-American Voters' Coalition............   121
 Made in the USA Foundation, Joel D. Joseph......................   124
Montagnard Dega Association, Inc., Y Hin Nie.....................    55
 Montagnard Human Rights Committee, Rong Nay.....................    58
Moon, John E., Veterans of Foreign Wars of the United States, as 
  presented by Bruce Harder......................................    95
National Alliance of Families for the Return of America's Missing 
  Servicemen, Lynn M. O'Shea.....................................    61
National League of POW/MIA Families, Ann Mills Griffiths.........    46
 National Vietnam & Gulf War Veterans Coalition, J. Thomas Burch, 
  Jr.............................................................   103
 Nay, Rong, Montagnard Human Rights Committee....................    58
 Nie, Y Hin, Montagnard Dega Association, Inc....................    55
 O'Dore, Thomas, American Chamber of Commerce in Vietnam-Hanoi 
  Chapter and CIGNA International................................    72
 O'Shea, Lynn M., National Alliance of Families for the Return of 
  America's Missing Servicemen, Bellevue, Washington.............    61
Rohrabacher, Hon. Dana, a Representative in Congress from the 
  State of California............................................    18
Smith, Hon. Christopher H., a Representative in Congress from the 
  State of New Jersey............................................    21
 Sommer, John F., Jr., American Legion...........................   108
 Thang, Nguyen Dinh, Boat People S.O.S...........................    51
U.S.-Vietnam Trade Council, Virginia B. Foote....................    77
Veterans of Foreign Wars of the United States, John E. Moon, as 
  presented by Bruce Harder......................................    95
 Vietnam Citibank, Bradley Lalonde...............................    91
 Vietnamese-American Voters' Coalition, Filong Levan.............   121
 Vietnam Veterans of America, George C. Duggins..................    98

                       SUBMISSIONS FOR THE RECORD

Office of the U.S. Trade Representative, statement...............   127

                                 ______

American Textile Manufacturers Institute, Carlos Moore, statement   128
Bell, Bill, Fort Smith, AZ, statement............................   130
Caterpillar Inc., statement......................................   135
Evans, Hon. Lane, a Representative in Congress from the State of 
  Illinois, statement............................................   135
General Electric, Hanoi, Vietnam, Andre Sauvageot, letter........   136
Jefferson Waterman International, Stephen Lamar, letter and 
  attachment.....................................................   139
Lewis, Howard, III, National Association of Manufacturers, letter   141
McCain, Hon. John, a U.S. Senator from the State of Arizona, 
  statement......................................................    33
Moore, Carlos, American Textile Manufacturers Institute, 
  statement......................................................   128
Muller, Robert O., Vietnam Veterans of America Foundation, letter   141
National Association of Manufacturers, Howard Lewis III, letter..   141
Sauvageot, Andre, General Electric, Hanoi, Vietnam, letter.......   136
U.S. Chamber of Commerce, Willard A. Workman, statement and 
  attachments....................................................   142
Vietnam Veterans of America Foundation, Robert O. Muller, letter.   141
Will, Richard F., Sr., Westminster, MD, letter...................   107
Workman, Willard A., U.S. Chamber of Commerce, statement and 
  attachments....................................................   142



                      U.S.-VIETNAM TRADE RELATIONS

                              ----------                              


                        THURSDAY, JUNE 18, 1998

                  House of Representatives,
                       Committee on Ways and Means,
                                     Subcommittee on Trade,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:05 a.m., in 
room B-318, Rayburn House Office Building, Hon. Phil Crane 
(Chairman of the Subcommittee) presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                         SUBCOMMITTEE ON TRADE

                                                CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE

June 9, 1998

No. TR-27

                       Crane Announces Hearing on

                      U.S.-Vietnam Trade Relations

    Congressman Philip M. Crane (R-IL), Chairman, Subcommittee on Trade 
of the Committee on Ways and Means, today announced that the 
Subcommittee will hold a hearing on U.S.-Vietnam trade relations, 
including the President's renewal of Vietnam's waiver under the 
Jackson-Vanik amendment to the Trade Act of 1974. The hearing will take 
place on Thursday, June 18, 1998, in room B-318 Rayburn House Office 
Building, beginning at 10:00 a.m.
      
    Oral testimony at this hearing will be from both invited and public 
witnesses. Also, any individual or organization not scheduled for an 
oral appearance may submit a written statement for consideration by the 
Committee or for inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    Vietnam's trade status is subject to the Jackson-Vanik amendment to 
Title IV of the Trade Act of 1974. This provision of law governs the 
extension of most-favored-nation (MFN), or normal, tariff treatment, as 
well as access to U.S. government credits, or credit or investment 
guarantees, to nonmarket economy countries ineligible for MFN treatment 
as of the enactment of the Trade Act. A country subject to the 
provision may gain MFN treatment and coverage by U.S. trade financing 
programs only by complying with the freedom of emigration provisions 
under the Act. The extension of MFN tariff treatment also requires the 
conclusion and approval by Congress of a bilateral commercial agreement 
with the United States providing for reciprocal nondiscriminatory 
treatment. The Act authorizes the President to waive the requirements 
for full compliance with respect to a particular country if he 
determines that such a waiver will substantially promote the freedom of 
emigration provisions, and if he has received assurances that the 
emigration practices of the country will lead substantially to the 
achievement of those objectives.
      
    Since the early 1990s, the United States has taken gradual steps to 
improve relations with Vietnam. In February 1994, President Clinton 
lifted the trade embargo on Vietnam in recognition of the progress made 
in POW/MIA accounting and the successful implementation of the Paris 
Peace Accords. The United States opened a Liaison Office in Hanoi later 
that year. On July 11, 1995, President Clinton announced the 
establishment of diplomatic relations, which was followed by the 
appointment of former Congressman Pete Peterson as U.S. Ambassador to 
Vietnam.
      
    On March 9, 1998, the President issued a waiver from the Jackson-
Vanik freedom of emigration requirements for Vietnam. Because Vietnam 
has not yet concluded a bilateral commercial agreement with the United 
States, it is ineligible to receive MFN tariff treatment. The 
President's waiver for Vietnam, however, gives that country access to 
U.S. government credits, or credit or investment guarantees, such as 
those provided by the Overseas Private Investment Corporation and the 
Export-Import Bank. The President's waiver expires on July 3, 1998. The 
renewal procedure under the Trade Act requires the President to submit 
to Congress a recommendation for a 12-month extension no later than 30 
days prior to the waiver's expiration (i.e., by not later than June 3). 
On June 3, 1998, the President issued his determination to waive the 
requirements for Vietnam for the period of July 3, 1998, to July 2, 
1999.
      
    The waiver authority continues in effect unless disapproved by 
Congress within 60 calendar days after the expiration of the existing 
waiver. Disapproval, should it occur, would take the form of a joint 
resolution disapproving of the President's waiver determination. On 
June 5, 1998, H.J. Res. 120 was introduced, disapproving of the 
President's waiver determination for Vietnam.
      

FOCUS OF THE HEARING:

      
    The focus of the hearing will be to evaluate overall U.S. trade 
relations with Vietnam and to consider the President's renewal of 
Vietnam's waiver under the Jackson-Vanik amendment to the Trade Act of 
1974. The Subcommittee is interested in hearing testimony about 
Vietnam's emigration policies and practices, on the nature and extent 
of U.S. trade and investment ties with Vietnam and related issues, and 
on the potential impact on Vietnam and the United States of a 
termination of Vietnam's waiver. Finally, witnesses may also address 
U.S. objectives in the ongoing negotiations with Vietnam to conclude a 
bilateral commercial agreement.
      

DETAILS FOR SUBMISSIONS OF REQUESTS TO BE HEARD:

      
    Requests to be heard at the hearing must be made by telephone to 
Traci Altman or Bradley Schreiber at (202) 225-1721 no later than the 
close of business, Friday, June 12, 1998. The telephone request should 
be followed by a formal written request to A.L. Singleton, Chief of 
Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 
Longworth House Office Building, Washington, D.C. 20515. The staff of 
the Subcommittee on Trade will notify by telephone those scheduled to 
appear as soon as possible after the filing deadline. Any questions 
concerning a scheduled appearance should be directed to the 
Subcommittee on Trade staff at (202) 225-6649.
      
    In view of the limited time available to hear witnesses, the 
Subcommittee may not be able to accommodate all requests to be heard. 
Those persons and organizations not scheduled for an oral appearance 
are encouraged to submit written statements for the record of the 
hearing. All persons requesting to be heard, whether they are scheduled 
for oral testimony or not, will be notified as soon as possible after 
the filing deadline.
      
    Witnesses scheduled to present oral testimony are required to 
summarize briefly their written statements in no more than five 
minutes. THE FIVE-MINUTE RULE WILL BE STRICTLY ENFORCED. The full 
written statement of each witness will be included in the printed 
record, in accordance with House Rules.
      
    In order to assure the most productive use of the limited amount of 
time available to question witnesses, all witnesses scheduled to appear 
before the Subcommittee are required to submit 200 copies, along with 
an IBM compatible 3.5-inch diskette in WordPerfect 5.1 format, of their 
prepared statement for review by Members prior to the hearing. 
Testimony should arrive at the Subcommittee on Trade office, room 1104 
Longworth House Office Building, no later than Tuesday, June 16, 1998. 
Failure to do so may result in the witness being denied the opportunity 
to testify in person.
      

WRITTEN STATEMENTS IN LIEU OF PERSONAL APPEARANCE:

      
    Any person or organization wishing to submit a written statement 
for the printed record of the hearing should submit six (6) single-
spaced copies of their statement, along with an IBM compatible 3.5-inch 
diskette in WordPerfect 5.1 format, with their name, address, and 
hearing date noted on a label, by the close of business, Tuesday, June 
23, 1998, to A.L. Singleton, Chief of Staff, Committee on Ways and 
Means, U.S. House of Representatives, 1102 Longworth House Office 
Building, Washington, D.C. 20515. If those filing written statements 
wish to have their statements distributed to the press and interested 
public at the hearing, they may deliver 200 additional copies for this 
purpose to the Subcommittee on Trade office, room 1104 Longworth House 
Office Building, at least one hour before the hearing begins.
      

FORMATTING REQUIREMENTS:

      
    Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
exhibit not in compliance with these guidelines will not be printed, 
but will be maintained in the Committee files for review and use by the 
Committee.
      
    1. All statements and any accompanying exhibits for printing must 
be submitted on an IBM compatible 3.5-inch diskette in WordPerfect 5.1 
format, typed in single space and may not exceed a total of 10 pages 
including attachments. Witnesses are advised that the Committee will 
rely on electronic submissions for printing the official hearing 
record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. A witness appearing at a public hearing, or submitting a 
statement for the record of a public hearing, or submitting written 
comments in response to a published request for comments by the 
Committee, must include on his statement or submission a list of all 
clients, persons, or organizations on whose behalf the witness appears.
      
    4. A supplemental sheet must accompany each statement listing the 
name, company, address, telephone and fax numbers where the witness or 
the designated representative may be reached. This supplemental sheet 
will not be included in the printed record.
      
    The above restrictions and limitations apply only to material being 
submitted for printing. Statements and exhibits or supplementary 
material submitted solely for distribution to the Members, the press, 
and the public during the course of a public hearing may be submitted 
in other forms.
      

    Note: All Committee advisories and news releases are available on 
the World Wide Web at `HTTP://WWW.HOUSE.GOV/WAYS__MEANS/'.
      

    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      

                                


    Chairman Crane. Will everybody who can find one take a 
seat? And we want to commence here because we've got time 
constraints I know for the Senator and for our colleague Dana 
Rohrabacher.
    Dana, you will want to come up here and grab a chair. And 
let's see, we will commence with you, Senator Kerry, and 
traditionally we try and get everybody to keep their oral 
presentation to 5 minutes. Any written statements will be made 
a part of the permanent record. But if you feel, you're not 
under a tight time constraint, you can go ahead and go beyond 5 
minutes. That is only extended to colleagues.
    [The opening statements of Chairman Crane and Mr. Ramstad 
follow:]

Opening Statement of Hon. Philip M. Crane, a Representative in Congress 
from the State of Illinois

    Good morning. Welcome to this hearing of the Subcommittee 
on Trade on U.S.-Vietnam Trade Relations.
    Since the early 1990s, the United States has taken gradual 
steps to normalize our relations with Vietnam. This process has 
been most noticeable by President Clinton's lifting of the 
trade embargo against Vietnam in 1994, followed by the 
normalization of diplomatic relations in 1995 and the 
appointment of our former colleague Pete Peterson, who will 
testify today, to serve as U.S. Ambassador to Vietnam.
    Currently, the Office of the United States Trade 
Representative is negotiating a bilateral commercial agreement 
which will serve as the foundation for an extension of 
reciprocal most-favored-nation (MFN), or normal, tariff 
treatment after the agreement is concluded and approved by 
Congress. As an interim step, the President issued a waiver for 
Vietnam earlier this year from the freedom of emigration 
criteria in the Jackson-Vanik amendment to the Trade Act of 
1974. Because Vietnam is not yet eligible for MFN trade status, 
the practical effect of this waiver is to enable U.S. 
government agencies such as the Overseas Private Investment 
Corporation and the Export-Import Bank to provide financing to 
U.S. firms interested in doing business with Vietnam.
    The steps already taken to normalize our relations have 
been contingent upon full cooperation by Vietnam on the 
resolution of remaining POW/MIA cases. In addition, Vietnam's 
continued progress on processing emigration cases is absolutely 
essential to justify the President's determination that waiving 
the Jackson-Vanik criteria will substantially lead to the 
achievement of the emigration objectives. Full cooperation by 
Vietnam in all areas of our bilateral relationship is an 
absolute prerequisite to laying the groundwork for 
Congressional consideration in the future of a bilateral 
commercial agreement and extension of MFN tariff treatment.
    I look forward to our witnesses testimony today on a broad 
range of bilateral issues and policy objectives in U.S. 
relations with Vietnam.
      

                                


Opening Statement of Hon. Jim Ramstad, a Representative in Congress 
from the State of Minnesota

    Mr. Chairman, thank you for calling today's hearing to 
discuss U.S.-Vietnam Trade Relations.
    I am pleased that Vietnam has made noticeable progress in 
reforming the country's economy since 1986, moving away from 
its centrally-planned economy to a more market-oriented one. 
Vietnam's own policy of political and economic reintegration in 
the world must be encouraged, especially in light of recent 
economic decline in the region.
    Hopefully, just as the Vietnamese Communist Party has 
relinquished some of its control over the economy to spur its 
growth, they will also see the benefits of political freedoms 
for the citizens. While there are signs of personal freedoms 
and considerable power at the local levels, there is 
significant need for greater democracy in Vietnam.
    Two-way trade between the U.S. and Vietnam has tripled 
since 1994, reaching to $666 million in 1997. The U.S. is the 
8th largest foreign investor in Vietnam, with $1.2 invested in 
the country.
    I know some people testifying today will discuss the status 
of POWs and MIAs still believed to be in Vietnam and I look 
forward to learning more about their concerns, as well as the 
potential for locating any more of America's brave soldier with 
the help of the Vietnam government.
    Knowing how crucial an engaged relationship between the US 
and Vietnam,, I want to thank you again, Mr. Chairman, for 
calling this hearing. I look forward to hearing from today's 
witnesses about the importance and implication of U.S.-Vietnam 
trade relations.
      

                                


    Chairman Crane. So, we'll start with you Senator, yes.

STATEMENT OF HON. JOHN F. KERRY, A U.S. SENATOR FROM THE STATE 
                        OF MASSACHUSETTS

    Senator Kerry. Mr. Chairman, thank you very, very much. 
Bob, it's good to be here with you. And thank you for the 
privilege of testifying before the Subcommittee.
    This is obviously a very important decision--the question 
of the President's decision to waive Jackson-Vanik and the 
House and the Congress' rights with respect to that now. Let me 
say at the outset that I very, very strongly support the 
President's decision. And I believe that overturning it would 
have very serious negative consequences not just for our 
relationship with Vietnam, but for larger interests that the 
United States has in the region. And that's what we measure 
when we measure the rationale for a Presidential waiver.
    Today, the United States, as we know, has huge and varied 
interests in the region--economic interests, strategic 
interests including our relationships with China, Cambodia, and 
Burma,\1\ as some of us continue to call it.
---------------------------------------------------------------------------
    \1\ Myanmar
---------------------------------------------------------------------------
    And second, we have a huge interest in promoting freedom of 
immigration. And that's an area where the Government of Vietnam 
has made substantial progress in the last year or so.
    Third, we have an obvious ongoing interest in promoting 
human rights and democratic freedoms around the world, 
including in Vietnam, where the composition of the population, 
over 60 percent of the population, is under 25 years of age. 
Their memories of the war and of the divisions between us are 
considerably different than those of the vast majority of the 
people of Vietnam in the past. And they are moving down an 
economic road of increased openness, increased engagement with 
the world. To move in a direction that would send a signal from 
the United States that we want to disengage or freeze our 
bilateral relations at this point would be contrary to our 
interests in Vietnam and our strategic interests in the region.
    Vietnam is obviously an integral part of Southeast Asia. 
The ASEAN meeting, this fall, will be held in Hanoi. Vietnam 
has joined the community, and that community wants Vietnam to 
be a participant.
    In light of the financial crisis that is engulfing Asia and 
the turbulent events in Cambodia over the last year, it is in 
our enormous strategic interest to have an active presence in 
the region, an effective working relationship with the 
countries of the region; and that very much includes Vietnam 
with some 75 million people.
    It was the Bush administration's overtures toward Hanoi in 
1990 and 1991 which resulted in the so-called roadmap for 
United States-Vietnam relations, and that was born out of the 
need to try to help resolve the Cambodian conflict at the time, 
as well as to establish regional security and stability. I 
think we have overriding strategic and larger political 
interests in counterbalancing China's position, and 
particularly in recognizing that over the last few years, China 
has been very aggressively courting the countries of Southeast 
Asia including Cambodia; even those such as Vietnam which were 
historical enemies. If we want to make them all an enemy, the 
way to do it is to become insular and turn around and start 
being punitively self-destructive. We have critical issues 
still with Cambodia, with Hun Sen, with the effort of trying to 
have an election there. China has been the number one supplier 
of arms to the military junta in Rangoon; has continually 
worked to develop Burma as an outlet for Chinese goods, from 
land-locked Yunnan Province. And although Vietnam has been 
invaded by China many times, Beijing has made a concerted 
effort to improve relations with Hanoi. Any trip to the border 
along China and Vietnam will show you the increased engagement 
and commerce that is taking place there.
    But last, and absolutely not least, it should be the 
responsibility of the U.S. Congress to continue to try to 
recognize the road we have traveled with respect to the POW-MIA 
issue and the accounting process. For years after the war, Mr. 
Chairman, we tried to isolate Vietnam. And at the same time, we 
tried to promote the primary interest of the United States, 
which was to account for our missing service people. And so we 
did that by denying Vietnam the benefits of trade and 
diplomatic relations. The record is irrefutably clear--God 
bless you--the record is absolutely clear that for the entire 
period of that isolation, Mr. Chairman, we didn't get answers. 
Our families were getting increasingly frustrated. And the fact 
is--and it is indisputable--that progress on the POW-MIA issue 
came only as we began to engage the Vietnamese and recognize 
that they needed and wanted a relationship with the United 
States. That recognition was implicit in the Bush 
administration's roadmap, which set out the step-by-step 
process for normalization of relations. In fact, the Clinton 
administration delayed the roadmap and delayed the process in 
order to further press the POW-MIA accounting process.
    Today, we have the most significant accounting process any 
nation has ever put in place in the history of warfare. And 
that was put in place, Mr. Chairman, with a bipartisan effort, 
in the Senate particularly, where we had the Select Committee 
working on that.
    In the last 5 years, American and Vietnamese personnel have 
conducted 30 joint field activities in Vietnam to recover and 
repatriate remains. Two hundred and thirty-three sets of 
remains have been repatriated and 97 remains have been 
identified. In addition to working jointly with the United 
States on remains recovery, the Government of Vietnam agreed in 
1996 to an American request to undertake unilateral actions. 
Since that time, Vietnamese teams have provided reports on 
their unilateral investigations of 115 cases.
    When I became Chairman of the Senate Select Committee on 
POW/MIA Affairs in 1991, 196 individuals were on the list of 
so-called ``discrepancy,'' or ``last known alive'' cases. These 
are the most difficult cases, Mr. Chairman, in which members of 
the Armed Forces had survived their incident, and we knew them 
to have survived their incident. And we had evidence that they 
had survived it. But they remained unaccounted for because they 
didn't return alive, and their fate was uncertain. These are 
the most difficult and the most heartbreaking cases. As of 
today, I am proud to say that fate has been determined for all 
but 43 of the 196 on the list. In human terms that means that 
because we engaged, because we created a process, because we 
were able to visit sites, to work together cooperatively, that 
all but 43 families now know to a certainty what happened to 
their loved one. That is progress by any measure.
    Now since the agreement was reached in December 1994 on 
joint United States-Vietnamese-Lao trilateral investigations in 
Laos, 22 Vietnamese witnesses have participated in operations 
in Laos; the government has identified another 32 to 
participate in future investigations. Those witnesses have 
proved crucial to our accounting efforts in Laos. For example, 
information provided by Vietnamese witnesses resulted in the 
recovery and repatriation of remains associated with two cases 
in 1996, one involving 8 Americans and another involving 4.
    One of the critical questions at the core of the accounting 
process is what documents or information does Vietnam or its 
citizens have that could provide further answers. When we 
started this process in 1991, we didn't have anything that 
guaranteed us access to information. Now we have a full-time 
archive in Hanoi where Americans and Vietnamese work side-by-
side to resolve remaining questions. Thousands of artifacts, 
documents, and photographs have been turned over by Vietnamese 
officials for review. In the last 5 years alone, 28,000 
archival documents have been reviewed and photographed by joint 
research teams. We've conducted over 195 oral history 
interviews, in addition to those conducted during the joint 
field activities. In response to an American request, Vietnam 
in 1994 created unilateral document search teams, and since 
that time, they've provided documents, in 12 separate turn 
overs, totaling 300 documents of some 500 to 600 untranslated 
pages. To date, these teams have also conducted unilateral 
research in 19 provinces.
    Now, Mr. Chairman, in my time as Chairman of the POW/MIA 
Committee and otherwise, I've made numerous trips--in the 
double digits--to Vietnam, often accompanied by my good friend, 
Senator John McCain and even then by our now Ambassador, then 
Congressman Pete Peterson--and I was delighted to have him with 
me as part of that critical effort. I'm convinced that we made 
progress on this issue, as I know Pete Peterson will tell you 
and John McCain will tell you, because we engaged. If they have 
documents that we don't have, if there are, indeed, secrets 
held, and there probably are, you're not going to get them if 
we shut off, and turn off, and turn away. The best hope we've 
ever had is to be able to engage people, to learn where things 
may be, and to work the process. And if anybody thinks that 20 
years of isolation produced those answers, show them to me. The 
fact is that it's only the last years of engagement that we've 
been able to really begin to create a process that begins to 
resolve the dilemma.
    The initial waiver of Jackson-Vanik exercised by the 
President just a few months ago was a modest but important step 
in the continued effort to normalize our relations. It's 
important--Mr. Chairman--it's important to note that the waiver 
does not extend most-favored-nation tariff status. That's 
further down the road. But it does, step-by-step, continue a 
very cautious, considered roadmap process of engagement where 
we buildup further the relationship.
    Now those who oppose Jackson-Vanik argue we're moving too 
fast, that Vietnam's performance in immigration, human rights, 
and some even assert POW/MIA isn't satisfactory. I disagree, as 
I've said, and I think the record backs me up. The use of 
carrots or incentives creatively has been at the core of our 
policy with respect to Vietnam, and there's no question that 
even the decision to move on Jackson-Vanik created further 
progress on immigration itself this year. Since the waiver was 
issued, Vietnam has made significant and consistent progress in 
fulfilling its commitments under the ROVR agreement, which 
provides for resettlement in the United States of eligible 
Vietnamese who had returned to Vietnam from refugee camps in 
the region.
    As of June 8, Vietnam had cleared for interview 15,081, or 
81 percent, of the 18,718 potential applicants. I would point 
out, Mr. Chairman, it's our own INS that has been slow and only 
interviewed 9,447 of the 15,000. And so far, 3,119 have arrived 
in the United States.
    Vietnam is also cooperating with us to expedite processing 
of those applicants still in the pipeline and to provide an 
accounting of a list of 3,000 individuals which we handed over 
in January. The administration expects that a significant 
number of these people will be cleared for interview once we've 
given the Vietnamese additional information with which to find 
them.
    Mr. Chairman, since the waiver was granted, Vietnam has 
also adopted more liberal procedures in the Orderly Departure 
Program, under which some 480,000 Vietnamese have emigrated as 
refugees or as immigrants to the United States over the last 10 
to 15 years. At this point, there are only about 6,900 ODP 
applicants remaining to be processed, including Montagnards and 
former re-education camp refugees. Vietnam's agreement early 
this month to allow U.S. officials to interview all Montagnard 
ODP cases, as well as the procedural changes adopted by 
Vietnam, will enable the United States to complete these 
interviews by the end of the year. That's progress, and we 
shouldn't interrupt it.
    Now I will say that human rights is, and must continue to 
be, at the forefront of our bilateral agenda. Treasury 
Secretary Rubin and Secretary of State Albright have raised 
human rights issues with the Vietnamese at the highest levels 
during their visits to Vietnam. The United States and Vietnam 
have established a regular bilateral human rights dialog, in 
which general issues as well as specific issues are raised. I 
have consistently raised human rights issues during each of my 
trips to Vietnam. I have turned over lists, and we have had 
prisoners released. These entreaties and the gradual 
improvement in our relations have had some positive results. 
Several jailed dissidents have been released and some degree of 
liberalization is taking place. No one can go to Hanoi today 
and not recognize that exposure to and interaction with other 
countries is changing Vietnam at an extraordinary pace. 
Vietnamese enjoy more personal liberty than they ever have 
before. They own shops; have economic mobility; speak to 
foreigners, in most cases without any fear at all. They have 
more access to information and foreign media. And although the 
newspapers are state papers, they are increasingly outspoken 
about corruption and governmental inefficiency.
    After last year's legislative elections, the number of 
nonparty members elected to the National Assembly doubled, from 
8 percent to 15 percent. While this represents a minority of 
the Assembly's membership, it is a trend in the right 
direction. And the fact that the assembly itself is playing a 
stronger role on key issues that are both economic and 
political should not be ignored.
    Now some would argue that the only way to change Vietnam's 
human rights record is to deny them the benefits of trade, to 
force OPIC and Ex-Im Bank to close their doors and freeze our 
relationship right here and now. As one who has been engaged in 
this process for over 30 years and who has witnessed how this 
country has changed in such a short time period, I just simply 
believe that would be an enormous mistake. And I think the 
record of progress bears out that that approach is wrong. We 
need to maintain the ability to discuss all of the issues at 
the highest levels of government. Vietnamese leaders know full 
well the importance that we place on human rights and that 
progress on this issue is going to be a very important part of 
the context of our future relationship. I know this 
Subcommittee will be hearing testimony from some who argue that 
Vietnam hasn't even cooperated fully on the POW issue. But I 
think the facts and the testimony of all those who participate 
in that process would contradict that. During each of my trips, 
I've met with the American teams who worked on this issue with 
the Vietnamese. Every one of these teams, including the one now 
in place, has indicated to me that Vietnamese cooperation has 
been outstanding.
    Second, to those who argue that Vietnam is withholding 
documents or even remains, I say if that is so, the only way 
you're going to find out is to continue the process and the 
policy we now have in place.
    So, Mr. Chairman, I think that we need to continue down the 
road we're going. I think reversing the policy by disapproving 
the President's waiver would stand to probably slow down some 
of the cooperative efforts that we've made progress on and 
negate our own interests in the region. And I clearly hope this 
Subcommittee and the House will act in the strategic interests 
of the United States of America.
    Thank you.
    [The prepared statement follows:]

Statement of Hon. John F. Kerry, a U.S. Senator from the State of 
Massachusetts

    Mr. Chairman, thank you for inviting me to testify this 
morning on the President's decision to renew the waiver of the 
Jackson-Vanik amendment for Vietnam. Let me say at the outset 
that I strongly support this decision, and I believe 
overturning it would have serious negative consequences for our 
bilateral relations with Vietnam and our larger interests in 
Southeast Asia.
    Today, the United States has many important and varied 
interests in Vietnam and in the region. First, we have an 
overriding humanitarian interest in continuing the process of 
obtaining the fullest possible accounting of American 
servicemen missing from the war.
    Second, we have an interest in promoting freedom of 
emigration--an area in which the government of Vietnam has made 
substantial process over the last year.
    Third, we have an ongoing interest in promoting human 
rights and democratic freedoms around the world, including in 
Vietnam where the composition of the population--over 60 
percent of Vietnam's population are under 25 years of age--and 
the process of economic development hold the promise of 
political liberalization over time.
    Fourth, Vietnam is a potentially significant market for 
American services and goods, but that market can only be 
developed if Vietnam maintains the course of economic reform 
that it began in the late 1980s. When I was in Vietnam earlier 
this year, it was clear to me that there was concern within the 
leadership about the financial crisis in Asia and what 
implications that crisis had for Vietnam. I believe after 
talking with the Prime Minister and other senior Vietnamese 
officials that Vietnam will stay the course. However, if we 
force Eximbank and OPIC to close down--which is what supporters 
of the resolution of disapproval want--we run the risk of 
setting that process back. It is in the interest of American 
workers and businesses to continue to encourage this process of 
reform.
    Vietnam is an integral part of Southeast Asia--a region 
where political stability has been sporadic at best. In light 
of the financial crisis that is engulfing Asia and the 
turbulent events in Cambodia over the last year, it is in our 
interest to have an active presence in the region and effective 
working relationships with the countries of the region, 
including Vietnam. In fact the Bush Administration's overtures 
toward Hanoi in 1990 and 1991, which resulted in the so-called 
``road map'' for U.S.-Vietnamese relations, were born out of 
the need to end the conflict in Cambodia and establish a 
process to promote regional stability.
    We also have overriding strategic and political interests 
in counter balancing China's position and growing influence in 
Southeast Asia. Over the last few years China has been 
aggressively courting the countries of Southeast Asia even 
those, such as Vietnam, which were historical enemies. China 
has mended fences with Cambodia's second prime minister, Hun 
Sen, and was quick to provide aid to Cambodia in the wake of 
the coup last July in which Hun Sen deposed his co-prime 
minister Prince Ranariddh. China has also been the number one 
supplier of arms to the military junta in Rangoon, and has 
continuously worked to develop Burma as an outlet for Chinese 
goods from land-locked Yunnan province. Although Vietnam has 
been invaded by China many times, Beijing has made a concerted 
effort to improve relations with Hanoi. A trip to the border 
provides a first hand picture of the budding trade relationship 
between China and Vietnam.
    Last, but certainly not least, we have an interest, a 
responsibility, and a national need to heal the wounds of a 
nation and put the past behind us once and for all. The step by 
step process of normalizing our relations with Vietnam is a 
means of healing those wounds.
    The real question is how we promote these interests most 
effectively? Those who oppose the Jackson-Vanik waiver want to 
turn the clock back to the policy that we had in place for some 
20 years after the war--a policy of denial. But Mr. Chairman, 
as the history of the POW/MIA issue clearly demonstrates, that 
policy was a failure.
    For years after the war, we tried to promote our primary 
interest in Vietnam--to resolve the cases of American 
servicemen still missing from the war--by denying Vietnam the 
benefits of trade and diplomatic relations. The policy produced 
few positive results. Progress on the POW/MIA issue came only 
when we began to engage the Vietnamese and to recognize that 
the Vietnamese needed and wanted a relationship with the United 
States. This recognition was implicit in the Bush 
Administration's roadmap which set out a step by step process 
for normalization of relations between the United States and 
Vietnam.
    Today, we can cite enormous progress in the process of POW/
MIA accounting as a result of the cooperation that we have 
received, and continue to receive, from the Vietnamese. In the 
last five years American and Vietnamese personnel have 
conducted 30 joint field activities in Vietnam to recover and 
repatriate remains. 233 sets of remains have been repatriated 
and 97 remains have been identified. In addition to working 
jointly with the United States on remains recovery, the 
government of Vietnam agreed in 1996 to an American request to 
undertake unilateral action. Since that time, Vietnamese teams 
have provided reports on their unilateral investigations of 115 
cases.
    When I became Chairman of the Senate Select Committee on 
POW/MIA Affairs in 1991, 196 individuals were on the list of 
``discrepancy'' or ``last known alive'' cases. These were cases 
in which individuals survived their loss incidents but they 
remain unaccounted for because they did not return alive and 
their fate was uncertain. These are the most difficult and 
heartbreaking cases. As of today, fate has been determined for 
all but 43 of the 196 on this list. This means, Mr. Chairman, 
that their families and friends finally know what happened to 
them. That is progress by any measure.
    Since agreement was reached in December 1994 on joint U.S.-
Vietnamese-Lao trilateral investigations in Laos, 22 Vietnamese 
witnesses have participated in operations in Laos; the 
government has identified another 32 to participate in future 
investigations. These witnesses have proved crucial to our 
accounting efforts in Laos. For example, information provided 
by Vietnamese witnesses resulted in the recovery and 
repatriation of remains associated with two cases in 1996: one 
involving eight Americans and another involving four.
    One of the critical questions at the core of the accounting 
process is what documents or information does Vietnam or its 
citizens possess that could provide answers. When we started 
this process several years ago, we had little access to 
information. That has changed dramatically. We have a full time 
archive in Hanoi where Americans and Vietnamese work side by 
side to resolve remaining questions. Thousands of artifacts, 
documents and photographs have been turned over by Vietnamese 
officials for review. In the last five years alone, 28,000 
archival documents have been reviewed and photographed by joint 
research teams. We have conducted over 195 oral history 
interviews in addition to those conducted during the joint 
field activities. In response to an American request, Vietnam 
in 1994 created unilateral document search teams. Since that 
time they have provided documents in 12 separate turnovers 
totaling 300 documents of some 500-600 untranslated pages. To 
date these teams have also conducted unilateral research in 19 
provinces.
    During my tenure as Chairman of the POW/MIA Committee, I 
spent countless hours and made numerous trips to Vietnam, often 
accompanied by my good friend and committee colleague, Senator 
McCain, in an effort to develop and improve cooperation on the 
POW/MIA issue. I am convinced that we made progress on this 
issue because of engagement and cooperation, not isolation or 
containment. And I am equally convinced that the best way to 
promote our broad range of interests in Vietnam is to continue 
to engage the Vietnamese and to follow our present policy of 
step by step normalization of bilateral relations with Vietnam.
    The initial waiver of the Jackson-Vanik amendment, 
exercised by the President just a few months ago in March, was 
a modest but important step in the continued normalization of 
our relations with Vietnam. Coming nearly three years after the 
United States and Vietnam normalized diplomatic relations, this 
waiver simply enabled the Export-Import Bank and OPIC to begin 
operations in Vietnam--a step that is for the benefit of 
American companies and by extension the American economy. It is 
important to note that this waiver does not extend most-
favored-nation tariff treatment to Vietnam. That step is 
further down the road, and no doubt will come when the United 
States and Vietnam have completed negotiations on a bilateral 
trade agreement.
    Those who oppose the Jackson-Vanik waiver argue that we are 
moving too fast, that Vietnam's performance in the areas of 
emigration, human rights, and some would even say POW/MIA is 
unsatisfactory, that our policy of engagement has yielded few 
tangible results. I disagree and I think the record backs me 
up.
    The use of carrots or incentives creatively has been at the 
core of our policy toward Vietnam since the President, with the 
overwhelming express support of the Senate, lifted the 
unilateral U.S. trade embargo in 1994. There is no question 
that the President's decision to waive the Jackson-Vanik 
amendment in March of this year led to significant progress on 
emigration--the one and sole issue on which the extension of 
MFN, US governmental credits and credit insurance is dependent 
under the provisions of the amendment.
    Since the waiver was issued, Vietnam has made significant 
and consistent progress in fulfilling its commitments under the 
ROVR agreement which provides for resettlement in the United 
States of eligible Vietnamese who had returned to Vietnam from 
refugee camps in the region. As of June 8, Vietnam had cleared 
for interview 15,081, or 81 percent of the 18,718 potential 
applicants. I would point out, Mr. Chairman, that INS has 
interviewed only 9447 of those cleared by the Vietnamese to 
date. So far, 3119 have arrived in the United States. Vietnam 
is also cooperating with the us to expedite processing of those 
applicants still in the pipeline and provide an accounting of a 
list of 3000 individuals which we handed over in January. The 
Administration expects that a significant number of these 
people will be cleared for interview once we have given 
Vietnamese officials additional information with which to find 
them. Not only did the waiver produce results but the very 
prospect of a waiver led Vietnamese officials to modify 
processing procedures for the program last October.
    Since the waiver was granted, Vietnam has also adopted more 
liberal procedures for those in the Orderly Departure Program 
(ODP) under which some 480,000 Vietnamese have emigrated as 
refugees or immigrants to the U.S. over the last 10 to 15 
years. At this point there are only about 6900 ODP applicants 
remaining to be processed, including Montagnards and former 
reeducation camp refugees. Vietnam's agreement early this month 
to allow U.S. officials to interview all Montagnard ODP cases 
as well as the procedural changes adopted by Vietnam will 
enable the United States to complete these interviews by the 
end of the year.
    Clearly Vietnam has made substantial and measurable 
progress in the area of emigration, but what about human 
rights. To be candid, Mr. Chairman, the record is not as 
impressive. Vietnam continues to be a one-party state that 
tolerates no organized political opposition. Many basic 
freedoms, such as freedom of the press or speech, are denied or 
curtailed, and according to Amnesty International, Vietnam has 
at least 54 political prisoners.
    Human rights is and must continue to be on our bilateral 
agenda with Vietnam. Treasury Secretary Rubin and Secretary of 
State Albright have raised human rights issues with Vietnamese 
officials at the highest levels during their visits to Vietnam. 
The United States and Vietnam have established a regular, 
bilateral human rights dialogue in which general issues as well 
as specific cases are raised. I consistently raise human rights 
issues during my trips to Vietnam. These entreaties and the 
gradual improvement in our relations has had some positive 
results. Several jailed dissidents have been released, and some 
degree of liberalization has taken place.
    No one can go to Hanoi and not recognize that exposure to 
and interaction with other countries is changing Vietnam. 
Vietnamese enjoy more personal liberty than they ever had 
before; they own shops, have economic mobility, and speak to 
foreigners in most cases without fear. They have more access to 
information and foreign media and although the newspapers are 
``state papers,'' they are increasingly outspoken about 
corruption and governmental inefficiency. After last year's 
legislative elections, the number of nonparty members elected 
to the National Assembly doubled from 8 percent to 15 percent. 
While this represents a minority of the Assembly's membership, 
it clearly is a trend in the right direction, as is the fact 
that the Assembly itself is playing a stronger role on key 
issues, both economic and political.
    Some argue that the only way to change Vietnam's human 
rights record is to deny them the benefits of trade, force OPIC 
and EXIMBANK to close their doors, and freeze our relationship 
here and now. As one who has made more than a dozen trips to 
Vietnam over the last eight years and who has witnessed how 
this country has changed in such a short time period, I 
honestly believe that they are wrong. If we want to promote 
human rights and political change in Vietnam, we need to expand 
our contacts, not contract them through all the tools at our 
disposal--trade, aid, exchange programs, participation in ASEAN 
and other regional and international institutions. And we need 
to maintain the ability to discuss this issue at the highest 
levels of government. Vietnamese leaders know full well the 
importance that we place on human rights and that progress on 
this issue will be part of the context in which our relations 
develop.
    I know this committee will be hearing testimony later this 
morning from some who argue that Vietnam has not cooperated 
fully on the POW/MIA issue. As is obvious from my earlier 
remarks, I disagree, but let me make two additional points. 
First, during each of my trips to Vietnam I have met with the 
American teams--teams composed of our military personnel--who 
work on this issue daily with the Vietnamese. Every one of 
these teams, including the one now in place, has indicated to 
me that Vietnamese cooperation has been outstanding. Second, to 
those who argue that Vietnam is withholding documents or even 
remains, I say if that is so, the only way you are going to 
find out is to continue the process and the policy we now have 
in place.
    Mr. Chairman, I believe the record over the last few years 
clearly proves that our step by step approach to normalizing 
relations with Vietnam is working and is consonant with the 
many interests we have in that country and the region. 
Reversing that policy by disapproving the President's waiver of 
the Jackson-Vanik amendment will reduce our influence and 
threaten future progress on POW/MIA, emigration, human rights, 
economic reform and trade, and other interests I have not 
discussed, such as stemming the flow of illegal drugs. In 
short, it would do irreparable harm to our relationship and our 
interests not only in Vietnam but also in the region.
    The decision to treat Vietnam as a country, rather than a 
war, was made when we normalized diplomatic relations in 1995. 
We cannot and should not turn the clock back now. The President 
made the right decision when he decided to waive the Jackson-
Vanik amendment and to renew it this month. Congress should let 
that decision stand.
      

                                


    Chairman Crane. Thank you, Senator.
    Dana, you're up next. Wait just a moment, Dana, if you'll 
yield. Do you have to run right now, Senator?
    Senator Kerry. I technically do. I'll try to stay for----
    Chairman Crane. Well, then, let me see if anyone has a 
major question they'd like to direct to you before you split. I 
had just one. And that is on Jackson-Vanik and freedom of 
emigration: What is the incentive to jail, for religious 
reasons or political reasons, any Vietnamese citizen if you can 
kick them out of the country?
    Senator Kerry. Well, they are not as good as we want them 
to be at this point in the normal immigration process, which is 
something we're working on right now. I think Ambassador 
Peterson will address that, but I know that they have made 
increased improvements to that. If you can get a visa, if you 
can get a passport, you can leave. And, as I said, under the 
ROVR Program, some 15,000 plus have left and come over here. So 
we've had a remarkable rate of immigration.
    But, you know, this is still unfortunately a one-party 
government. It's a totalitarian government. I don't like that. 
I've spoken out against that. I will continue to speak out 
against that. I look forward to the day hopefully when Vietnam 
will be a democracy. But they are moving in the right direction 
in terms of each of these issues. And the question is, how do 
you engage any of these countries in a constructive way, in a 
world where our allies are so reluctant to join us in some of 
the sanctions we put in place or other efforts? We tend to be 
shooting ourselves in the foot around the world right now, Mr. 
Chairman, with a set of sanctions, country-for-country, that no 
one joins in with us. It may make us feel good, but the truth 
is we're actually losing influence in the process in many of 
these places.
    And, you know, business certainly is not at the forefront; 
never should be at the forefront of any of these choices. We're 
talking about value systems. But we also, even as we don't gain 
on the value system side, do wind up losing on the business 
side, too. And most people who've been engaged in these 
countries for long periods of time would say that through 
engagement there are huge gains to be made.
    I visited the Ford plant in Vietnam. And there are other 
plants there. While some complain about the conditions, I mean, 
this was a plant as clean as any plant I've ever seen in 
Detroit or anywhere. It's modern. And the workers there are 
earning two and three times the salaries of the rest of the 
people in the country. And they're wearing blue jeans and 
western clothes and listening to our music. And even that, a 
lot of people in their country object to.
    But there's an opening up that automatically comes through 
engagement that you simply can't achieve through some of these 
older fashion tools that worked in a bipolar, east-west divided 
world, which is not where we are today in the world of the 
Internet, in the world of wireless communications, and the 
world of instant flow of information. They have fax machines, 
too. They know what we're doing on a daily basis, just as we 
do. And the reality is that it is engagement that will bring 
about change and the marketing of democracy. That's what 
changed the Eastern European bloc countries.
    Why do we apply to Vietnam a standard of change that is 
totally different from the successful standard of change we 
utilized in so many other parts of the world? The wave of 
democracy is winning. We should be excited about the lesson we 
learned from the experience we've had of the last 20 years. And 
we should be engaging even more so, I think because of the 
lessons learned. And Ronald Reagan and others, with their great 
public diplomacy efforts, said tear this wall down. And the 
efforts of public diplomacy were exactly the opposite direction 
of what, you know, disapproving the waiver of Jackson-Vanik 
would do vis-a-vis Vietnam.
    So I think we need to learn from the positive experience 
we've had. And in the end, I think we'll make further progress 
with Vietnam on the issue of normal immigration.
    Chairman Crane. Thank you.
    Mr. Matsui.
    Mr. Matsui. I thank the Chairman. Senator Kerry, I 
appreciate your observations and comments. I just want to ask 
you one question with respect to the POW-MIA issue. We have a 
full-time individual there going through the archives. If, in 
fact, we deny the waiver this time around, what is your 
thoughts on that? Would that person still remain there or what? 
And this is just a smaller part of the larger issue I think you 
just answered in terms of Mr. Crane's question.
    Senator Kerry. I think, Congressman, that clearly if we 
begin to take back what we've given, if we begin to suggest 
that the judgment made by the administration and the capacity 
of the administration to engage is going to be micromanaged by 
the Congress in a way that is a slap, you know, at the process, 
without cause, we will give them reason to say, well, the 
Americans aren't really serious about this. We don't know who 
we're dealing with. And you put people at risk. I mean, they 
have their own tensions in their government. There are 
hardliners there. There are people who want to engage more 
there. There are people who think they should be more involved 
with China rather than the United States. If you want to give 
those people who would move in directions that are inimical to 
our larger strategic interest the upper hand, then treat them 
badly and treat them like somebody and make ourselves somebody 
who is suspect. I think if there weren't progress, then I 
wouldn't say waive it. I mean, I went over there specifically 
in January to measure whether or not there was sufficient 
progress, and we were moving. And I've been willing to call 
what I see pretty directly in Vietnam along the way. I've 
spoken out against the restraints on religious freedom, and 
that's improving. And there are increasing freedoms available 
for practicing religious freedom and so forth. I've been to 
mass in the cathedral there. I know this as a matter of fact. 
Our Ambassador was married in the cathedral there. There are 
changes happening. I think to embrace a policy that is already 
discredited could result in the archive shutting down and 
cooperation slowing down. It will be the families who will 
suffer for that and also the larger strategic interests of the 
United States of America.
    Mr. Matsui. Thank you.
    Chairman Crane. Mr. Neal.
    Mr. Neal. Thank you, Mr. Chairman.
    John, your credentials over the three decades are 
impeccable as it relates to this issue. Let me ask you a 
question that kind of cuts to the quick. In your judgment, 
having been at this for the period of time that you have, is 
conceivable that there are POWs that could be still alive, 
knowing that this issue draws great emotion, and people are 
seeking closure in their lives?
    Senator Kerry. Well, the Senate POW/MIA Committee in its 
report several years ago unanimously concluded--Republicans and 
Democrats alike--that there was no compelling evidence at that 
point in time that anybody was still alive certainly in 
Vietnam. We did conclude--we did conclude unanimously that it 
was our judgment that some people could have been left behind, 
or were left behind. So, people have to make a judgment about 
the level and credibility of the evidence today. But I will 
tell you, none of our teams--I mean, our teams are made up of 
servicemen--think there is credible evidence today. Our teams 
are made up of people who wear the uniform today. And nobody 
better understands than they what it might it be like to be a 
person in uniform left behind. So they are not playing politics 
in this. They're not coming at it as a Republican or a 
Democrat, a liberal or a conservative. There's no ideology. 
They're going out there to find Americans if they're there. And 
there isn't one general, one admiral, not one person in uniform 
on those teams who has gone out to search the evidence that 
they're given through intelligence and other sources who has 
come back and said, I'm convinced so and so is there. They run 
down those reports, sometimes at risk of their life.
    So I think we have to rest with their judgment that at this 
moment there's no credible evidence that anybody is being held. 
I'm not going to give some sweeping statement to write off 
some, you know, outlying possibility. But that's why we're 
engaged in the most comprehensive and expensive search for 
people, not just remains, but for people and answers that any 
country has ever mounted in the history of human warfare. And I 
think we ought to be very proud of that.
    Mr. Neal. How do you react to that suggestion every once 
and a while that appears in publications across the country 
that there's been a sighting of a potential American POW.
    Senator Kerry. Well, I personally react with an element of 
skepticism, but nevertheless with the notion that let's check 
it out. What we did was put into place a quick response 
capacity to go immediately to the best of our ability to 
investigate the report. We are in someone else's country. We do 
have to rely on logistics. They've improved significantly. And 
I can tell you I personally swooped in on some prisons, 
unannounced--one or two by accident actually because they 
landed in the wrong place. And we went into the prison, 
unannounced, and managed to convince people that we should go 
through the entire place, and we went through the entire place 
and couldn't even find evidence that any American had ever been 
there, let alone was there today.
    So, I mean, we're trying to do the most exhaustive process 
that's ever been engaged in, and I don't frankly know what more 
we could do in a cooperative kind of effort where we're 
dependent on another country and their people to be able to get 
the answers. People can express frustration, and I'm 
sympathetic with the frustration for people who've lived 25 and 
30 years with no answers, and with a government, frankly, that 
wasn't forthcoming for a long period of time. So I'm very 
sympathetic to those people who come and say, they may be 
holding on to something. But for 20 years, they gave us nothing 
or very little even as we were tough. And those were the years 
when the evidence was most ripe. Now, later on, after all of 
this engagement to the degree there may be evidence, the best 
shot is going to be for someone to come up to some American 
who's in the country and say, hey, come on over, I want to show 
you something. But if you start shutting that down again and 
moving in the opposite direction, I think we lose a lot of 
interests that are large and that are very compelling for us.
    Mr. Neal. Thanks, John.
    Chairman Crane. Mr. Ramstad.
    Mr. Ramstad. Thank you, Mr. Chairman. I'll be very brief. 
Senator, I was going to ask the question my good friend from 
Massachusetts just asked, but let me just say this: Your 
efforts and those of Senator McCain and my good friend, Pete 
Peterson, have been truly exemplary with respect to the POW-MIA 
issue. Certainly, the families of Minnesota's POWs and MIAs are 
very grateful for those efforts.
    With respect to your testimony, I couldn't agree more that 
the best hope--the only hope--is engagement. Those, in good 
faith, who would build a wall around Vietnam, are very 
misguided. In continuing the Richie Neal tradition of cutting 
to the chase, let me just ask this: Were we to overturn the 
President's Jackson-Vanik waiver for Vietnam, wouldn't we 
totally lose leverage with respect to hastening economic and 
political reforms, as well as the POW-MIA issue and other 
concerns? Wouldn't the leverage just be gone?
    Senator Kerry. I believe we would severely set back the 
progress we've made, and as I said a moment ago, give people 
cause to look for relationships elsewhere, to believe that 
we're maybe not interested in being a steady partner.
    We don't give up much for this, you know, with the waiver 
of Jackson-Vanik, the involvement of Ex-Im and OPIC. I mean, 
that is exporting capitalism. Why, in God's name, would we want 
to choose to move in an opposite direction than the export of 
capitalism, which they're embracing? Here are countries that 
have been totalitarian that are embracing free market systems 
increasingly. I mean, there are people working on a law project 
in Vietnam, trying to put contract law in place, property law 
in place, intellectual property law, and so forth. To not 
recognize where the world is moving in that regard is to--I 
don't know--I guess it's really to be wishing for a world that 
isn't any more. But it's not a good place for us to go.
    Mr. Ramstad. Thank you very much, Mr. Chairman.
    Chairman Crane. And thank you very much, Senator. Oh, wait, 
Jennifer, did you have a question?
    Ms. Dunn. Thank you very much, Mr. Chairman. And, Senator, 
thank you for coming. And I'm a little late to the hearing, so 
I don't know if you covered this. But my interest is besides, 
then, Mr. Neal's question is also in the area of immigration. 
And I'm wondering what the status is, what the trends are, for 
immigration, and what obstacles exist to free immigration from 
Vietnam?
    Senator Kerry. As I did mention a little bit earlier, I'm 
delighted to just quickly recap. I just want to get my figures 
absolutely correct here. Under the Orderly Departure Program, 
some 480,000 Vietnamese have emigrated as refugees to the 
United States--or as immigrants--either one--immigrants or 
refugees--over the last 10 to 15 years. There are only about 
6,900 people in that program now as applicants remaining to be 
processed, and those include Montagnards and former reeducation 
camp refugees. This month, Vietnam agreed to allow us to 
interview all of the Montagnard ODP cases which had been a 
problem. So that's an improvement.
    In addition to that, as of June, they've cleared for 
interview 15,081, or 81 percent of the potential applicants 
under the repatriation of returnees program. Those are the 
people who left the country and then came back, but who have 
cause to believe they want to get out. And we are working with 
them--and the Ambassador will detail it--we are making 
significant improvements on people's access to visas, access to 
passports and ability to be able to leave the country.
    So I think as we increasingly build the relationship that 
is going to increase. And many, many Vietnamese, you know, 
Vietnamese-Americans--are now going back on a regular basis, 
and having a great amount of family exchange and so forth in 
their former country. All of that has a profound impact, too. 
And obviously, if you start slapping down restraints on our 
side, they could slap down restraints on their side. And I 
think that's counterproductive.
    Chairman Crane. Again, we want to express appreciation for 
your giving your time and coming over here and testifying and 
giving us your insights.
    Senator Kerry. Mr. Chairman, I'm delighted to thank you for 
the time. I think it's very important.
    Chairman Crane. Well, we appreciate it----
    Senator Kerry. And I'll apologize to my colleagues.
    Chairman Crane. And, Dana, you're up next, and Chris you 
want to come up here and grab a seat? And proceed when ready.

    STATEMENT OF HON. DANA ROHRABACHER, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Rohrabacher. Yes, I would have preferred to have a back 
and forth with the Senator because I don't like to refute 
someone's arguments when they're not here.
    Let me just say that those who believe that we brought down 
the Soviet empire, especially the Soviet Union with the use of 
trade have an interpretation of history that just boggles the 
mind. I mean the fact is that President Reagan never suggested 
giving most-favored-nation status to the Soviet Union, and it 
was, in fact, the economic barriers that he put up, as well as 
the military barriers to the Soviet Union that helped wither 
the confidence of those people who were still in the Kremlin 
and helped bring down that dictatorship. The idea that we, in 
some way, were opening trade with them; and that caused that 
society to liberalize is just a pure rewrite of history.
    Number two, these archives that the Senator talks about 
this is nothing more than--I was there with the Senator when 
they opened the archives in North Vietnam several years ago. 
This is nothing more than a building in which they give papers 
that they want us to read. This is not their archives. This is 
not open access to their papers.
    The Senator knows very well that we've been requesting some 
significant documents for the last 20 years, and the Vietnamese 
have not been forthcoming.
    For example, even when I was there, and this is a repeated 
request, they have not given us the records from the prisons in 
which our own prisoners were kept. Where's Pete Peterson? Pete 
was kept in a prison, and--you were an MIA for the first couple 
years, as prisoner were you not. All right. He was kept as an 
MIA and isolated from other American prisoners for several 
years. The records from his prison have not been given to us to 
find if there were any other Americans who were kept in that 
prison or other prisons separate from the other prisoners. Now 
it would be very easy for the Vietnamese to give us those 
records. Now why haven't they done it? OK, they want to have an 
open relationship--give us those records. And when I personally 
asked them on our visit to Vietnam, they said American bombs 
had destroyed all the records from all their prisons. You know, 
give me a break. And I said, and I remember it when Pete was 
right there. I said that's like saying the dog ate the 
homework. And then they said, well, we can't translate that. 
Well. [Laughter.]
    I will translate it now. It is beyond believability that 
all the records for those prisons were destroyed by American 
bombs after the war or near the end of the war. Let's see those 
records. This has not been a high level of cooperation, and we 
have other things that still need to be addressed. And I think 
that we should not give Vietnam economic favors, even if none 
of that existed, and we had not been at war with the Communist 
dictatorship that still controls Vietnam. Let us not forget 
that there has been no liberalization of the dictatorship in 
Vietnam. It is still as if the old Communist regime existed in 
the Soviet Union. Now I am very much in favor of engaging the 
new regime in Russia where they're trying to be democratic. 
This is not what's going on in Vietnam. There has been no 
liberalization of that government. No attempt at free 
elections. No attempt at free speech, at all. Period. Zero. I 
am, and that's why and so even if we hadn't had this war with 
them and had our POW issue, we still should be very hesitant to 
give them to our capital. We are not talking about exporting 
capitalism to Vietnam. We are talking about exporting capital 
to Vietnam, and whether the American taxpayer should be 
subsidizing people who want to invest. So that Ford plant that 
Senator Kerry was talking about--hoop dee doo. So the workers 
there get paid twice or three times as much as the rest of the 
workers in Vietnam--hoop dee doo. How much is that? Fifty cents 
an hour? Give me a break. We're going to give a businessman who 
wants to invest in a Communist dictatorship a loan guaranteed 
by the American taxpayer. And that's what this issue is about. 
It's not about free trade. It's about subsidy by the taxpayer 
of people who want to take manufacturing units and put it in 
Communist dictatorships.
    I say and if we're going to have any type of incentive and 
subsidies for American businessmen to set up manufacturing 
units, let's do it in countries where they are struggling to 
create democracy, like the Philippines, for example. They are 
struggling to have a democracy there. They need the jobs, and 
what are we doing? We're giving businesses an incentive to go 
to the Communist dictatorship. We're giving them--our 
businesses the incentive to invest in a country that's had 
absolutely no reform. And that's the reason why we have this 
joint resolution, it's cosponsored by Ben Gilman, chairman of 
the International Relations Committee, and Chris Smith, who is 
with us today, as well as Senator Bob Smith. And it would 
disapprove the President's waiver authority contained in 
section 402 of the Trade Act of 1974, in respect to Vietnam. I 
say that extending American tax dollars to subsidize or insure 
business with the Communist Vietnam is not only a betrayal of 
American values, but it's bad business. And with your 
permission, I'll put my entire statement in the record.
    Chairman Crane. Without objection, so ordered.
    Mr. Rohrabacher. The statement goes through time and again, 
where because it's a dictatorship, businessmen who go over 
there are getting screwed. There, people are being asked for 
bribes. They don't come through with bribes. They end up having 
to lose their entire investment. There are businesses pulling 
out of Vietnam, and a great number right now. Is this a time 
when we want to put the good housekeeping seal of approval on 
this administration, encourage more businessmen to go over 
there? Of course, many of the businessmen who are going there 
they don't care if they lose their shirt because they're 
guaranteed by good 'ole U.S. taxpayers. And that's what this 
debate is about. Again, it is not about free trade. It's not 
about engagement. We can engage these people without giving 
them subsidy. We engage--Ronald Reagan engaged the bosses of 
the Soviet Union. He didn't extend the most-favored-nation 
status and say any American businessman that wants to trade 
over there is going to be able to get a guaranteed loan from 
the Export-Import Bank. It's time that we use our common sense. 
I believe in free trade. My motto is free trade between free 
people. Let's side with the democracies of the world--these 
struggling democracies like the Philippines. Let's work with 
these people now in Indonesia who want to have a democracy. And 
let's make sure that when you have people who are struggling 
and they've made these changes, let's give them that little bit 
of help with the Export-Import Bank and others. Let's not 
extend this to vicious dictatorships, it makes no sense 
business wise; and it makes no sense in terms of the basic 
values of our country.
    Thank you very much.
    [The prepared statement follows:]

Statement of Hon. Dana Rohrabacher, a Representative in Congress from 
the State of California

    Mr. Chairman:
    I have a Joint Resolution, co-sponsored by Ben Gilman, 
Chairman of the International Relations Committee and Chris 
Smith, Chairman of the Human Rights and International 
Organizations Subcommittee, as well as Senator Bob Smith, that 
would disapprove the extension of the President's waiver 
authority contained in section 402(C) of the Trade Act of 1974 
with respect to Vietnam.
    Extending American tax dollars to subsidize or insure 
business with the communist Vietnam is not only a betrayal of 
American values but bad business. The communist regime in Hanoi 
has now had six months since President Clinton first granted a 
waiver to permit the Ex-Im Bank and OPIC to operate in Vietnam 
to demonstrate a willingness to change their repressive and 
corrupt system. Unfortunately, human and religious rights 
continue to be abused, there are no free and fair elections--in 
just last week the regime announced it would create a 
``Patriotic Catholic Church'' similar to communist China, and 
that Marxism-Leninism is being reintroduced as mandatory study 
in public schools.
    I knew that business conditions in Vietnam are so bad that 
many international companies are pulling out because of the 
lack of a credible legal system and the high levels of 
corruption on all levels of government. But I was shocked to 
learn that the IMF has ended lending to Vietnam because of the 
high rate of bad loans in the banking sector, the lack of 
honest reporting of Vietnam's financial data and ``inadequate 
risk appraisal'' that make all investments in Vietnam high risk 
to both lenders and investors.
    Yesterday, I received a preliminary briefing by the GAO 
team that is working on a study on the Vietnamese economy that 
I have requested. I learned that Both IMF and the World Bank 
are greatly dissatisfied with the lack of access to the 
financial data of the bankrupt Vietnamese banking and stat 
economic sectors. That trade data is a state secret, where 
journalists and public officials have been jailed under charges 
of treason for merely discussing trade issues. That rosy 
accounts of foreign investment are overstated because only a 
small percentage of contracts are realized because of pervasive 
corruption and red tape. The IMF reports, ``Bad loans are 
mounting throughout Vietnam's banking sector and import tariffs 
remain high.... Vietnam's banks have the politically driven 
duty to lend money to state-owned enterprises.''
    Even long-time apologists for Vietnam, such as Carlyle 
Thayer say that the cause of Vietnam's financial crisis is 
Hanoi's ``own doing--corruption, red tape, high overheads, 
arbitrary decision-making and Byzantine licensing process are 
to blame.''
    The International Herald Tribune reports that two major 
economic agreements ``have fallen through--protection of 
copyrights and commercial air links. Talks on overall trade 
agreements drag on.... Investors continue to be harassed by a 
communist leadership that has yet to concede that foreign 
business need to make money themselves to help Vietnam's 
economy grow. Business managers say ``If 10 percent of foreign 
invested companies in this country are making a profit, I'd be 
surprised.'' Opaque regulations and officials seeking bribes 
make Vietnam a hard sell.''
    Mr. Chairman, this is not the type of environment that we 
should support. Instead, we should hold back further economic 
ties as an incentive for the government of Vietnam to reform 
economically and politically.
    My resolution has the support of the American Legion, 
Vietnam Veterans of America and the National Veterans Coalition 
and the National Alliance of POW/MIA Families because of their 
concerns that Hanoi is not doing enough to account for our 
MIAs. Yesterday, high level officials from the Department of 
Defense testified before the International Relations Committee 
that Hanoi can do more to provide a full accounting.
    Numerous Vietnamese-American organizations support this 
bill Bacchus the Vietnamese government continues to abuse human 
rights on a routine scale, with hundreds of democracy activists 
and religious believers still in detention, and because 
emigration--especially of former U.S. allies such as 
reeducation camp survivors and montagnard veterans and their 
families--are being denied by the communist regime.
    If precious American tax dollars are to be used as 
collateral to promote business in the region, let it be in 
democratic countries such as the Philippines, Korea or Thailand 
that are struggling to overcome the regional financial crisis. 
It is far more prudent to withhold further economic benefits to 
the communist government of Vietnam until there is real 
progress in reforming their corrupt system and real steps 
toward democracy are achieved.
      

                                


    Chairman Crane. Before you start, Chris, I know you have a 
tight time constraint, too. But is there anyone that would like 
to ask Dana a question before he departs?
    Mr. Rohrabacher. Thank you very much.
    Chairman Crane. No questions. Thank you, Dana, for your 
presentation.
    And Chris, you're our next witness.

  STATEMENT OF HON. CHRISTOPHER H. SMITH, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Smith of New Jersey. Thank you, Mr. Chairman. I 
appreciate it, Mr. Matsui, Members of the Committee.
    When President Clinton announced in 1995 his intention to 
normalize the U.S. relationship with the Communist Government 
of Vietnam, some of us argued that we should not take this 
important step until the government agreed to be less brutal to 
its own people. The administration responded that we had not 
yet given up our most important leverage, the wide range of 
economic concessions that go with the waiver of the Jackson-
Vanik amendment, including MFN status. The prospect of these 
concessions we were assured would be an important incentive for 
Hanoi to release its grip on political and religious prisoners, 
as well as on re-education camp survivors and other Vietnamese 
who had suffered because of their wartime associations with the 
United States.
    Three years later, the prisoners of conscience are still 
imprisoned, and thousands of our former comrades in arms are 
still trapped in Vietnam. Yet, in March, the President waived 
Jackson-Vanik anyway. The most important immediate consequence 
of the waiver was that the U.S. taxpayers began paying for 
subsidies to U.S. trade and investment in Vietnam, through the 
Ex-Im Bank and the OPIC, the Overseas Private Investment Corp. 
Ex-Im Bank and OPIC were probably even more important than MFN, 
because the over-regulation and widespread corruption that 
characterize the Vietnamese economy make it a relatively bad 
place to do business. Ex-Im Bank and OPIC subsidies have the 
effect of turning unprofitable deals into profitable ones. U.S. 
taxpayers now compensate businesses for the greed and 
inefficiency of their partners in Hanoi. This is likely to 
bring hundreds, or even thousands, of new United States 
entrants into the Vietnam market, which will greatly increase 
the political difficulty of ever again linking economic 
concessions to progress toward human rights. This is because 
most of these taxpayer-subsidized businesses will soon become 
energetic lobbyists against any attempt to turn off the spigot. 
So the time is now to take a hard look as to whether or not a 
Jackson-Vanik waiver is working to promote freedom of 
immigration and other human rights in Vietnam. And this is the 
time to do it.
    The only significant human rights concessions the 
Vietnamese Government made in order to get the waiver was to 
finally begin letting us interview thousands of former asylum 
seekers who had been returned to Vietnam and who are eligible 
for the U.S. refugee program called ROVR. As a matter of fact, 
Members will recall I tried to stop their return in the first 
place. As the CPA was winding down, many of us argued that 
these people were true refugees and should have never been put 
on planes and put back into Vietnam.
    The ROVR Program is for people who managed to escape 
Vietnam, but were sent back, although they were refugees under 
United States law. Predictably, the Vietnamese authorities 
denied us access to the vast majority of these people. As of 
December 1, 1997, over 1\1/2\ years after they promised to view 
the returnees, they had cleared for interviews only 1,100 out 
of an estimated 18,000 to 20,000 who are eligible. But in the 2 
months before the waiver was announced, when we really held 
their feet to the fire--and I want to commend our distinguished 
Ambassador--I have the highest respect for Ambassador 
Peterson--they cleared another 13,000. Unfortunately, as soon 
as the waiver was granted, the clearances slowed right back to 
a trickle. It has been over 3 months now since the waiver, and 
only 1,400 additional persons have been cleared for interview, 
about 400 per month, as opposed to 4,000 in each of the months 
preceding the waiver.
    The lesson is clear: The Vietnamese Government has no 
trouble clearing refugees for interviews when they really want 
to. And once they get what they want from us, they have no 
interest in allowing people to leave. So even if the returnees 
were the only Vietnamese whose rights we cared about, we should 
reverse the Jackson-Vanik waiver until the government allows 
the ROVR-eligible refugees to leave.
    You might recall, Mr. Chairman, that during the years of 
the Jackson-Vanik situation with the former Soviet Union. Every 
year some of the refuseniks would be allowed out, but it was 
only at that opportune time to try to impress Congress, and to 
try to impress the White House, then they went right back to 
their old business as usual. Dante Fascell and others always 
used to comment on how you could almost predict it, take it to 
the bank--some would be allowed out, but then the repression 
would be ratcheted right up afterward.
    Let me say, we do care about other people, Mr. Chairman. 
Aside from ROVR, the other major refugee program is the orderly 
departure program for re-education camp survivors, former U.S. 
Government employees, and others who never left Vietnam. 
Thousands of these people have been unable--unable to get exit 
permits from their local security police. In some cases, it's 
because their political views and associations made them 
particularly unpopular with the government. Others have been 
unable to pay the exorbitant bribes frequently demanded for 
exit permits. Some of the most deserving refugees, such as 
members of the Montagnard ethnic minority, who fought valiantly 
for the United States, have suffered greatly ever since--
suffering from both of these disadvantages. And until they get 
exit permits, U.S. refugee personnel have been unable to even 
interview them for possible resettlement in the United States.
    Mr. Chairman, just yesterday, the State Department informed 
my staff that the Vietnamese Government had finally granted us 
the right to interview ODP applicants without their having 
first to get exit permits. At first, I thought this was an 
important concession, probably timed to coincide with your 
hearing in the upcoming congressional vote on renewing Jackson-
Vanik waiver. Unfortunately, I've since learned that the United 
States is still forbidden to interview any ODP applicant until 
he or she gets a ``letter of introduction'' from the Vietnamese 
Government. It appears that the same officials who have been 
denying exit permits will now be in a position to keep people 
from getting letters of introduction. For instance, despite the 
change in procedure only four Montagnard applicants out of over 
800 we believe to be eligible for U.S. refugee programs have 
been cleared for interview.
    Finally, we must not forget, Mr. Chairman, the Vietnamese 
prisoners of conscience imprisoned for their political or 
religious beliefs. Hanoi insists that it has no political or 
religious prisoners--only ordinary lawbreakers. We've heard 
that before. When visiting, American delegations point out that 
these lawbreakers include Catholic priests, Buddhist monks, 
prodemocracy activists, scholars and poets who are imprisoned 
for such crimes as activities to overthrow the government and 
``using freedom and democracy to injure the national unity.'' 
They need to be persuaded that a system like this is not one 
with which Americans are comfortable doing business.
    Mr. Chairman, the list of human rights violations goes on 
and on. Vietnam enforces a two-child per couple policy by 
depriving the parents of ``unauthorized children,'' of 
employment and government benefits. It denies workers the right 
to organize independent trade unions and has subjected many to 
forced labor. The government not only denies freedom of the 
press, but also systematically jams Radio Free Asia which 
strives to bring them the kind of broadcasting they would 
provide for themselves if their government would allow freedom 
of expression. The congressional decision on the Jackson-Vanik 
waiver will set the tone for our future relationship with 
Vietnam. The Vietnamese Government and others like it must come 
to understand that when they do good things, good things will 
flow to them from the United States. When they do bad things to 
their people, benefits will no longer flow. We may not be able 
to insist on perfection, but we must insist on progress. I 
thank you, Mr. Chairman, for this honor of testifying and I 
will happily answer any questions.
    [The prepared statement follows:]

Statement of Hon. Christopher H. Smith, a Representative in Congress 
from the State of New Jersey

    When President Clinton announced in 1995 his intention to 
``normalize'' the U.S. relationship with the Communist 
government of Viet Nam, some of us argued that we should not 
take this important step until that government agreed to be 
less brutal to its own people. The Administration responded 
that we had not yet given up our most important leverage---the 
wide range of economic concessions that go with a waiver of the 
Jackson-Vanik Amendment, including eventual Most Favored Nation 
status (MFN). The prospect of these concessions, we were 
assured, would be an important incentive for Hanoi to release 
its grip on political and religious prisoners, as well as on 
re-education camp survivors and other Vietnamese who had 
suffered because of their wartime associations with the United 
States.
    Three years later, the prisoners of conscience are still 
imprisoned and thousands of our former comrades-in-arms are 
still trapped in Viet Nam---yet in March the President waived 
Jackson-Vanik anyway.
    The most important immediate consequence of the waiver was 
that U.S. taxpayers began paying for subsidies to U.S. trade 
and investment in Viet Nam through the Export-Import Bank 
(``Eximbank'') and the Overseas Private Investment Corporation 
(OPIC). Eximbank and OPIC are probably even more important than 
MFN, because the overregulation and widespread corruption that 
characterize the Vietnamese economy make it a relatively bad 
place to do business. Eximbank and OPIC subsidies have the 
effect of turning unprofitable deals into profitable ones. U.S. 
taxpayers now compensate businesses for the greed and 
inefficiency of their partners in Hanoi. This is likely to 
bring hundreds or even thousands of new U.S. entrants into the 
Viet Nam market, which will greatly increase the political 
difficulty of ever again linking economic concessions to 
progress toward human rights. This is because most of these 
taxpayer-subsidized businesses will soon become energetic 
lobbyists against any attempt to turn off the spigot. So the 
time to take a hard look at whether the Jackson-Vanik waiver is 
working to promote freedom of emigration and other human rights 
in Viet Nam is right now.
    The only significant human rights concession the Vietnamese 
government made in order to get the waiver was to finally begin 
letting us interview thousands of former asylum seekers who had 
been returned to Viet Nam and who were eligible for the U.S. 
refugee program called ``ROVR'' (Resettlement Opportunities for 
Vietnamese Refugees). This program is for people who managed to 
escape Viet Nam but were sent back---although many were 
refugees under U.S. law---with a promise that the U.S. would 
interview them in Viet Nam and quickly resettle those who were 
entitled to our protection. Predictably, the Vietnamese 
authorities then denied us access to the vast majority of these 
people. As of December 1, 1997, over a year and a half after 
they promised to let us interview the returnees, they had 
cleared for interviews only 1100 out of an estimated 18,000 to 
20,000 who were eligible. But in the three months before the 
waiver was announced--when we really held their feet to the 
fire--they cleared another 13,000. Unfortunately, as soon as 
the waiver was granted the clearances slowed back to a trickle. 
It has been over three months now since the waiver, and only 
1400 additional persons have been cleared for interview--about 
400 per month, as opposed to over 4000 in each of the three 
months before the waiver was granted.
    The lesson is clear: the Vietnamese government has no 
trouble clearing refugees for interview when it really wants 
to. But once they get what they want from us, they have no 
interest in allowing people to leave. So, even if the returnees 
were the only Vietnamese whose rights we cared about, we should 
reverse the Jackson-Vanik waiver until after the government 
allows all the ROVR-eligible refugees to leave.
    But we do care about other people too. Aside from ROVR, the 
other major refugee program is the Orderly Departure Program 
(ODP), for re-education camp survivors, former U.S. government 
employees, and others who never left Viet Nam. Thousands of 
these people have been unable to get exit permits from their 
local security police. In some cases it is because their 
political views and associations made them particularly 
unpopular with the government. Others have been unable to pay 
the exorbitant bribes frequently demanded for exit permits. 
Some of the most deserving refugees---such as members of the 
Montagnard ethnic minority who fought valiantly for the U.S. 
and have suffered greatly ever since---suffer from both these 
disadvantages. And until they get exit permits, U.S. refugee 
personnel have been unable even to interview them for possible 
resettlement in the United States.
    Mr. Chairman, just yesterday the State Department informed 
my staff that the Vietnamese government has finally granted us 
the right to interview ODP applicants without their having to 
get exit permits first. At first I thought this was an 
important concession---probably timed to coincide with this 
hearing and the upcoming Congressional vote on renewing the 
Jackson-Vanik waiver. Unfortunately, I have since learned that 
the U.S. is still forbidden to interview any ODP applicant 
until he or she gets a ``letter of introduction'' from the 
Vietnamese government. And it appears that the same officials 
who had been denying exit permits will now be in a position to 
keep people from getting ``letters of introduction.'' For 
instance, despite the change in procedure, only 4 Montagnard 
applicants---out of over 800 we believe to be eligible for U.S. 
refugee programs---have been cleared for interview.
    Finally, we must not forget the Vietnamese prisoners of 
conscience, imprisoned for their political or religious 
beliefs. Hanoi insists that it has no political and religious 
prisoners---only ordinary lawbreakers. When visiting American 
delegations point out that these lawbreakers include Catholic 
priests, Buddhist monks, pro-democracy activists, scholars, and 
poets who are imprisoned for such crimes as ``activities to 
overthrow the government'' and ``using freedom and democracy to 
injure the national unity,'' Vietnamese officials cheerfully 
remind them that ``we have a different system.'' They need to 
be persuaded that a system like this is not one with which 
Americans are comfortable doing business.
    Mr. Chairman, the list of human rights violations goes on 
and on. Viet Nam enforces a ``two-child per couple'' policy by 
depriving the parents of ``unauthorized'' children of 
employment and other government benefits. It denies workers the 
right to organize independent trade unions, and has subjected 
many to forced labor. The government not only denies freedom of 
the press, but also systematically jams Radio Free Asia, which 
tries to bring them the kind of broadcasting they would provide 
for themselves if their government would allow freedom of 
expression.
    The Congressional decision on renewal of the Jackson-Vanik 
waiver will set the tone for our future relationship with Viet 
Nam. The Vietnamese government and others like it must come to 
understand that when they do good things, good things will flow 
to them from the United States--and that when they do bad 
things, these benefits will no longer flow. We may not be able 
to insist on perfection, but we must insist on progress.
      

                                


    Chairman Crane. Thank you, Chris.
    Mr. Matsui.
    Mr. Matsui. I have no questions. Thank you, Chris.
    Chairman Crane.
    Mr. Camp.
    Mr. Ramstad.
    Mr. Neal.
    Ms. Dunn.
    Well, we thank you for your testimony, Chris, and 
appreciate it. We look forward to working with you on an 
ongoing way, even though there are times we have our 
disagreements. But we share the concerns that you've expressed 
here today. Thank you.
    Our next witness before the Committee is our distinguished 
Ambassador Pete Peterson, who is a former colleague.

STATEMENT OF HON. DOUGLAS ``PETE'' PETERSON, U.S. AMBASSADOR TO 
    VIETNAM; ACCOMPANIED BY CHUCK KARTMAN, DEPUTY ASSISTANT 
          SECRETARY OF STATE, U.S. DEPARTMENT OF STATE

    Chairman Crane. Pete, you spent what, 6 years in the Hanoi 
Hilton?
    Ambassador Peterson. Six and one-half.
    Chairman Crane. So Pete has a special perspective, but it's 
truly remarkable thing that you are serving in the capacity you 
are today. We are indebted to you for all of the sacrifices you 
made to guarantee that you were able to come back here. He was 
here just a couple of weeks ago. Then you traveled all over the 
world and you managed to get back here in time for our hearing. 
We thank you for that.
    Ambassador Peterson. I know what's important, Mr. Chairman. 
Obviously, this is a very important issue with me.
    It's a great honor for me to be in front of my former 
colleagues and all the friends that I have worked with in the 
past--several classmates, actually, I see here--Dave, Tim. I'm 
happy to have Chuck Kartman with me, as well, from the State 
Department, Deputy Assistant Secretary of State for EAP, who as 
you know is a Korean expert. But he's got us a lot of other 
work as well and I'm very proud to have him with me.
    This issue that you're looking at today, the renewal of 
Jackson-Vanik, is critically important to the United States. It 
would signal, not only to the Vietnamese, but I think to the 
rest of the world that we are not closing the gates. That we 
are, in fact, going to continue to reach out to the rest of the 
world and export our capitalism--as the Senator so well put it 
a moment ago. I might add that I know I'm back to this 5-minute 
rule which I got away from----
    Chairman Crane. Well, except for distinguished witnesses 
such as yourself, you can have latitude.
    Ambassador Peterson. But I went back to Vietnam, not 
because I had to. I went because I wanted to. I saw the 
Vietnamese at their very worst and they saw me at my very 
worst, as well. It's a rare opportunity for someone to go back 
to a country like this in which there was so much pain to focus 
then on the future, not the past, and to close the gates of the 
past because you can't change that. I can't do anything about 
what happened yesterday, but I can help move forward positively 
and constructively on what happens tomorrow.
    That's why I'm in Vietnam. Because Vietnam is a very large 
country--12th most populated country in the world. It has a 
very, very intellectual population and as the Senator said the 
most significant aspect of that population--he said over 60 
percent is under age 25. Do you see the potential that lies 
there? This is a nation in major transition. It's being 
transitioned politically, economically and generationally.
    We, as a Nation, have the opportunity to influence that 
transition in everyone of those aspects. My staff and myself 
work diligently in promoting American interest in that 
transition process in Vietnam everyday. As a result of that, 
we've created an incredible amount of goodwill--goodwill that 
has taken us now to helping the Vietnamese understand what a 
free market is. They essentially woke up one morning and said 
this is what we have to do. We have to transition from a 
centrally planned economy to a free-market economy if we're 
going to be successful in the rest of the world. They're 
starting to move into that. They don't know how to do it. 
They're asking for help. They want American help because they 
look to us--strangely enough--as the leader in this effort and 
let bygones be bygones.
    This war is no longer being fought in Vietnam, I might tell 
you. This is the past and they're building on the future. Why? 
In 4,000 years of history in Vietnam, they've never had peace 
and prosperity. Never. This is the first time in their history 
that they can look out over into the future. They see the 
potential of not only prosperity but peace for perhaps 
generations. We can help do that because our engagement in 
Vietnam not only brings with it the opportunities of expanding 
our national interest and meeting our foreign interest goals, 
and increasing the opportunities for business, but it brings 
that peace and stability potential in a real sense--in a very, 
very sensitive and historically violent part of the world.
    So our engagement here and the President's very, very wise 
choice to open diplomatic relations with Vietnam in 1995 and 
then subsequently the efforts to build on that incrementally 
over the several years here. Now in March to grant the Jackson-
Vanik waiver--and now enlightenedly coming forward to the 
Congress and asking for congressional concurrence for a renewal 
of that Jackson-Vanik waiver is exactly the right thing to do. 
Because it moves this whole agenda forward. It allows America 
to do what it does best and that is to bring nations into the 
world community and at the same time help those nations to 
learn how to market their product and to develop their 
incredibly efficient human resources. Vietnam has all of those. 
Why would we take a walk on that? Why would we not do that? 
What is the alternative?
    The alternative is essentially to isolate Vietnam. Now, I 
think Senator Kerry very well stated the case for not doing so. 
There's every reason to think that we're going to continue the 
progress in immigration, human rights, POW-MIA, and all of the 
other aspects of the relationship that we wish to build on by 
engagement. By continuing this incremental bilateral process 
that will take the Vietnamese into a new level each day. That 
new level will hopefully create an economic engine that will 
serve the purpose of bringing them, hopefully prosperity, but 
will also bring enlightenment to their people. To enlightenment 
of their people that ultimately will be reflected in the 
government.
    In fact, though some speakers today have said that there 
has been no change in the Vietnamese Government, I would 
suggest there has been some change. The National Assembly has 
changed quite dramatically in the last couple of years. In 
fact, they have 61 members of the National Assembly that are 
not members of the Communist Party. There are three members of 
the National Assembly who were elected, who, as the papers put 
it, when they were elected said have no political support at 
all--which would say that they were totally independent. They 
are. One of them is a former ARVN major who is now serving in 
the National Assembly. So there is a change.
    I see in our frontline position in Vietnam--I see changes 
in the power structure. I see the National Assembly assuming 
more of the policymaking process. It's not there yet. It's not 
what we want to see. It's not a democracy. There are not 
opposing parties, but there is a very, very wide spectrum of 
ideologies within the government and that is significant to the 
extent that it's pulling Vietnam to the right and left based on 
the issue.
    For us to deny the renewal of Jackson-Vanik would be 
playing directly into the hands of those who wish for Vietnam 
to return to the old days of totalitarianism and the total 
disregard of the world community. It would be a huge reversal 
of the opportunities that we have in Vietnam.
    Now whenever we talk about Vietnam and look to the 
possibility of enhancing our relationship there, we have to 
look at what we're doing on the MIA-POW issue. I can assure you 
that we're moving ahead on that in a very positive way. Senator 
Kerry cited the numbers and I won't re-address those, but I 
spend significant part of my time as an Ambassador working this 
issue. It is--and the Vietnamese know it is--our first priority 
in our relationship. As a result of that, they've done a number 
of things that I've specifically asked to be done in enhancing 
the overall search efforts. They have not essentially turned me 
down on any aspect of that. Now are we getting everything? Are 
we getting the equivalent of CIA records? No. I don't think 
that anybody expects that to happen right now. We're not going 
to send someone in to their very highest and sensitive 
documents. But if we can ask for a specific classified 
document, they have assured us that they will send someone in 
and try to get that document's content and bring that back to 
us. We've been doing that for several years.
    So with the President's certification earlier this year on 
the levels of cooperation on the MIA issue, I can assure you 
that it's an accurate appraisal of what's actually happening. 
They are cooperating with us on this issue in a very, very 
constructive and excellent fashion. As a result of that, we've 
been able to move into a whole host of other areas of mutual 
concern with the Vietnamese. They're serious about helping us 
on this. Someone asked the question earlier--what would happen 
if we denied the renewal of Jackson-Vanik? What would that do 
to the POW issue?
    You know what, I would suggest even if we did deny the 
renewal of Jackson-Vanik, the Vietnamese would continue to 
cooperate with us in the same manner and fashion they are now 
on that issue. They have told me over and over and over again 
that this is a humanitarian issue which they are very serious 
about and they have no intention, regardless of our actions, of 
withdrawing from that. Does that mean we should not renew 
Jackson-Vanik because we're going to continue to get 
cooperation in the MIA-POW issue? Absolutely not. Because with 
the renewal of Jackson-Vanik, we send that message of 
commitment.
    We have now engaged them in the economic fields and in 
medical fields, and in education, and in environment, and in 
virtually every other aspect of nation-to-nation relationships. 
All of them are positive. A renewal of Jackson-Vanik will 
enhance that positive aspect of our relationship. Why would we 
not do so? There is no cost essentially. The cost to the 
taxpayers for Ex-Im and OPIC, it is widely claimed, is a lot of 
money. OPIC actually makes money, if I recall, and the people 
who use their services pay for those services. Ex-Im is a 
process in which we're exporting products that creates jobs in 
America. That's what this is all about.
    The companies that are over there right now are taking 
great risk and they're doing so on their own nickel. They're 
being successful in some areas and unsuccessful in others, but 
that's what the capitalistic system is all about. I continue to 
tell the Vietnamese that capitalism and a free-market is 
essentially the freedom to do two things: freedom to succeed 
and freedom to fail. They have to learn that. They have to 
learn how to be competitive. Who best to teach them how to do 
that than America?
    So we have every reason to move on with this and allow this 
economic engine to help us with the Vietnamese understanding of 
international standards for human rights, help them to 
understand how to market themselves in the world community. 
Because with them involved in the world community, that 
essentially meets the benefit of the United States. We're not 
doing anything--United States--in Vietnam that isn't in the 
United States' interest.
    Now 5 minutes or not, I could go on for a couple of hours 
on this subject because I'm there on the frontline, as are my 
colleagues. We're there because it's the right thing to do. Our 
engagement in Vietnam will and is now having significant 
benefit to the United States. To continue to build on this 
relationship to the renewal of Jackson-Vanik is absolutely 
critical to our credibility with the Vietnamese and frankly to 
the credibility of our allies who are involved with commercial 
and human rights aspects of their relationship with Vietnam.
    So, Mr. Chairman, I'm deeply honored to be here and I value 
the--and respect deeply all of the Members of this Subcommittee 
and would ask your strong support in the renewal of Jackson-
Vanik for the reasons so stated by Senator Kerry and some 
others that will speak after me, but certainly from my 
position. Because it is the right thing to do, at the right 
time, and is the best thing that we can do for America.
    [The prepared statement follows:]

Statement of Hon. Douglas ``Pete'' Peterson, U.S. Ambassador to Vietnam

    Mr. Chairman, I would like to thank you for this 
opportunity to consult with you today about the Jackson-Vanik 
waiver for Vietnam. As you know I arrived in Hanoi a little 
over a year ago to take up my duties as U.S. Ambassador to 
Vietnam. This is an important posting for me personally as I am 
able to focus on the future and put the past, and the memories 
of my earlier years in Hanoi firmly behind me. More to the 
point, through the exchange of ambassadors the United States 
took another significant step in a process of incremental 
normalization of our bilateral relationship with Vietnam. On 
March 10 of this year, the United States took a step forward 
when the President signed a determination granting a Jackson-
Vanik waiver for Vietnam. And earlier this month, the President 
decided to renew that waiver for a period of one year and has 
asked for Congressional concurrence.
    The President made the decisions to grant, and later, to 
renew this waiver, first, because the Vietnamese Government had 
taken several positive steps to accelerate immigration 
processing as requested by the U.S., second, because it is in 
the national interest of the United States and, finally, 
because the waiver enhances U.S. foreign policy goals. The 
record unequivocally shows that incrementally building a 
bilateral relationship with Vietnam supports important foreign 
policy goals of the United States including POW/MIA accounting, 
freedom of emigration, human rights, regional stability and 
increased U.S. trade with Vietnam.
    Whenever consideration is given to taking any step in 
normalizing our bilateral relationship with Vietnam, it is 
necessary to once again review progress in the issue of 
``fullest possible accounting'' for our missing from the 
Vietnam War. On this point, I can assure you that no one in 
this Administration--and certainly not I--has forgotten, nor 
have we underestimated, the pain and suffering of those who 
have lost friends and loved ones in the Vietnam war. I 
personally expend a significant portion of my time as 
Ambassador directly working this issue and have consistently 
emphasized to the Vietnamese that obtaining the fullest 
possible accounting of our missing continues to be the highest 
priority in our relations with Vietnam. Every senior American 
official who meets with Vietnamese government representatives 
stresses this point in order to ensure that there can be no 
misunderstanding of our position.
    Vietnam does understand the importance of this issue to our 
government and to the American people and has been providing us 
excellent cooperation in our accounting efforts over the past 
several years. It was this excellent cooperation that enabled 
us to establish diplomatic relations in 1995 and to develop 
normal relations in other areas of mutual interest. On March 4 
of this year, President Clinton issued a determination that 
Vietnam has been ``cooperating fully in good faith'' with us to 
account for our missing. This was the third time the President 
has validated Vietnam's cooperation.
    Vietnam is a nation undergoing an enormous political, 
economic and generational transition. After years of self-
imposed isolation from its neighbors and the West, Vietnam's 
leaders have adopted a policy of political and economic 
reintegration with the world. At the same time, they also 
embarked on a policy of domestic renovation, or ``Doi Moi,'' 
which sought to reduce the role of central planning and 
encourage the development of a free market system, particularly 
in the agricultural and retail sectors. This policy unleashed a 
surge of economic growth in the 1990's and a steady stream of 
foreign investors and traders going to Vietnam to seek new 
business opportunities. Our policy of re-engagement with 
Vietnam builds on and supports these changes.
    A prosperous Vietnam integrated into world markets and 
regional organizations will contribute to regional stability. 
In recent years, Vietnam has made significant strides in 
achieving regional integration by joining ASEAN in 1995, 
gaining membership to APEC in 1998, and laying the groundwork 
for its eventual accession to the WTO. The granting and 
continuation of a Jackson-Vanik waiver for Vietnam contributes 
to this positive trend.
    Insofar as the objectives of the Jackson-Vanik amendment 
are concerned, renewal of the waiver will substantially promote 
greater freedom of emigration from Vietnam thus fulfilling the 
major objective of the amendment. I am confident that the 
prospect of a Jackson-Vanik waiver was an important factor last 
October in encouraging Vietnam to significantly modify its 
processing procedures for the Resettlement Opportunity for 
Vietnamese Returnees (ROVR).
    Specifically, Vietnam dropped its requirement for ROVR 
applicants to obtain an exit permit prior to interview by INS, 
a change that has greatly facilitated implementation of ROVR. 
Similarly, at the end of April this year, Vietnam modified its 
procedures for processing former reeducation camp detainees 
under the Orderly Departure Program (ODP), and, on June 3, 
Vietnam informed us that we may interview all Montagnard ODP 
cases using accelerated interview procedures. The prospects for 
renewal of the Jackson-Vanik waiver, it is clear to me, have 
favorably influenced Vietnam to continue to facilitate 
improvements in ODP processing. The current efficiency and 
acceleration of ODP processing demonstrates that the waiver is 
achieving its desired results.
    It should be pointed out that in a broad sense, Vietnam has 
a solid record of cooperation over the last 10-15 years in 
permitting Vietnamese to emigrate to the U.S. Over 480,000 have 
emigrated to the U.S. via the Orderly Departure Program (ODP), 
and there are only about 6,900 ODP applicants remaining to be 
processed. With the changes in procedures I mentioned above, we 
anticipate that we will be able to complete interviews for 
applicants in several of the ODP sub-programs, including ROVR, 
by the end of 1998.
    After a slow start initially, Vietnamese performance in 
implementing the ROVR agreement has improved dramatically this 
year. As of June 15, Vietnam has cleared for interview 15,322 
or 82 percent of the 18,786 potential applicants. INS has 
interviewed 9,892 persons and 3,267 have departed for the U.S. 
under the program. Both sides are working to move people 
through the pipeline as quickly as possible. Vietnam has not 
yet provided clearance for 2,463 persons. However, it has 
provided an accounting for cases, comprising 1,001 persons, 
that it has not cleared for interview. These are the remainder 
of about 3,000 persons for whom we requested an accounting in 
January, 1998. We expect that a significant number of these 
will be cleared for interview once we are able to provide 
additional information to Vietnamese officials on these 
outstanding cases.
    However, it should be noted that as we near the end of the 
caseload, we can expect a slowdown as we begin to process the 
remaining cases, many of which lack complete addresses or other 
pertinent information. Nevertheless, we will continue to seek 
information on these cases and an accounting for any cases 
Vietnam cannot locate or finds ineligible.
    Another area of concern for the U.S. is human rights, and 
we believe that engagement with Vietnam has produced tangible 
results. Vietnam does deny or curtail some basic freedoms to 
its citizens, including the freedom of speech, association and 
religion. There are a number of people in jail or under house 
arrest for the peaceful expression of their political or 
religious views. We have repeatedly told the Vietnamese that 
these practices are unacceptable. I personally press Vietnam 
for improvement in these areas at every opportunity and at the 
highest levels. Senior U.S. officials visiting Vietnam have 
brought our concerns to the attention of Vietnamese officials, 
as did Secretary Albright and Treasury Secretary Rubin during 
their visits to Vietnam last year. On May 26, our Assistant 
Secretary for Democracy, Human Rights and Labor, led the sixth 
session of our bilateral human rights dialogue here in 
Washington. In that meeting we raised both general human rights 
issues as well as specific detention cases of concern to us.
    Continuing to engage Vietnam and encouraging greater 
openness and reform are the keys to improving its respect for 
human rights. I am convinced that Vietnam's contact with the 
outside world has led and will continue to lead to increased 
openness and relaxation of restrictions on personal liberty, in 
addition to improved access to information and foreign media. 
Since normalization, several jailed dissidents have been 
released. Over time, contacts via media, internet, trade and 
investment, travel and exchanges the Vietnamese will likely 
move closer to international standards and values relative to 
human rights.
    Engagement, not isolation, is also the answer for U.S. 
business. U.S. business views Vietnam, the twelfth most 
populous country in the world with a population of nearly 78 
million, as an important potential destination for U.S. exports 
and investment. U.S. exports to and investment in Vietnam 
ultimately translate into jobs for U.S. workers. To be 
successful, U.S. enterprises seeking to conduct business in 
Vietnam need access to the U.S. government trade support and 
investment promotion programs such as those offered by the 
Export-Import Bank (Ex-Im), the Overseas Private Investment 
Corporation (OPIC) and the U.S. Department of Agriculture 
(USDA) in order to compete on a level playing field with their 
foreign competitors who have access to similar programs. 
Withdrawal of the Jackson-Vanik waiver would deny these 
important programs to U.S. businesses operating in Vietnam with 
the end result that the U.S. jobs that might have otherwise 
been created are lost.
    Vietnam is, admittedly, still a difficult place to do 
business. After nearly a decade of economic reform, the pace of 
change has slowed in part due to the current Asian Financial 
Crisis and, to some extent, due to the slow decision-making 
process in Vietnam. While U.S. businesses are not optimistic 
about the near-term prospects for increased activity in 
Vietnam, many U.S. businesses remain active in Vietnam and 
anticipate improved prospects in the medium to long term. They 
believe the U.S. government has an important role to play in 
encouraging the government of Vietnam (GVN) to improve the 
country's business climate.
    Vietnam needs to undertake additional fundamental economic 
reforms to create the free trade and open investment regimes 
that will allow Vietnam's economy to grow and compete 
internationally. Recent policy changes indicate that the 
Vietnamese leadership understands that the country's economic 
performance will suffer further unless it remains firmly 
committed to carrying out economic reform. This was confirmed 
to me during a one-on-one meeting with Vietnam's Prime Minister 
Khai on Monday this week. The U.S. government has consistently 
joined the international donor community in urging Vietnam to 
further reform state enterprises, the financial sector and the 
foreign exchange system, and to move ahead with trade 
liberalization.
    The U.S. government is using a variety of levers to 
encourage Vietnam to undertake these reforms. We actively 
engage Vietnamese officials in an on-going dialogue on economic 
reform and necessary improvements to their country's business 
climate. Bilateral trade negotiations and WTO accession 
preparations provide leverage, holding out the prospect of 
possible MFN treatment in the future. These processes make 
available to us opportunities to obtain from the Vietnamese 
commitments to increase U.S. access to that country's markets 
and to make changes to their trade and investment regime that 
will directly benefit U.S. businesses.
    Withdrawal of the waiver at this time would certainly 
derail our trade negotiations. As you know, a Jackson-Vanik 
waiver is one prerequisite for MFN trading status; the other is 
a completed bilateral trade agreement. Both are necessary if 
the United States is to support Vietnam's accession to the WTO. 
The waiver has already proved to be an useful tool to seek 
economic reform and to address U.S. businesses' difficulties in 
Vietnam. Shortly after the waiver was granted in March, the 
Vietnamese demonstrated renewed interest in concluding the 
bilateral trade agreement by presenting a vastly improved 
proposal. Vietnam's first formal discussions on WTO accession 
were also set around that time. Vietnam would likely interpret 
our failure to renew the J-V waiver to mean that the United 
States is not a committed or credible party in these 
negotiations.
    Extension of the Jackson-Vanik waiver for Vietnam directly 
benefits the United States by supporting continued Vietnamese 
cooperation and dialogue on our most important goals including 
POW/MIA accounting, emigration and human rights. Furthermore, 
it will enhance our ability to credibly promote comprehensive 
economic reform and greater international engagement on the 
part of Vietnam. Finally, by ensuring the continued 
availability of U.S. government programs such as those offered 
by Ex-Im and OPIC to U.S. business, the waiver will enable U.S. 
companies to compete effectively in this potentially lucrative 
market. As U.S. exports to and investment in Vietnam expand, 
more jobs for U.S. workers can be created.
    During the 1980's, U.S. policy isolated Vietnam 
diplomatically and economically. In the 1990's, we have 
established diplomatic relations, exchanged ambassadors, and 
began to normalize our economic ties. We have made significant 
progress toward achieving our policy goals since we re-engaged 
Vietnam. I feel strongly that it is firmly in the U.S. interest 
to continue to build a new relationship with Vietnam on a solid 
foundation of cooperation on our priority interests.
      

                                


    Chairman Crane. Thank you, Mr. Ambassador. Unfortunately, 
Senator McCain was not able to be here, but we have his 
testimony which will become a part of the record, too. John, I 
think, spent the same time at the Hanoi Hilton as you--6\1/2\ 
years--didn't he? He's a strong supporter of the views that 
you've expressed before the Subcommittee.
    [The prepared statement follows:]

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    Chairman Crane.
    Mr. Matsui.
    Mr. Matsui. Thank you very much, Mr. Chairman. Pete, I just 
want to, again, congratulate you for resuming the position of 
Ambassador of Vietnam. Certainly you're a hero to all of us in 
the Congress and to our country. I very much appreciate your 
testimony.
    I was trying to remember my history because one of the 
members that testified before you in the last panel, equated 
Vietnam to the Soviet Union. If I recall correctly, the cold 
war--Soviet Union was an expansionist power; Soviet Union had 
nuclear weapons; Soviet Union obviously was a military threat. 
Do you view Vietnam as a military threat? Are they attempting 
to expand in other areas in Southeast Asia?
    Ambassador Peterson. They did at one time, but I can assure 
you they are not now. This is a country of great poverty. I 
have visited--have been invited to visit army divisions and 
aviation divisions, and I have done so. Their equipage is 
essentially a collection of antiques. They're not going to do 
much with those, I can assure you. They have reduced the size 
of their military establishment by half, roughly. A lot of that 
frankly has not come back because in their way of operating, 
many of those military people are engaged in commercial 
activity because that's how they fund their army. They have 
construction companies. They have other kinds of things which I 
understand funds roughly 50 to 55 percent of the military 
operation--mostly in the salary standpoint.
    So they are certainly no military threat to anyone. They 
have shown no indication or any desire, in fact, to pursue 
that. We have begun, with them, a very narrow and very small 
military-to-military liaison because I do have a military 
liaison officer on my staff. But the activities that we engage 
in are largely humanitarian and exchanging specialties only. 
They have not indicated any desire to pursue any military 
equipage or anything like that to this extent.
    Mr. Matsui. Are the people in Vietnam, from your 
perspective, seeking more and more American goods--seeking more 
and more American culture? I know there was a front page story 
in the New York Times 2 days ago in which a survey was done--a 
scientific survey. A polling firm did it with respect to what 
the Chinese--who the Chinese view as the most influential 
Americans. Thomas Edison, Albert Einstein and Michael Jordan 
were among the top four or five--maybe Michael Jordan because 
the Bulls had just won the championship. But are the Vietnam 
citizens somewhat similar in the sense of really seeking out or 
trying to find out what our culture is about--things of that 
nature?
    The reason I ask that, too, is because through that process 
that's how the whole concept of democratization, freedoms and 
those kinds of issues start to come into play. That's the whole 
concept behind the President, I think, many members who want to 
see the continuation of the waiver would view how eventually 
Vietnam will become more liberal in terms of freedoms and 
religious freedoms and human rights.
    Ambassador Peterson. The reason I continue to repeat the 
statistic of the 60 percent under the age of 25 is because the 
youthful focus is clearly on America. They are so fascinated 
with what's happening in America and if you go visit, you will 
see constantly tee shirts that are all English. You would think 
you were walking in downtown DC or out on the mall someplace 
because you can't distinguish these individuals from anyone 
else in the world. Blue jeans, sneakers, and the shoes, of 
course, of choice are the little slides that they wear. But it 
is very, very much focused on America. They look to us as the 
leader in the cultural side. English is the most sought after 
second language. In fact, people are studying it from dawn 
until after midnight every night. The schools are full of 
individuals seeking language, economics, and whatever. They 
look also for America to--from a leadership of the technology, 
management skills, and overall business--entrepreneurial 
advice. So America is their idol, I would say, in a general 
sense. That's just the people on the street.
    I'm not talking about the government; I'm talking about the 
average person. I mix with them. I'm downtown. I talk to them 
all the time. They give me insights to what they're thinking. 
I'm very pleased to say that if they had a choice right now, 
they would certainly take America. American products are very 
popular there. They realize American products have value. We 
just discovered a Caterpillar tractor that is now over 60 years 
old. General Electric engines that are running--and generators 
that have been running for years and years and years and years. 
Most of the rolling stock of the old war days are still running 
around in Vietnam carrying cargo. So they know that we have 
value, they know we have quality. They know that American 
products are generally the products that are desired most 
around the world and they seek those.
    Chairman Crane. Thank you very much.
    Mr. Camp.
    Mr. Camp. Thank you, Mr. Chairman.
    Thank you, Mr. Ambassador, for being here. You obviously 
come to this Subcommittee as a colleague and classmate of mine. 
Also, you come with a great deal of personal integrity and it's 
good to see you. I appreciate your testimony. I have generally 
supported the idea of engagement when dealing with other 
countries and I think it's so eloquently stated by Senator 
Kerry. But I do have some concerns particularly about the human 
rights record in Vietnam.
    The continued restrictions on freedom of association; 
freedom of press; freedom of religion;the fact that prisoners 
of conscience have not been released; the lack of structural 
reforms in the banking sector; and the lack of market reforms. 
Also, very frankly, progress on the POW-MIA issue that is 
concrete. I guess I would ask you how can we most effectively 
influence the direction of those political and economic reforms 
and at the same time get the fullest accounting of our 
prisoners of war. I would like to hear your comments on that. 
If you could specifically--how many unaccounted-for Americans 
remain in Vietnam? In recent months, what has been the progress 
on that issue?
    Ambassador Peterson. Well, I'd have to seek out the numbers 
here in the book exactly on the MIA-POW issue. But in Vietnam, 
I think the number is 1,564 or something like that that are 
still listed as MIA. Of that number, however, we have 
significant portfolios of investigations. Many of those cases 
have been investigated multiple times. If I were to hand you a 
case study of a number of them--several hundred of them--you 
would probably conclude that well we know what happened to that 
individual. But our threshold of proof is very high and 
therefore we continue to keep those cases open in order to add 
to the portfolio--add to the investigative evidence that would 
take us to a final absolute conclusion. I understand that a 
board is in fact being formed at DoD hopefully in the near 
future that would review these files in a more professional way 
and come to the conclusions on some of those cases.
    There's still a lot of work to be done. A lot of what we do 
is, you know, is essentially archaeology--very, very difficult. 
We've done the easy stuff. Now it's just really just head down. 
As Senator Kerry said, the people who are doing this are 
largely people in uniform--people who have no agenda. They're 
there working with the Vietnamese just as colleagues--shoulder-
to-shoulder--working to make these discoveries and they're 
doing it from the archaeology standpoint, they're doing it from 
the archives standpoint; they're doing it for some interviews 
of people throughout the country; and their getting information 
from all walks of life.
    I might add the fact that we have Americans--more Americans 
in the country as a result of American businessmen coming in 
with our opening of our diplomatic relations and now hopefully 
with the continuation of Jackson-Vanik, that adds to the 
potential for spontaneous discovery. We're going to have more 
people in the country; we're going to have more access to 
various other places--people are just going to go in the larger 
areas of the country and hopefully can make discoveries that 
our small JTF troops can never get throughout that whole thing. 
I think we have six people who are permanently assigned to JTF. 
Then we're bringing in a couple of hundred every other month to 
do the JTF. But that process will be enhanced through the 
waiver and by additional Americans going into the country.
    But what we're doing is very systematic, and I might add 
that what we have here now is an organizational structure to 
get the job done and it's a professional team. Those people who 
are working this are just remarkable. I would like for you to 
come and visit and let me show you what they're doing. It's an 
absolutely fantastic experience to see what these individuals 
are doing under very, very adverse conditions. Then marry you 
up with the Vietnamese side and let them tell you for 
themselves what they're doing and what they're objectives are. 
They're moving way out ahead in some areas and doing things on 
their own now that they weren't doing before. This is because 
of our insistence and request that they do so.
    So there's progress being made across that whole spectrum. 
The other thing, frankly, is the other side of it is that you 
all are funding it--the work--properly. So we have the 
organizational structure in place. We have the right kind of 
people doing the work. We're funding it properly and we just 
have to wait this thing out. Nothing is going to happen quickly 
on this. This isn't going to be completed overnight. But I can 
assure you that this isn't something that we've got on the back 
burner--this is front burner work. Everything we do in the 
country is predicated on successes that we derive from our 
efforts in the POW-MIA area.
    But you also bring up the human rights thing. I'm a firm 
believer that only through some mechanism are we able to 
achieve the improvement of human rights. I mean, just to sit 
there and make law that says you must do this and you must do 
that, isn't going to be totally satisfactory. We do make those 
points.
    At every opportunity, I make that point to the Vietnamese 
as virtually every visitor we have that we aren't going to 
tolerate the lack of improvement in human rights. But we can 
best help that in my view by getting the economic engine 
running at a higher momentum and with that hopefully we'll 
bring the opportunity for the higher quality of life for all of 
the citizens of the entire country which clearly is a human 
rights issue in itself. But with that you will bring 
empowerment to those individuals that will ultimately force 
changes in the political system that will allow greater 
freedoms throughout the whole spectrum of human rights.
    Mr. Camp. I appreciate that. Over recent years, there's 
been a number of steps that have been taken--whether it's 
continuing humanitarian aid, lifting the trade embargo, 
settling property claims. Do you believe the progress made in 
the last 6 months with the Jackson-Vanik waiver is sufficient 
to continue the waiver?
    Ambassador Peterson. Well, there's no doubt about that. But 
you see, it's very hard; in 6 months you can't measure 
virtually anything in those kinds of things. OPIC and Ex-Im and 
none of those procedural things that would be released as a 
result of that have really done anything in Vietnam. There's no 
activity from OPIC in the country. There's a number of things 
in the pipeline. Ex-Im has done zero in the country. TDA, the 
Trade and Development Agency, has one project, I think, that's 
being executed and a couple of others that are sitting on the 
blocks. There's no change in Ag, no improvement in AID. 
Nothing's really happened, so I can't measure that. But I do 
know that the Vietnamese have seen it as a positive commitment 
from the standpoint of the United States and they have moved 
forward with us in our bilateral trade negotiations in a much 
more positive way than was earlier possible. The proposals that 
they have given us of late, we just concluded our fifth rounds 
of talks last month, is a very, very good working document. 
We're moving forward in that area.
    So I can't measure in 6 months' success and that's why we 
need to renew this. It's essentially a no-risk deal on our 
part. Once we continue--complete our bilateral trade 
relationship negotiation and once we look at what comes with 
that--that has to come back to the Congress. A renewal of 
Jackson-Vanik will have to come back to Congress next year. So 
what you're doing is essentially giving us another look for 12 
months on the potentials that can be derived from the 
continuation of the Jackson-Vanik waiver.
    Chairman Crane. Just to interrupt for a moment. My 
understanding is that for the ROVRs there were, in a 3-month 
period, 14,000 that were approved to emigrate. Then after the 
waiver and the next 3 months, only 150--is that correct?
    Ambassador Peterson. That very likely is correct because as 
you get down the chain, there was only 18,000--what is it--
18,184 or something like--or 784, that are in that entire list. 
So we did the, I guess the easy ones----
    Chairman Crane [continuing]. The easy ones.
    Ambassador Peterson. Now when you start getting down to the 
latter ones, you end up finding some that have difficulties 
with having broken Vietnamese law. You have some that 
addresses--many of them--that the addresses are just so bad 
that you can't find these people. So the processing really 
slows down when you get to that point. So I don't think the 
fact that Jackson-Vanik was waived at a certain point on that 
processing would indicate whether that improved the processing 
or not. Although I can tell you that the potential of having 
the Jackson-Vanik waiver was critical in the Vietnamese 
decision to change the processing procedures so that we could 
accelerate and more efficiently conduct our interviews that 
would get us through this process.
    Chairman Crane. Thank you. Mr. Ramstad.
    Mr. Ramstad. Thank you, Mr. Chairman. Welcome to the 
Subcommittee, Ambassador. You are not only a good friend and a 
classmate, but in my judgment a true profile in courage and a 
true American hero. I don't use those terms loosely, Pete. To 
endure 6\1/2\ years as a prisoner of war, as you did in Vietnam 
and to have the sense of forgiveness, and hope and optimism 
that you do is an inspiration to all of us. Congratulations, as 
well, on your marriage. You're doing an excellent job and we're 
proud of you.
    I just wanted to ask, Mr. Ambassador, as I understand 
amongst the ruling elite in Vietnam, there are two factions: 
the conservatives and the reformers. The reformers want real 
economic reform and a stronger private sector while the 
conservatives want to retain the country's socialist positions 
and more of the status quo. Which faction now is dominant, more 
powerful? Can approval of the waiver help boost the reformers' 
efforts?
    Ambassador Peterson. I would say that the reformers clearly 
are in the leadership at this moment. The Prime Minister who I 
had a private meeting with--just on Monday of this week--is 
very much proactive in moving toward and making policy changes 
that would enhance the further development of this free-market 
system that they wish to put in place. A very constructive, 
very enlightened individual, and his staff, I would suggest, is 
of the same mindset. Throughout the rest of leadership 
basically it's a reform of leadership of the former advocates. 
So spiced around throughout the government are the 
conservatives and that is on purpose. Because they have a 
consensus-making process in Vietnam and all of the voices have 
to have an opportunity to project their concerns and so 
throughout the whole governmental structure, you'll have a mix. 
But at the moment, I would say that the reformers have the 
upper hand and they have the upper hand because of the fact 
that we have renewed our diplomatic relationship with Vietnam; 
that we have moved forward in our overall bilateral 
relationship.
    Because let me--let me make sure you understand that our 
relationship is not just POW-MIA--it's not just economic--but 
there's a whole host of other things we do with Vietnam that 
are in the interest of the United States. You may have read 
recently where they have cooperated with us in a law 
enforcement area where they have apprehended and returned to 
the United States some of America's 10 Most Wanted. They did 
that out of the fact that they did it because the value of an 
agreement to do so. We asked them to do so and they've done 
that.
    We're working with them, on the discovery and the control 
of infectious disease--something that knows no borders, and by 
working there in an area where we essentially have a very 
devastating laboratory, I might add, we're able to find ways of 
treatment and also to prevent those diseases from reaching 
America. They're cooperating with us on that whole spectrum of 
activity. So it's not just that we're doing economics and these 
things that are in the forefront there; there's a whole host of 
other activities that are tangential to our work there that are 
of great benefit to the United States.
    Mr. Ramstad. Do the reformers support greater personal and 
political freedoms as well?
    Ambassador Peterson. They do and you may be following the 
news on that. The Vietnamese people are taking exception to 
what the leadership is doing. There have been major outbursts 
of disapproval in various provinces in Vietnam and the people 
are winning. The Vietnamese Government is having to change 
personnel and having to be more transparent in their activity 
so that the people are assured of getting what they deserve.
    I might add, here that in the past, the Vietnamese have not 
had any assets. They had nothing to lose whenever the 
government made a policy decision that may have put them in 
jeopardy. Now, the Vietnamese people have motorcycles; they 
have TVs; they have VCRs; they have houses; they have land; 
they have a whole lot of assets that are, in fact, potentially 
put into jeopardy if the Vietnamese Government makes the 
decision counter to their best wishes.
    As a result of that, the government is having to be much 
more sensitive to a constituency than they ever have before and 
they have told me that over and over. In fact, the National 
Assembly members for the first time ever have actually had to 
go back to the provinces and campaign for their seats because 
there were actually a lot more candidates than there were 
seats. I think there were 680 candidates and there were 450 
seats. So there was, in fact, competition politically. So 
things are changing in that realm.
    Mr. Ramstad. Final question: In your judgment, is there any 
credible evidence of American POWs or MIAs still alive in 
Vietnam?
    Ambassador Peterson. I would answer in the same way that 
Senator Kerry has--that there's no compelling evidence that 
suggests that there is. However, I don't think anybody would 
deny the potential that that might occur and that's why we're 
searching. We have a very, very strong system established so 
that we can investigate live-citing reports almost immediately. 
In that regard, we haven't had any live-citing reports for some 
time that have been meritorious--in fact, we've never had one 
meritorious. So I would suggest that it would be very, very 
unlikely that any live Americans will be found in Vietnam; 
there is no compelling evidence that suggests that. But I would 
certainly never say never.
    Mr. Ramstad. Thank you, Mr. Ambassador, Mr. Chairman.
    Chairman Crane. Mr. Neal.
    Mr. Neal. Thank you, Mr. Chairman. Mr. Ramstad took that 
last question from me, but it's just nice to have you back, 
Pete. You have special credibility in the House and you were a 
terrific Member of the House. I think one of the real troubles 
with the American people today is that they never got to hear 
from people like Pete Peterson who served in the House of 
Representatives. Most of the attention was focused on the 
bickering which occurred on a day-in and day-out basis. There 
were a lot of people upstairs that had that special credibility 
that guys like you have around here. It's a shame the public 
never got to focus on you while you were you here. Nice to have 
you back.
    Ambassador Peterson. Thank you, Richard. Appreciate it.
    Chairman Crane. Ms. Dunn.
    Ms. Dunn. Thank you very much, Mr. Chairman.
    Ambassador, it's good to see you back. We're proud of you 
for the work that you're doing in Vietnam. I'm a bit, I guess, 
like Mr. Camp. I am as much a supporter of fair and free trade 
and support MFN consistently in fast track and sort of saying I 
believe in engagement and believe that's a very important 
policy. I have not before voted for the waiver for Vietnam, 
however, and so it's very important to me what I'm hearing 
today in this hearing; particularly, your comments have been 
helpful to me.
    I have mixed feelings. Since the early eighties, I have 
been meeting with a group of Vietnamese--former Vietnamese--
folks who are U.S. citizens and we talked often. In the early 
eighties, they were great supporters of Ronald Reagan because 
they believed that he would open up the opportunity for them to 
go back home, where they could speak their own language and 
visit their relatives. So that was a common link that we had. 
But now they're telling me that they're very concerned about 
our agreement, or my voting for this waiver because, most 
particularly, of the MIA-POW situation on the others.
    And along with that, I will simply tell you that at a 
dinner table conversation a couple of years ago I was listening 
to a member, an employee, of the Russian Embassy here who was 
telling me how great a hero our own Sam Johnson was in the 
prison camp. And I said, ``How do you know this?'' And he said, 
``Because I have access to the records.'' And I want to feel 
that we've got access to those same records that the Russians 
are looking at, because I think it's important.
    On the other side of it, I talk with people like Roy 
Prosterman, who has been very helpful in Vietnam and other 
Asian regions and other regions, like the Philippines, in the 
area of land use and how you convert from a totally 
totalitarian system to a system where people can own their own 
private property, and how that property can be used.
    I am concerned about a couple of things that were said by 
earlier people who testified here. I think the point that Mr. 
Rohrabacher makes about, why are we putting our money into 
economic organizations that guarantee loans in totalitarian 
countries like Vietnam, when we could be putting this emphasis 
into emerging democracies or democracies-to-be, as the 
Philippines?
    So these are all things that come into my mind. I guess I'm 
asking you, what position gives us the best leverage in helping 
this nation open up more to an eventual less totalitarian 
system than communism right now? And what's happening in the 
economy? And what puts us in the very best position to be able 
to urge them to go forward and provide them incentives, and yet 
not be naive about it, be very realistic about it, because we 
need something back in return?
    Ambassador Peterson. Well, you've asked quite a spectrum of 
questions there and the best way for us to influence the 
Vietnamese into moving forward positively and constructively in 
a transition politically, economically across the board there, 
is clearly continuing our engagement. And that's the full 
spectrum of our engagement, I mean, this is not being halfway, 
and what we have to do ultimately is normalize our relationship 
with Vietnam across the whole spectrum of our opportunities 
here. Renewing Jackson-Vanik is just one of those aspects of 
it, it's not all of them. I might add that this isn't taking us 
to most-favored-nation status. It's only to take us to the 
release of Ex-Im, OPIC, and some of the other financial 
mechanism, programs that would aid American businesses that are 
doing business in Vietnam now, over 400 American businesses are 
there now. And so we're just opening up the opportunities for 
them to be competitive with the other nations that are already 
there, and I might add Australia is just celebrating their 25th 
year of relationship with Vietnam, 25 years they've been 
working with Vietnam in all sorts of activities. And their 
objectives in working with Vietnam are much the same as ours, 
and that is the human rights aspects, the economic aspects and 
even to the extent of the POW-MIA issue, they've been very 
supportive with us on that.
    I just think that for us to take exception to everything 
they're doing, and they're not doing everything we'd like them 
to do, I mean, it's not a perfect society. For us not to be 
there and not to influence them through our processes of 
economics and to our POW-MIA issue, and through our political 
mechanisms, then we can't really complain about what they're 
doing. We can complain now, at the very highest levels. I have 
access to virtually every office in the land. The goodwill that 
is established between our two nations is at a very high point 
at this time, and we need to take advantage of that. They're 
looking to us for leadership. They're listening to us in the 
process of our conversations across the POW, human rights, 
economics, and political issues. And they're assisting us from 
the standpoint of, as I said, law enforcement, infectious 
disease control, all of those kinds of things in a very 
constructive way, and this would continue that.
    Now, may I say, please, on the point you made of Sam 
Johnson: I've worked with the Russians on the documents that 
they have, and if this Russian has those kinds of documents, I 
would like for him to bring them forward because in the 6 
years, the nearly 6 years I worked with them, none of that was 
ever discovered and we had a full team that was there working 
in the Russian archives and we never found anything of the 
sort. So I suggest that this may be a slight exaggeration on 
the part of that individual. But certainly Sam Johnson is a 
hero and a very good friend of mine and he conducted himself 
with incredible distinction while in captivity and I'm proud to 
say that I was happy to serve with him in that capacity.
    Ms. Dunn. Let me just follow up, you made one point--the 
economic situation, could you augment a little bit your 
thoughts on the trend of the economic situation. We have 
stalled on bilateral negotiations with Vietnam and the IMF in 
fact is holding back its most recent payment to Vietnam and I'm 
wondering what your thoughts are on how that's moving and if 
you see some resolution to that soon.
    Ambassador Peterson. The IMF, as you know, has very strict 
standards and rightfully so, and the IMF has really held, their 
activity has held in abeyance until the Vietnamese actually 
establish a policy working document with not just the IMF, but 
the whole host of the donor countries. And so until that is 
concluded, we're not going to continue, the IMF is not going to 
work with the Vietnamese to conclude the ESF agreement. And 
once that is in place, of course, then they'll move forward.
    I just came from a donor's meeting on Monday in Hue city, 
in which all of these points were reiterated with the 
Vietnamese, the leadership, the Prime Minister was there, and 
all of those points were made and we were given some assurances 
that they were going to attempt to move forward on that area.
    Chairman Crane. Mr. Jefferson.
    Mr. Jefferson. Mr. Ambassador, it's good to see you here, 
sir. I have often wanted to have you in a position where I 
could ask you questions like this in public. [Laughter.]
    Pete Peterson is my classmate; we came here together. We 
made a good, strong friendship and I'm very happy that he is 
doing as well as he is in the post that he's in, as we all knew 
that he would. You can see since you've left I've moved up 
quite rapidly, I'm here now as a Ranking Member, having moved 
out Mr. Matsui just about 2 minutes ago. [Laughter.]
    And imagine the Chairman, so yes, no telling when you come 
back again what will be happening here Pete, but it's wonderful 
to see you and I wish you the very best and I don't want to 
really, now that I have the chance to ask you questions, 
probably don't really want to ask you anything that is of much 
moment. But I did have the chance in 1994 to travel to Vietnam, 
which I know in those 4 years has changed dramatically from the 
time because the changes were happening very rapidly with Mr. 
Gibbons, who was then the head of the Trade Committee. And we 
spent 4 days there in the northern and southern parts of 
Vietnam. And we met with what was then a very small group of 
people who called themselves the American Chamber of Commerce, 
mostly in the southern part of the country. And they were 
struggling to get a footing there, but optimistic about their 
chances and hopeful that we would at that time restore our 
diplomatic relations and move out our barriers to trade and 
commercial activity with Vietnam which of course has happened. 
And I know its all now in an embryonic stage and there's a lot 
to be done to make all those promises real, but I want to ask a 
question, not so much about the issue of opening our markets to 
Vietnam, because I think we should do that, and I think that we 
ought to move toward as normal a relationship as we can.
    But I know that with the emerging economies it's very hard 
for them to open their markets in ways that are important to 
us, and they are still very protective in their minds that they 
want to have access to our markets. What do you feel is the 
mood of the Vietnamese Government toward opening Vietnam for 
United States investment and for United States trade, and if 
there's market access to the Vietnamese market?
    Ambassador Peterson. They're frightened by the potential of 
doing so, but they know they must do so ultimately. And as part 
of our bilateral trade negotiations right now we're addressing 
all of the points that you've just made. What will be America's 
opportunities in Vietnam for investment and trade, national 
treatment, the access for intellectual property right 
protection, services, processes, all of those things are being 
negotiated now in our bilateral trade agreement. And so, once 
we conclude that, those guarantees that we've negotiated will 
be honored in Vietnam.
    Essentially, we're asking for reciprocity in all of those 
things that we would do with them, and I feel confident that 
ultimately we'll have a very strong trading relationship with 
Vietnam. They are still not confident in their ability to 
compete, and that's really one of the big drawbacks, and that 
they don't have as much confidence in themselves as the rest of 
the world community actually, because the Vietnamese have 
proven themselves to, in some areas, at least, to be quite 
competitive. And now they have to learn how to do that in a 
much larger world market, and regardless of what they might do 
with us, they are petitioning for accession to the WTO, and 
have already committed to the WTO standards to the extent that 
they want to join in the future, become a member of APEC this 
year, and will have to concur to the restrictions and comply to 
all of the aspects of that membership, and they will have to 
also ultimately and very soon, actually, concur and follow the 
prerequisites of trade amongst the ASEAN, because that's part 
of their neighborhood. And they're gearing up their economy to 
compete and to share reciprocity with their neighbor countries. 
So by the time we get to a bilateral trade relationship with 
them, they will have learned, and I think will be quite capable 
of participating with the United States in an equal trade 
relationship, the kind that we would expect from any other 
country.
    Mr. Jefferson. You may have already said it, and I may have 
missed it because I came in after your testimony was complete, 
but what do you see as the, what progress is being made on the 
bilaterals and what timetable do you see that the bilateral 
agreement being completed?
    Ambassador Peterson. I don't think anybody can give you a 
timetable. We just completed last month our fifth round of 
talks with the Vietnamese, but this was one, the first one that 
was really of substantive nature, because we now have from them 
a very professional proposal on how to move forward with our 
negotiations.
    We've concluded those talks this last month with many 
questions to be answered on their part and they have gone back 
and are working on them. I have asked the Prime Minister just 
as late as Monday to accelerate the work on that so that we can 
get back to the table quickly, so that we don't lose the 
momentum that we've established in these talks of last month.
    So I suspect that the talks will be conducted again maybe 
at the end of July in Hanoi. And we'll reengage too, as 
aggressively as we possibly can. Now, when might it be 
complete? There's still some very serious issues which need 
additional work and so I would say that in the best-case 
scenario, perhaps the end of this year, the first of next, 
something could be concluded, but it may be way longer than 
that.
    Mr. Jefferson. The last thing is, what are some of the more 
difficult areas of discussion and negotiation you're having 
about the bilateral agreement?
    Ambassador Peterson. The most difficult probably is the 
investment area in that they just don't understand all the 
details with that. And they just don't understand what all this 
means to them and whether this puts them into jeopardy or 
whether or not it is a benefit to them.
    Mr. Jefferson. In multinational investment----
    Ambassador Peterson. Exactly. And well, in American 
investment specifically. They don't understand the concept of 
services in the sense that we do in that it's construction as 
well as a whole host of other things. And they at one time 
said, ``well, we don't have any services, and so we don't need 
this chapter.'' So we've brought them along quite a way on that 
now, and so they are discussing with us on that.
    IPR, intellectual property rights, is another area of 
concern and it'll be, I'm sure that area that can be worked 
out, but at this juncture it's still one of those things that's 
difficult to conclude.
    Mr. Jefferson. Thank you.
    Chairman Crane. Well, again, Mr. Ambassador, we want to 
express appreciation for the sacrifices you made to be here, 
but also to commend you for the outstanding job that you've 
been doing. Keep it up and we look forward to ongoing 
communication with you on all of the issues of concern in our 
bilateral relationships. And thank you.
    Ambassador Peterson. Thank you, Mr. Chairman, and certainly 
if the Subcommittee should want any updates, data, or any 
assistance in formulating position papers or anything like 
that, we'd be happy to provide whatever assistance you'd like 
to have.
    Chairman Crane. Thank you so much.
    And now our next panel is Nguyen Dinh Thang, executive 
director, Boat People, SOS; Y Hin Nie, president, Montagnard 
Dega Association, Incorporated; Rong Nay, member of the 
Montagnard Human Rights Committee; Ann Mills Griffiths, 
executive director, National League of Families of American 
Prisoners and Missing in Southeast Asia; and Lynn M. O'Shea, 
New York State Director, National Alliance of Families for the 
Return of America's Missing Servicemen.
    Before you get seated, folks, let me alert you that the 
bells have just gone off, and we're going to be interrupted 
here by a vote. So you needn't necessarily get situated in the 
chairs and wait here because I will recess the Subcommittee 
subject to call of the Chair and it looks like we've got at 
least two votes. Is it two?
    Motion to recommit I think is the first, so we'll recess 
subject to call of the Chair and there are at least two 
forthcoming votes so you can relax and enjoy for awhile.
    [Recess.]
    Chairman Crane. Folks, would you all please take seats and 
would our witnesses please take seats, and if you will please 
defer to Ms. Griffiths, she has a national conference today 
that she has to attend, so we'll let her go first and then 
we'll proceed in the order that I asked you to come up here to 
the table. Thank you.
    Ms. Griffiths, and again, try and keep your oral 
presentations to 5 minutes, and any written presentations will 
be made a part of the permanent record, and the little light 
here will give you an alert sign with the green and then yellow 
and then red. And, Ms. Griffiths, please give us your 
presentation.

STATEMENT OF ANN MILLS GRIFFITHS, EXECUTIVE DIRECTOR, NATIONAL 
                   LEAGUE OF POW/MIA FAMILIES

    Ms. Griffiths. Well, thank you, Mr. Chairman, and I 
appreciate your consideration of our national conference. I do 
welcome the opportunity to represent the POW-MIA families here 
today. I do have a very brief statement to make, although I'm 
discarding most of that; but I have a full statement with a 
small attachment that I would like in the record.
    Obviously these hearings are very timely, but hearings 
before Congress are a sad occasion for the families, that it's 
necessary to again appear. Given President Clinton's rhetoric, 
we had in fact hoped, especially in his first 18 months, that 
this issue would, as he stated, ``be the highest priority of 
the relationship with Vietnam,'' and that normalization steps 
would in fact be based, as a matter of reciprocity, to POW-MIA 
accounting results. Sadly, any objective observer knows that 
this is not the case. The administration's strategy, in our 
view, was and is to move forward as rapidly as possible toward 
normalization. That is their objective, regardless of whether 
bilateral issues are resolved, POW-MIA as well as others, in 
our view.
    But to proceed in this way the administration had to ensure 
that the POW-MIA issue was not fully integrated into policy, 
and in fact they took several steps. Their strategy encompassed 
downgrading intelligence collection and analysis, moving the 
issue institutionally to the Department of Defense and to field 
operations, then using those activities as the sole measure of 
success.
    These actions were then followed by certifications by the 
President to Congress, and Cabinet level assurances that 
Vietnam is fully cooperating, and this was reliant almost 
solely on joint field operational reports and totally ignored 
Vietnam's ability to unilaterally account for hundreds of 
Americans not in crash or gravesites.
    This has led to political appointees and newly assigned 
career officers, who have little real knowledge and/or 
background on the issue and of necessity accept the assurances 
of their predecessors that all is going well. And that, in our 
view, is the primary reason why the Vietnamese leadership no 
longer takes this issue seriously.
    I was at hearings yesterday, and although I was unable to 
be here to hear Ambassador Peterson and Secretary Kartman, I 
did hear Secretary Kartman yesterday, as I did the Principal 
Deputy Assistant Secretary of Defense. In both cases, they 
stated that they had moved in a very measured and marked way in 
response to the tremendous cooperation being provided by the 
Vietnamese. This hearing was held by your colleague, Mr. 
Gilman, whom you know has a longstanding record on this issue.
    My question at that hearing and today is: if the Vietnamese 
are cooperating so fully, in such an outstanding, superb way, 
as is claimed, then why is it that the POW-MIA families, and 
specifically the National League of Families, which as you know 
with your long history with us, has a record of total 
responsibility, we don't make things up out of whole cloth, we 
have always relied on the U.S. Government as our basis of 
actual data and our expectations of what could be achieved. Our 
charter and bylaws, is the fullest possible accounting. We have 
never sought a full or complete accounting. That is impossible 
in warfare, and we know that. The Vietnamese Government is 
providing good cooperation to the field operators to conduct 
joint field activities. That has a multipurpose benefit for 
them, and some benefit for the POW-MIA accounting issue.
    The benefit from their standpoint and the U.S. 
Government's, the administration's, is that the larger the 
field operation and the more widespread, the greater the 
perception of full and complete cooperation, as has been 
certified by the President. The fact of the matter is that 
there's longstanding intelligence available to the U.S. 
Government, and certainly the Vietnamese leadership knows this. 
I've been dealing with them directly in numerous, I can't even 
count how many delegations since 1982. And it is well known 
that they are continuing to withhold relevant information, 
including remains of Americans that have long been known 
stored.
    Our view is, what is sadly lacking here, and something 
about which the operational commands and the Department of 
Defense can do little, is the policy overall that the 
leadership of our government, or our administration at present, 
is to have high-level negotiations that not only raise this 
issue. When they say that this is the first issue raised with 
the Vietnamese, they're right. It is at the top of every 
talking point. They must raise it, but that is before they go 
on to what they all consider, or appear to consider, as the 
really important things like trade, like the other issues of 
bilateral interest to the United States.
    Now we don't oppose MFN on ideological grounds. We support 
it for Laos and Cambodia. We don't support it for Hanoi, for 
the Vietnamese Government, because of their refusal of 
cooperation to date on what they can provide on their own, not 
jointly, and with that I'll close, and if I have to leave 
before the questions and answers, my apologies, sir.
    [The prepared statement follows:]

Statement of Ann Mills Griffiths, Executive Director, National League 
of POW/MIA Families

    Mr. Chairman, Members of the Committee......I welcome this 
opportunity to represent the POW/MIA families at this important 
hearing. The timing is vital, and Congressional attention is 
urgently needed. We appreciate your efforts over the year, Mr. 
Chairman, and know that achieving the fullest possible 
accounting has long been a shared objective, one very close to 
your heart.
    Throughout the years since the National League of POW/MIA 
Families was formed in May, 1970, there have been many 
difficulties and obstacles. The POW/MIA issue from the Vietnam 
War, as compared to other wars, is very different. Not only was 
there no timely U.S. access to the battlefields, but the U.S. 
faced a national Vietnamese policy of well orchestrated 
exploitation of the issue for their political and economic 
objectives, as well as domestic divisiveness.
    The greatest challenges came during the immediate post-war 
period, and they were very tough to overcome. Then, from 1981-
92, the primary U.S. objective with Vietnam was accounting as 
fully as possible for America's POW/MIAs, anticipating that 
satisfactory resolution could allow the United States and 
Vietnam to move toward normal relations after a Cambodia 
settlement. It was during this period that most accountability 
occurred.
    The Clinton Administration has rhetorically taken the same 
public stance regarding highest priority on resolving the POW/
MIA issue but, operationally, POW/MIA objectives are not being 
met. Although the process of joint cooperation has brought some 
success, especially in Laos, POW/MIA accounting from Vietnam 
has been minimal when compared to official, long-established 
expectations.
    The most glaring challenges the League now faces are U.S. 
policy that continues to provide incentives to Vietnam without 
performance on unilateral actions to account for Americans, 
including repatriation of remains that cannot be recovered in 
the field, and accounting for last known alive discrepancy 
(LKA) cases, directly linked to confirmed data which Vietnam is 
withholding from U.S. researchers.
    Today, 2,089 Americans are still missing and unaccounted 
for from the Vietnam War, though there are approximately 50 
``sets'' of remains in varying stages of the identification 
process. About half of the total were originally carried as POW 
or MIA; the other half were original-status KIA/BNR, or killed-
in-action/body-not-ecovered.
    Statistical data surrounding this issue changes constantly, 
but one crucial, though seldom mentioned, fact is that it is to 
Vietnam that the U.S. must turn for accountability on most 
missing Americans, regardless of where the loss occurred. Even 
in Laos, where 447 are still missing, over 80% were lost in 
areas under Vietnamese control at the time; in Cambodia, the 
figure is 90% of the 75 U.S. losses.
    The League definition of accountability, long ago accepted 
officially as well, is the missing man returned alive, or his 
identifiable remains or convincing evidence as to why neither 
is possible, in which case the individual's name stays on the 
list as unaccounted for, but there is little to no expectation 
of remains recovery.
    Our expectations, based upon official information and other 
evidence, have long been realistic. We accept the nature of war 
that does not allow answers on all the missing. Knowing the 
historical record, understanding the volume of intelligence 
data and having witnessed Hanoi's manipulation of the issue for 
decades, the League also recognizes approaches that work, 
versus those that do not.
    On Veterans Day of last year, President Clinton stated, 
``Let us never waiver for a moment in our common efforts to 
obtain a full accounting for all our MIAs.'' The public appeal 
received sustained applause, as expected, but it should have 
been in the form of a policy directive to some administration 
officials who fail to treat the POW/MIA issue seriously.
    In February of this year, the President affirmed in a 
letter regarding a Jackson-Vanik waiver for Vietnam that 
``obtaining the fullest possible accounting of our missing from 
the Vietnam War is the highest priority in our relations with 
Vietnam.'' The President's assurances are welcome, but 
officials in his administration do not implement his 
commitments seriously. Some either do not accept the validity 
of the President's stated policy, or they elect to ignore the 
direction given.
    Last year, Congress discovered that the intelligence 
priority enjoyed by the POW/MIA issue in the 1980s and early 
1990s was removed from presidential directives in 1995. It took 
significant effort to obtain a pledge from the administration 
to restore the priority, and an independent analytic capability 
in the intelligence community still has not been established.
    The President's 1997 certification to Congress that Vietnam 
is ``co-operating in full faith'' was not accurate. According 
to findings in a 1997 Senate Select Committee on Intelligence 
staff inquiry, ``The intelligence community appears to have 
played no formal analytic role in the determinations'' 
regarding Vietnam's cooperation. The President's certification, 
based upon staff recommendations, was heavily influenced by 
economic interests, an amorphous desire to ``heal'' and 
Vietnam's skillful implementation of its own policy.
    Much has been and is being heard on Capitol Hill and in the 
media about the Jackson-Vanik Amendment, covered in Title IV, 
Section 402 of the Trade Act of 1974, dealing with free 
emigration. Very little was or is heard about the Gurney-Chiles 
Amendment covered in Title IV, Section 403, an effort to get 
all countries to assist in accounting for missing Americans.
    The League is very familiar with the Gurney-Chiles 
provisions. In fact my father, the late Mr. E.C. Mills, then 
serving as League Executive Director, testified on this very 
issue before this Committee, though at the time it was the 
Committee on Foreign Affairs, chaired by your former colleague, 
the esteemed Clement Zablocki.
    We were not the only ones to recognize this vital link; 
apparently, the Clinton Administration did as well. The 
President's March 4th certification that Vietnam was ``fully 
cooperating in good faith'' missed congressional deadlines, but 
was timed to coincide with the strategy for gaining 
Congressional approval of the President's March 11th decision 
to grant the Jackson-Vanik waiver.
    Hanoi's reaction to the waiver was predictable. Unlike some 
U.S. officials and businessmen, the Vietnamese foreign ministry 
``gave a cool welcome to the decision, calling it reasonable 
and a step toward normal economic relations,'' according to 
press reports. Anxious to achieve their highest priority--Most 
Favored Nation trade status--officials in Hanoi treated the 
waiver as routine and justified, merely another step along the 
path to normal diplomatic and economic relations that this 
administration has pursued with inordinate urgency, given the 
lack of Vietnam's critical economic and strategic import to the 
United States.
    The League's opposition to MFN for Vietnam is not 
ideological, but based upon Hanoi's failure to take unilateral 
actions that could account for hundreds of missing Americans. 
We have long supported MFN for Laos and Cambodia due to both 
countries' historical record of far more serious accounting 
efforts.
    Obvious manipulation continues to come from Hanoi--from 
Vietnam's leadership, not the Vietnamese people. To objective 
observers, Hanoi's record over the years proves our point. 
Vietnam's leadership has enjoyed tremendous continuity through 
seven U.S. administrations, and they have not been reluctant to 
exploit those changes, alternating between surges of 
cooperation and stonewalling.
    There is apparent unwillingness, however, by current U.S. 
officials to recognize and accept as valid Vietnam's 
manipulation of the issue, including Hanoi's failure to account 
for the most obvious cases of Americans last known to be alive. 
Now, the official statements refer to last known alive cases as 
``down to 48'' from 196, without any reference to the fact that 
the remains of nearly all of these men have not been returned--
they should be the easiest to account for by returning remains, 
not the hardest, as alleged by this administration, since they 
obviously were not destroyed in an aircraft crash.
    Administration officials also ignore a direct 1985 
admission by a member of the Vietnamese Politburo to a White 
House official that hundreds of remains were being withheld. 
Since 1990, Vietnam has failed to renew unilateral repatriation 
of stored remains, and, ironically, U.S. policy-makers seem to 
accept the Politburo's failure to authorize such full 
cooperation as somehow proving that there are no more 
available. Why? Presumably because acknowledging that Vietnam 
is withholding remains and information, rather than being fully 
cooperative, is counter to the Clinton Administration's real 
objectives--full normalization regardless of the cost to 
achieving the fullest possible accounting.
    Despite these circumstances, long before it was politically 
correct, the POW/MIA families supported humanitarian aid to the 
people of Vietnam, Laos and Cambodia through assistance to the 
disabled, school con-struction and other projects. We still do. 
We also support a rational policy to meet Vietnam's political 
and economic objectives--as they meet ours in terms of 
accounting for missing Americans--not payment in advance in the 
naive hope that Vietnam will respond in good faith.
    Over the years, there have been obstacles that arose 
domestically, whether from self-deluded RAMBOs, apologists for 
U.S. involvement in the war, or con-artists who preyed upon 
some families, veterans and the general public. One of the 
greatest frustrations has come from un-informed people who, in 
the name of undefined ``healing'' and ``putting the past 
behind,'' seem to believe that facts, evidence, principles and 
justice for those who serve can be ignored. Such a mentality 
assumes that commitments can be summarily dismissed to pursue 
economic and political objectives, even when answers are being 
deliberately withheld, as is the case with Vietnam.
    Ending uncertainty and bringing facts to waiting families 
and our nation has been the League's mission for nearly three 
decades, during which I have served nearly twenty years as 
Executive Director. Our expectations are realistic. The 
families simply want answers that, according to senior U.S. 
officials over many years, could readily be provided on 
hundreds of missing Americans if the Vietnamese leadership 
makes the decision to cooperate seriously.
    Overcoming current challenges requires an educated, 
committed executive branch, backed by informed families, 
veterans and Members of Congress, unified behind an approach 
that can succeed. We long ago recognized the need for active 
involvement by the veterans community. Support from America's 
veterans not only enables the League to continue to fight for 
answers, but helps ensure that Congress and the Executive 
Branch clearly understand that this issue must be resolved. The 
United States must send a clear signal that those who serve our 
nation are not expendable, that they will be accounted for if 
it is humanly possible.
    The Vietnam War POW/MIA issue, and specifically the efforts 
of the League, brought significant changes to our nation and to 
the world. This is a contribution of which we are, justifiably, 
proud. In Desert Storm, unprecedented efforts were made to 
account as fully as possible for America's POW/MIAs before U.S. 
troops were withdrawn. Russia is now seeking to account for her 
missing in Afghanistan and Chechnya; Kuwait seeks answers for 
citizens held and missing in Iraq; Israel is still seeking the 
return of her POWs from Lebanon; and the Croatians search for 
men unaccounted for in Serb-controlled Bosnia. All have come to 
the League for advice. Our quest to account for America's POW/
MIAs from the Vietnam War has given rise to international 
recognition: you can blame the war, but don't blame the 
warrior.
    The League's POW/MIA flag is now the recognized symbol of 
the principle of nations seeking accountability for those who 
serve. Last year, Congress passed, as part of the Defense 
Authorization Act for FY98, language that mandates flying our 
POW/MIA flag six days each year: Armed Forces Day, Memorial 
Day, Flag Day, Independence Day, National POW/MIA Recognition 
Day and Veterans Day. On permanent display in the U.S. Capitol 
Rotunda since March 9, 1989, the League's POW/MIA flag now is 
to be flown on the grounds or in the public lobbies of all 
major military installations; all Federal national cemeteries; 
the Korean War and National Vietnam Veterans Memorials; the 
U.S. Capitol; the White House; offices of the Secretaries of 
State, Defense and Veterans Affairs (where it now flies daily) 
and the Director of the Selective Service System; and at all 
offices of the U.S. Postal Service. Passage was supported by 
the League and all major national veterans organizations.
    The League and our nation's veterans have fought for 
answers because it is the right thing to do. The Vietnamese 
people suffered much greater loss of life than we in America, 
but Vietnam's unaccounted for citizens are known dead, body not 
recovered. There are no Vietnamese MIAs! Families in Vietnam 
have no uncertainty except for the location where
    their loved ones are buried, and that is tragic enough. It 
is, however, important to distinguish between the two issues.
    Vietnamese KIAs were not only buried in unmarked graves, 
but will never be accounted for in terms we recognize. Even 
with the assistance of American veterans in providing relevant 
information, the Vietnamese have no medical records or other 
data against which to compare remains and material that may be 
recovered. Unlike the Vietnamese leadership, the United States 
was not and is not withholding the identifiable remains of 
Vietnamese citizens, nor information that could help account 
for them. Therein lies the core difference on that element of 
humanitarian reciprocity.
    Answers can come on many more American POW/MIAs. The 
timing, however, depends primarily upon whether the Clinton 
Administration reestablishes the principle that the pace and 
scope of U.S. responses to Hanoi's priorities will be directly 
related to their unilateral accounting actions.
    As in the past, Hanoi's response will be based upon self 
interest. If the President and senior U.S. officials 
demonstrate seriousness and commitment, the leadership of 
Vietnam will respond. Unified determination to succeed--by the 
POW/MIA families, our nation's veterans, the American people 
and our representatives in Congress--can ensure that the 
Clinton Administration implements the President's commitments 
with the integrity that America's missing veterans demonstrated 
by their honorable service in the cause of freedom.
    Thank you, Mr. Chairman. I look forward to your questions.
      

                                


    Chairman Crane. We understand that, and we thank you for 
your presentation, Ms. Griffiths.
    Next is Dr. Thang.

STATEMENT OF NGUYEN DINH THANG, EXECUTIVE DIRECTOR, BOAT PEOPLE 
                  S.O.S., MERRIFIELD, VIRGINIA

    Mr. Thang. Thank you, Mr. Chairman, and Members of the 
Subcommittee. Today I speak on behalf of the Boat People 
S.O.S., but I am quite convinced that I also represent the view 
of the majority of Vietnamese-Americans in this country. 
According to a poll conducted by the Orange County Register the 
day after the waiver was granted to Vietnam, 93% of all 
Vietnamese-American respondents opposed that waiver.
    Three months ago, President Clinton granted Vietnam the 
waiver to the Jackson-Vanik amendment, contending that it would 
substantially promote free and open emigration. Under that 
amendment, free and open emigration means: one, no citizen 
should be denied the right or opportunity to emigrate. And two, 
no citizen should be made to pay more than a nominal fee on 
emigration on the visas or other required documents for 
emigration.
    After the waiver, Vietnam has substantially slowed down its 
clearance of eligible applicants, not the other way around. 
Senator Kerry did quote a number, 15,000 cleared for interviews 
so far under the ROVR Program. However, he forgot to mention 
that the vast majority of those names already cleared, that is, 
14,000 than before the waiver. Since the waiver, over the past 
3 months only about 1,000 have been cleared so far, so that's 
very indicative of a major slowing down in the processing of 
these cases.
    And Ambassador Peterson did mention that, did acknowledge 
that's the problem, but he explained in a way that since we are 
getting to harder cases to deal with. He quote that some of the 
cases might have been involved in criminal activities, others 
had wrong addresses. Well, in Vietnam, criminal activities 
might mean political activities not permitted or not allowed by 
the Vietnamese Government there. Actually we have submitted the 
State Department a long list of about 600 cases and so far we 
have received very few replies from State Department on those 
cases. We did include the addresses along with the list.
    And now since, actually back in March the State Department 
was very optimistic. They told us that they expected that the 
remaining caseload of 4,000 names would be cleared by the end 
of March. We are now already in June and still 2,000 cases are 
still waiting for clearance, not to mention 1,200 case 
individuals have been already denied clearance for interview 
altogether.
    Regarding applicants under the HO program, there has been 
very little to no progress whatsoever. Among the 900 
Montagnards that have been of interest to the United States, 
since the waiver only 3 percent have been granted clearance for 
interview. Of the 6,000 former political prisoners and former 
U.S. employees under the same program, since the waiver, again 
only 3 percent have been cleared for interview.
    I don't think that with those figures anyone could say with 
a clear conscience that there has been substantial promotion of 
free and open emigration since the waiver. We have documented 
numerous cases of former political prisoners, religious 
leaders, immediate relatives of U.S. citizens, former 
commandoes, former U.S. Government employees, so on and so 
forth, who have been exiled to remote areas and banned from 
contacting any foreigners altogether. Their names do not even 
make it to the list of the U.S. Government. And there's not 
much our government can do to help. Under the current 
arrangement with Vietnam the United States is not allowed to 
contact these people directly. Not until Vietnam has cleared 
them for interview. So we are in a catch-22 situation here.
    Late last year I took part in a congressional staff 
delegation to Vietnam. We included one such case among the list 
of people that we would like to visit. And our Embassy in Hanoi 
submitted that list of names. And we are not allowed to visit 
this particular individual. Just yesterday I receive a message 
of despair from this person through his friends saying that he 
had been investigated and interrogated multiple times ever 
since about how his name got on our list. So many are the 
reasons for which an applicant may be denied emigration. For 
instance, I know the wife of a Montagnard now in North Carolina 
was offered exit permission only on the condition that she 
renounce her religion. She didn't and she's still in Vietnam. 
That's not the case of a refugee who was allowed to leave only 
if he leaves his wife, real wife and children behind and takes 
substitutes assigned by the government as condition for exit. 
And not too long ago a former political prisoner came to me and 
ask for assistance because he had been told by the Vietnamese 
Government that he had to commit himself to gather intelligence 
once he arrived in the United States for the Ministry of 
Interior of Vietnam as condition for exit. And he was very 
frightful because if he didn't cooperate, then his children 
still back in Vietnam will suffer the consequences.
    I know that my time is up and therefore I would like to 
stress on one major area that has been ignored altogether in 
all the previous testimonies, especially from the State 
Department and from Mr. Kerry, and that is the issue of 
corruption. There's rampant corruption in Vietnam that has 
marred the entire emigration process. We have documented cases 
and we would like to submit in confidence to this Subcommittee 
the statement of two newly arrived refugees. One had to pay 
$500 and the other one $3,000 in exchange for exit permission.
    In conclusion, I would like to suggest the following 
conditions for the extension of the waiver. One, Vietnam has to 
agree to expeditiously clear the entire ROVR caseload for 
interview including the 1,200 people who are denied clearance. 
Two, to give the United States full and direct and unhindered 
access to our applicants of interest to the United States. And 
three, a concrete and immediate step to combat corruption 
throughout the emigration process. Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Nguyen Dinh Thang, Executive Director, Boat People S.O.S., 
Merrifield, Virginia

    Mr. Chairman and distinguished members of the Subcommittee,
    I am Nguyen Dinh Thang, Executive Director of Boat People 
S.O.S., a human rights and refugee rights organization that has 
worked on issues related to Vietnamese refugees and immigrants 
for almost two decades. Today I would like to present hard 
numbers and facts that are self-explanatory about Vietnam's 
attitude towards free and open emigration. I also would like to 
raise my concern over the Administration's foreign policy 
towards Vietnam in the broader context of human rights and 
trade.
    Three months ago President Clinton granted Vietnam waiver 
to the Jackson-Vanik Amendment. His justification is that the 
waiver will substantially promote free and open emigration. 
Under the Jackson-Vanik Amendment, free and open emigration 
means: (1) no citizen should be denied the right or opportunity 
to emigrate, and (2) no citizen should be made to pay more than 
a nominal tax, levy, fine, fee on emigration or on the visas or 
other documents required for emigration.
    After the waiver, Vietnam has substantially slowed down its 
clearance of eligible returnees for interview under the 
Resettlement Opportunity for Vietnamese Returnees (ROVR) 
program. This program was officially announced in April 1996. 
After 18 months of foot-dragging, Vietnam suddenly cleared for 
interview 14,000 of the 18,000 persons of interest to the U.S., 
all of this within a period of three months leading to the 
waiver. The State Department was optimistic that the remaining 
4,000 names would be cleared before the end of March.
    We are now in the second half of June and some 2,000 names 
are yet to be cleared. Worse yet, Vietnam has already denied 
interview clearance to over 1,200 eligible returnees. Based on 
some 600 cases that we have compiled and submitted to the State 
Department, I have reasons to believe that many victims of 
persecution with the most compelling refugee claims are among 
those denied access to U.S. interview. I have brought to the 
attention of the State Department a significant number of 
returnees currently under house arrest, in prison or in hiding.
    Similarly there has been little progress in the HO program, 
which resettles former U.S. employees and former political 
prisoners. Of the 900 Montagnards that the U.S. has tried to 
gain access to for years, only 3% have been granted exit 
permission since the waiver. Thousands of former political 
prisoners denied exit permission prior to the waiver are still 
without exit permission after the waiver.
    I have also worked on numerous cases of beneficiaries of 
current immigrant visa petitions or religious visa petitions 
who continue to be blocked from U.S. interviews. Appeals by 
their U.S. relatives or U.S.-based religious institutions to 
Ambassador Pete Peterson, to Vietnamese Ambassador Le Van Bang, 
to the State Department, and intervention by members of 
Congress have been fruitless.
    With the above facts and figures I cannot see how any 
sensible and fair person could argue that the waiver has 
substantially promoted free and open emigration. Vietnam has 
become less, not more, cooperative after the waiver.
    The problem is actually many times worse than those numbers 
may show. Most emigration applicants must pay hefty amounts of 
bribes in exchange for required documents, clearance and exit 
permit. I have interviewed many of these victims who arrived in 
the U.S. in recent months. Some of them had to pay several 
hundred dollars; others several thousand dollars; and many had 
to practically give away their houses and other properties to 
state officials. Considering the average annual per capita 
income in Vietnam is only 250 dollars, such payments cannot be 
characterized as nominal. Those who cannot afford such bribes 
are often excluded from emigration altogether. I would like to 
submit in confidence to the subcommittee signed statements of 
two witnesses who recently arrived in the U.S. One had to pay 
500 dollars, the other 3,000, in order to get clearance for 
interview with the U.S. delegation.
    Because it has nothing good to say, the State Department 
chooses to ignore such corrupt practices, which constitute a 
gross violation of the Jackson-Vanik Amendment, altogether.
    The problem is even uglier if we look beyond the Jackson-
Vanik Amendment. I have worked on the case of a Montagnard now 
in North Carolina whose wife in Vietnam is offered exit 
permission only if she renounces her religion. She refuses and 
is still in Vietnam. I know another case who must leave his 
real wife and children back in Vietnam, and take substitutes 
assigned by the government as condition for exit permission. A 
former political prisoner, now living in Washington DC, has 
come to me to ask for help because Vietnam's Ministry of 
Interior had required that, once in the U.S., he gather 
intelligence for them as condition for his exit; his relatives 
left in Vietnam would suffer the consequences if he fails to 
cooperate. I am quite certain that the State Department is 
aware of but would like to overlook such problems.
    Earlier this year, President Clinton opposed the Freedom 
from Religious Persecution Act on the ground that the threat of 
mandatory sanctions would cause U.S. officials to overlook the 
problem so as to avoid the imposition of the sanctions. I 
believe he spoke from experience. That is exactly how the 
Administration acts with respect to Vietnam, not only on the 
issue of free and open emigration, but also on the broader 
issues of human rights and trade.
    In July 1995, when President Clinton normalized relations 
with Vietnam, the Administration reassured skeptics that such a 
move would promote democracy and human rights in that communist 
country. Since then, the Communist government has further 
tightened its grip over its citizens. The number of imprisoned 
religious leaders and political dissidents has gone up, not 
down. So has the number of ordinary citizens detained and 
charged for criticizing corruption in government, and the 
frequency and severity of reprisals against independent voices 
in the government-controlled press. December of last year, I 
took part in a Congressional staff fact-finding mission to 
Vietnam. On our own initiative, we talked to several 
intellectuals, dissidents, ordinary people, and even members of 
the Communist party. The consensus was that human rights 
conditions had deteriorated since normalization.
    Last year, when President Clinton pushed for ``fast track'' 
authority, the Administration convinced Congress and the 
American people that it will ensure that trade expansion will 
promote workers rights. However, within a day of the President 
Clinton's announcement of the Jackson-Vanik waiver for Vietnam, 
the Overseas Private Investment Corporation (OPIC) hurriedly 
announced programs in Vietnam, despite a statutory requirement 
that OPIC should not operate in any country that violates basic 
international labor standards. Knowing that workers are not 
allowed to form independent labor unions and that forced labor 
remains common practice in Vietnam, OPIC bypassed the 
requirement with a waiver.
    Aggressively pushing for expanded trade with Vietnam, the 
Administration seems intent on glossing over rampant and 
uncontrollably spreading corruption in that communist country, 
which not only violates the Jackson-Vanik Amendment but will 
also affect the health and fairness of trade between the U.S. 
and Vietnam. A survey published in April by the Hong Kong-based 
Political and Economic Risk Consultancy (PERC) ranks Vietnam 
the third most corrupt Asian country, only ahead of Indonesia 
and Thailand. A report issued by the United Nations Development 
Program four days ago warned that serious lack of transparency 
in financial dealings means peril and trouble for Vietnam in 
the months ahead. In two weeks, Vatico Inc., the first American 
firm licensed to operate in Vietnam, will close shop after 6 
rough and unprofitable years. Its president was quoted in the 
press that he would be surprised ``if 10 percent of foreign-
invested companies in [Vietnam] are making a profit.'' Twenty 
years ago Congress passed the Foreign Corrupt Practices Act. 
With regard to Vietnam, this Act may face the same fate as the 
Jackson-Vanik Amendment and the statute on OPIC.
    Worst of all, Vietnam seems to know how our Administration 
thinks and acts. Let me quote an electronic message from a 
high-ranking Communist official whose email address, although 
based in Thailand, can be traced all the way back to Hai Phong, 
North Vietnam. This message was sent to us a few days ago: ``I 
believe that US now or later would have to waive the Jackson-
Vanik for Vietnam but the problem is when. And so why don't 
Vietnamese overseas support such a move but go against it? If 
Vietnam's economy develops, they at least can be proud that 
their homeland would not be in the list of poorest countries in 
the world. I believe the human rights issue is the western 
issue to rule Asian countries more than actually from their 
heart.''
    It is time that we send a different message to Vietnam, 
that our Administration speaks from its heart, not its lips.
    In her testimony before Congress on February 23rd of this 
year, Secretary Julia Taft, representing the State Department, 
reassured Congress that if Vietnam fails to live up to its 
promised cooperation with U.S. resettlement programs, the State 
Department would recommend that the waiver to the Jackson-Vanik 
Amendment be rescinded. Vietnam does not keep its words; our 
State Department should.

Dr. Nguyen Dinh Thang grew up in South Vietnam and entered 
college after the communist takeover in 1975. He escaped by 
boat to Malaysia in 1978 and arrived in the U.S. seven months 
later.
    He obtained his doctorate in Mechanical Engineering from 
Virginia Tech in 1986 and since then has worked as an engineer 
at David Taylor Research Center. Ever since his arrival in the 
U.S., he has been active in the refugee community. In 1986 he 
founded the College Entrance Preparation program for newly 
arrived immigrants and refugees. In 1988 he joined Boat People 
S.O.S. and became its Executive Director in 1990. In the same 
year he co-founded Legal Assistance for Vietnamese Asylum 
Seekers (LAVAS), a project sending pro bono lawyers and 
paralegals to first-asylum camps to assist Vietnamese boat 
people in their application for refugee status.
    In December of last year, Dr. Thang took part in a 
Congressional staff delegation to Vietnam to look into the 
conditions of repatriated boat people and into the general 
human rights conditions in Vietnam.
    Dr. Thang presently serves as the President of the 
Vietnamese Community of Washington, D.C., Maryland and 
Virginia.
      

                                


    Chairman Crane. Thank you, Dr. Thang.
    Mr. Nie.

STATEMENT OF Y HIN NIE, PRESIDENT, MONTAGNARD DEGA ASSOCIATION, 
                INC., GREENSBORO, NORTH CAROLINA

    Mr. Nie. My name is Y Hin Nie. On behalf of Montagnard Dega 
Association, I would like to thank----
    Chairman Crane. Wait just a moment. You might pull that 
microphone--there you go. Thank you.
    Mr. Nie. I want to thank Chairman Crane for his help in 
bringing about this hearing. And further, I want to thank all 
the Members of the Subcommittee in holding these hearings on 
United States and Vietnam trade relations, including the 
present renewal of Vietnam waiver under the Jackson-Vanik 
amendment, and their interest and assistance in this matter and 
emigration policy and practice in Vietnam.
    And particularly, I want to talk about Montagnard 
reunification, as the Montagnard people believe in the 
trustworthiness of the United States of America and as a leader 
of democratic freedom and we place our trust in today's 
hearing.
    And since 1975, most of our people who immigrated to United 
States as refugees were combatants against Communist tyranny, 
in the aftermath Vietnam unification. And allow me to sketch 
out the role of history of Vietnam and the United States. I 
will then focus on the human rights violations of emigration, 
persecution, and restrictions on free emigration for our 
Montagnard people suffering in central highlands of Vietnam.
    The Montagnard people were among those suffering the most 
from the Vietnam war. Our recent history is rooted in events 
during and after the war. And during the Vietnam war many of us 
were compatriots with the U.S. Army groups. On March 30, 1998, 
on the History Channel, they profiled the Special Forces' role 
in the Vietnam war prior to 1975. Retired Green Berets who were 
interviewed stated that the Montagnards would sacrifice their 
lives to protect American lives. And our association with the 
Special Forces and veterans' service organizations was evidence 
of Montagnards' traitorous status to the post-1975 Communist 
Government of Vietnam. And consequently, restrictions were 
placed on Montagnards and those who might wish to help. 
Similarly, the Hanoi government has denied exit visas for 
spouse and children who want to reunite with their family in 
United States.
    The Jackson-Vanik amendment prohibits certain commercial 
relations with a country that engages in practices prohibiting 
and severely restricting free emigration of its citizens and 
specifically identifies such practice as: denying its citizens 
the right politically to emigrate and, second, as imposing more 
than a nominal tax on emigration or documents required for 
emigration; and, third, imposing more than a nominal tax on a 
citizen as a consequence of his desire to emigrate to the 
country of his choice. And consequently, as Montagnards, we are 
similarly opposed to any waiver of the Jackson-Vanik amendment 
or the easing to any and all restrictions already placed on the 
Government of Vietnam until certain practices are greatly 
improved.
    The State Department is aware of 893 Montagnards who were 
not granted any sort of interview. In fact, a notification of 
the interviews were never made or delivered to any Montagnard 
applicants whose names appear on the State Department document 
under the ODP Program, Bangkok. In addition, 531 at the time of 
interview were denied, including 100 Amerasian children.
    Many of the Montagnards have waited years and years to be 
reunited with loved ones. The ODP Bangkok office has notified 
many applicants that they must have prior approval from the 
United States and Vietnam Governments before exit visas will be 
granted. And Julia Taft, a representative of the United State 
Department of State, stated in her letter on March 10, 1998, at 
the last Senate Committee hearing, that ``On February 26, the 
Vietnam Ministry of Foreign Affairs informed us that staff from 
the Ho Chi Minh City Ministry of Interior Office had already 
traveled to central highlands to interview the Montagnards on 
the ODP list and that ODP would be able to interview them 
soon.''
    Then Ms. Taft went on to say that, ``This was good news, 
but I want to assure you that we will not put this issue to 
rest until we are granted access to all eligible Montagnard 
cases.'' To date, this has not happened.
    I would like to suggest, if I may, that a Montagnard 
interpreter accompany the JVA officers to three provinces, 
Pleiku, Daklak, and Dalat in the central highland of Vietnam 
for the Montagnard case. In doing so, facilitating a clear 
picture of the barriers might be possible.
    With respect to the aforementioned issues on behalf of the 
Montagnard people, I would like to strongly encourage this 
Subcommittee to support the Jackson-Vanik amendment, in the 
hope that issues concerning human rights in Vietnam and 
emigration practices of the Hanoi authority may be overcome. 
The Clinton administration should not renew the Jackson-Vanik 
waiver until Montagnards and other ethnic groups and Vietnamese 
are allowed to freely emigrate. Please, this is the only 
honorable and just course for the United States in its 
relationship with Vietnam.
    God bless you and America. Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Y Hin Nie, President, Montagnard Dega Association, Inc., 
Greensboro, North Carolina

    The Honorable Philip Crane
     Ladies and Gentlemen:
    My Name is Y Hin Nie. On behalf of the Montagnard Dega 
Association, I want to thank Congressman Crane for his help in 
bringing about this hearing. Further, I want to thank the 
members of the Subcommittee holding these hearings on U.S.-
Vietnam trade relations, including the President's renewal of 
Vietnam waiver under the Jackson-Vanik amendment to the act of 
1974 for their interested and assistance in this matter of 
emigration policies and practice in Vietnam. Particularly in 
the Montagnard Reunification family cases. The Montagnard 
people believe in the trustworthiness of the United States of 
America and as a leader in democratic freedoms. We place our 
trust in today's hearings.
    Since 1975, most of our people who immigrated to the United 
States, as refugees, were combatants against Communist tyranny, 
in the aftermath of Vietnam's unification. Allow me to sketch 
our role in the history of Vietnam and the United States. I 
will then focus on the human right violations of immigration, 
persecution and restrictions on free emigration for our 
Montagnard people suffering in the Central Highlands of 
Vietnam.
    The Montagnard people were among those who suffered the 
most from the Vietnam War. Our recent history is rooted in 
events during and after the War. During the Vietnam War, many 
of us were compatriots with U.S. Army groups. On March 3, 1998, 
the History Channel profiled the Special Forces' role in the 
Vietnam War, prior to 1975. Retired Green Berets who were 
interviewed stated that Montagnards would sacrifice their lives 
to protect Americans' lives. Our association with the Special 
Forces was evidence of Montagnards' traitorous status to the 
post-1975 communist government of Vietnam. Consequently, 
restrictions were placed on Montagnards and those who might 
wish to help. Similarly, the Hanoi government has denied exit 
Visas for spouses and children who want to reunite with their 
families in the United States.
    The Jackson/Vanik Amendment prohibits certain commercial 
relations with a country that engages in practices prohibiting 
or severely restricting free emigration of its citizens and 
specifically identifies such practices as: (1) denying its 
citizens the right or opportunity to emigrate; (2) imposing 
more than a nominal tax on emigration or documents required for 
emigration; (3) imposing more than a nominal tax or other 
charge on a citizen as a consequence of his desire to emigrate 
to the country of his choice. Consequently, as Montagnards, we 
are severely opposed to any waiver of the Jackson/Vanik 
Amendment or the easing of any and all restrictions already 
placed on the Government of Vietnam until such emigration 
practices are greatly improved.
    The State Department is aware of 893 Montagnards who were 
not granted initial interviews. In fact, notification of any of 
the interviews were ever made or delivered to any of the 
Montagnard applicants who's names appear on the State 
Department documents under the ODP Program, Bangkok. In 
addition, 531 at the time of interview were denied including 
100 Amerasian children.
    Many Montagnards have waited years and years to be reunited 
with loved ones The ODP Bangkok office has notified many 
applicants that they must have prior approval from the US State 
and the Vietnamese Government before exit Visas will be 
granted. Julia E. Taft, a representative of the US State 
Department, stated in her letter of March 10, 1998 at the last 
Senate Subcommittee Hearings that ``on February 26, the 
Vietnamese Ministry of Foreign Affairs informed us that staff 
from the Ho Chi City Ministry of Interior office had already 
traveled to the Central Highlands to interview some of the 
Montagnards on the ODP list and that ODP would be able to 
interview them soon.'' Ms. Taft went on to say that ``this was 
good news, but I want to assure you that we will not put this 
issue to rest until we are granted access to all eligible 
Montagnard cases.'' To date, this has not happened.
    I would like to suggest, if I may, that a Montagnard 
interpreter accompany the JVA officer to the three provinces 
Pleiku, Daklak, and Dalat in Vietnam to interview Montagnard 
cases. In doing so, facilitating a clearer picture of the 
current barriers might be possible.
    With respect to the affore mentioned issues, on behalf of 
the Montagnard people, I would like to strongly encourage this 
subcommittee to support the Jackson/Vanik Amendment of 1974 in 
the hope that issues concerning Human Rights in Vietnam and the 
emigration practices of the Hanoi Authority may be over-come. 
The Clinton Administration should not renew the Jackson Vanik 
waiver until Montagnards and other Vietnamese are allowed to 
freely emigrate. Please. This is the only honorable and just 
course for the U.S. in its relationship with Vietnam. God bless 
you and the United States of America. Thank You.
      

                                


    Chairman Crane. Thank you, Mr. Nie.
    And our next witness is Mr. Nay.

    STATEMENT OF RONG NAY, MEMBER, MONTAGNARD HUMAN RIGHTS 
                COMMITTEE, CARY, NORTH CAROLINA

    Mr. Nay. Honorable Chairman Phil Crane and ladies and 
gentlemen, my name is Rong Nay. I'm a member of the Human 
Rights Committee of the Montagnard people. I would like to 
thank Chairman Crane, and the Members of the Subcommittee, for 
consideration of the Jackson-Vanik amendment for free 
emigration and trade with Vietnam.
    Today we are honored to have our voice heard. In Vietnam, 
please understand that the Montagnard/DEGA indigenous people 
have no voice to be heard--no true voice. We cannot get our 
families out of Vietnam. We cannot worship our Christian faith 
freely. We cannot receive humanitarian aid. We cannot have the 
same opportunities in education and development as the 
Vietnamese. Ambassador Peterson knows clearly about this, as 
does the U.S. State Department.
    We pray that the Vietnamese Government will hear our voice 
today. We ask only to be treated as human beings. We love our 
families, our children, just the way the Vietnamese do. Why 
can't we get our families out of Vietnam? Why does the 
Vietnamese Government continue to punish the Montagnard people 
just because we are an indigenous people or we fought and died 
alongside Americans?
    The intention of the Jackson-Vanik amendment is to promote 
free emigration, but the Montagnards are still suffering and 
are separated from their families. We are so sad that in 
Vietnam we are forced to substitute Vietnamese people into our 
family units, just so that half of our families can get exit 
visas to leave Vietnam. And, also, the Vietnamese Government 
forces our people to pay a huge amount of money to obtain the 
exit visa or we must substitute a relative of a police officer 
in order that their children can have the opportunity to get in 
the United States to study.
    Please believe us; these are the facts. This is against the 
law and policy of the United States. Our Montagnard people have 
been discriminated against for years, but now we are being told 
we must split our family, in order that some of us can have 
freedom in America.
    Why do the Vietnamese punish us? Because during the United 
States backing of South Vietnam in the Vietnam war, America's 
Special Forces have been recruiting and training thousands of 
the Montagnard group, who fought alongside the Americans with 
loyalty, bravery, and friendship. The Montagnard bonded to the 
Americans as their only true allies during the war. During 
Vietnam war, more than a million of the Montagnard were killed; 
85 percent of the Montagnard villages were abandoned or 
destroyed.
    Please don't turn your back on us. We need your help. We 
don't hate the Vietnamese. We respect the Vietnamese great 
culture and their struggle for sovereignty against China and 
other countries. Yet, the Montagnard, too, want our people to 
survive and develop.
     But then the Vietnamese Government writes ``FULRO, Anti-
Revolutionary'' on the paperwork of our people. This is a 
technique to stop our people from emigrating to the United 
States. The FULRO was the Montagnard Resistance Movement, but 
it no longer exists. In the past, the U.S. military supported 
our people. We emphasize now we struggle peacefully, because 
the days of freedom and independence of the Montagnards are 
gone. We are a broken people, but we still stand up with hope 
and dignity.
    I am a lucky person. On January 16, 1976, I was one of the 
first prisoners to escape from jail into the jungle and joined 
the Montagnard Resistance Force. We fought for freedom and 
independence against Hanoi's violations, assimilation, and 
extermination of our people.
    After 11 years, we have refugee status in the United 
States. I am the first member of the FULRO members to get my 
family out of Vietnam. My family had to pay $2,000 to get their 
exit visas.
    It is only because of Senator Helms, and other Members of 
the Congress and State Department, that my family was released 
on January 14, 1994. Why are hundreds and hundreds of the 
Montagnard waiting with hope? The United States is the only 
hope to help their families out of Vietnam. Please help us and 
get our families from Vietnam, and help our people still 
remaining in Vietnam to have opportunity to develop and to 
survive.
    Jackson-Vanik should not waiver until all the Montagnard 
cases are cleared. We need the Montagnard translators to 
translate for the Montagnard for interviews in the future.
    Thank you so much for the privilege to testify today. God 
bless you.
    [The prepared statement follows:]

Statement of Rong Nay, Member, Montagnard Human Rights Committee, Cary, 
North Carolina

    Ladies and Gentlemen:
    My name is Rong Nay and I am a member of the Human Rights 
Committee of the Montagnard People. I represent the Montagnard 
people living both in the United States and in the Central 
Highlands of Vietnam. I would like to thank Congressman Crane 
for the opportunity to share our feelings about the plight of 
the Montagnard people.
    I want to thank the members of the Trade Subcommittee for 
their interest and full consideration of the Jackson-Vanik 
Amendment, free emigration and trade with Vietnam.
    Today we are honored to have our voice heard. In Vietnam, 
please understand that the Montagnard/DEGA indigenous people 
have no voice to be heard. No true voice. We cannot get our 
loved ones out of Vietnam. We cannot worship our Christian 
faith freely. We cannot receive humanitarian aid. We cannot 
have the same opportunities in education and development as 
Vietnamese people.
    Ambassador Peterson knows clearly about this, as does the 
U.S. State Department.
    So we are honored to have our voice heard here today. We 
pray that the government of Hanoi will also hear our voice 
today. We ask only to be treated as human beings. We love our 
families and our children just the way Vietnamese people do. 
Why can't we be reunited with our loved ones who still remain 
in Vietnam and who cannot receive their exit visas? Why does 
the Vietnamese government continue to punish our people because 
we are an indigenous tribal people and because we fought and 
died with Americans?
    The intention of the Jackson-Vanik Amendment is to promote 
free emigration, but in the last three months of the 121 names 
presented by the Vietnamese government to U.S. officials, less 
than ten have been cleared for interview. Lists of Montagnards 
unable to receive exit visas have been given to Ambassador Le 
Bang, to our Ambassador Peterson and to our State Department 
months, even years ago. These same people cannot get their exit 
visas even though the purpose of Jackson Vanik is to promote 
free emigration from Vietnam. Our Montagnard people continue to 
suffer separated from loved ones.
    We are so sad that in Vietnam, we are forced to substitute 
Vietnamese people into our family units just so that half of 
our family can receive an exit visa to leave Vietnam. Please 
believe us. This is a fact. We are eligible to emigrate,yet the 
Vietnamese goverment forces our people to pay huge sums of 
money to obtain an exit visa or we are told we must substitute 
a relative of a police official so that their child can have an 
opportunity to study in the U.S. This is against the law and 
policy of the United States. Our tribal people have been 
cheated and discriminated against for years in Vietnam, but now 
we are being told we must bribe, cheat and split up our 
families so that some of us will have a chance for freedom in 
America.
    Can you possibly understand how sad, how desperate we feel? 
With respect to all members of Congress, Ambassador Peterson 
and others here today, you live with your families. Hundreds 
and hundreds of our Montagnard people have been living for 
years and years without their wives or husbands, fathers and 
mothers, sons and daughters because the Vietnamese government 
is punishing our people.
    Why do they punish us? Because we stood by the side of the 
American government in the Vietnam War. We were recruited and 
trained by the U.S. government. We were told the United States 
would help the Montagnard highlander people in our struggle for 
freedom and development. During the U.S. backing of South 
Vietnam in the Vietnam War from 1962 to 1972, American Special 
Forces recruited and trained thousands of Montagnard troops to 
fight alongside Americans with loyalty, bravery and friendship. 
Montagnards bonded to American soldiers as their only true 
allies during the war. During the Vietnam War more than a 
million Montagnard people were killed and 85 percent of 
Montagnard villages were destroyed or abandoned.
    Please do not turn your back on us now. We need your help.
    We have no hatred towards Vietnam or Vietnamese people. We 
respect Vietnam's great culture and her struggle for 
sovereignty against China and other countries. Yet, we 
Montagnards, too, want our people to survive and develop.
    The Montagnards are the indigenous people of Malayo-
Polynesian heritage. We have been living for over 2,000 years 
in the Central Highlands of Vietnam. We have over 40 tribal 
groups with rich cultures and traditions of peace. Now is a 
time of peace. Families should be together.
    The Vietnamese government writes FULRO Anti-Revolutionary 
on the paperwork of our people. This technique is a way of 
stopping our relatives to emigrate to the U.S. FULRO was the 
Montagnard Resistance Movement. It no longer exits. Although we 
had support from the U.S. military in the past, we want to 
emphasize we now struggle peacefully. The days of freedom and 
independence are gone. We are a broken people, but we can still 
stand up with hope and dignity.
    I am a very lucky person. On January 16, 1976, I was one of 
the first prisoners to escape into the jungle and join the 
Montagnard Resistance Force. At this same time thousands of 
people fled into the jungle. We fought for freedom and 
independence against Hanoi's violations, assimilation and 
extermination of Montagnard people. We finally realized it was 
impossible for us to survive. After 11 years in 1986, we 
received refugee status in the United States. I am one of the 
few FULRO members who has been able to get my family out of 
Vietnam. My wife and four children had their permission 
withheld for five years. My wife had to pay the immigration 
police $2,000 to get her exit visa. The Hanoi government 
demanded that I return and face trial before considering exit 
permission for my family.
    It is only because of Senator Helms, other members of 
Congress and the U.S. State Department that my family was 
released on January 14, 1994. What of the hundreds and hundreds 
of other Montagnards who are waiting with hope? The United 
States government is their only hope to get their family 
members out of Vietnam.
    Since 1986, the Montagnard Community in the United States 
found freedom and a new life. It is a great gift from America 
just to be able to survive. We will give back to America our 
lives as proud citizens of the U.S. The re-settlement of our 
Montagnard people is known nationally to be a model of refugee 
resettlement We don't use welfare. We are a quiet people. We 
love our families and our Christian faith. The U.S. government 
knows we are a family oriented, stable, non-violent, and self-
sufficient people.
    Please help us to get our families out of Vietnam and help 
our Montagnard people who remain there to have opportunities to 
develop. The Jackson-Vanik waiver should not be renewed until: 
l) All ROVR cases are cleared 2) All Montagnard cases, ODP and 
HO cases are cleared 3) The same procedures used for ROVR 
processing are used for Montagnards and HO cases. That is, we 
need Montagnard translators from the U.S. to translate in the 
interviews
    Thank you so much for the privilege to testify today. I am 
proud to be a citizen in this free and wonderful country.
      

                                


    Chairman Crane. And thank you and God bless you, Mr. Nay.
    And our final witness is Ms. O'Shea.

STATEMENT OF LYNN M. O'SHEA, NEW YORK STATE DIRECTOR, NATIONAL 
   ALLIANCE OF FAMILIES FOR THE RETURN OF AMERICA'S MISSING 
                SERVICEMEN, BELLEVUE, WASHINGTON

    Ms. O'Shea. Mr. Chairman, Mr. Jefferson, on behalf of the 
membership of the National Alliance of Families, we want to 
thank you for the opportunity to address this Subcommittee.
    We're here today to express our total support of House 
Joint Resolution 120 disapproving the extension of waiver 
authority contained in section 402 of the Trade Act with 
respect to Vietnam. The ancient Greeks said the first casualty 
of war is truth. Today in the United States we can say the 
first casualty of profit is morality. In the past, the United 
States has been a leader in championing the cause of human 
rights. We set the standard, and our standards were high. Now 
in the name of trade, and in the name of profit, we continually 
find ways to excuse or ignore human rights violations and 
citizens' oppression.
    A perfect example of this is China. We have opened trade 
with China, and the Chinese people are still oppressed, there 
are major human rights violations in China. We do not expect to 
see any difference if we open trade or extend the waiver of 
Jackson-Vanik to Vietnam.
    Of course as you are aware, while we support the human 
rights cause of our Vietnamese and Montagnard allies, our 
concern is the human rights violation of American prisoners of 
war missing in action and their families. Hanoi continues to 
stonewall United States efforts to gain accurate information 
relating to our prisoners and missing. Contrary to popular 
belief, there is no no-notice access to sites. United States 
investigators cannot go anywhere, anytime, and witnesses are 
routinely interviewed by Vietnamese officials prior to their 
meetings with United States investigators.
    At the conclusion of the Vietnam war, the Vietnamese told 
the U.S. Government that over 50 men had died in captivity. As 
of today, the remains of some 25 of those men still remain in 
Vietnam. These men died in camps in the south controlled by the 
North Vietnamese and the Vietcong. Men like Rohrabacher, 
Versace, Bennett and Cook to name but four. When do these men 
get to come home? Where is the Vietnamese cooperation on men 
they acknowledged they had control of? Circumstances of remains 
recoveries are questionable today. And in at least one case, we 
have very compelling evidence of site salting. Investigators 
have told us that the reason so little remains come out of 
Southeast Asia is because the soil is highly acidic and remains 
simply do not last and we find bone chips and shards and teeth. 
Yet one pilot who was buried supposed on the date of his 
incident in September 1972 and remained unprotected in the 
Vietnamese soil for some 24 years was recovered in a full 
flight, wearable flight suit, perfect condition. This is 
evidence of site salting and I would like to leave this 
photograph with the Subcommittee for the record along with my 
full testimony. Thank you.
    The family in this case has an answer. They do not have the 
truth, they do not know what happened to their loved one. At 
the conclusion of the Senate Select Committee in 1973 the 
Committee concluded that a small number of Americans were left 
behind at the end of the Vietnam war. They could not name them. 
The National Alliance of Families at this time with the 
permission of the family who has been kind enough to make 
available their documentation, along with documentation that we 
have uncovered on independent research, we are prepared to 
state firmly that Army Captain John T. McDonnell was alive in 
the Bak To Prison Camp in Quang Ngai Province from August 1972 
and his last sighting was mid to late February 1973. The source 
of the report--and I will use his name because he spoke to the 
Associated Press in June 1973 and gave his name and I take that 
as a waiver of his desire for protection of anonymity--the 
source was named Nguyen Thanh Son and he provided information 
that six American POWs remained in that camp in Quang Ngai 
Province and he had seen the six as late as mid to late 
February 1973. He could provide no description on five of the 
POWs who he described as NCOs. The sixth POW he described was 
an army captain captured in the 1968-1969 timeframe. He was 
married, he had two children, he was from the State of Texas 
where President Johnson lived, that's a direct quote. He had 
been an ARVN advisor, he gave instruction in artillery. He 
provided a very detailed physical description down to a mole on 
the lip of the POW and based on Joint Casualty Resolution 
Center's analysis, they concluded that that sighting related to 
one of two POWs: Either Captain John T. McDonnell or Army 
Sergeant Glen Tubbs. Looking totally at the evidence and 
factoring in a second or earlier sighting that JCRC also 
correlated to Captain John McDonnell with an almost identical 
physical description, we are prepared to state that John 
McDonnell was alive in a camp in 1973, February 1973 when the 
POWs were coming home. There is much more intelligence which is 
detailed in my full testimony. I would like to close with 
reading just one quote if I may because John T. McDonnell was 
on the late eighties original 119 discrepancy list that General 
Vessey presented to the Vietnamese. And this is a quote from a 
letter that General Vessey wrote to then Congressman Bob Smith, 
and he says, ``the discrepancy cases I presented to the 
Vietnamese were those in which Americans were known to have 
survived the incident in which they were involved. We believe 
they came into Vietnamese hands and probably were prisoners of 
the Vietnamese. These individuals did not return during 
Operation Homecoming in 1973 nor were their bodies returned in 
the intervening years and no explanation was provided by the 
Vietnamese. Because these cases may shed light on the fate of 
any American serviceman believed to have been alive after his 
loss, they are our priority effort.''
    In closing I would like to restate our firm opposition to 
the waiver of Jackson-Vanik, and I would like to ask every 
Congressman and every Senator when he considers his vote on 
Jackson-Vanik to consider Captain John T. McDonnell and why the 
Vietnamese have not provided information on his whereabouts. 
Thank you.
    [The prepared statement follows:]

Statement of Lynn M. O'Shea, New York State Director, National Alliance 
of Families for the Return of America's Missing Servicemen, Bellevue, 
Washington

    Mr. Chairman, members of the committee, on behalf of the 
membership of the National Alliance of Families, we thank you 
for the opportunity to address this committee.
    We are here today to express our total support for H.J. 
Res. 120 ``Disapproving the extension of the waiver authority 
contained in section 402 (c) of the Trade Act of 1974, with 
respect to Vietnam.
    The ancient Greeks said ``the first casualty of war, is 
truth.'' Today, in the United States we can say ``the first 
casualty of profit, is morality.''
    In years past, the United States of America led the world 
in championing the cause of human rights. We set the standard. 
Our standards were high and other nations followed our example.
    Now, in the name of trade, in the name of profit, we 
continually find ways to excuse or ignore major human rights 
violations and citizen oppression.
    The conditions that existed in 1974 leading to the passage 
of the Jackson-Vanick Amendment exist today, in Vietnam. The 
only thing that has changed is our willingness to excuse and 
look the other way. Today, our moral standards drift in the 
winds of trade and profit. The bigger the profit, the lower our 
standards go.
    In some cases, by our actions, we even appear to condone 
violations of human rights. The United States expanded trade 
with China, yet their people remain oppressed. Human rights 
violations are the norm in China, not the exception.
    Now, this administration has requested a waiver to the 
Jackson Vanick amendment to Title IV of the Trade Act of 1974, 
as it applies to Vietnam. This waiver would provide for 
taxpayer financed and/or guaranteed trade benefits for Vietnam.
    The administration justified its decision to seek a wavier 
to Jackson Vanick. by stating that trade will open doors and 
bring new freedom to Vietnam. Opening trade with China did not 
bring freedom to its people and it will not bring freedom to 
the Vietnamese people.
    Our organization supports the cause of human rights for our 
Vietnamese allies wishing to escape communist oppression. The 
original intent of the Jackson-Vanick Amendment to the Trade 
Act of 1974, was to insure free emigration as a condition for 
expanding U.S. trade relations with non-market communist 
nations. Vietnam had not met the conditions required for a 
waiver of the Jackson-Vanick Amendment.
    As you well know, while we support the human rights cause 
for freedom loving Vietnamese, our primary concern is the human 
rights violations inflicted on American Prisoners of War, 
Missing in Action and their families.
    Hanoi continues to stonewall U.S. efforts to gain accurate 
information relating to our Prisoners and Missing. Contrary to 
popular belief, there is no ``no notice'' access to sites. U.S. 
investigators can not go anywhere, anytime. Witnesses are 
routinely interviewed by Vietnamese officials prior to their 
meetings with U.S. investigators.
    The Vietnamese provide movement but no real progress in the 
search for our Prisoners and Missing.
    According to the Vietnamese over 50 American prisoners died 
in captivity, during the war. To this date the remains of less 
than 30 of those POWs have been returned to their families. 
These men died under the control of the North Vietnamese and 
Viet Cong. They died in their POW camps. When do these men get 
to come home. Where is the cooperation? Where is the 
compassion?
    Remains recoveries and identifications are questionable. We 
now have evidence that, in at least one case, the recovery site 
was salted. According to the Vietnamese, the pilot was found 
dead in his parachute and buried.
    Much is heard of the highly acidic Vietnamese soil which 
leaves little in the way of remains. After 24 years in the 
acidic Vietnamese soil little was left of this pilots' remains. 
Yet, the flight suit in which this pilot was buried remained in 
almost perfect and wearable condition.
    The family questions this recovery, yet the Vietnamese 
consider this case a success, as one more POW/MIA case is 
resolved. The fated of this pilot may be resolved in the minds 
of the Vietnamese and U.S. investigators, but no one has come 
anywhere near the truth.
    Although they could not name them, the Senate Select 
Committee on POW/MIA Affairs concluded in 1993, that a small 
number of American POWs were left behind at the end of the 
Vietnam War.
    Based on evidence available to us, we believe that one of 
those POWs was Army Captain John T McDonnell. Capt. McDonnell 
was sighted and conversed with the source on four occasions 
between August 1972, and mid-to-late February 1973, at the Bak 
To prison camp in Quang Ngai Province.
    This sighting was taken very seriously by the United States 
government. On June 15 th, 1973, the Defense Intelligence 
Agency issued a message stating ``REFERENCED REPORT PROVIDED 
INFORMATION OF URGENT POLITICAL SENSITIVITY.''
    On April 10th, 1973, two days before Assistant Secretary of 
State Dr. Roger Shields declared all the POWs home or dead, a 
North Vietnamese soldier defected to the south. The defector, 
who held the rank of ``aspirant and was commanding officer for 
the 157 Co. 21st Bn, 2nd Div,'' provided stunning information 
that six (6) American POWs remained in a POW camp in Quang Ngai 
Province. He had seen the six (6) Americans as recently as late 
February 1973.
    The source, interviewed by U.S. investigators on May 22nd, 
described the six (6), as an American ``Captain'' and 5 NCOs 
The source never got a good look at the NCO's and could provide 
no descriptions. However, the source did provide a detailed 
description of the ``Captain.''
    110900A Jun 73--From the Department of Defense National 
Military Command Center:, ``In August 1972, Source entered an 
MR-5 PW Camp.... Source contacted members of the 12th Artillery 
Bn (NVA) who were at the PW Camp location to study the 
operation of captured 105 MM Howitzers. Their instructor was a 
captured American Artillery Officer... who was captured 
(estimated 1968-1969) by the 459th Sapper Regt. in Binh Dinh 
Province. The PW was forced to give artillery instructions 
under threat of execution. In addition to the officer, there 
were five (5) American NCOs referred to as sergeants and 200 
ARVN PWs.... The Americans were segregated from the ARVN PWs. 
Source only caught a glimpse of the five NCOs and thus could 
provide no information concerning them. Source, however, 
conversed with the Artillery Captain on four different 
occasions, from August 1972 until late February 1973.''
    ``Source stated the American officer was approximately 75 
inches tall, with blue eyes and blond hair. He had a high 
bridged nose and was thin but had a large frame. The artillery 
Captain had a small mole on the upper portion of his left lip 
and a scar approximately 1 1/2 inches long behind his left ear. 
Subject had two tattoos-one on his right forearm... the other 
on his upper left arm.... The American was married and had one 
girl 11 and one boy aged 5. Source states that on the four 
occasions he conversed with this Captain, a Sr. LT. Hinh, MR-5 
interpreter, assisted him. Source states the Captain was from 
Texas, the same place where President Johnson lived, and from 
source's imitation of the sound of his name it may be inferred 
that the officer's first name was John (sic)....''
    According to the source the POW ``was forced to give 
artillery instruction under threat of execution.'' We would 
assume that the 5 American NCOs in camp with the ``Captain'' 
faced the same threat of execution, if the ``Captain'' failed 
to cooperate.
    June 13th, 1973--the Defense Intelligence Agency (DIA) 
narrowed down the identity of the Captain to one of two men. 
They were Captain John T. McDonnell and Sgt. Glenn E. Tubbs, 
both of the United States Army.
    June 15th, 1973--the DIA issued their message regarding 
``INFORMATION OF URGENT POLITICAL SENSITIVITY.'' After 
declaring all the POW's home or dead, the Department of Defense 
faced a unique crisis. A first hand eyewitness provided a 
detailed description of an American POW alive in Quang Ngai 
Province in February 1973, and he was not alone.
    In DIAs words,  ``Analysis of the descriptive data of the 
``American Captain'' has produced two candidates. Although 
neither fits the description perfectly, both have enough of the 
reported characteristics that their photographs should be shown 
to the source. The two individuals are DATA (McDonnell J.T. 
Cpt, USA) and DATA (Tubbs, G.E. E5, USA)... Both families are 
being interviewed to determine what tattoos and scars the 
individuals may have had. Sgt. Tubbs is known to have had one 
tattoo on each arm. It is not known whether Cpt. McDonnell had 
tattoos. The scar behind the left ear fits Cpt. McDonnell. It 
is not known if Sgt. Tubbs had a similar scar.''
    Capt. McDonnell and Lt. Ronald Greenfield were pilots 
aboard a AH-1G helicopter. On March 6, 1969 their chopper was 
hit by ground fire and crashed 50 kilometers southeast of Hue 
and 3 kilometers southeast of Thon Thuy Cam, Thua Thien 
Province.
    U. S. search teams operated in the area from 1600 hours (4 
P.M.) March 6th to March 12th. They found no sign of Capt. 
McDonnell. On March 7th, at approximately 1330 hours (1:30 
P.M.) American search teams located Lt. Greenfield, near the 
downed helicopter. Lt. Greenfield was seriously wounded and had 
no memory of events after the crash. He was unconscious from 
the time of the crash until about 3-5 hours later. Greenfield 
believes that Capt. McDonnell removed him from the downed 
helicopter. Examination of the downed helicopter revealed that 
Capt. McDonnell's seat belt and harness were open and placed 
neatly on the seat. Search teams located McDonnell's helmet. 
There was no sign of blood in the helmet. Also located at the 
crash site were maps, weapons, and survival equipment. 
According the ``JTF-FA Narrative'' presented to the Vietnamese 
in 1989, this suggests ``he either had to quickly flee the area 
or was captured.''
    Sgt. Glenn Tubbs was a rifle man on a Long Range 
Reconnaissance patrol. During a river crossing, Sgt. Tubbs lost 
his grip on the safety line. The current was strong and he was 
swept away. Search efforts were complicated when helicopters 
received enemy fire. Early records list Sgt. Tubbs loss 
location as South Vietnam. However, we have located a document, 
from Army files dated 17 March 1970, which lists Glenn Tubbs as 
missing in a classified area of Southeast Asia. Glenn Tubbs was 
lost in Cambodia, not South Vietnam as the early records 
indicated.
    We have been unable to locate the Tubbs family, however, 
the case narrative and witness statements, available at the 
Library of Congress, describe Sgt. Tubbs incident as almost 
non-survivable.
    Both men are from Texas and married. Capt. McDonnell has 
three children. Sgt. Tubbs has two. The physical description 
fits Capt. McDonnell, with one possible discrepancy. There is 
no record of Capt. McDonnell having tattoos, while it is known 
that Sgt. Tubbs had two, one on each arm.
    Documentation obtained by the National Alliance of Families 
proves that the sources description of the tattoos does not 
match Glenn Tubbs. Official documentation also indicates that 
many servicemen acquired tattoos while in service, and 
therefore official records may not be accurate in this matter. 
Capt. McDonnell has a scar behind the left ear. Records 
available to the National Alliance of Families indicate Sgt. 
Tubbs had no such scar.
    In addition to the physical description, the first name, 
the time frame of capture, rank of the PW, the fact that the PW 
was an ARVN advisor and artillery officer all match Capt. 
McDonnell. It should be noted that Capt. McDonnell was on his 
third tour of duty. His first two tours were served with the 
Green Berets as an ARVN advisor.
    In reviewing this material, one must remember that all four 
conversations were conducted through an interpreter. Minor 
errors of translation may have occurred regarding the number of 
children. It should also be remembered that the number of 
children is a minor detail which the source may have been 
confused. It is critical to remember that all major facts 
relating to the American ``Captain'' correlate to John 
McDonnell.
    This was not the first sighting of Capt. McDonnell in 
captivity. This first sighting provides a physical description 
almost identical to the description of the ``Captain'' in the 
Quang Ngai POW camp.
    February 16th, 1973--another North Vietnamese rallied to 
the GVN. This source was a former NVA sergeant. He served as 
squad leader with the 5th Company, 14th Antiaircraft Battalion 
NVA 2nd Yellow Star Division. Generated by the Central 
Intelligence Agency, this report provides a firsthand 
observation of two U.S. Prisoners of War with the North 
Vietnamese Army 2nd Yellow Star Division in Laos, on three 
different occasions, between May and July of 1971.
    The first sighting took place ``in early May or June 1971 
when he saw the two POWs eating lunch with personnel of the 
Military Staff and political offices, North Vietnamese Army 
(NVA) 2nd Yellow Star Division [word unreadable] Doan 2 Sao 
Vang, at the 13th Commo-Liaison Station (WD876558), 33rd Binh 
Tram, NVA 559th infiltration line (Doung Day 559) in 
Savannakhet Province Laos. He observed them for about 30 
minutes.''
    ``The second time source saw the same POWs was for about 
two minutes in July, 1971.''
    ``The third time he saw the POWs was for about ten minutes 
in July, 1971, while POWs were sitting in a hut in the 
division's base camp area.''
    The source was told that the POWs ``had been captured by 
the NVA 2nd Division in Quang Nam Province, South Vietnam.
    Source observed the POWs the first time from at a distance 
of about two meters. Both were Caucasian, one was about 30 
years old, about 1.8 meters tall, and weighted about 90 kilos. 
He had a heavy build, a pink complexion, a long face, short 
brownish blond hair, a receding hairline, a high straight nose, 
brown eyes, white regular teeth, a round mouth, and a red mole 
under his lower left lip. He was wearing a green NVA uniform 
consisting of a short-sleeved shirt and trousers. He was also 
wearing a white metal ``seiko'' wrist watch and a large gold 
ring with a red ruby on his left hand.''
    ``In about October 1972, servent (sic) NAME, a radio 
operator in the NVA 2nd Division, told Source that the two POWs 
had been sent to North Vietnam.
    In the words of Joint Casualty Resolution Center (JCRC) 
``no correlation could be made on the second POW cited in the 
report.'')
    With regard to the first POW, JCRC stated in the ``Field 
Comment''--``Records indicate that source probably observed 
Capt. John T. McDonnell, USA (JCRC Nr. 0176).... There is an 
indication that McDonnell may have been captured.... 
McDonnell's description follows: age in 1971 was 31, height: 
1.77 meters; weight 75 kilos' hair; brown; race; Caucasian; 
wears white silver seiko watch and large ring on left hand.'' A 
photo of Captain McDonnell wearing such a ring was provided to 
the National Alliance of Families by the McDonnell family.
    JCRC re-contacted the source. He was shown McDonnell's 
photo ``mixed with 15 other photographs. However source was 
unable to make an identification. Then he was shown McDonnell's 
photographs. After five minutes of study, source said that the 
photograph looked very similar to the POW who wore the ring, 
except that his hair was longer and that his nose was long and 
nostrils were less pronounced. He said that the shape of the 
face, the eyes, and the mouth were similar to the man in the 
photograph, but stopped short of making a definite 
identification because of the difference in the hair style and 
nose.''
    April 23, 1976--The next record, available to us, comes in 
a report compiled by the Joint Casualty Resolution Center. The 
report is titled ``Project X.'' ``Project X'' was a study to 
``evaluate the possibility of any of the unaccounted for being 
alive. The conclusion reached is: There is a possibility that 
as many as 57 Americans could be alive....''
    Among the 57 Servicemen mentioned in ``Project X'' is Capt. 
John T. McDonnell. The Case Summary on Capt. McDonnell cites 
the 1971 sighting stating, ``information in this report 
correlated to Cpt. McDonnell.'' There is no mention of the 1972 
-1973 sightings in Quang Ngai.''
    In the late 1980's the name of John McDonnell was placed on 
the ``Original 119'' Vessey Discrepancy List.
    What was the significance of being on the ``Original 119'' 
Vessey Discrepancy List.? In a November 15th, 1989 letter to 
then Congressman Bob Smith, General John W. Vessey Jr. writes 
``The discrepancy cases I presented to the Vietnamese were 
those in which Americans were known to have survived the 
incident in which they were involved. We believed they came 
into Vietnamese hands and probably were prisoners of the 
Vietnamese. These individuals did not return during Operation 
Homecoming in 1973, nor were their bodies returned in the 
intervening years and no explanation was provided by the 
Vietnamese. Because these cases may shed light on the fate of 
an American serviceman believed to have been alive after his 
loss, they are the priority of our efforts.''
    On April 25th 1991, Kenneth Quinn, then Chairman of the 
Administration's POW/MIA Inter-Agency Group testified before 
the Senate Foreign Relations Subcommittee on Asian and Pacific 
Affairs. In response to a question from Senator Alan Cranston, 
Mr. Quinn stated ``In terms of actually conducting 
investigations on the ground, General Vessey has focused on 119 
discrepancy cases, which is to say those cases, which 
represent, from looking at all the information we know about 
them, represent the greatest possibility that the men involved 
might still be alive. We had evidence that they were alive 
after the incident occurred where the plane was shot down or 
they were lost on the ground and we don't know what happened to 
them and what their fate was.''
    ``So those represented to General Vessey the possibility 
where it is most probable or most likely that they might still 
be alive.''
    Statements by General Vessey and Mr. Quinn re-enforce our 
position that Capt. McDonnell, listed as an ``Original 119'' 
Vessey Discrepancy Case, was alive in February 1973.
    The United States Government possessed strong evidence 
placing John McDonnell in captivity. That evidence shows John 
McDonnell alive in February 1973.
    1992--Joint Task Force--Full Accounting (JTF-FA)  all but 
ignored the two sightings in case narratives, on John 
McDonnell, presented to the Vietnamese. Of the three JTF-FA 
Narratives available to us, dated, August 1989, July 1990, and 
Jun 1993, only the July 1990 Narrative mentions the 1972-1973 
sighting. None mentions the 1971 sightings, in which JCRC 
concluded ``that source probably observed Capt. John T. 
McDonnell.''
    JTF-FA ignored the strong evidence of John McDonnell's 
capture. They ignored evidence of his imprisonment and survival 
along with five (5) enlisted men.
    Instead, in 1992  JTF-FA chose to interview witnesses 
supplied by the Vietnamese. All claimed to have witnessed the 
helicopter crash. None, however, saw Captain McDonnell. None 
witnessed his capture. None witnessed his death or participated 
in his supposed burial on March 7, 1969.
    September 30, 1992--In their field activity report JTF-FA 
said, of the Vietnamese witnesses, ``Although none of the 
witnesses actually took part in the capture and burial of the 
American, they all provided hearsay information that he died 
while being escorted probably to the Tri Thien Hue Military 
region Headquarters...''
    Captain McDonnell's identification card was located in the 
Hue City Museum. The card, according to records arrived at the 
museum in 1975. Field Investigators excavated Captain 
McDonnell's alleged grave site. The excavation yielded no human 
remains.
    Based on the hearsay of 4 Vietnamese, the 1993 Narrative 
incorporated the ``corroborating hearsay testimony concerning 
the crash of a U.S. helicopter in 1969 and the subsequent 
capture and burial of an American.''
    In other words, since the Vietnamese witnesses all told the 
same story, it was true.
    Today, the case of John McDonnell is considered fate 
determined. This determination is based on 4 hearsay accounts 
of Vietnamese witnesses who claimed they heard about a captured 
American, who died the next day. JTF-FA routinely ignores 
hearsay information about live POWs. Yet, in this case they are 
willing to believe hearsay information regarding the death of a 
POW. A POW, who by their own records and correlation's, was 
alive in February 1973.
    One must wonder, if these same four Vietnamese provided 
information that Capt. McDonnell was in the Quang Ngai POW Camp 
at Bak To, would JTF-FA investigators be so willing to believe 
them.
    We, at the National Alliance of Families, believe that 
based on the information cited, there can be only one 
conclusion. Capt. John McDonnell was alive as a Prisoner of War 
at least until February 1973. We further believe that Capt. 
John McDonnell survived in captivity, as the Nixon 
Administration was declaring him, and the 5 NCOs with him, 
dead.
    We believe that this case is ample evidence that the 
Vietnamese government is not ``cooperating in full faith'' on 
the POW issue. How many other cases, like this, are ignored?
    The Vietnamese Government must be held responsible for the 
fate of John McDonnell and the 5 NCOs with him.
    Long discussed within the POW/MIA issue was information 
regarding a press conference held in Saigon in June, 1973. 
During this press conference, a defector provided information 
regarding POWs not released. Until now little was known about 
what went on during that press conference as the story was 
``spiked'' at the request of the American Embassy.
    That defector was Nguyen Thanh Son, source of the sighting 
of the American ``Captain'' and 5 NCOs in Quang Ngai Province 
between August 1972 and February 1973. During the Saigon 
interview, in June of 1973, attended by members of the media 
representing Associated Press, United Press International and 
NBC, Son spoke of POWs. To our knowledge there is only one 
record of that interview. It is a short Associated Press 
Article from the Baltimore Sun, dated June 9th, 1973. In that 
article, Nguyen Thanh Son is represented as a ``junior North 
Vietnamese officer'' not the ``commanding officer for the 157 
Co. 21st Bn, 2nd Div,'' as described in the DIA message.
    Mr. Son spoke of North Vietnamese plans to infiltrate the 
South and discussed a North Vietnamese ``plan not to launch a 
general offensive until 1976--before the U.S. presidential 
elections.'' ``Right now, they don't want to launch an 
offensive. They're afraid of the reaction of world opinion as 
well as President Nixon,'' he said.
    Perhaps the Nixon resignation in August of 1974, allowed 
the North Vietnamese to move up their time table.
    On the subject of POWs Mr. Son, according to the AP 
article, stated ``he also believes the North Vietnamese are 
still holding some American prisoners in effect as hostages to 
insure that all mines are removed from North Vietnamese waters 
and that Hanoi receives United States reconstruction money. 
They want to keep U.S. prisoners because there are many 
problems to be settled with the U.S. government. They want to 
keep prisoners in case the U.S. government launches war again, 
they will have some prisoners.''
    The article went on to say that ``Mr. Son refused to 
elaborate further,'' on the subject of POWs.
    If Mr. Son did not have information deemed credible, why 
did the Defense Intelligence Agency, on June 15th, 1973 issue 
there message of ``URGENT POLITICAL SENSITIVITY.'' Why did the 
Embassy in Saigon go to extreme lengths to have the story 
killed? The bigger question is why did the media in the person 
of UPI and NBC agreed and killed the story.
    A telegram dated June 11th, 1973, from the American Embassy 
Saigon to the Secretary of State Washington D.C., states ``NVA 
rallier/defector Nguyen Thanh Son was surfaced by GVN to Press 
June 8 in Saigon. In follow on (sic) interview with AP, UPI and 
NBC American correspondents, questions elicited information 
that he had seen six prisoners whom he believed were Americans 
who had not yet been released. American officer present at 
interview requested news services to play down details; AP 
mention was consistent with embargo request, while UPI and NBC 
after talk with Embassy Press Officer omitted item entirely 
from their stories.
    Details on rallier's account being reported septel (sic) 
through military channels by Bright Light Message today, [word 
missing] White House.''
    Nowhere in the Associated Press article is the number of 
POWs mentioned. Nor is it mentioned that Mr. Son actually saw 
the POWs over an extended period of time. Or that he spoke with 
one of them on 4 different occasions. Instead a carefully 
crafted sentence states ``he also believes the North Vietnamese 
are still holding some American prisoners...''
    All the evidence indicates John McDonnell and 5 NCO's were 
alive in a Quang Ngai POW camp, in mid-to late February 1973. 
How much longer must they wait to come home?
    The Vietnamese government knows what happened to John 
McDonnell and when it happened. Only his family and the 
American public remain in the dark.
    The National Alliance of Families challenges the Clinton 
Administration, to live up to its commitment of a full and 
truthful accounting. A good place to begin is with the case of 
John McDonnell and the 5 NCOs in the Quang Ngai Prison POW 
Camp, in February of 1973.
    We challenge every Senator and Congressman to stand up and 
ask the Vietnamese where is John McDonnell? The evidence 
outlined above is overwhelming.
    John T. McDonnell is but one of the 2,000 plus reasons The 
National Alliance of Families adamantly opposes a waiver of the 
Jackson-Vanick amendment to Title IV of the Trade Act of 1974, 
as it applies to Vietnam. Waiving the Jackson Vanick Amendment 
will allow the Vietnamese government to continue with business 
as usual. They will fill their treasury by charging outrageous 
fees to American corporations doing business in Vietnam, while 
their citizens work in substandard conditions for substandard 
wages..
    Additional trade concessions will not improve the quality 
for life or the average Vietnamese citizen. Additional trade 
concessions will not improve Vietnamese cooperation on the POW/
MIA issue.
    Waiving the Jackson-Vanick amendment as it applies to 
Vietnam is about profit, not about benefits to the Vietnamese 
people or advancing the cause of our POW/MIAs. It is about the 
difference between a CEO's 60 million dollar bonus or his 50 
million dollar bonus.
    The question is, will this congress allow that check to be 
written on the backs of our POW/MIAs and the oppressed 
population of Vietnam?
      

                                


    Chairman Crane. Thank you, Ms. O'Shea.
    Mr. Jefferson.
    Mr. Jefferson. I wish to thank our Chairman and thank each 
of you for your very sincere testimony today. This is a very 
difficult area and when you have people who have had personal 
experiences reporting here it makes it very hard for us to pass 
judgment on it without really taking a moment to give great 
credence to what you have had to say. I want to ask, in the 
cases where people have been denied the permission to emigrate, 
what reasons does the government offer for that? What do they 
say to people as to why they do not want them to leave the 
country?
    Mr. Thang. I would like to answer your question if I may, 
Mr. Jefferson. Usually the Vietnamese Government doesn't give 
any reason whatsoever. For the small number of cases that we 
have documented, we know the reasons. For instance, if an 
applicant cannot afford to pay an exorbitant amount of money to 
an official, for instance, that person would not make it to the 
list. Often one can confirm at least on a number of cases that 
have been denied permission, and the reason was that these 
individuals are longer interested in the programs. However, 
through the relatives in the United States, also direct mail 
from them, I'm very sure, I'm very certain, that they are still 
very much interested just because they didn't get the money to 
pay and therefore they----
    Mr. Jefferson. Do you contend that every immigrant in 
Vietnam pays this exorbitant sum of money which you have 
described?
    Mr. Thang. Well, actually I would like to suggest this. 
It's very easy and simple to verify. The Subcommittee only 
needs to request a study by the General Accounting Office here, 
and all they need to do is to conduct a number of interviews of 
newly arrived immigrants and refugees, say over the past 3 
months. And we can have a very clear and concrete benchmark to 
judge whether Vietnam has improved its record on emigration or 
not.
    Mr. Jefferson. So it is your contention that there has been 
no improvement in the emigration record of Vietnam, and you can 
prove that nothing suggests improvement in that conduct.
    Mr. Thang. Not only that, sir. There has been some motion 
but there has been a significant slowing down so I don't 
consider that as improvement. Actually it has gone backward. I 
would like to add one, one point here with regard to one 
specific case. It relates to MIA-POW issue. I had been trying 
to get one Vietnamese woman out of Vietnam. She escaped to 
Malaysia many years ago and provided valuable information to 
the American team, I think it's the Joint Task Force, just 
interviewed and her information did bring about a resolution of 
at least one case. Her whole family was allowed to leave 
Vietnam, however she was not because she had contacted 
foreigners without permission. It would be of great help if 
Senator Kerry could exert his influence on the Vietnamese 
Government to get this poor woman access to interview. I think 
that she would appreciate that and all the other people here in 
this room would appreciate that as well.
    Mr. Jefferson. I was looking at the declaration, I'm sorry, 
at the extensive waiver authority for Vietnam, message from the 
President transmitting it to the Congress notifying the 
Congress of the President's determination to extend the waiver. 
The waiver is fairly new since March 9, and so the statement 
here is that there hasn't been enough time to judge whether 
there's been any material change in the immigration policy. But 
it notes that some 480,000 Vietnamese entered the United States 
in the last 10 to 15 years, I expect to note that people who 
have wanted to leave is far higher. It talks about progress 
made of the resettlement opportunities for Vietnamese returning 
program. And it states in those years as to how many people 
have benefited from that effort.
    Have you had a chance to see this--the notice transmitted 
by the President to the Congress?
    Mr. Thang. Not yet sir, however I got the latest figures 
yesterday and again----
    Mr. Jefferson. Has anyone seen this document and is it 
their contention that these findings are in error or overstated 
or can you suggest that they are correct?
    Mr. Thang. I think that it has a misstatement in there, 
sir. Actually, not misstatement but mispresentation of the 
facts and figures. Even Senator Kerry did mention that Vietnam, 
actually I'm sorry, Mr. Peterson, did mention and did 
acknowledge that Vietnam had cleared about 40,000 cases, 
individuals for interview under the ROVR Program during a very 
brief period of about 3 months. So Vietnam had the full 
capability to clear the rest but it's only about 3,000 names 
within a month but it has been 3 months already and there's no 
reason why Vietnam cannot do it just overnight.
    Mr. Jefferson. The efforts that are being made--thank you 
very much, sir--Mrs. O'Shea, the efforts that are being made to 
identify remains and satisfy families in their enquiries about 
missing, missings-in-action if you will, or people who have 
not--the cases that we talk about now, are they cases where we 
don't know what happened at all to individuals, and the most 
cases we'll know that they were casualties of military action 
but we haven't been able to have the remains returned? Which 
cases do you find yourself working with now more of, now?
    Ms. O'Shea. The cases--we realize that we are not going to 
get a full accounting of every man. We do not expect that, it 
was a war and that's not going to happen. But in very many 
cases we have extensive information that contradicts the 
resolutions that are being presented to the families. In other 
words, in this particular case of Navy pilot Daniel Borah, his 
family was told in the family report that his body--he had 
ejected from his aircraft, did not survive the ejection and his 
body was found in his parachute in a tree, he was found dead by 
the Vietnamese. They took the body down and they buried him and 
there he rested until the excavation in 1996. National Security 
Agency documents tracked the shootdown and within 10 minutes of 
Dan Borah's shootdown we have a document that states he had 
been captured alive. The overhead aircraft reported short 
bursts of manual beeper transmission and we have one document 
that was presented to the Vietnamese in 1973 as part of the 
four-party Joint Commission which was then designed to resolve 
all these cases, which states that Dan actually gave a voice 
transmission from the ground and the transmission was ``Gomer 
drawn all around.''
    Mr. Jefferson. May I ask you, how many cases are there like 
this----
    Ms. O'Shea. There are a lot more than people realize. I 
could not give you an actual estimate. I can tell you the Borah 
case is one; I can tell you the McDonnell case is one. There's 
a case of four men who were in ambush also in Quang Ngai 
Province. There is CIA documentation that they were captured. 
They were being held--plans were being made to move them to a 
western area and the most recent report I got from the family 
is they're scheduling field excavation at the exact loss site. 
So if the CIA Intelligence was correct, an excavation at the 
loss site will tell us one of two things: There's nobody there 
or the site was salted. Assuming the CIA reports are correct 
and the subsequent reports of sightings, there are many cases 
where there is strong information and the reports coming back 
to the--we have movement but we don't have real progress and 
the families don't have real truth. To be told that your loved 
one is dead and to have a good remains identification is one 
thing, but most of these families still do not know what 
happened and those answers lie in Hanoi and some of these men 
who were in a POW camp, some of them were probably executed 
very shortly after captivity. But the families that I talked to 
and that I work with, they want to know this. They want to know 
if they died immediately, if they were executed, if they lived 
in a camp for 4 years, if for some reason the Vietnamese held 
them until 1975 and then decided to execute them. They--all 
they want is the truth.
    Mr. Jefferson. I recognize that and I cannot imagine how 
tortuous it must be for a family. I have no way to imagine 
that. And so I think that our government must continue to work 
in the area, as vigorously as it can and put as much effort 
into it and as much modern technology and much whatever else we 
can to help to resolve these things and these very sensitive 
areas for families. And we should continue to have a commitment 
to that as far forward as it takes to satisfy every possible 
interest of any family member out there. I mean that's how I 
feel about it.
    The question before us and that we have to deal with is 
whether we cannot continue to press forward and make progress 
in that area and not only on the issues that you talked about 
with trade and investment, continue to allow Americans to find 
opportunities in Vietnam and in Vietnam's surroundings. And at 
the same time without losing priority on this, press for human 
rights issues and press for openness on, why can't we--is there 
some reason why we cannot press for all these things at the 
same time? And make them all priorities----
    Ms. O'Shea. At this point I believe there is a reason. We 
have lifted the trade embargo with Vietnam, we have normalized. 
This has all happened within a very short period of time and I 
have to differ with the witnesses who spoke earlier saying that 
that generated a tremendous amount of progress and resolution 
of cases. It resulted in movement, it did not result in 
progress. We still do not have answers. U.S. investigators are 
going to the same sites four and five times because the 
Vietnamese are doling out witnesses one at a time. I think we 
need to stand back. We have rewarded nonprogress twice or 
limited progress twice. I think instead of us making the 
overture and saying, give us more we're going to give you 
Jackson-Vanik, we should say if you want the Jackson-Vanik 
waiver but we're going to sit on it 6 months or a year, you 
give us and then we'll sit down and talk. We're giving before 
we're getting and we did that with the trade embargo and we did 
that with the normalization, and I think Jackson-Vanik is our 
last lever and I think we should use that. We are in the 
stronger negotiation position and I think we should negotiate 
using that strength and it should be held off and the 
Vietnamese, we should go to them and give them the opportunity 
to show us, not for us to show our good faith continually in 
giving to them in hope that we get answers.
    Chairman Crane. Well, I want to express appreciation to all 
of you witnesses and please stay in touch and keep 
communicating with the Subcommittee because we certainly want 
to address the questions and the concerns that you've raised 
and I confess that my two kid brothers were over there during 
the Vietnam war in the late sixties and I had the opportunity 
to get over there three times in 1970, 1972 and 1974 and I was 
overwhelmed when we got the news back here that our last 
survivors were climbing up on helicopters to get out of there. 
It's one of those vivid experiences and it has to be profoundly 
vivid to all of you folks that were there. So please 
communicate and thank you for coming and testifying today.
    Ms. O'Shea. Thank you.
    Chairman Crane. And our next panel I would now like to call 
Thomas O'Dore, chairman of the American Chamber of Commerce in 
Vietnam-Hanoi Chapter; Virginia Foote, president of the U.S.-
Vietnam Trade Council; Greig Craft, vice chairman, Asia Pacific 
Council of American Chambers; and Bradley Lalonde, vice 
president and country corporate officer for Vietnam with 
Citibank.
    And I would like to remind you to try and keep your oral 
presentations to 5 minutes and any written presentations will 
be made a part of the permanent record. And we shall proceed in 
the order I presented you.
    Mr. O'Dore, you're first.

   STATEMENT OF THOMAS O'DORE, CHAIRMAN, AMERICAN CHAMBER OF 
 COMMERCE IN VIETNAM, HANOI CHAPTER; AND CHIEF REPRESENTATIVE, 
                      CIGNA INTERNATIONAL

    Mr. O'Dore. Thank you, Mr. Chairman and honorable 
Subcommittee Members. My name is Thomas O'Dore, chairman of the 
American Chamber of Commerce in Vietnam, Hanoi Chapter. I'm 
also chief representative for a U.S. multinational insurance 
company, CIGNA International. And I'm also an American citizen 
living in Hanoi, married to a Vietnamese national and I have a 
rather large extended Vietnamese family.
    Amcham-Vietnam has nearly 600 members comprised of Fortune 
500 companies, nongovernmental organizations including 
veterans' groups, and entrepreneurs including many Vietnamese-
Americans. Americans have invested roughly $1.3 billion in 
Vietnam following the lifting of the embargo, bringing America 
quickly into the top 10 list of Vietnam's largest investors. 
This is significant as American companies got a late start due 
to the delay in lifting the embargo and has been successful 
without U.S. financing programs and development aid, which our 
foreign competitors have had for years.
    Now that we have Ex-Im, OPIC, TDA, afforded to us by the 
President's waiver under the Jackson-Vanik amendment to the 
Trade Act of 1974, we now have a level playingfield with other 
investor countries operating in Vietnam. Amcham-Vietnam 
applauds the President's renewal of Vietnam's waiver under the 
Jackson-Vanik amendment, and we urge Congress to accept the 
President's warranted decision.
    Today progress is being made by our U.S. Trade 
Representatives to negotiate a comprehensive bilateral trade 
agreement which will enhance market access for U.S-made goods 
and services and strengthen protection of all intellectual 
property rights. We further urge Congress to give the bilateral 
trade agreement early consideration and ratification once it is 
signed by extending normal trading status to Vietnam.
    Vietnam has the second largest population in Southeast Asia 
and I believe the 12th largest in the world with about 78 
million people. It has huge potential as a market for U.S-
produced goods, services and technology. Vietnam remains 
engaged and open to United States companies, more United States 
jobs will be added to the existing three million American jobs 
which already support the $245 billion in exports from the 
United States to Asia. But the negative effect of the Asian 
financial crisis on U.S. exports and jobs which we estimate 
will be down about $30 billion this year alone, we need to open 
more markets, not close the door further.
    We will not hide the fact that our nearly 600 members find 
Vietnam a difficult market to enter. But I point out that our 
membership is increasing, most of us are doing business in 
Vietnam and we have success stories to tell. Most importantly 
we all have a positive long-term view on Vietnam's potential 
and position in ASEAN.
    We also want Americans to know that our member companies 
are very much aware of the POW-MIA human rights, immigration 
and religious freedoms issues present in Vietnam. Of the large 
American communities living and working in Vietnam, we 
participate and engage the Vietnamese in these issues in our 
daily lives. Our Amcham board of governors includes veteran 
groups and humanitarian and nongovernmental organization 
members, and they have a visible and active Committees in our 
organization. Americans must engage Vietnam to nurture and 
develop our ideals of democracy, religious freedom and basic 
human and labor rights.
    Lifting the embargo has already started the process of 
change in Vietnam. Waiving the Jackson-Vanik amendment has 
taken another step forward. In just a few short years English 
has replaced Russian and French as the second language of the 
Vietnamese. The National Economics University in Hanoi has 
established its first internationally recognized MBA program. 
Satellite TV stations like CNN, ESPN, MTV, and international 
publications like ``The Wall Street Journal,'' ``USA Today'' 
and of course the Internet, are widely available to the 
Vietnamese population. The government is decentralizing 
investment decisionmaking and a stock market is in the works. 
Vietnam's decisionmaking body, the National Assembly, has more 
women representatives on a percentage basis than our own 
Congress. Large state-owned enterprises are being equitized and 
are insisting on American technology in their infrastructure 
projects with foreign companies. MIAs are coming home, and the 
hundreds of Catholic churches are overflowing on Sunday. 
Unilateral penalties and sanctions against the Vietnamese 
Government inhibiting American individuals, organizations, and 
business in Vietnam will have the opposite effect in achieving 
their well-intentioned goals. In fact, it will give our 
competitors an upper hand in Vietnam and they will not 
participate in a one-sided policy toward Vietnam, stepping into 
the space we vacate.
    As we have witnessed in Indonesia, only by educating the 
people and engagement can we make change in Vietnam's 
government happen. The Asian financial crisis has handed 
America the unique opportunity to step in and take the lead in 
shaping the future of Vietnam and Asian countries in general.
    In speaking to you as chief representative of CIGNA, the 
insurance market was a monopoly owned by the state-owned 
insurance company, Bao Viet. Since lifting the embargo, Vietnam 
unilaterally saw the need to create a competitive insurance 
market to attract foreign investment. To date, there is over 
$30 billion in new foreign investment, six new insurance and 
reinsurance companies in just the past 3 years. There are over 
30 insurance company representative offices, including four 
American companies: Aetna, AIG, CIGNA and John Hancock.
    While the opening of the market is too slow from my 
perspective, it is a positive step in the right direction. 
Further, it is likely that the first 100 percent foreign-owned 
licensed insurance company will be an American insurance 
company, but only if the U.S. Government continues to 
positively engage Vietnam.
    A joint resolution to negate the renewal of the President's 
waiver under Jackson-Vanik amendment will give our competitor 
countries a stronger position in Vietnam and further weaken our 
progress.
    And on one final personal note, my wife is Vietnamese. We 
were married in Vietnam last year. My wife's ability to freely 
travel to other countries is only limited by the countries she 
wants to visit. She's currently on vacation in Europe because 
the United States would not give her an entry visa to be with 
me here today. Vietnam no longer requires its citizens to 
obtain exit visas in their passports. They're free to leave and 
return as they please as long as they have a passport. She is 
free to leave and return to Vietnam any time she wants just as 
I can leave and return to the United States, not because she's 
married to me but because the Vietnamese Government passed laws 
allowing all Vietnamese passport holders to do just that.
    In summary, engagement is working, albeit slower than some 
of us expect. Progress is happening in areas of investment, 
human and labor rights, repatriation of MIAs, emigration, and 
religious freedoms. If you take away the Jackson-Vanik 
amendment, you take away the light at the end of the tunnel for 
Vietnam. You'll take away the incentive to negotiate a 
comprehensive trade agreement and all incentive for economic 
and social reform. Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Thomas O'Dore, Chairman, American Chamber of Commerce in 
Vietnam, Hanoi Chapter; and Chief Representative, CIGNA International

    Dear Mr. Chairman and Honorable Committee Members.
    Today, I come before you first, as Chairman of the American 
Chamber of Commerce-Hanoi Chapter, second as Chief 
Representative for US multinational insurance company CIGNA 
International, and lastly, as an American Citizen living in 
Hanoi. Under all three scenarios, I will show that support for 
the President's renewal of the waiver under the Jackson-Vanik 
amendment is the right position to take.
    Amcham Vietnam has nearly 600 members, comprised of Fortune 
500 companies, non-governmental organizations (NGOs), including 
veterans groups, and entrepreneurs, including many Vietnamese-
Americans.
    Americans have invested roughly $1.3 billion in Vietnam 
following the lifting of the embargo, bringing America quickly 
into the Top Ten list of Vietnam's largest investors, behind 
primarily Asian countries, such as Singapore, Japan, Korea and 
Taiwan. This is significant, as American companies got a late 
start due to the delay in lifting the embargo and have been 
successful without US financing programs and development aid, 
which our foreign competitors have had for years. Now that we 
have EXIM, OPIC and TDA, afforded to us by the President's 
waiver under the Jackson-Vanik amendment to the Trade Act of 
1974, our option of becoming Vietnam's #1 investor is 
excellent. We now have a ``level playing field'' with other 
investor countries operating in Vietnam.
    Amcham-Vietnam applauds the President's renewal of 
Vietnam's waiver under the Jackson-Vanik amendment and we urge 
Congress to accept the President's warranted decision.
    To date, progress is being made by our US Trade 
Representatives to negotiate a comprehensive bilateral trade 
agreement, which will enhance market access for US made goods 
and services, and strengthen protection of intellectual 
property rights. We further urge Congress to give the bilateral 
trade agreement early consideration in ratification, once it is 
signed, by extending non-discriminatory treatment (i.e., normal 
trading status, or MFN if you prefer), as well a tariff 
preferences pursuant to the ``generalized system of 
preferences'' to Vietnam.
    Why to we ask for these considerations, you wonder?
    First, Vietnam has the second largest population in SE Asia 
with about 78 million people. It has huge potential as a market 
for US produced goods, services and technology. If Vietnam 
remains engaged and open to US companies, more US jobs will be 
added to the existing 3.3 million American jobs which already 
support the $245 billion in exports from the US to Asia last 
year.
    Second, with the negative affect of the Asian Financial 
Crisis on US exports and jobs, which will be down around $30 
billion this year, we need to open more markets, not close the 
door further.
    We will not hide the fact that our nearly 600 members find 
Vietnam a difficult market to enter. But I point out that our 
membership is increasing, most of us are doing-business in 
Vietnam and, we have success stories to tell. Most importantly, 
we all have a positive long term view on Vietnam's potential 
and position in ASEAN.
    We also want Americans to know that our member companies 
are very much aware of the MIA, human rights, emigration and 
religious freedoms issues present in Vietnam, which other 
witnesses will raise today. As a large American community 
living and working in Vietnam, we participate and engage the 
Vietnamese in these issues in our daily lives. Our Amcham Board 
of Governors includes veteran groups and humanitarian NGO 
members, and they have visible and active committees in our 
organization.
    The affect of the 30 year embargo on Vietnam was like 
locking a child in his room for 30 years and feeding him only 
bread and water. We cannot expect the child to emerge from the 
locked room as an educated scholar, married and with a well-
adjusted family.
    Certain individuals and groups, not living in Vietnam, 
expect Vietnam to have emerged from it punishing isolation as a 
``new and improved'' version of American society. This is not 
realistic. It cannot possibly happen that easily and there is 
no precedence for it. Not even in American history. It takes 
time and struggle.
    America must engage Vietnam to nurture and develop our 
ideals for democracy, religious freedom and basic human and 
labor rights.
    Lifting the embargo has already started the process of 
change in Vietnam. Waiving the Jackson-Vanik amendment has 
taken it another step forward. In just a few short years;
     English has replaced Russian and French as the 
second language of the Vietnamese,
     The National Economics University in Hanoi, has 
established its first internationally recognized Master in 
Business Administration (MBA) program,
     Satellite TV stations like, CNN, ESPN, and 
international publications like The Wall Street Journal and USA 
Today are widely available to the Vietnamese population,
     The government is decentralizing investment 
decision making and a stock market is in the works,
     Vietnam's decision making body, the National 
Assembly, has more women representatives (on a percentage 
basis) than our own Congress,
     Large state owned enterprises are being equitized 
and are insisting on American technology in their 
infrastructure projects with foreign companies (e.g., $1.3 
billion Dung Quat oil refinery project between Petrovietnam and 
the Russians),
     MIAs are coming home,
     And the thousands of catholic churches are 
overflowing on Sundays.
    Unilateral penalties and sanctions on the Vietnamese 
government, inhibiting American individuals, organizations and 
business in Vietnam will have the opposite affect in achieving 
their well-intentioned goals. In fact it will give our 
competitors an upper hand in Vietnam, as they will not 
participate in our policy towards Vietnam. As we have witnessed 
in Indonesia, only by educating the people and engagement can 
we make change in Vietnam happen too.
    The Asian Financial Crisis has handed America the unique 
opportunity to step-in and take the lead in shaping the future 
of Vietnam, and Asian countries in general. Lets step-in and 
strengthen our relationship with Vietnam and increase their 
dependence on us.
    It is easy to unilaterally discipline and punish your own 
child in your own home, but impossible to unilaterally penalize 
someone else's child, when no other parents agree to 
participate. Let's not make that mistake with Vietnam. Let's 
engage and nurture Vietnam to get the desired result.
    Now, speaking to you as Chief Representative of CIGNA, 
resident in Vietnam....
    During the embargo, the insurance market in Vietnam was 
monopolized by the state-owned insurance company Bao Viet. 
Since lifting the embargo, Vietnam unilaterally saw the need to 
create a competitive insurance market to attract foreign 
investment. To date, there is over $30 billion in new foreign 
investment, and six new insurance and reinsurance companies in 
just the past three years; two (2) state-owned, two (2) foreign 
joint ventures, and two (2) joint-stock companies. There are 
over 30 insurance company representative offices, including 
four (4) American companies; i.e, Aetna, AIG, CIGNA and John 
Hancock.
    The next step is 100% foreign-ownership. A recent letter 
from the Communist Party dated May 25, 1998, includes the 
instructions to open the market further and include 100% 
foreign-ownership.
    While the opening of the market is too slow from my 
perspective, it is a positive step in the right direction. 
Further, it is likely that the first 100% foreign-owned license 
will go to an American insurance company. But only if the US 
government continues to positively engage Vietnam. CIGNA 
applied for a 100% foreign-owned license earlier this year. And 
we are still patiently waiting.
    A joint resolution to negate the renewal of the President's 
waiver under the Jackson-Vanik amendment will give our 
competitor countries a stronger position in Vietnam and further 
weaken our progress.
    To date, CIGNA has spend over $2,000,000 in Vietnam, 
including expenditures in developing the insurance industry. 
Education and training has gone to groups of individuals in the 
Insurance Supervisory Department in the Ministry of Finance and 
the local insurance companies licensed in Vietnam. Our American 
style and approach to competition and in handling customers 
fairly and honestly is changing the market dramatically in the 
right direction. This demonstrates that engagement works.
    On a personal note.
    My wife is Vietnamese. We met and were married in Vietnam 
last year. Several of my friends have also been through the 
process and it gets easier and easier each time, as the 
Vietnamese government gains more exposure to the idea and 
experience in handling the procedures.
    My wife's ability to freely travel to other countries is 
only limited by the country she wants to visit. She is 
currently on vacation in Europe, because the US would not give 
her an entry visa to be with me here today.
    Vietnam no longer requires its citizens to obtain ``exit'' 
visas in their passports. They are free to leave and return as 
they please, as long as they have a passport. There are no 
onerous departure fees levied on Vietnamese, as they do in 
Indonesia to inhibit Indonesians from leaving their country, 
for instance.
    She is free to leave and return to Vietnam anytime she 
wants, just as I can leave and return to the US. NOT because 
she is married to me, but because the Vietnamese government 
passed laws allowing all Vietnamese passport holders to do just 
that.
    In summary, engagement is working, albeit slower than some 
of us expect. Progress is happening in areas of investment, 
human and labor rights (like freedom of association and 
speech), repatriation of MIAs, emigration, and religious 
freedoms.
    By renewing the waiver under the Jackson-Vanik amendment, 
giving American companies access to loans from TDA, EXIM and 
OPIC, and continuing to work towards a bilateral trade 
agreement, Congress is setting in motion opportunities to 
create more US exports and US based jobs in America. This in 
turn keeps the pressure on Vietnam. American companies, NGOs 
and individuals working in Vietnam spread our ideals deep into 
the social fabric of the Vietnamese. And only the Vietnamese 
can demand and make change happen in their government's 
policies towards them. Let's keep the pressure on through 
engagement.
    Thank you.
      

                                


    Chairman Crane. Thank you, Mr. O'Dore.
    Ms. Foote.

 STATEMENT OF VIRGINIA B. FOOTE, PRESIDENT, U.S.-VIETNAM TRADE 
                            COUNCIL

    Ms. Foote. Thank you, Chairman Crane. I'm pleased to be 
here today as president of the U.S.-Vietnam Trade Council, to 
testify in strong support of the renewal of the Jackson-Vanik 
waiver for Vietnam.
    The U.S.-Vietnam Trade Council was founded in 1989 and is a 
trade association with members from the American Business 
Community. We have worked through our educational affiliate, 
the U.S.-Vietnam Forum, to improve relations between the United 
States and Vietnam, with educational exchange programs, annual 
conferences, congressional delegations, and programs designed 
to provide the Vietnamese assistance on international trade 
norms and standards.
    Today I would like to address why the renewal of the 
Jackson-Vanik waiver for Vietnam is so important both to the 
United States and to Vietnam. Beginning in the late eighties, 
Vietnam embarked on a bold economic reform program which showed 
impressive results almost immediately. Growth rates have 
claimed to 8 and 9 percent. From 1988 to 1996 over $26 billion 
in foreign investment was committed. And starting with from a 
very low per capita income of only $250 a year, the 
international donor community began generous overseas 
development assistant programs pledging $2.4 billion in 1997, 
which adds to the $8.5 billion pledged since 1993.
    Vietnam has made tremendous in establishing relations with 
Europe, within Asia and with the United States. Vietnam joined 
ASEAN in 1995, will join APEC this November, and is committed 
to joining WTO. But the United States normalization process has 
moved far more slowly than other nations have, and American 
business involvement in Vietnam has lagged as a result of this 
and continues to operate with severe handicaps.
    Without MFN status, without a trade agreement, and 
initially without trade support programs, American companies 
and individuals nonetheless began travelling, investing and 
trading with Vietnam. In 1997 the United States was the eighth 
largest investor in Vietnam, was the eighth largest trading 
partner, with $1.2 billion in investment committed and $1 
billion worth of two-way trade.
    In the last year, the Vietnam Embassy here in Washington 
has issued some 91,000 visas to Americans wishing to travel to 
Vietnam, over 66,000 of those for Vietnamese-Americans wanting 
to visit their homeland, and I understand 200,000 visas have 
been issued worldwide for Americans to travel to Vietnam. But 
in 1997 Vietnam's impressive growth began to slow. While 
Vietnam is in a sense one step removed from the Asian financial 
crisis with a nonconvertible currency and plans for a stock 
market still in the future, 70 percent of its foreign 
investment had been coming from Asian countries as does nearly 
70 percent of its international trade.
    It is in this difficult environment that the United States 
is now negotiating a trade agreement with Vietnam and is 
opening Ex-Im Bank and OPIC programs for American companies 
there. U.S. policy has pegged Jackson-Vanik to progress on the 
ROVR Program. On the merits of progress on ROVR alone, Jackson-
Vanik ought to be renewed. If you expand it to look at the 
Orderly Departure Program overall, Jackson-Vanik ought to be 
renewed.
    And on the economic front, the renewal of Jackson-Vanik is 
equally important to achieving U.S. goals. American involvement 
in the economic reform process is welcome in Vietnam and could 
be extremely important to overall development in the long run. 
American companies and government negotiators set a high 
standard for trade, investment, labor, and business practices. 
American management and technology is greatly admired in 
Vietnam. American companies are actively involved in training 
programs through my organization and also individually. 
American products are popular in Vietnam.
    In the process of negotiating comprehensive trade agreement 
with the United States, Vietnam has accepted the general 
principles outlined in our draft and is now working on the very 
difficult task of designing an implementation plan and is 
asking for additional technical assistance. The United States 
should stay involved in this process. It is in our interest to 
see a stronger and more economically healthy Vietnam in the 
Southeast Asian region.
    Vietnam has set on an economic reform path that many 
countries began years ago. It is a process that is going slower 
than many of us had hoped, and with American companies coming 
in late it has not been easy for American companies to operate 
in Vietnam. Yet companies are confident that progress is being 
made, there are major infrastructure projects that are in the 
pipeline, and with the help of Ex-Im and OPIC, American 
companies are in a strong position to win over $2 billion worth 
of projects in the next few months. With fully normalized 
economic relations, the United States could well be one of the 
top investors in Vietnam. My colleagues here are outlining some 
of their success stories.
    In addition, with the initial waiver of Jackson-Vanik, the 
Vietnamese have greatly sped up the trade negotiations with us 
and have set an ambitious goal of finishing the trade agreement 
by the end of this year. The issues on the table such as 
liberalizing the trade and investment regimes, the 
strengthening of intellectual property rights, are all of great 
importance to anyone doing business in Vietnam, now or in the 
future, or anyone hoping to see Vietnam's standard of living 
increase. Vietnam's strategic and economic role in the region 
will be greatly affected by U.S. policy overall, and by the 
course of the bilateral relationship, even in the short run. 
The bipartisan policy of a step-by-step process normalizing 
relations with Vietnam, while we feel it has been too slow, it 
has produced positive results for American interest. The 
Jackson-Vanik waiver has produced important results, even since 
it was initially waived by the President in March of this year 
and it is crucial that the waiver be renewed at this important 
time in our relationship. Thank you, Mr. Chairman.
    [The prepared statement and attachments follow:]

Statement of Virginia B. Foote, President, U.S.-Vietnam Trade Council

    Chairman Crane, members of the Committee, I am pleased to 
be here today as President of the U.S.-Vietnam Trade Council to 
testify on the renewal of the Jackson-Vanik waiver for Vietnam. 
If there are no objections, I would like to submit into the 
record letters that we circulated to Congress and to the 
President in support of the waiver and a fact sheet we have 
done in cooperation with other groups on the importance of this 
waiver.
    The U.S.-Vietnam Trade Council, founded in 1989, is a trade 
association with members from the American business community. 
A list of our members is attached to my testimony. With offices 
in Washington and Hanoi we have worked along with our 
educational affiliate the U.S.-Vietnam Forum to improve 
relations between the United States and Vietnam with 
educational exchange programs, annual conferences, 
Congressional delegations and programs designed to provide 
assistance on international trade norms and standards.
    Today I would like to address why the renewal of the 
Jackson-Vanik waiver for Vietnam is so important to both the 
United States and to Vietnam. Beginning in the late 1980's 
Vietnam embarked on a bold economic reform program which showed 
impressive results almost immediately. Vietnam went from near 
famine to become the third largest rice exporter behind 
Thailand and the United States in a matter of a few years. 
Growth rates climbed to 8 and 9%. Foreign investors flocked to 
Vietnam. From 1988 -1996 over $28 billion was committed. And 
with a very low per capita income of only $250 per year, the 
international donor community began generous foreign 
development assistance programs reaching pledges of $2.4 
billion in 1997, adding to the $8.5 billion pledged since 1993.
    Also beginning in the late 1980's the Vietnamese government 
committed to end its isolation and began working to normalize 
relations with its neighbors, Europe and the United States. 
Vietnam has had tremendous diplomatic success in normalizing 
relations in Europe, within Asia and with the United States. 
Vietnam joined ASEAN in 1995 and will join APEC this November.
    The Reagan and Bush administration recognized Vietnam's 
attempt to end its isolation and responded with a policy of 
normalizing relations with Vietnam with a step-by-step process 
pegged to cooperation on the U.S.'s principal goal of seeking 
the fullest possible accounting for our missing in action from 
the Vietnam War.
    As the attached timeline shows, this process has proceeded 
slowly through three administrations but has led to the lifting 
of the trade embargo, the establishment of diplomatic relations 
and the beginnings of economic normalization. In response, 
Vietnam has greatly enhanced its efforts on issues of high 
priority to the U.S. including the MIA/POW efforts, immigration 
goals, and now economic reform.
    But because the U.S. normalized relations far more slowly 
than other nations, American involvement in the Vietnamese 
economy has come later than other nations and still operates 
with severe handicaps. Without MFN status*, a trade agreement, 
and initially without trade support programs, American 
companies and individuals began traveling, investing and 
trading with Vietnam. By 1997 the United States was the eighth 
largest investor and eighth largest trading partner with $1.2 
billion in investment committed and $ 1 billion in two way 
trade. In the last year alone some 91,500 visas have been 
issued for Americans to travel to Vietnam, over 66,000 for 
Vietnamese Americans wanting to visit their home land.
---------------------------------------------------------------------------
    *Only 5 countries do not have MFN status: Afghanistan, Cuba, Laos, 
North Korea, and Vietnam.
---------------------------------------------------------------------------
    In 1997, Vietnam's impressive growth began to slow. Foreign 
investment dropped by 40%. While the growth rate hit 8.8%, the 
projections for equal levels of growth in 1998 began to look 
overly optimistic. The easy parts of economic reform had been 
accomplished. Harder issues loom large. And although Vietnam is 
in a sense one step removed from the Asian financial crisis 
with a non-convertible currency and plans for a stock market 
still in the works, 70% of its foreign investment had been 
coming from Asian countries as does nearly 70% of its trade.
    It is in this difficult environment that the U.S. is now 
negotiating a trade agreement with Vietnam and opening Eximbank 
and OPIC programs after the March 1998 initial waiver of 
Jackson-Vanik amendment.
    U.S. policy has pegged the Jackson-Vanik waiver to progress 
on the ROVR program. On the merits of progress on the ROVR 
program alone, Jackson-Vanik ought to be renewed. And in 
assessing the Orderly Departure immigration program overall, 
Jackson-Vanik ought to be renewed. Close to half a million 
Vietnamese have come to the United States under ODP with fewer 
than 7,000 applicants left to be processed. Another 2,500 ROVR 
cases out of a universe of nearly 19,000 are left to be cleared 
for interview, with half of these cases missing due to address 
or name errors. Since the initial waiver of Jackson-Vanik, the 
Vietnamese have allowed all remaining ODP cases--including the 
Montagnard cases which are of particular concern to the U.S.--
to be processed under the new and far quicker system developed 
by the Vietnamese initially just for ROVR cases.
    On the economic front, the renewal of Jackson-Vanik is 
equally important for achieving U.S. goals. American 
involvement in economic reform process is welcome in Vietnam 
and could be extremely important to overall development in the 
long run. American companies and government negotiators set a 
high standard for trade, investment, labor and business 
practices. American management and technology is greatly 
admired in Vietnam. American companies are actively involved in 
training programs through the Trade Council and individually. 
American products are popular. With a population of 77 million 
with over half under the age of 25 and well educated, Vietnam 
has great potential as a significant trading partner.
    In the process of negotiating a comprehensive trade 
agreement with the United States, Vietnam has accepted the 
general principles outlined in our draft and is now working on 
the very difficult task of designing an implementation plan and 
is asking for technical assistance. The United States should 
stay involved in this process. It is in our interest to see a 
stronger and more economically healthy Vietnam in the Southeast 
Asian region. Yes, Vietnam has a corruption problem. Yes, 
Vietnam is mired in bureaucracy. Yes, they are fearful of 
massive unemployment if they let the state enterprise system 
go. Yes, they worried about what lessons are to be learned from 
the economic crisis in the region.
    But Vietnam has also set out on an economic reform path 
that other countries began years ago. It is a process that has 
been slower than many hoped and with American companies coming 
in late, it has not been easy for American companies to operate 
in Vietnam. But companies are confident that progress is being 
made, major infrastructure projects are in the pipe line, and 
with the help of Exim and OPIC American companies are in a 
strong position to win over $2.0 billion worth of projects in 
the next few months. With fully normalized economic relations, 
the United States could well join the top ranks of investors in 
Vietnam. My colleagues here have outlined some of the important 
individual success stories.
    In addition, since the initial waiver of Jackson-Vanik, the 
Vietnamese have greatly sped up the trade negotiations and set 
an ambitious goal of finishing the agreement by the end of 
1998. The issues on the table such as liberalizing the trade 
and investment regimes and the strengthening of intellectual 
property rights are of great importance to anyone doing 
business in Vietnam, now or in the future, or anyone hoping to 
see Vietnam's standard of living increase.
    Vietnam's strategic and economic role in the region will be 
greatly affected by U.S. policy overall and by the course of 
bilateral relations even in the short run. The bi-partisan 
policy of a step-by-step process of normalizing relations with 
Vietnam, while slow, has produced positive results for American 
interests. The Jackson-Vanik waiver has produced important 
results since it was initially waived by President Clinton in 
March of this year and it is crucial that the waiver be renewed 
at this important time in our relationship.
    Thank you.
      

                                


U.S.-Vietnam Trade Council Membership

                           Corporate Members

 American International Group
American Rice
Amway Corporation
Boeing Company
Caterpillar, Inc.
Chase Manhattan Bank
Chevron Overseas Petroleum
CIGNA
Citibank
The Coca-Cola Company
Craft Corporation
Dresser Industries
Eli Lilly
Enron International
Estee Lauder International, Inc.
Exxon Corporation
Fluor Daniel, Inc.
General Electric
IBM
Johnson & Johnson
Mobil Oil Corporation
Motorola
Nike Inc.
Oracle Corporation
The Procter & Gamble Company
Raytheon
Skadden, Arps, Slate, Meagher & Flom
Texaco Inc.
Unocal
White & Case

                           Associate Members

Ablondi, Foster, Sobin & Davidow, P.C.
Archeon International
Asia Joint Partners
Cardinal Consulting Inc.
DeMatteis Ireland USA, Inc.
East & West Trading Company
Finansa Thai Ltd.
Footwear Distributors and Retailers of America
The Harker Firm
JNS International
James V. Kimsey
Long Pham International, Inc.
Manolis & Co., Ltd.
M. West Consulting
Powell, Goldstein, Frazer & Murphy
Samuels International Associates, Inc.
Thomas W. Sloop
Spivey International, Inc.
Toy Manufacturers of America
VinaTech
Virginia Port Authority
      

                                


THE 1998 JACKSON-VANIK AMENDMENT RENEWAL FOR VIETNAM

                  What is the Jackson-Vanik Amendment?

    It is an amendment to the U.S. Trade Act of 1974 which 
precludes the participation of nonmarket economy countries in 
any U.S. Government program that extends credits or credit and 
investment guarantees if the country restricts emigration. 
Before the waiver was issued, American projects in Vietnam were 
not eligible for assistance from the Export-Import Bank (EX-IM) 
or the Overseas Private Investment Corporation (OPIC). To 
remove this restriction on a country such as Vietnam, the 
President must either certify that the country permits free 
emigration, or the President can waive the emigration 
requirement on the grounds that the waiver will promote U.S. 
emigration objectives. On March 11, 1998, President Clinton 
announced his decision to issue a waiver of the Jackson-Vanik 
Amendment for Vietnam.

               Why the Jackson-Vanik waiver is important?

    The availability of export promotion programs is a critical 
factor in a number of major procurement decisions being made 
now in Vietnam. The ability of U.S. companies to utilize EX-IM 
or OPIC now places them on a more level playing field with 
their foreign competitors who have enjoyed a high level of 
government support for their projects in Vietnam. Though the 
U.S. currently is the eighth largest investor in Vietnam, the 
investment and trade opportunities for U.S. companies could 
expand significantly with access to EX-IM and OPIC financing.

                      What did Vietnam need to do?

    For Vietnam, the Administration specifically pegged 
satisfactory implementation of the Resettlement Opportunity for 
Vietnamese Returnees (ROVR) program to the waiving of the 
Jackson-Vanik amendment. During Secretary of State Madeleine 
Albright's trip to Vietnam in June 1997, she stated: ``I was 
very encouraged by commitments I received from the Vietnamese 
officials concerning the refugee resettling program. The 
official acknowledged that problems had occurred at the outset 
but promised significantly more rapid progress from here on 
out. If that progress materializes, I expect to be able to 
recommend to President Clinton that he waive the Jackson-Vanik 
provision soon. And as you know, this would clear the way for 
EX-IM Bank and a number of other programs.'' Once a new ROVR 
procedure was instituted by the Vietnamese in October 1997, 
implementation became very effective.

                   What role does Congress play now?

    Under the President's authority, the waiver goes into 
effect immediately with an executive order published in the 
Federal Register. On an annual basis, the President must submit 
to Congress by June 3rd a request to renew his authority to 
issue waivers of the Jackson-Vanik amendment in principle. 
Congress then has the opportunity to reject the overall 
authority, or to withhold it for an individual country through 
a joint resolution of disapproval which must pass both the 
House and Senate before September 1st. This year China, Vietnam 
and Belarus are on the Jackson-Vanik waiver list. If Congress 
does not act the authority is automatically renewed.

           What does this initial waiver of Jackson-Vanik do?

    1. It allows EX-IM to begin operations with U.S. companies 
doing business in Vietnam.
    2. It allows OPIC operations to begin. OPIC also requires 
the signing of a bilateral agreement specific to OPIC and a 
labor determination that Vietnam is taking steps to implement 
internationally recognized worker rights. The bilateral 
agreement and labor determination are completed.
    3. It allows the Agency for International Development (AID) 
to expand operations in Vietnam.
    4. It allows the Maritime Administration (MARAD) to begin 
project support in Vietnam.

      MFN : What the Jackson-Vanik waiver for Vietnam does not do

    The waiver does not grant Most Favored Nation Trade Status 
(MFN) to Vietnam as the Jackson-Vanik waiver is only one step 
in the MFN process. A bilateral trade agreement must first be 
negotiated and signed and then Congress must vote whether or 
not to approve the extension of MFN status to Vietnam. (While 
trade negotiations have begun, they are expected to continue 
through the rest of 1998.) This year's waiver will renew MFN 
status for China and Belarus, but not for Vietnam.
      

                                


                                                    28 January 1998

Member of Congress
United States Senate/House of Representatives
Washington, DC

    Dear Senator/Representative:

    As associations representing companies interested in Vietnam, we 
urge you to support a Presidential waiver of the Jackson-Vanik 
Amendment for Vietnam. As the attached chronology shows, bilateral 
relations between the two countries have improved since President 
Reagan first initiated the normalization process in 1987. Nevertheless, 
our two nations have yet to normalize commercial relations fully. The 
opening of the U.S. Consulate in Ho Chi Minh City and the continued 
support of Ambassador Peterson in Hanoi have been important steps in 
that direction; however, more must be done to put our companies on a 
par with foreign competitors in the country.
    To this end, the availability of U.S. government trade and 
investment agencies in the country has been one of our highest 
priorities. The lack of such programs places our companies at a severe 
disadvantage with respect to foreign competitors who enjoy a high level 
of government support for their projects in Vietnam. With the granting 
of a Jackson-Vanik waiver for Vietnam, the first obstacle to opening 
the Export-Import Bank of the United States and the Overseas Private 
Investment Corporation in Vietnam will be cleared. With financing 
assistance from these government agencies, investment and trade 
opportunities for U.S. companies will expand significantly. Only by 
proactively supporting U.S. business in Vietnam can these goals be met.
    We urge you to support the Administration's work to normalize 
commercial relations with Vietnam fully. We stand prepared to support 
these efforts.

            Sincerely,

American Chamber of Commerce, Hanoi
American Chamber of Commerce, Ho Chi Minh City
American Chamber of Commerce, Hong Kong
American Farm Bureau Federation
Asia Pacific Council of American Chambers of Commerce
Emergency Committee for American Trade
Footwear Distributors and Retailers of America
National Association of Manufacturers
National Foreign Trade Council
Pacific Basin Economic Council, US Committee
Petroleum Equipment Suppliers Association
 USA * Engage
US Chamber of Commerce
 US Council for International Business
US-Vietnam Trade Council
Value Manufacturers of America Association
 Vietnam Business Committee of the US-ASEAN Business Council
 Vietnamese Chamber of Commerce in Orange County
      

                                


                                                       23 June 1997

President William Jefferson Clinton
 The White House
1600 Pennsylvania Avenue
 Washington, DC 20500

    Dear Mr. President:

    We write to urge you to give favorable consideration to 
establishing full economic normalization with Vietnam. Secretary of 
State Madeleine Albright's upcoming trip to Vietnam presents a fresh 
opportunity to review U.S.-Vietnam relations. As companies and 
associations who are interested in trade and investment in Vietnam, we 
applaud you for lifting the trade embargo and establishing diplomatic 
relations with Vietnam in your first term. With the establishment of 
diplomatic relations in July 1995, the beginning of negotiations for a 
bi-lateral trade agreement earlier this year and the arrival of 
Ambassador Pete Peterson, we are hopeful that 1997 will see great 
progress in commercial relations.
    For immediate action, we urge that a U.S. consulate can be opened 
in Ho Chi Minh City since it is the hub of Vietnam's business activity 
with many U.S. companies and citizens based there. The establishment of 
a consulate would be of great assistance to all Americans living and 
traveling in the south.
    We also urge you to support the opening of Export-Import Bank, 
Overseas Private Investment Corporation and U.S. Trade and Development 
Agency programs in Vietnam by late summer. The availability of export 
promotion programs is a critical factor in a number of major 
procurement decisions being made by Vietnam. The inability of U.S. 
companies to utilize the Export-Import Bank or OPIC places them at a 
serious competitive disadvantage. We therefore urge the Administration 
to act immediately to waive the Jackson-Vanik amendment in preparation 
for Ex-Im Bank and OPIC to begin support for projects in Vietnam.
    The availability of export financing and the conduct of trade on 
the basis of reciprocal most-favored-nation treatment are crucial to 
the ability of U.S. companies to compete on an equal basis in this 
emerging market. Opportunities and market share in Vietnam will 
otherwise continue to be taken by our international competitors whose 
initial advantages will be difficult, if not impossible, to overcome. 
We therefore support the continuation of the trade agreement 
negotiations and hope they will continue in an expeditious manner, 
leading to meaningful market access for U.S. companies and reciprocal 
MFN status.
    We encourage the Administration, overall, to continue the process 
of economic normalization which it has already begun. We stand ready to 
be of assistance to you.

            Sincerely,

                               Companies

Ablondi, Foster, Sobin & Davidow
AIG
Airport Group International
Allied Signal
APL Limited
AMP Incorporated
Bechtel Group Inc.
Black & Decker (U.S.), Inc.
Black & Veatch
The Boeing Company
Burrit Associates Caterpillar, Inc.
The Chase Manhattan Bank
Chevron Corporation
CIGNA Corporation
Citicorp/Citibank
The Coca-Cola Company
Conoco
Corestates Bank
Craft Corporation
DeMatteis International Group
Digital Equipment
Dresser Industries
DuPont
Eastman Kodak
Ellicott International
Enron International
Eveready Battery Company
Exxon
Fluor Corporation
Foster Wheeler Energy International
The General Electric Company
The Harker Firm
Harris Corporation
IBM Corporation
IPAC Corporation
KHM Inc.
Lockheed Martin
McDermott Incorporated/Babcock & Wilcox
Mobil Inc.
Motorola
Oracle Corporation
Ormat International
Pragmatics, Inc.
Procter & Gamble
Raytheon International Inc.
Saigon Express Corp.
Samuels International Associates
Spivey International Inc.
Tampa Bay International
Tradespan International
Unisys Corporation
United Technologies
Unocal Corporation
U.S. Trade & Investment Company
Vietnam Management Initiative
Vietnam Venture Group
Vina USA Inc.
White & Case

                              Associations

Aerospace Industry Association
American Chamber of Commerce-Hanoi
American Chamber of Commerce-Ho Chi Minh City
Footwear Distributors and Retailers of America
National Association of Manufacturers
National Foreign Trade Council
Pacific Basin Economic Council-U.S. Committee
Petroleum Equipment Suppliers Association
U.S. Chamber of Commerce
U.S. Council for International Business
U.S.-Vietnam Trade Council
Value Manufacturers Association of America
Vietnam Business Committee of the U.S.-ASEAN Business Council
      

                                


Chronology of Normalization of U.S.-Vietnam Relations under Presidents 
                        Reagan, Bush and Clinton

    August 1987--Under the Reagan Administration, General John 
Vessey visits Vietnam for discussions on cooperation and to 
resolve the fate of American servicemen missing in action.
    1988--Vietnam and the U.S. begin joint MIA programs.
    April 1991--President Bush's Administration presents Hanoi 
with ``roadmap'' plan for phased normalization of ties. Both 
sides agree to open U.S. government office in Hanoi.
    October 1991--Vietnam supports U.N. peace plan for 
Cambodia. Secretary of State James Baker says Washington is 
ready to take steps toward normalizing relations with Hanoi.
    December 1991--Bush Administration lifts ban on organized 
U.S. travel to Vietnam.
    April 1992--Bush Administration eases trade embargo by 
allowing commercial sales to Vietnam for basic human needs and 
allows establishment of telecommunications links with Vietnam.
    July 2, 1993--President Clinton clears way for resumption 
of international lending to Vietnam.
    Jan. 27, 1994--Senate vote urging Clinton to lift embargo.
    Feb. 3, 1994--Clinton lifts trade embargo.
    Jan. 28, 1995--United States and Vietnam sign agreements 
settling old property claims and establishing liaison offices 
in each other's capitals.
    May 15, 1995--Vietnam gives U.S. presidential delegation 
batch of documents on missing Americans, later hailed by 
Pentagon as most detailed and informative of their kind.
    June 1995--Veterans of Foreign Wars announces support of 
U.S. normalization of diplomatic relations with Vietnam.
    July 11, 1995--Clinton announces ``normalization of 
relations'' with Vietnam.
    Aug. 6, 1995--Secretary of State Warren Christopher visits 
Hanoi to open U.S. Embassy.
    Sept. 11, 1995--Congress votes to impose Presidential 
certification of Vietnam's cooperation in POW/MIA activities 
requirement on expansion of U.S. Embassy funding.
    April 1996--U.S. Department of Commerce Foreign Commercial 
Service office opens.
    May 1996--U.S. presents Vietnam with trade agreement 
blueprint.
    May 23, 1996--Clinton Administration announces nomination 
of Congressman Pete Peterson, former Vietnam War veteran and 
prisoner of way, as U.S. Ambassador to Vietnam.
    April 7, 1997--Vietnam agrees to repay debts of $146 
million of the former government of South Vietnam. The Debt 
Accord was signed by U.S. Treasury Secretary Robert Rubin in 
Hanoi.
    April 10, 1997--Senate confirms Congressman Pete Peterson 
as ambassador.
    April 1997--U.S. presents Vietnam with trade agreement 
draft.
    April 16, 1997--Vietnam agrees to sign a copyright 
agreement.
    May 9, 1997--Peterson takes up post as ambassador in Hanoi.
    May 9, 1997--Vietnam's ambassador to the United States, Le 
Van Bang, arrives to take up post.
    June 1997--Secretary of State Albright visits Vietnam to 
open U.S. consulate in Ho Chi Minh City and promises a waiver 
of Jackson-Vanik with progress on ROVR emigration program.
    June 1997--The U.S. Trade and Development Agency opens for 
Vietnam.
    October 1997--Vietnam institutes new processing procedure 
in ROVR program significantly improving progress.
    November 1997--Vietnam opens consulate in San Francisco, 
CA.
    March 10, 1998--President Clinton waives the Jackson-Vanik 
Amendment for Vietnam paving the way for EXIM and OPIC 
operations.
    March 19, 1998--OPIC and Ambassador Le Van Bang sign the 
OPIC bilateral for Vietnam in Washington.
    March 26, 1998--Minister of Planning & Investment Tran Xuan 
Gia and Ambassador Pete Peterson finalize the signing of the 
OPIC bilateral for Vietnam.
    June 3, 1998--President Clinton submits to Congress 
extension of the Jackson-Vanik waiver authority, which includes 
a waiver for Vietnam.
      

                                


    Chairman Crane. Thank you, Ms. Foote. Perfect timing. 
[Laughter]
    And our next witness is Greig Craft.

 STATEMENT OF GREIG CRAFT, VICE CHAIRMAN, ASIA PACIFIC COUNCIL 
              OF AMERICAN CHAMBERS, HANOI, VIETNAM

    Mr. Craft. As vice chairman of APCAC, the Asia Pacific 
Council of American Chambers, I thank you for the opportunity 
to share our position with respect to Vietnam, as well as to 
provide firsthand observations as a result of my 9 years of 
residency in Hanoi. I would like to reemphasize the points made 
by our colleagues that all businessmen in Vietnam share the 
concerns of Americans for the fullest possible accounting of 
MIA and also with respect to human rights.
    Twenty-five years after the end of hostilities, Vietnam 
still conjures up an image of war, not a nation of young people 
and families in the minds of far too many Americans. The 
reality is Vietnam is eager to embrace America and a market-
driven approach to business. Most Vietnamese were born after 
1975 and as such have no firsthand recollection of the war. 
They have a difficult time understanding America's seeming 
unwillingness to put the war behind us. The gradual opening of 
this society over the past 10 years has been directly 
correlated to improvements in the overall relationship based on 
the principle of mutual benefit.
    Members of APCAP represent more than 40,000 business 
executives and more than 6,600 companies in 18 countries 
including Vietnam. In our experience, our presence in these 
countries has helped foster openness and reform. It's our 
position that Vietnam with its young and well-educated 
population offers significant opportunities to help sustain 
this economic growth, provided our companies remain competitive 
there through access to programs such as Ex-Im, OPIC and TDA.
    Vietnam has the second largest population in Southeast Asia 
and the opportunities for United States manufacturers are 
immense. Well-known brands such as Coca-Cola, Pepsi, Kodak, 
Proctor and Gamble and others already are market leaders in 
many instances. Access to television programming such as MTV, 
CNN, even NBC, only adds to this consumer brand awareness and 
provides a window to our society and a different way of life 
for its young people.
    And Vietnam's strategic location on China's southern border 
makes it of pivotal political importance to the United States 
as well. Its dynamism is further reflected in the recent 
selection of younger leaders to the position of Prime Minister, 
President, and the Chairman of the National Assembly. All of 
these gentlemen are associated with reform. It's interesting to 
note that their National Assembly has a higher percentage of 
women than even our own House of Representatives.
    Vietnam's desire to join the world community is evidenced 
by its entry into many numerous international organizations. 
However, as a part of its globalization initiative, Vietnam 
wants and needs to fully normalize relations with the United 
States. In our opinion, it's in our national interest to 
maintain a fully normalized, economic and political 
relationship with Vietnam. If further developed, it will 
provide stability and leadership in the region, something that 
is certainly urgently needed in this current situation.
    It's interesting to note that ordinary citizens show much 
goodwill toward Americans living in Vietnam and there are many 
humanitarian programs being carried out by the people of both 
countries. Tens of thousands of Vietnamese-Americans who you 
will not hear from today, have returned to Vietnam to work and 
visit. Many are former boat people, or the children of boat 
people. They're eager and enthusiastic to contribute to 
Vietnam's modernization. It's important that once and for all 
we ease the pain and divisiveness that have troubled the 
national psyche of America for 25 years. It's time to continue 
building the relationship with Vietnam and time to move on to a 
new era of peace and forgiveness. Constructive engagement by 
the U.S. Government toward Vietnam is a policy which we should 
continue. American businesses are certainly attempting to do 
this. This type of engagement has been greatly responsible for 
the gradual opening up of the country which has taken place 
since 1994.
    For example, since 1995 our company, Craft Corporation, has 
led the development of Vietnam's first direct reduced iron 
plant. Our $300 million project will be the first American 
involvement in Vietnam's emerging steel industry. It will 
create a valuable feedstock required even by our own steel 
producers here in the United States. Our American consortium 
including partners Raytheon, Enron and Midrex will utilize U.S. 
technology, U.S. services and U.S. equipment in the 
implementation of this important infrastructure project. We 
were awarded the first TDA grant to Vietnam last September and 
have recently submitted an application to OPIC for financing of 
$150 million. Discussions with Ex-Im regarding additional 
financing and insurance are also underway.
    The denial of the programs available with the Jackson-Vanik 
extension will force Vietnam to go to other countries for their 
investment, raw materials and trade. The target of the 
naysayers therefore will not be Vietnam, but United States 
companies, United States workers, indeed the United States 
economy. Denial of these programs becomes a form of unilateral 
sanctions, which in the end hurts everyone, but principally 
America. This should not be our policy. Denying Jackson-Vanik, 
we believe, is the wrong action at the wrong time. Thank you 
for considering our views.
    [The prepared statement follows:]

Statement of Greig Craft, Vice Chairman, Asia Pacific Council of 
American Chambers, Hanoi, Vietnam

    Twenty five years after the end of hostilities, Vietnam 
still conjures up an image of `war'--not a nation of young 
people and families--in the minds of far too many Americans. A 
significant number of our fellow citizens still think of 
Vietnam as a small insignificant country ``somewhere in Asia''; 
yet nothing could be further from the truth. Vietnam is a young 
and vibrant country, eager to embrace America and a market 
driven approach to business. My name is Greig Craft. In my 
capacity as Vice Chairman of APCAC (the Asia Pacific Council of 
American Chambers) I am honored to be here today to share with 
you our position with respect to Vietnam, as well as to provide 
to you first hand observations as a result of my 9 years of 
residency in Hanoi.
    The members of APCAC represent more than 40,000 business 
men and women, and more than 6,600 companies in 18 countries. 
Our membership manages trade volumes in excess of $200 billion 
and investments of over $50 billion in the region. We serve 
America's national interests by fueling the growth of American 
jobs and exports which have contributed so significantly to 
America's economic success in recent years. It is our position 
that Vietnam, with its young and well educated population of 
nearly 78 million, offers significant opportunities to help 
sustain this economic growth, provided American companies can 
remain competitive there through access to essential US 
government programs such as EXIM, OPIC and TDA. American 
companies operating in Vietnam have invested $1.2 billion to 
date, with an additional $2 billion in advanced stages of 
development. This is impressive, coming after only 4 years 
since the President announced ``normalization of relations'' 
with Vietnam. But this could increase substantially if full 
normalization was in place.
    In spite of the obstacles and inherent difficulties of 
undertaking business in a developing country like Vietnam, 
there has been significant and notable progress in recent 
years. Vietnam has the second largest population in SE Asia and 
the opportunities for US manufacturers are immense. Well known 
brands such as Coca Cola, Pepsi, Kodak, Proctor & Gamble and 
others are already market leaders in many instances. Access to 
television programming such as MTV, CNN and NBC only adds to 
this consumer brand awareness. Its strategic location on 
China's southern border makes it of pivotal political 
importance to the United States as well. Vietnam's dynamism is 
further reflected in the recent selection of younger leaders to 
the position of Prime Minister, President, and the Chairman of 
the National Assembly. All are associated with reform. It is 
interesting to note that their National Assembly has a higher 
percentage of women than even our own House of Representatives.
    Vietnam's desire to join the world community is evidenced 
by it's recent entry into ASEAN, preparations to join the WTO 
and the upcoming November entry into APEC. However, as a part 
of its globalization initiative Vietnam wants and needs to 
fully normalize relations with the United States. It is in the 
national interest of the United States to maintain a fully 
normalized economic and political relationship with Vietnam in 
our opinion. If further developed, it will not only help 
sustain economic growth in America, but equally important, will 
provide stability and leadership in the region.
    Seventy percent of Vietnam's population are under the age 
of 25. Most, born after 1975, have no first hand knowledge or 
recollection of the war, and indeed, have a difficult time 
understanding America's seeming unwillingness to put the war 
behind us. We in the business community can help further this 
process, and consequent healing, but only if we have the 
ability to remain engaged in Vietnam on a day to day basis. 
This means we must be able to compete equally with other 
foreign companies who enjoy concessionary financing and support 
from their respective governments. Continuation of the Jackson-
Vanik waiver is therefore essential to maintain continued 
American involvement in Vietnam, for the benefit of American 
enterprise.
    Since 1995 our company, Craft Corporation, have led the 
development of Vietnam's first Direct Reduced Iron plant. Our 
$300 million project will be the first American involvement in 
Vietnam's emerging steel industry. It will create a valuable 
feedstock required even by our own steel producers in the US. 
Our American consortium, including partners Raytheon, Enron and 
Midrex, will utilize US technology, US services, and US 
equipment in the implementation of this strategically important 
project. We were awarded the first TDA grant to Vietnam last 
September and have recently submitted an application to OPIC 
for financing of $150 million. Advanced discussions with EXIM 
regarding additional financing and insurance are also underway. 
However, without access to these government programs there 
would be no alternative but to turn to foreign financial and 
equipment sources.
    Despite our turbulent past, the United States and Vietnam 
have made significant progress toward normalization of 
relations. Ordinary citizens show much goodwill toward 
Americans living in Vietnam and there are many humanitarian 
programs being carried out by people of both countries. Tens of 
thousands of Vietnamese-Americans have returned to Vietnam to 
visit and work. Many are former boat people, or the children of 
boat people. They are eager and enthusiastic to contribute to 
Vietnam's modernization. Taking advantage of opportunities in 
Vietnam will help sustain, and indeed, increase, job 
opportunities for American workers involved in the manufacture 
and export of American products to Asia. And equally important, 
it will help once and for all to ease the pain and divisiveness 
that have troubled the national psyche of America for 25 years. 
It is time to continue building a new relationship with 
Vietnam, and time to move on to a new era of peace and 
forgiveness. Constructive engagement by the US Government 
towards Vietnam is a policy which should continue in the 
national interest.
    But denial of the programs available with the Jackson-Vanik 
extension will force Vietnam to go to other countries for their 
investment, raw materials and trade. The target of the 
naysayers, therefore, will not be Vietnam, but US companies, 
workers, indeed the US economy. Denial of these programs 
becomes a form of unilateral sanctions which in the end hurts 
everyone, both Vietnamese and American. This should not be our 
policy.
    Denying Jackson-Vanik is the wrong action at the wrong 
time.
    Thank you for considering our views.

Greig Craft is testifying on behalf of APCAC (the Asia Pacific 
Council of American Chambers). He is Managing Director of Craft 
Corporation. 

[GRAPHIC] [TIFF OMITTED] T8852.001

[GRAPHIC] [TIFF OMITTED] T8852.007

1[GRAPHIC] [TIFF OMITTED] T8852.008

      

                                


    Chairman Crane. Thank you.
    And our final witness is Mr. Lalonde.

  STATEMENT OF BRADLEY LALONDE, VICE PRESIDENT AND CORPORATE 
               COUNTRY OFFICER, VIETNAM CITIBANK

    Mr. Lalonde. Thank you, Mr. Chairman, for the opportunity 
to testify today. My comments will echo those of my colleagues 
here and those made earlier this morning for the most part.
    Citibank has been in Vietnam now since 1993 when we opened 
a representative office in Hanoi after the easing of the 
restrictions by President Bush and shortly after the lifting of 
the embargo in 1994, we opened a branch in Hanoi, it was our 
first branch and just a few months ago we reopened our Ho Chi 
Minh City branch being the very first American bank to do that 
in the country. And in that 3-year period of time we have 
become the largest foreign bank in the country, in a highly 
competitive banking industry. There are 26 foreign bank 
branches. There are only two American banks: Citibank and Bank 
of America, and we are struggling. We got off to a slow start 
because of the embargo but obviously we've been making up for 
that in a short period of time.
    Citibank played a leading role in the American business 
community and has fully encouraged complete commercial 
normalization. We've also embraced the broader issues, the 
front-burner issues as Ambassador Peterson put it, of 
supporting the MIA-POW effort. We've never hesitated to 
emphasize to the Vietnamese authorities that this is the key to 
the relationship and we've always supported this because we 
recognize that it is the key for obvious reasons. I think the 
business community has played a role in progressing that and 
the fact that we are doing business in the country bringing 
technology, bringing capital support, with their continued 
efforts to cooperate with us and in the 4 years that I've been 
in Vietnam I don't have any anecdotal evidence that they're not 
fully cooperating.
    I've also served as chairman of Amcham for several years 
and I've been on the board of the American Chamber in Hanoi for 
4 years and I can echo the sentiments of my colleagues that 
Vietnam is a market of importance and great potential, and that 
is why we're there and many of our customers are there as well. 
It's true that American firms have been handicapped by 
inability to access government-backed financing and insurance 
from the Export, Ex-Im Bank and the OPIC. And as a banker who 
has been doing business in Vietnam for the past 4 years, I can 
say that we're at a significant disadvantage to our 
competitors. American firms simply are not competitive in 
Vietnam without access to Ex-Im Bank and OPIC. Countries such 
as Japan, Taiwan, Korea, Singapore and France have dedicated 
huge amounts of government funds toward developing market share 
in Vietnam.
    To be competitive, United States companies need to access 
government financing, and to get that financing they are being 
forced to go to third countries. As a condition of securing 
that financing they're also required to source their products 
from those countries. That means they are buying Caterpillar 
tractors or GE turbines. You heard mention they found a 60-
year-old Caterpillar. We would like to see some newer equipment 
in the country and that's where Ex-Im Bank would certainly come 
in handy. Yes, very much so. And that means jobs that would be 
created here to build those products, rather than going to 
Tokyo and Paris, and that's really the point of the Jackson-
Vanik waiver.
    Since the President issued his waiver of Jackson-Vanik 
earlier this year, we have made significant strides toward 
providing United States companies with financing support in 
Vietnam. Both OPIC and Ex-Im have completed steps needed to 
begin operations, and are both open for business. In short, 
taking away that tool now is akin to transferring jobs to our 
major competitors. It would be a terrible blow to American 
companies and American workers, and I think it's time that 
somebody stands up for American workers in all of this, too. 
And it is part of the broader agenda that is coming to the 
fore.
    Mr. Chairman, the hearing notice for the meeting asked 
witnesses to focus on the potential impact on Vietnam and the 
United States of a termination of Vietnam's waiver. Well, the 
answer is that a termination would be devastating. Despite many 
fits and starts, we've made great progress in our bilateral 
relationship in a very short period of time, and that the 
Vietnamese have worked diligently to address the concerns that 
have been raised during this process.
    As Ambassador Peterson told you earlier, they're working in 
good faith to cooperate with us on MIA issues and many others. 
And I don't have any doubt in my mind about that.
    They've also agreed to pay the old debts, in fact inherited 
from the Government of South Vietnam, as a gesture of, I would 
say, more than good faith. They've also agreed to, in Secretary 
Albright's visit, the agreement on copyright protection. And 
there are other examples of cooperation.
    Taking away the Jackson-Vanik waiver now, you know, would 
put all of this progress in jeopardy. And who knows how it 
might also impact the MIA-POW search and human rights of 
religious groups, and so on and so forth.
    On a final but personal note, I'd like to mention that 
Citibank reopened its Ho Chi Minh City branch after 23 years. 
And the guy who opened our branch in Ho Chi Minh City is the 
guy who closed our branch in Saigon in April 1975, and that he 
has come full circle. He's an American of Vietnamese descent, 
and he's back to take part in rebuilding our business in a new 
era. And I think that very much says what's happening today.
    And we also put our sign on our building in Ho Chi Minh 
City, at the top of the building. And to see the look of pride 
in the faces of not only our staff, but in the man on the 
street, when they see Citibank's name, it says something. And 
they feel that--and I see this--that they're reassured of 
American business presence because it's symbolic of this new 
era and this change that's taking place. And that's why I feel 
so strongly about what we're doing is the right thing, and I 
would encourage you to continue with this and reject this--I 
forget the resolution number, but--120.
    [The prepared statement follows:]

Statement of Bradley Lalonde, Vice President and Corporate Country 
Officer, Vietnam Citibank

    Mr. Chairman, members of the Subcommittee on trade, my name 
is Bradley Lalonde, and I am Vice President and Corporate 
Country Officer for Citibank in Vietnam. Thank you very much 
for inviting me to testify today regarding U.S.-Vietnam trade 
relations and, specifically, the proposed resolution of 
disapproval regarding renewal of the President's waiver of the 
Jackson-Vanik amendment with regard to Vietnam.
    Citibank has been operating in Vietnam since 1993 when 
President Bush eased trade restrictions and allowed U.S. 
companies to establish representative offices. Shortly after 
President Clinton lifted the trade embargo, Citibank applied 
for a branch license in Hanoi and opened a branch in January 
1995. For the last three years, Citibank has provided a wide 
range of banking services primarily to our multinational and 
top tier local corporate clients. Our services range from trade 
and investment finance to electronic banking, foreign exchange 
and project finance advisory. In less than three years, 
Citibank has become the largest foreign bank in the country. 
Citibank has also played a leading role in the American 
business community and fully encouraged complete commercial 
normalization now for many years. We are convinced that our 
efforts to improve commercial relations has helped the 
Administration make progress on other goals, as well, such as 
the POW/MIA priority. Personally, I have served on the Board of 
Governors of the American Chamber of Commerce for over four 
years and two of those years, I served as chairman.
    Vietnam holds tremendous potential as a market for U.S. 
products and services. With a population of 75 million people--
more than half under the age of 25--and with tremendous needs 
in infrastructure and human development, it is a country that 
deserves our attention.
    Although tremendous opportunities exist for firms seeking 
to do business in Vietnam, American companies have been 
handicapped when compared to their competitors from other 
countries as a result of several factors.
    First, we got a late start. Because the United States did 
not have diplomatic relations with Vietnam until 1994, we 
started at a significant disadvantage as compared to companies 
from other parts of the world who had been there for years.
    Second, the lack of a bilateral trade agreement and most-
favored-nation status for Vietnam puts U.S. firms at a 
disadvantage in investing in Vietnam, moving goods in and out 
of the country, and leaves us without strong protections for 
intellectual property. Negotiations about the structure of a 
trade agreement are underway, and our negotiators are doing an 
excellent job of moving the talks forward. In fact, we expect 
them to return to Hanoi later this month for the next round of 
discussions. There is, however, still a long way to go and once 
the agreement is concluded, it will still need congressional 
approval. I urge you to move that agreement quickly once it 
arrives here.
    Third, American firms have been handicapped by their 
inability to access government-backed financing and insurance 
from the Export-Import Bank and the Overseas Private Investment 
Corporation. As a banker who has been doing business in Vietnam 
for the past four years trying to support American exports and 
investment, I can tell you that is a significant disadvantage. 
American firms simply are not competitive in Vietnam without 
access to the Eximbank and OPIC. Countries such as Japan, 
Taiwan, Korea, Singapore and France have dedicated huge amounts 
of government funds toward developing market share in Vietnam. 
To be competitive, U.S. companies need access to government 
financing, and to get that financing they are being forced to 
go to third countries. As a condition of securing that 
financing, they are required to source their products in those 
countries. That means they aren't buying Caterpillar tractors, 
or GE turbines, or other products made in the United States. 
And that means the jobs that would have been created here to 
build those products will instead go to Tokyo and Paris.
    Since the President issued his waiver of Jackson-Vanik 
earlier this year, we have made significant strides toward 
providing U.S. companies with financing support in Vietnam. 
Both OPIC and ExIm have completed the steps needed to begin 
operations and both are open for business. In short, taking 
that tool away now is akin to transferring jobs to our major 
competitors. It would be a terrible blow to American companies 
and American workers.
    Mr. Chairman, the hearing notice for this meeting asked 
witnesses to focus on the ``potential impact on Vietnam and the 
United States of a termination of Vietnam's waiver.'' The 
answer to that question is that a termination would be 
devastating. Despite many fits and starts, we have made great 
progress in our bilateral relationship in the few years since 
President Clinton normalized relations. The Vietnamese have 
worked diligently to address the many concerns that we have 
raised during this process. As Ambassador Peterson told you 
earlier, they are working in good faith to cooperate with us on 
MIA issues. They signed the agreement to resolve the issue of 
debts owed by the former Government of South Vietnam. And they 
signed an initial agreement on copyright protection during 
Secretary of State Albright's visit last year. They are making 
a real attempt to work with us. I have seen many visitors come 
and go to Vietnam over the last four years and the overwhelming 
impression that visitors get is that not only is there a real 
cooperative relationship in progress to between Vietnam and the 
United States, but that many Vietnamese have a strong 
preference for American products, services and people.
    Taking away the Jackson-Vanik waiver would put all of this 
progress in jeopardy and would undercut the efforts of those 
within the Vietnamese government who are pushing for more 
openness, more contact with the outside world and more 
liberalization in economic affairs. It would likely have a 
negative impact on their cooperation on MIA issues; and it 
certainly would have a negative impact on the ongoing trade 
talks. I would note that the first substantive progress made in 
the talks came in April--just after the President issued his 
Jackson-Vanik waiver. I believe that was an example of an 
expression of good faith in response to our show of good faith. 
I am willing to bet that a show of bad faith on our part--such 
as withdrawing the Jackson Vanik waiver--would result in a 
similar show on their part.
    Such backsliding on these issues is not in Vietnam's 
interest and it is not in ours. Not only will it harm our 
economic interests, but I would also argue it would harm our 
national security interests, as well, in a very critical area 
of the world.
    Mr. Chairman and members of the Committee, the decision 
that Congress makes on this issue will have significant and 
lasting impact on our bilateral relations with Vietnam. As a 
representative of Citibank, I can tell you that terminating the 
waiver will mean that U.S. companies will lose business to 
their competitors from other countries. As an American who has 
lived there for 4 years, I can tell you it will lessen the 
impact that the United States has in a large, strategically-
located emerging country. I urge you to reject H. J. Res. 120 
and allow the President's waiver of the Jackson-Vanik Amendment 
to stand.
    One final, but personal note. As you may know, Citibank 
reopened its Ho Chi Minh branch in January of this year, about 
23 years after we closed our Saigon branch. Our branch manager 
is the same person that closed the Saigon branch in April 1975. 
He is, however, back today as an American of Vietnamese 
descent, working to rebuild our business in a new era. When 
Citibank raised its sign to the top of one of the most modern 
and new business towers, I could see the smiles of pride, not 
just on the faces of our staff, but also on the faces of many 
people on the street. I get the impression that our presence in 
this dynamic city also gives hope and promise to many people 
who are assured by an American business presence and encouraged 
to continue to embrace market reform and greater openness. We 
should not miss the opportunity before us today. It is real and 
it is progressing. I hope you get a chance to visit this 
dynamic country and experience firsthand, what I have been 
trying to convey to you in a few words.
    Thank you.
      

                                


    Chairman Crane. Well, folks, let me express appreciation to 
all of you for coming and testifying.
    We've got two more votes coming up and so the Subcommittee 
will now stand in recess subject to the call of the Chair. 
Thank you.
    [Recess.]
    Chairman Crane. Will everybody please take seats and let me 
call up our next panel: John Moon, commander-in-chief, Veterans 
of Foreign Wars of the United States; John F. Sommer, Jr., 
executive director of the American Legion; George Duggins, 
national president, Vietnam Veterans of American; and Thomas 
Burch, Jr., chairman, National Vietnam & Gulf War Veterans 
Coalition.
    The first witness, John Moon's testimony will be presented 
by Bruce Harder, director of national security and foreign 
affairs.
    Now, wait a second, are we missing someone? Mr. Sommer, I 
know, had a potential problem, but where's Mr. Burch? Oh, OK, 
well, no it's no big deal, I'm just curious as to whether he's 
going to make it. All right, well then, we will proceed.
    Let's see, Mr. Harder first, and then Mr. Duggins.

  STATEMENT OF JOHN E. MOON, COMMANDER-IN-CHIEF, VETERANS OF 
FOREIGN WARS OF THE UNITED STATES AS PRESENTED BY BRUCE HARDER, 
DIRECTOR OF NATIONAL SECURITY AND FOREIGN AFFAIRS, VETERANS OF 
               FOREIGN WARS OF THE UNITED STATES

    Mr. Harder. OK, sir, as advertised, I am Bruce Harder. We 
have our oral statement and our written statement are the same, 
and I can get it in under 5 minutes, so I'll proceed, if that's 
OK.
    Chairman Crane. All right.
    Mr. Harder. The Veterans of Foreign Wars of the United 
States is pleased to be able to present testimony at the 
hearing today. As mentioned, I am standing in for commander-in-
chief John Moon who can't make it today. We understand that the 
purpose of today's hearing is to evaluate overall United States 
trade relations with Vietnam, and to consider President 
Clinton's renewal of Vietnam's waiver under the Jackson-Vanik 
waiver to the Trade Act of 1974.
    My testimony today is limited to present the VFW's views on 
the impact of the President's renewal of Vietnam's waiver on 
the prisoner of war and missing in action issue in Southeast 
Asia. The POW-MIA issue has been, and remains, a priority issue 
with the Veterans of Foreign Wars.
    The VFW has been making trips to Vietnam since July 1991. 
On our first trip, VFW officials accompanied Congressman Lane 
Evans of Illinois and representatives of other veterans' 
services organizations to visit Hanoi, Hue City, Ho Chi Minh 
City. Since that first visit, the Veterans of Foreign Wars has 
made regular annual visits back to Southeast Asia, and on each 
trip, our mission has been the same: It is to urge both the 
U.S. Government and foreign government officials, and other 
veterans' organizations, to diligently work toward resolving 
the cases of Americans still missing from the war in Southeast 
Asia.
    The VFW sends national officers to Southeast Asia each year 
to remind all involved that the mission is not yet completed. 
We will not rest until the mission is accomplished, and our 
missing comrades are accounted for. We will not forget those 
who have been left behind, and we want to bring them home to 
their families and their country.
    Most recently, in March 1998, three of our national 
officers, including myself, traveled to Southeast Asia to 
demonstrate our continuing commitment to the fullest possible 
accounting process for missing Americans from the war. We were 
there to express our views and to listen to key U.S. and 
foreign government officials, and foreign veterans' 
organizations that we consulted.
    Also, we went to visit the Joint Task Force for Full 
Accounting detachments deployed at field recovery sites in 
remote areas throughout the region. We were able to do this in 
both Laos and Vietnam. We were there to follow up on reports 
received and to collect facts for ourselves. We found the 
Americans deployed under the command and control of Joint Task 
Force for Full Accounting to be highly motivated, dedicated, 
focused on the mission, and inspiring to observe.
    Our trips to Vietnam have included trips both before and 
after the trade embargo was lifted and diplomatic relations 
were established. And since the establishment of diplomatic 
relations, we have not seen any diminishing of United States or 
Vietnamese efforts to account for our missing men.
    On our most recent visit to Vietnam and Laos, we saw no 
evidence that current U.S. Government policies on trade were 
resulting in any negative impact on the accounting process for 
missing in action. On the contrary, we believe that current 
United States trade policies have resulted in both gradual 
improvements in United States-Vietnamese relations in general, 
and proportional improvements in the effort to account for 
Americans, in particular.
    A few positive examples we saw are better overall United 
States-Vietnamese cooperation, the establishment of the joint 
document center in Hanoi, the creation of a Vietnamese 
unilateral archival research programs which seeks to develop 
new information on specific loss incidents, the Vietnamese 
Government publicizing activities related to missing Americans. 
If there was no diminishing of the fullest possible accounting 
effort after the lifting of the embargo and the establishment 
of diplomatic relations, it suggests there will be no 
diminishing or decreasing of effort now that the Jackson-Vanik 
restrictions have been lifted.
    Based on our observations and conversations we had with 
Joint Task Force for accounting personnel and other U.S. 
Government officials during our visit to Vietnam, we believe 
that current trade relations with Vietnam have helped rather 
than hindered the accounting process for missing Americans. 
Also, if we can reach our goal of the fullest possible 
accounting by improving or expanding United States-Vietnamese 
trade relations, then we ought to do so.
    In conclusion, in the past, the United States has had most-
favored-nation trade status with a number of Communist 
countries, the most notable relationship is the one we have 
with the People's Republic of China. The PRC was a former enemy 
during the Korean war, and has not yet fully cooperated on the 
accounting of our missing men from that conflict. Our view is 
that Vietnam's current cooperation effort on the POW-MIA issue 
should serve as a model for the kind of, and quantity--quality, 
rather, of support we hope to achieve from China. And, 
similarly, the United States-China trade relationship should be 
a model for our relationship with Vietnam.
    Finally, our goal is to achieve the fullest possible 
accounting of Americans missing from the war in Southeast Asia, 
as well as all missing Americans from our Nation's past wars 
and conflicts.
    Mr. Chairman and Members of the Subcommittee, thank you for 
this opportunity to present the views of the Veterans of 
Foreign Wars of the United States on this issue of United 
States-Vietnam trade relations, and I'll be happy to answer any 
questions you might have.
    [The prepared statement follows:]

Statement of John E. Moon, Commander-in-Chief, Veterans of Foreign Wars 
of the United States

    Mr. Chairman and Members of the Subcommittee:
    The Veterans of Foreign Wars of the United States is 
pleased to be able to present testimony at this hearing today. 
I am John E. Moon, Commander-in-Chief of the Veterans of 
Foreign Wars of the United States.
    We understand that the purpose of today's hearing is to 
evaluate overall U.S. trade relations with Vietnam and to 
consider President Clinton's renewal of Vietnam's waiver under 
the Jackson-Vanik Amendment to the Trade Act of 1974.
    My testimony today is limited to presenting the VFW's views 
on the impact of the President's renewal of Vietnam's waiver 
under the Jackson-Vanik Amendment to the Trade Act of 1974 on 
the Prisoner of War (POW) and Missing in Action (MIA) issue in 
Southeast Asia. The POW/MIA issue has been, and remains a 
priority issue with the Veterans of Foreign Wars.
    The VFW has been making trips to Vietnam since July 1991. 
On our first trip VFW officials accompanied Congressman Lane 
Evans of Illinois and representatives of other Veterans Service 
Organizations to visit Hanoi, Hue City, and Ho Chi Minh City. 
Since that first visit, the VFW has made regular annual visits 
back to Southeast Asia. On each trip, our mission has been the 
same. It is to urge both U.S. Government and foreign government 
officials and other veterans' organizations to diligently work 
toward resolving the cases of Americans missing from the war in 
Southeast Asia. The VFW sends national officers to Southeast 
Asia each year to help remind all involved that the mission is 
not yet completed. We will not rest until the mission is 
accomplished and our missing comrades are accounted for. We 
will not forget those who were left behind. We want to bring 
them home to their families and their country.
    Most recently, in March 1998, three of our national 
officers traveled to Southeast Asia to demonstrate our 
continuing commitment to the ``fullest possible accounting'' 
process for Missing Americans from the war. We went there to 
express our views and listen to key U.S. and foreign government 
officials and foreign veterans' organizations. Also, we went to 
visit Joint Task Force-Full Accounting Detachments deployed at 
field recovery sites in remote areas throughout the region, 
follow up on reports received and collect facts for ourselves. 
We found the Americans deployed under the command and control 
of Joint Task Force-Full Accounting to be highly motivated, 
dedicated, focused on the mission and inspiring to observe.
    Our trips to Vietnam have occurred both before and after 
the trade embargo was lifted and diplomatic relations were 
established. Since the establishment of diplomatic relations, 
we have not seen any diminution of U.S. or Vietnamese efforts 
to account for our missing men. On our most recent visit to 
Vietnam and Laos, we saw no evidence that current U.S. 
government policies on trade were resulting in any negative 
impact on the MIA accounting process.
    On the contrary, we believe that current U.S. trade 
policies have resulted in both gradual improvements in U.S.-
Vietnamese relations in general and proportional improvements 
in the effort to account for missing Americans in particular. A 
few positive examples are: better overall U.S.-Vietnamese 
cooperation; the establishment of a Joint Document Center in 
Hanoi; creation of a Vietnamese unilateral archival research 
program which seeks to develop new information on specific loss 
incidents; cooperation on Trilateral Recovery Operations with 
the U.S. and Laos: and, the Vietnamese government publicizing 
activities related to missing Americans.
    If there was no diminution of the ``fullest possible 
accounting'' effort after the lifting of the embargo and 
establishment of diplomatic relations, it strongly suggests 
there will be no diminution of effort now that the Jackson-
Vanik restrictions have been lifted. Based upon our 
observations and conversations we had with JTF-Full Accounting 
personnel and other U.S. government officials during our visit 
to Vietnam, we believe that current trade relations with 
Vietnam have helped rather than hinder the accounting process 
for missing Americans. Also, if we can reach our goal of the 
``fullest possible accounting'' by improving or expanding U.S.-
Vietnamese trade relations, then we ought to do so.
    In conclusion, history reveals that the United States has 
maintained ``most favored nation'' trade status with a number 
of communist countries. The most notable of these trade 
relationships is with the People's Republic of China (PRC). The 
PRC was a former enemy during the Korean War and has not yet 
fully cooperated on the accounting of our missing men from that 
conflict. Our view is that Vietnam's current cooperation and 
effort on the POW/MIA issue should serve as a model for the 
kind and quality of support we hope to achieve from China. 
Similarly, the U.S.-China trade relationship should be a model 
for our relationship with Vietnam.
    Finally, our goal is to achieve the fullest possible 
accounting of Americans missing from the war in Southeast Asia 
as well as all Americans missing from all our nation's wars and 
conflicts.
    Mr. Chairman and Members of the Subcommittee, thank you for 
this opportunity to present the views of the Veterans of 
Foreign Wars of the United States on the issue of U.S.-Vietnam 
Trade Relations. I will be happy to answer any questions you 
may have.
      

                                


    Chairman Crane. Thank you, Mr. Harder.
    Mr. Duggins.

  STATEMENT OF GEORGE C. DUGGINS, NATIONAL PRESIDENT, VIETNAM 
                      VETERANS OF AMERICA

    Mr. Duggins. Thank you very much, Mr. Chairman. I ask the 
Subcommittee to bear with me, I just returned from New Zealand 
and the change in climate has given me a horrific head cold, so 
I'm going to give it my best shot.
    Chairman Crane. You mean this chilly weather has given you 
a cold? [Laughter.]
    Mr. Duggins. This chilly weather. Mr. Chairman and Members 
of the Subcommittee, Vietnam Veterans of America appreciate the 
opportunity to present our views on trade relations between the 
United States and Vietnam. VVA is adamantly opposed to the 
future normalization of trade relations with Vietnam at this 
time, and we urge Congress to disapprove the President's 
Jackson-Vanik waiver determination.
    VVA is the only Congress-chartered national Vietnam 
veterans' organization exclusively dedicated to Vietnam-era 
veterans and their families and supporters. As you can expect, 
the issue of United States-Vietnam trade relations is one of 
the great, serious concerns of our members.
    VVA recognizes that the Jackson-Vanik amendment also deals 
with human rights and freedom of immigration issues. While 
these are very important matters to Congress to consider, these 
are issues outside of the purview of our organizational 
mandate. VVA strongly feels that the Jackson-Vanik is a tool 
available to the U.S. Government in seeking cooperation from 
the Vietnamese on the POW-MIA issue.
    VVA views on United States-Vietnamese trade relations is 
not an attempt to punish our former combatants. Let me say that 
again: VVA's views on United States-Vietnamese trade relations 
is not an attempt to punish our former combatants. Rather, we 
believe this is the best way to maintain the strategic U.S. 
negotiating position on POW-MIA information.
    VVA demonstrates our commitment to the full resolution of 
American POW-MIA cases, as well as to hear mandatory assistance 
through our veterans' initiative project. This program is 
designed to compliment existing government-to-government effort 
with direct veteran-to-veteran exchange of information. My 
written statement details the measurable results which we have 
seen from this project.
    VVA believes very firmly that the number of United States 
decisions in recent years relating to the normalization of 
relations with Vietnam are premature and that we disagree with 
the President's determination to waive the Jackson-Vanik 
amendment for Vietnam which will open the door to future trade 
enhancements.
    The President's waiver of Jackson-Vanik relating to Vietnam 
came 1 day after his March 4 declaration that Vietnam is fully 
cooperating in good faith with the United States POW-MIA 
accounting efforts. President Clinton's assessment of United 
States-Vietnam cooperation and its subsequent March 10 waiver 
of Jackson-Vanik was premature without considering the results 
of the Special National Intelligence Estimate.
    The SNIE published within DOD on May 22 in classified form 
is supposed to measure whether Vietnam is meeting United States 
intelligence expectations on the disclosure of information of 
POWs or MIAs, or repatriation of remains from the Vietnam war.
    VVA firmly believes that the SNIE must be declassified and 
fully assessed before the United States make trade policy 
decisions based upon the Vietnamese cooperation. To proceed 
with the Jackson-Vanik waiver without all available 
intelligence information contained in this SNIE does not serve 
the best interest of the commission and their families.
    Attached to my written statement is a copy of VVA's most 
recent convention resolution on this topic. I draw your 
attention to this resolution. It categorically set forth the 
current VVA's position on the issue of Vietnam war POW-MIAs in 
Southeast Asia. VVA has constantly stated over the past decade 
that without fullest possible accounting, the Vietnam war, 
America's longest, is not over.
    We acknowledge that the Vietnamese--we acknowledge that 
Vietnam has made some serious efforts to assist our government 
in achieving the fullest possible accounting for our missing, 
and we're proud of the contribution our organization has made 
to this effort through the Veterans' Initiative. Nevertheless, 
we must earnestly believe that the Vietnamese Government can 
and must do more.
    We have endorsed H.R. resolution 120 and S.J. resolution 
47, and we strongly urge the Subcommittee and the entire 
Congress to pass this legislation in order to nullify the 
President's waiver of Jackson-Vanik for Vietnam. VVA believes 
that the continuation of the Jackson-Vanik waiver at this time, 
without thorough analysis of the recently completed SNIE, 
demonstrates that the administration has lost sight of the--
prioritization of the fullest possible accounting has been 
abandoned. This commitment to veterans and the POW family.
    We depend then upon Congress to review our Nation's focus 
on this issue--to renew our Nation's focus on this issue.
    This concludes VVA's statement. I would be happy to provide 
any additional information the Subcommittee may desire. Thank 
you very much.
    [The prepared statement follows:]

Statement of George C. Duggins, National President, Vietnam Veterans of 
America

                              Introduction

    Mr. Chairman and members of the Committee, Vietnam Veterans 
of America appreciates the opportunity to present its views on 
the current status of trade relations between the United States 
and the Socialist Republic of Vietnam. As the Congress 
considers the President's waiver of the Jackson-Vanik amendment 
to the Trade Act of 1974 with relation to Vietnam, it is very 
important that our nation's long-standing commitment to 
achieving the fullest possible accounting of American POW/MIAs 
from the Vietnam War be maintained.
    Vietnam Veterans of America (VVA) is the only 
Congressionally chartered national Vietnam veterans 
organization exclusively dedicated to Vietnam-era veterans and 
their families and supporters. As you would expect, the issue 
of U.S.-Vietnam trade relations is one of great seriousness and 
concern to VVA. VVA is adamantly opposed to the further 
normalization of trade relations with Vietnam at this time and 
we urge Congress to disapprove the President's waiver 
determination. Our members have expressed the strong belief 
that additional steps toward normalization are premature until 
the Vietnamese government demonstrates improved unilateral 
efforts to assist the U.S. with accounting of POW/MIAs.
    VVA also recognizes that Jackson-Vanik deals with human 
rights and freedom of emigration issues. While these are very 
important matters for the Congress to consider, these are 
issues outside of the purview of our organizational mandates. 
Therefore, I will limit my remarks exclusively to Jackson-Vanik 
and POW/MIA accounting. VVA strongly feels that this measure of 
the 1974 Trade Act is a tool available to the U.S. government 
in seeking cooperation from the Vietnamese on the POW/MIA 
issue. It is for that reason that we are presenting this 
statement for your consideration.

                    The Fullest Possible Accounting

    VVA has consistently taken the strongest stands on 
demanding that the President of the United States continue to 
press the Vietnamese government, as a matter of highest 
priority, for the fullest possible accounting of POW/MIAs lost 
in the Vietnam War, utilizing both joint and unilateral 
activities. Specifically, we have called for the highest 
priority of effort to be focused on the accounting for:
    1. Any American POW/MIAs who may still be alive in 
Southeast Asia and held against their will; and
    2. Those last known alive or known to have died in 
captivity.
    Needless to say, VVA also believes that the accounting for 
and return of the remains of American soldiers believed to have 
been killed in action without their bodies being recovered must 
also be treated as a priority matter and aggressively pursued.
    Accordingly, in recent years VVA strongly opposed a number 
of decisions it thought were premature relating to the 
normalization of relations with Vietnam, including lifting the 
trade embargo, opening an embassy in that country and 
appointment of a U.S. ambassador. Most recently, VVA's National 
Convention in Kansas City, Missouri adopted Resolution PM-11-97 
[a copy of which is attached for the Committee's review and 
information]. National Convention resolutions mandate VVA's 
policy and positions on a wide range of issues. This resolution 
categorically sets forth the current VVA position on the issue 
of Vietnam War POW/MIAs in Southeast Asia and concludes with 
the words: ``With respect to OPIC, MFN status, and other steps 
toward normalization of relations with Vietnam, VVA most 
strongly urges the President to defer decisions until the 
Vietnamese Government has demonstrated measurably increased 
unilateral efforts that yield concrete results in terms of 
accounting for American POW/MIAs. Moreover, VVA urges the 
President to hold to his commitment to the major veterans 
service organizations and the National League of Families of 
American Prisoners and Missing in Southeast Asia to seek their 
input to considering such decisions.''
    VVA has consistently stated for the past decade that 
without the fullest possible accounting, the Vietnam War, 
America's longest, is not over. We acknowledge that Vietnam has 
made some serious efforts to assist our government in achieving 
the fullest possible accounting for our Southeast Asia POW/
MIAs. Nonetheless, we still earnestly believe that the 
Vietnamese government can, and must, do more.
    VVA has already endorsed H.R. 3159, sponsored by Rep. 
Edward Royce, which would provide that the President may not 
waive the provisions of title IV of the Trade Act of 1974 with 
respect to the Socialist Republic of Vietnam. And today, we 
declare our strong support and endorsement for H.J. Res. 120 
and S.J. Res 47. VVA is adamant that President Clinton's March 
10th waiver of the Jackson-Vanik Amendment of the Trade Reform 
Act of 1974 was premature, as was his June 3rd decision to 
extend the waiver. Passage of this legislation is necessary to 
nullify this action.
    The President's waiver of Jackson-Vanik relating to Vietnam 
came only days after his March 4th declaration that Vietnam is 
``fully cooperating in good faith'' with U.S. efforts to 
account for missing American soldiers from the Vietnam War. The 
1974 Trade Act bars the U.S. government from giving trade and 
investment funding to non-market economy nations unless the 
President certifies compliance with human rights and free 
emigrations. With the Socialist Republic of Vietnam, the 
amendment also contains very specific requirements of 
cooperation toward the accounting of U.S. personnel missing 
from the Vietnam War. Waiver of Jackson-Vanik removes the major 
obstacles to full economic and trade relations with Vietnam.
    President Clinton's assessment of Vietnam's cooperation, 
and the March 10th waiver of Jackson-Vanik was premature 
without the result of the Special National Intelligence 
Estimate (SNIE). The SNIE, published within DOD on May 22nd in 
classified form, is supposed to measure whether Vietnam is 
meeting U.S. intelligence expectations on the disclosure of 
information, or remains associated with captured and missing 
American servicemen from the Vietnam War. VVA firmly believes 
that the SNIE must be declassified and fully assessed before 
the United States makes trade policy decisions based upon 
Vietnamese cooperation. To proceed with the Jackson-Vanik 
waiver without all available intelligence information contained 
in the SNIE does not serve the best interest of the missing and 
their families.
    VVA believes that the President's action to continue the 
Jackson-Vanik waiver at this time without thorough analysis of 
the recently completed SNIE demonstrates that the 
Administration has lost sight of the prioritization of the 
fullest possible accounting and has abandoned this commitment 
to the veterans service organizations and POW/MIA families. We 
must depend upon Congress, then, to ensure that progress on 
American POW/MIA accounting is measured appropriately based 
upon the following criteria:
     Concrete results from efforts on Vietnam's part to 
recover and repatriate American remains;
     Continued resolution of remaining discrepancy 
cases, live sightings and field activities;
     Further assistance in implementing trilateral 
investigation with Laos; and
     Accelerated efforts to provide all POW/MIA related 
documents that will help lead to genuine answers.

                      The VVA Veterans Initiative

    To demonstrate that VVA is serious in its efforts to seek 
the fullest possible accounting, allow me to convey to this 
Subcommittee some information about another VVA endeavor which 
is innovative and realistic. VVA's Veterans Initiative promotes 
a direct veteran-to-veteran exchange of information on 
unaccounted-for American servicemen and Vietnamese war 
casualties. This program is designed to complement existing 
government-to-government efforts, and has produced measurable 
results toward the achievement of the fullest possible 
accounting on both sides.
    The Veterans Initiative is a humanitarian effort which 
demonstrates VVA members' commitment not only to fostering 
resolution of American POW/MIA cases, but also attempts to help 
Vietnamese families achieve closure for their missing loved 
ones. We presently have a delegation in Vietnam and they have 
been told by the Vietnamese Ministry of Defense that VVA has 
helped to locate remains to account for 811 Vietnamese war 
casualties. According to Vietnamese government officials, we 
have provided them with information on approximately 8,000 of 
their missing. This program demonstrates that VVA's view on 
U.S.-Vietnamese trade relations is not an attempt to punish our 
former combatants, but rather is our belief about the best way 
to maintain the strategic U.S. negotiating position.
    In turn, the Veterans Initiative, working through our 
counterpart organization the Vietnamese Veterans Association, 
has been able to obtain information on previously unknown crash 
sites, grave sites, the recovery of remains, and has been 
invaluable in assisting the U.S. Oral History Program in 
obtaining information which otherwise would be lost. Ambassador 
Pete Peterson has said of the VVA Veterans Initiative, ``I 
believe that private individuals may hold the keys to answering 
the questions as to the fates of missing Americans. Any program 
that helps bring a fuller accounting of our missing servicemen 
is worthy.'' VVA is proud of our work to resolve the cases of 
the remaining American POW/MIAs.

              No Further Normalization Steps at This Time

    We must also emphatically underscore that VVA remains 
adamantly opposed to the approval of any additional steps 
toward the normalization of relations with Vietnam because of 
the lack of the fullest possible accounting for our POW/MIAs to 
date.
    Specifically, we will not support, directly or indirectly, 
any efforts or decisions at this time that would extend to 
Vietnam either Overseas Private Investment Corporation (OPIC) 
eligibility or Most Favored Nation (MFN) status.
    The United States and Ambassador Pete Peterson must have 
significant leverage in evaluating whether or not Vietnam is 
fully cooperating with our government's POW/MIA efforts and 
whether/when the fullest possible accounting has, in fact, 
taken place.

                               Conclusion

    Vietnam Veterans of America remains strongly opposed to the 
President's waiver of the Jackson-Vanik amendment for Vietnam 
and any further trade normalization steps. Our government must 
not breach faith with those POW/MIAs or their families. VVA has 
led the fight for the fullest possible accounting for twenty 
years. We shall continue to do so. We take great pride in our 
POW/MIA record and our more recent accomplishments through the 
VVA Veterans Initiative.
    VVA urges this Subcommittee and the full House Committee on 
Ways and Means to pass H.J. Res. 120 without delay, and present 
the legislation to the full House for consideration. We 
strongly recommend that Congress demand declassification of the 
SNIE and assess this document fully prior to approving further 
advancements in U.S.-Vietnam trade. It is important that 
Congress not allow our nation's POW/MIAs and their families to 
be forsaken in the Administration's urgency to expand U.S.-
Vietnamese trade.
    Vietnam Veterans of America would be happy to provide any 
additional information the Committee may desire. This concludes 
our statement.
      

                                


FULLEST POSSIBLE ACCOUNTING OF POW/MIAS IN VIETNAM (PM-10-97)

                                 Issue:

    Vietnam Veterans of America, Inc., has a long-established 
position opposing further normalization of diplomatic and 
economic relations between the United States and Vietnam until 
the fullest possible accounting of POW/MIAs lost in the Vietnam 
War has been achieved.

                              Background:

    At every opportunity, VVA has urged the United States 
government to continue to press the Vietnamese government to 
increase its unilateral efforts and to demonstrate greater 
cooperation by facilitating follow-up of live sighting reports, 
expanding its participation in joint remains recovery efforts, 
opening its wartime archives, and helping to locate Vietnamese 
citizens and soldiers who witnessed incidents of loss.
    Since the establishment of the Joint Task Force Full 
Accounting (JTF-FA) in early 1992, U.S. officials directly 
involved with the accounting process have claimed that the 
Vietnamese government has recently demonstrated increased 
cooperation in resolving the fate of American POW/MIAs and that 
American field investigators have been able to follow up live 
sighting reports with very little prior clearance by local 
Vietnamese officials, and that the number of joint remains 
recovery teams operating throughout Vietnam has increased.
    Despite U.S. government claims, American specialists have 
been given only limited access to Vietnamese national and local 
wartime archives and to witnesses of incidents of loss. Vietnam 
has provided alleged witnesses for trilateral investigations 
with American and Lao teams in those areas of Laos controlled 
during the war by Vietnamese armed forces; however, Vietnam has 
not yet provided relevant documents to help resolve such cases.
    U.S. government officials attribute Vietnam's increased 
cooperation for joint activities to the lifting of the trade 
embargo in February 1994 and the agreement to open embassies in 
Washington and Hanoi. Even these U.S. government officials, 
however, have reported that the Vietnamese government has not 
been fully candid about information it is believed to have on 
MIAs last known to be alive and those who died in captivity, as 
well as other discrepancy cases.
    On July 11, 1997, despite the opposition of VVA and other 
veterans and family organizations, President Clinton announced 
the establishment of diplomatic relations with Vietnam. On May 
9, 1997, this decision resulted in the opening of an American 
embassy in Hanoi and Vietnam's embassy in Washington, D.C. 
There are, however, further steps in the ``normalization'' 
process that have not yet been taken, such as extending 
Overseas Private Investment Corporation (OPIC) insurance, which 
safeguards private investments in foreign countries, and Most 
Favored Nation (MFN) status, which greatly reduces tariffs on 
goods imported from MFN countries.
    This resolution amends Resolution PM-11-95.

                             Resolve that:

    Vietnam Veterans of America, Inc., at National Convention 
in Kansas City, Missouri, August 5-10, 1997, strongly urges 
that:
    1. The President of the United States continue, as a matter 
of highest priority, to press the Vietnamese Government for the 
fullest possible accounting of POW/MIAs lost in the Vietnam War 
through both joint and unilateral activities.
    2. Priority of effort be placed on accounting for a) any 
American POW/MIAs who may still be alive in Southeast Asia, and 
b) those last known alive or known to have died in captivity.
    3. Urges the President to measure progress on fullest 
possible accounting by the four criteria established in 1994 by 
the Clinton administration;
    a) Concrete results from efforts on Vietnam's part to 
recover and repatriate American remains;
    b) Continued resolution of remaining discrepancy cases, 
live sightings, and field activities;
    c) Further assistance in implementing trilateral 
investigation with Laos; and
    d) Accelerated efforts to provide all POW/MIA related 
documents that will help lead to genuine answers.
    VVA endorses the definition of ``fullest possible 
accounting'' that has been accepted by the major veterans 
service organizations and the National League of Families of 
American Prisoners and Missing in Southeast Asia: namely, the 
repatriation of a live American POW/MIA, the return of his 
remains, or compelling evidence why neither of these is 
possible. VVA affirms that the impact of our position on this 
issue is strengthened when we are able to work cooperatively 
with these other organizations.
    With respect to OPIC, MFN status, and other steps toward 
normalization of relations with Vietnam, VVA most strongly 
urges the President to defer decisions until the Vietnamese 
Government has demonstrated measurably increased unilateral 
efforts that yield concrete results in terms of accounting for 
American POW/MIAs. Moreover, VVA urges the President to hold to 
his commitment to the major veterans service organizations and 
the National League of Families of American Prisoners and 
Missing in Southeast Asia to seek their input prior to 
considering such decisions.
      

                                


    Chairman Crane. Thank you, Mr. Duggins.
    Mr. Burch.

STATEMENT OF J. THOMAS BURCH, JR., CHAIRMAN, NATIONAL VIETNAM & 
                  GULF WAR VETERANS COALITION

    Mr. Burch. Mr. Chairman, I'm Tom Burch, chairman of the 
National Vietnam & Gulf War Veterans Coalition. This is the 
first time we've had an opportunity to appear before the House 
Ways and Means Committee, and we are grateful that you give us 
this opportunity to put our views forward on this very 
important issue of the waiver of the Jackson-Vanik amendment. 
We want the House of Representatives to overturn the 
President's waiver and we--our 95 member groups with our 
combined membership of 350,000 join in that request with 
Vietnam Veterans of America.
    We also, in our organization, maintain very close ties to 
the Vietnamese exile organizations. We organized for advocacy 
on 10 issues of particular concern to veterans of these two 
wars. One of these issues is full accountability for prisoners 
of war and missing in action.
    Given the sorry record of the Socialist Republic of Vietnam 
on POW-MIA accountability, any issue should be raised, any road 
should be explored, that can used to pressure or leverage 
Vietnam. The Jackson-Vanik amendment is such a mechanism.
    It is a self-evident proposition that Vietnam is not a 
country which permits free emigration. There are significant 
roadblocks placed in the way of those desiring to leave the 
country for reasons of conscience or to pursue better 
opportunities, which has produced the unrivaled phenomenon of 
the boat people.
    Even the Orderly Departure Program, the most recent 
resettlement opportunity for Vietnamese returnees, had been 
tainted by significant corruption. We understand from our 
Vietnamese sources that bagmen acting on behalf of the 
Communist regime have traveled the world to conduct shakedowns 
of these emigres whose in-country relatives desire to be placed 
on the waiting list for legal emigration.
    As the boat people have stated in a recent letter, 
Vietnam's recent changes in the resettlement opportunity for 
Vietnamese returnees program only delays the requirement for 
exit permission. There's also mounting evidence that local 
authorities have invented many different ways other than the 
denial of exit permission to block access to the resettlement 
opportunity program. Since 1995, more political dissidents and 
religious leaders have been imprisoned. Freedom of the press 
has been much more severely curtailed than before.
    More recent events bear these contentions out. In the last 
3 months leading up to the President's waiver, 14,000 
individuals were cleared under the resettlement opportunity 
program. In the subsequent 3 months, a mere 150 have been 
cleared.
    The lesson is clear. There's no basis for concluding that 
Vietnam is complying with the Jackson-Vanik amendment. Any 
waiver thereof would have to be based on some extraneous 
benefit. But what is that benefit?
    The waiver will enable corporations desiring to do business 
in Vietnam access to credits and guarantees principally funded 
throughout the Overseas Private Investment Corp. and the 
Export-Import Bank. This access can only hurt the American 
taxpayer. The combination of red tape and corruption in the 
Socialist Republic of Vietnam has rendered foreign investment 
ineffective.
    Chrysler is the most conspicuous recent example of the 
failure of the investment policy. After making an investment of 
over $60 million, they had to withdraw because of failed 
opportunities with the Vietnamese.
    Last, a resolution of the POW-MIA accounting issues for so 
many of our veteran constituencies is long overdue. Since we 
anticipate that other witnesses have addressed Hanoi's history 
of noncompliance in meticulous detail, we will confine 
ourselves to this point: As the perception of business 
opportunities mounted over the last decade, there's been a 
campaign to deny the reality of living prisoners of war still 
in captivity.
    Remember particularly when President Clinton lifted the 
embargo that one of the particular documents that we felt would 
come out of that is something called the ``blue file.'' This is 
known to be out there. It's been testified to many times 
before. This was a promise that we have received because it was 
very sensitive after lifting the embargo, and we have never 
received it. Because of the sensitivity admitting these 
occurrences, the files could not be produced at the time, but 
they still haven't been produced.
    I'd like to take a couple more minutes of my remaining time 
to comment on a couple things Ambassador Peterson said, and we 
all recognize him to be a great gentleman and patriot, but I 
take exception to one thing he said. He said that they had been 
getting pretty good access in Vietnam.
    I met with Ambassador Peterson before he went over there 
and I gave him three live-sightings reports of a specific 
military prison, underground, 85 miles northwest of Hanoi. And 
said: ``you know, sir, the only thing I'm asking you to do is 
to visit that prison complex. Just do that one,'' and, because 
we thought that was the best location we could ascertain. After 
all, we used to deal with intelligence, I'm a former Green 
Beret. We know what we're talking about. Check that site.
    I asked him before he testified today, had he been to that 
site. He said, no, they won't let me in there. They'll let me 
into the other sites. I said, sir, that's the one we want you 
to go to. And until they do that, we want to make sure that 
there are no living Americans.
    Last, about the reform government. The reform government's 
not in power. That's Do Moi's government in power. The reform 
people tell us that they can't resolve the live POW issue 
because every time they start getting some leverage on the 
Communist regime, which has to get results, our government 
eases up on the trade, gives them the money, gives them 
diplomatic recognition, and it makes their government 
successful in the face-saving category.
    The reformers feel that if we would hold the line, it would 
give them a stronger hand to get free trade and get these 
credits because they could deliver that, and with that they 
will deliver the live POWs that they tell us are still being 
held in captivity. That we need this as a point of leverage, I 
agree with my colleague from Vietnam Veterans of America. We're 
not angry because of the war, but we want the live people that 
we believe to be over there, some in Vietnam, some in Laos, 
returned to us.
    Thank you for the opportunity to express our views, Mr. 
Chairman. There is no merit to the contention that the Jackson-
Vanik provision should be waived. We believe that H.R. 3159 is 
the correct approach. We strongly urge it's passage. Thank you, 
Mr. Chairman.
    [The prepared statement follows:]

Statement of J. Thomas Burch, Jr., Chairman, National Vietnam & Gulf 
War Veterans Coalition

    Mr. Chairman, we thank you for the opportunity to appear 
before this Subcommittee, the first time we have appeared 
before this Committee in our 15-year history.
    The National Vietnam & Gulf War Veterans Coalition is a 
federation of 95 Vietnam and Gulf War veterans organizations 
and issue groups, with an estimated combined underlying 
membership of 350,000. We also maintain close ties to 
Vietnamese exile organizations. We are organized for advocacy 
on ten issues of particular concern to veterans of these two 
wars. One of these issues is full accountability for prisoners 
of war and missing in action.
    Given the sorry record of the Socialist Republic of Vietnam 
on POW-MIA accountability, any issue should be raised, any road 
should be explored, that can be used to pressure or leverage 
Vietnam. The Jackson-Vanik Act is such a mechanism.
    It is a self-evident proposition that Vietnam is not a 
country which is permitting free emigration. There are 
significant roadblocks placed in the way of those desiring to 
leave the country for reasons of conscience or to pursue better 
opportunities, which has given rise to the unrivaled phenomenon 
of the boat people. Even the Orderly Departure Program and the 
more recent Resettlement Opportunity for Vietnamese Returnees 
have been tainted by significant corruption; we understand from 
our Vietnamese sources that bagmen acting on behalf of the 
Communist regime have traveled the world to conduct shakedowns 
of those emigres whose in-country relatives desire to be placed 
on the waiting lists for legal emigration. Dr. Nguyen Dinh 
Thang, of Boat People S.O.S., circulated a letter on January 
which points out:

          ``Vietnam's recent changes in the Resettlement Opportunity 
        for Vietnamese Returnees (ROVR) only delays the requirement for 
        exit permission.... There is also mounting evidence that local 
        authorities have invented many different ways other than the 
        denial of exit permission to block access to RVOR....
          ``... [M]any eligible applicants under the general Orderly 
        Departure Program (ODP) are also facing problems with exit 
        permission. They include former political prisoners, former 
        U.S. employees, religious leaders, dissidents, immediate 
        relatives of U.S. citizens, etc....
          ``... [Since] 1995 [, m]ore political dissidents and 
        religious leaders have been imprisoned. Freedom of the press 
        has been much more severely curtailed than before.''

    More recent events bear these contentions out. In the three 
months leading up to the President's waiver, 14,000 individuals 
were cleared under ROVR. In the subsequent three months, a mere 
150 have been cleared.
    The lesson is clear. There is no basis for concluding that 
Vietnam is complying with the Jackson-Vanik Act. Any waiver 
thereof would have to be based on some extraneous benefit. But 
what is that benefit?
    The waiver will enable corporations desiring to do business 
in Vietnam access to credits and guarantees principally funded 
through the Overseas Private Investment Corporation and the 
Export-Import Bank. This access can only hurt the American 
taxpayer. The combination of red tape and corruption in the 
Socialist Republic of Vietnam has rendered foreign investment 
ineffective. CitiBank and Chrysler are the most conspicuous 
examples of American companies that have already ceased to do 
business in Vietnam. Nor have these failures been confined to 
American companies; the most spectacular failure was that of a 
French company named TOTAL, which abandoned a $60 million 
investment in an oil refinery, rather than relocate it to a 
port which could not accommodate oil tankers but could supply 
jobs to relatives of the cadres ordering the switch. Mr. 
Chairman, the American people should not be paying through 
their taxes for future failures of these types, when corporate 
business interests, always eager for the next deal and 
protected by a safety net which ignores the discipline of the 
market, positions themselves in an economic Dienbienphu.
    Lastly, a resolution of the POW-MIA accounting issue that 
troubles so many of our veteran constituency is long overdue. 
Since we anticipate that other witnesses will address Hanoi's 
history of non-compliance in meticulous detail (as they were 
also addressed in yesterday's hearing before the House 
Committee on International Relations), we will confine 
ourselves to one point. As the perception of business 
opportunities has mounted over the past decade, there has been 
a campaign to deny the reality of living prisoners of war still 
in captivity. One of the centerpieces of this campaign was the 
publication of Malcolm McConnell's Inside Hanoi's Secret 
Archives, a credible, but flawed, book on the issue. The author 
was apparently utilized as a conduit for a story line that all 
`discrepancy case' MIAs who had not died from combat-related 
causes had been executed and that the proof of this explanation 
was contained in so-called `blue files,' which were maintained 
on each POW-MIA about whom the Vietnamese authorities have 
knowledge. Because of the sensitivity of admitting to these 
occurrences, the files could not be produced until diplomatic 
recognition had been accorded, so the story line went. We have 
now had diplomatic recognition for more than a year. Where are 
the blue files?
    Mr. Chairman, there is no merit to the contention that the 
Jackson-Vanik Act provisions should be waived. H.R. 3159 is the 
correct approach. We strongly urge its passage. Thank you.
      

                                


    Mr. Burch. One last thing, Mr. Chairman, one of our groups, 
the Rolling Thunder, didn't have an opportunity to testify, and 
they wanted to have the statement added to the record.
    Chairman Crane. Without objection, so ordered.
    Mr. Duggins. The statement of Mr. Richard Will.
    [The prepared statement follows:]
                                   Richard F. Will, Sr.    
                                      Westminster, MD 21157
                                                      June 18, 1997

To: Honorable Philip Crane and Members of the Committee

    Ladies and Gentlemen,

    My Name is Richard F. Will Sr. and I am a Vietnam Veteran, having 
served in Pleiku, South Vietnam from July of 1964 to July of 1965. I am 
grateful for the chance, today, to address this Committee, regarding 
the Presidents recent waiver of the Jackson/Vanik Amendment. And, I 
wish to thank you for that opportunity!
    I am a member of the following VSO's, though I am not formally 
here, representing either: Life Member of VFW, Member of the American 
Legion, Member of the Vietnam Veterans of America, Member of Veterans 
of the Vietnam War, Member of In Country Vietnam Veterans, Member of 
ALVETS, and a Member of National Vietnam Veterans/Gulf War Coalition. I 
am also a Member of the Co-Montagnard Association, the Maryland Vietnam 
Veterans Last Patrol, and the Alliance of Families.
    However, as I go around the country, I have gathered a feel of how 
a great many members of all of those above-mentioned organizations 
feel, toward the Presidents Waiver. They are opposed to it! And, so am 
I!
    Allow me to explain why!
    The Socialist Republic of Vietnam, has not even begun to warrant 
such action by our Government. Hanoi has not moved positively in 
addressing the question of `Humane Rights' let alone an honest full 
accounting of our `Missing In Action' nor possible `Live American 
POW's.'
    Since 1993, I have returned to Southeast Asia three times. On those 
trips I have met with and seen first hand, the oppressive actions of 
the Hanoi Government. Our Montagnard Brothers and Sisters have been 
isolated and refused the right to emigrate to this country. Contrary to 
what might be portrayed by our State department.
    In March I listened as Ms. Julia Taft (A Representative of the 
State Department) gave testimony to a similar Senate Select Committee, 
regarding the `Waiver' and ODP progress. At that time, I believe, she 
was asked if there were any other ethnic groups (Tribal) in neighboring 
Laos or Cambodia, that were experiencing the same emigration 
difficulties. Her response was that she had no knowledge of any. Did 
she not know of the Hmong Tribe People, the Lao Tung, the Nung?
    I give this example, because it proves that the State Department 
Experts are not `Experts'! But, they will do their jobs. And that job, 
is to promote the Administrations premise that the Communist Vietnamese 
are doing all they can, to change............... A False-Hood!
    The Montagnards, to use an example, were our staunchest allies. 
Their love for the Americans' was such, that they would lay down their 
lives, to protect us. Even after the war, they continued the `Fight' 
for freedom and democracy. As such, in the eyes of Hanoi, they are to 
be continually punished.
    However, there are many more religious and ethnic peoples being 
treated the same, by the Hanoi Government. The Buddhists are being 
imprisoned and killed, for their beliefs. The Catholics, some of which 
have been relocated to lands saturated by Agent Orange, are under the 
same type of oppression. To ignore these blatant Humane Rights 
Violations, would be sinful.
    In closing, I am opposed to such a `Waiver,' as it relates to 
Hanoi's co-operation on the POW/MIA Issue. There has been no real co-
operation! The Administrations rhetoric, would imply that there is. If 
you judge the statements by action, logic would say, there has not 
been.
    As most of you should be aware, during Operation Homecoming and 
after the War, our Government knew (By our own list and that of Hanoi) 
that there were over 150 PW's that were not released. By DPMO's own 
admission, in the summer of 1997 at a WA BOD Meeting, possibly one set 
of remains (from that category) has been returned. Once again, `Logic' 
would tell us, there's not much co-operation there!
    The simple fact is, Vietnam is run by an oppressive communist style 
of leadership. They will lie and say anything to accomplish their 
goals. Tis the nature of the beast! It is up to us (The United States), 
as a Nation and a `Leader in Freedoms Fight', to judge words by action.
    Likewise, this Committee and our Congressional Representatives, 
will be judged by the action taken on either supporting or denying the 
Jackson/Vanik Amendment Waiver. You have a choice between abandoning 
`Freedoms Fight' or making a stand for Freedom, Human Rights, and 
Humane Dignity.
    The Choice is yours!
    Thanking you for your time, I am....

            Gratefully Yours,
                                       Richard F. Will, Sr.

 RFW: rfw
cc: File
      

                                


    Chairman Crane. Very good.
    And, finally, Mr. Sommer.

STATEMENT OF JOHN F. SOMMER, JR., EXECUTIVE DIRECTOR, AMERICAN 
                             LEGION

    Mr. Sommer. Thank you, Mr. Chairman.
    Chairman Crane. Perfect timing.
    Mr. Sommer. On behalf of the American Legion, we want to 
thank you for the opportunity to participate in today's hearing 
on the President's proposed renewal of Vietnam's waiver under 
the Jackson-Vanik amendment.
    It's obvious to the American Legion that all Vietnamese 
citizens are not by any stretch of the imagination free to 
leave Vietnam if they so wish. And the Montagnards, who you 
heard from earlier today, who populate the central highlands, 
are even further restricted in their attempts to emigrate. And 
I mention the Montagnards because the United States involved 
them in the war in Vietnam, and they became loyal and dedicated 
allies. Then, following the total United States withdrawal from 
South Vietnam in 1975, many, if not most, of the Montagnard 
held out some degree of hope that their American allies would 
return to the highlands to rejoin them. As you and I know, that 
was not to be.
    The plight of the Montagnard today remains most 
unfortunate. Millions of dollars and thousands of man-hours of 
humanitarian assistance are expended in Vietnam by American 
NGOs each year. However, few, if any of these organizations are 
permitted by the Vietnam Government to develop and administer 
programs that would provide humanitarian aid to the Montagnards 
in the central highlands despite the horrendous conditions of 
poverty and hopelessness that exist among the tribal people.
    The failure of the Vietnamese Government to allow the 
provision of humanitarian assistance in the highlands is not 
the only problem facing the Montagnards. We have seen and heard 
numerous reports, some anecdotal and others official, of the 
strife that has beset Montagnards who have attempted to 
emigrate from Vietnam. It is often reported that many have been 
forced to pay province officials exorbitant fees for exit 
permits, and then, in some cases, bribes to other Vietnamese 
officials, in their mostly futile attempts to negotiate the 
emigration process.
    The situation regarding the Montagnard is concisely 
described in a recent report prepared by the chief counsel of 
the House International Relations Committee's Subcommittee on 
International Operations and Human Rights, following his 
December 1997 trip to Vietnam. The report states, in part, 
``The Montagnard population, many of whose members have 
particularly strong ties to the United States, and particularly 
compelling refugee claims, continues to face problems that are 
even worse than those of most other Vietnamese of humanitarian 
interest to the United States. Because of their remote 
location, and their alienation from the mainstream of 
Vietnamese society, they're particularly vulnerable to all of 
the abuses listed above. They have even less access to 
information than other residents of Vietnam and are even more 
helpless in the face of official corruption. For instance, some 
Montagnard refugees resettled in the United States have been 
forced by corrupt local officials to leave family members 
behind and substitute nonfamily members who then disappear upon 
their arrival in the United States.''
    Mr. Chairman, I might add, we just found out this week of a 
case that happened within the last 3 weeks, where a Montagnard 
arrived in Charlotte, North Carolina, and had been forced to 
adopt a ``wife'' and ``family members'' who were not his, and 
bring them with him before he could get his exit visa.
    With respect to specific refugee programs, the ROVR Program 
was not viewed favorably by the American Legion from the 
outset. Vietnam's failure to uphold its end of the bargain 
until just before the Jackson-Vanik waiver by the President has 
been even more disconcerting.
    The purpose of ROVR was to create conditions under which 
boat people would voluntarily return to Vietnam from the 
refugee camps in countries of first asylum. Those who met the 
United States-defined criteria of refugee and returned to 
Vietnam would be interviewed, and if found eligible, be granted 
passage to the United States. In turn, Vietnam agreed to not 
take reprisals against them for having fled the country and to 
issue exit permits necessary for them to become involved with 
United States immigration officials in preparing to leave 
Vietnam.
    Vietnam's cooperation in furnishing the United States with 
names of those who are to be interviewed has been sporadic. 
According to the latest available State Department statistics, 
the number of cases cleared for interview under ROVR has slowed 
considerably, as compared to Vietnam clearing 14,000 names 
during the 3 months immediately prior to the President's waiver 
of Jackson-Vanik. This is typical Vietnamese manipulation.
    It's important to note that the ROVR Program is not the 
only important measure of Vietnam's cooperation on the 
emigration issue. The Orderly Departure Program is equally as 
important. We understand that the ODP, implemented nearly 20 
years ago, potentially has nearly 95,000 applicants, and 
thousands of cases that are unresolved for one reason or 
another. These include cases of reeducation camps' survivors 
and their widows, former U.S. Government employees, Amerasians, 
and others, who are of significant importance to the United 
States.
    Mr. Chairman, the POW-MIA issue and the lack of unilateral 
cooperation on the part of the Vietnam Government is another 
concern with respect to why the American Legion believes that 
the waiver of the Jackson-Vanik amendment should not be 
extended, as well as the human rights violations that are 
spelled out in detail in our own State Department's 1997 report 
on human rights in Vietnam.
    We urge the Congress to disapprove any further extension of 
the Jackson-Vanik waiver until such time that Vietnam makes 
significant, meaningful improvements in its emigration policies 
and human rights, and unilateral cooperation on helping achieve 
the fullest possible accounting of our POWs and MIAs. The 
American Legion fully supports the enactment of H.J. Res. 120, 
which calls for the Congress to disapprove the President's 
waiver determination.
    Again, Mr. Chairman, we appreciate very much your 
scheduling this hearing on this most important issue today. 
Thank you.
    [The prepared statement follows:]

Statement of John F. Sommer, Jr., Executive Director, American Legion

    Mr. Chairman and Members of the Subcommittee:
    On behalf of The American Legion, thank you for the 
opportunity to participate in today's hearing on the 
President's proposed renewal of Vietnam's waiver under the 
Jackson-Vanik amendment to the Trade Act of 1974.
    In December 1997, the Clinton Administration announced that 
the President was seriously considering waiving the 
requirements of the Jackson-Vanik Amendment (19 U.S.C. 
2432(a)). Briefly, Jackson-Vanik renders communist governments 
ineligible for economic concessions through the Export-Import 
Bank and the Overseas Private Investment Corporation until 
their citizens are guaranteed unfettered freedom of emigration.
    It is obvious to The American Legion that all Vietnamese 
citizens are not by any stretch of the imagination free to 
leave Vietnam if they so wish, and the Montagnards who populate 
the Central Highlands are even further restricted in their 
attempts to emigrate. I mention the Montagnards because the 
United States involved them in the war in Vietnam, and they 
became loyal and dedicated allies. Then, following the total 
U.S. withdrawal from South Vietnam in 1975, many--if not most--
of the Montagnard held out some degree of hope that their 
American allies would return to the Highlands to rejoin them. 
That was not to be.
    The plight of the Montagnard today remains most 
unfortunate. Millions of dollars and thousands of man-hours of 
humanitarian assistance are expended in Vietnam by American 
NGOs each year. However, few--if any--of these organizations 
are permitted by the Vietnamese government to develop and 
administer programs that would provide humanitarian aid to the 
Montagnards in the Central Highlands, despite the horrendous 
conditions of poverty and hopelessness that exist among the 
tribal people.
    An example is the Vietnam Highlands Assistance Project 
which was developed by Lutheran Family Services in 1989. During 
the nine years since it was established, the project has only 
been allowed access to the Central Highlands on one occasion, 
though not for a lack of trying. Project officials have 
continuously pushed Vietnam's Peoples Aid Coordination 
Committee (PACCOM) for NGO humanitarian access to the Central 
Highlands.
    Of course, the failure of the Vietnamese government to 
allow the provision of humanitarian assistance in the Highlands 
is not the only problem facing the Montagnards. We have seen 
and heard numerous reports--some anecdotal and others 
official--of the strife that has beset Montagnards who have 
attempted to emigrate from Vietnam. It is often reported that 
many have been forced to pay province officials exorbitant fees 
for exit permits, and then in some cases bribes to other 
Socialist Republic of Vietnam (SRV) officials, in their mostly 
futile attempts to negotiate the emigration process.
    The situation regarding the Montagnard is concisely 
described in a recent report prepared by the Chief Counsel of 
the House International Relations Committee's Subcommittee on 
International Operations and Human Rights following his 
December 1997 trip to Vietnam. The report states in part:

          ``The Montagnard population---many of whose members have 
        particularly strong ties to the United States and particularly 
        compelling refugee claims---continues to face problems that are 
        even worse than those of most other Vietnamese of humanitarian 
        interest to the United States. Because of their remote location 
        and their alienation from the mainstream of Vietnamese society 
        they are particularly vulnerable to all of the abuses listed 
        above. They have even less access to information than other 
        residents of Viet Nam, and are even more helpless in the face 
        of official corruption. For instance, some Montagnard refugees 
        resettled in the United States have been forced by corrupt 
        local officials to leave family members behind and substitute 
        non-family members who then disappear upon their arrival in the 
        United States.''

    Mr. Chairman, we just recently learned of a case of a 
Montagnard who arrived in Charlotte, North Carolina within the 
last three weeks who had been forced to accept a Vietnamese 
``wife'' and ``family members'' before he could get his exit 
visa. Most everyone in this room can go home to their families 
at night. However, many of the Montagnards who have emigrated 
to the United States have been waiting to be reunited with 
their families for years.
    One of the obstacles that has prevented Montagnards from 
leaving Vietnam, and has also blocked the emigration attempts 
of ethnic Vietnamese, has included the use of translators 
provided by the SRV by our own Orderly Departure Program (ODP), 
and Immigration and Naturalization Service (INS). These SRV 
interpreters have been responsible for such sensitive issues as 
commenting on the authenticity of documents or testimony 
provided by refugee applicants during the interview process. It 
is commonly known that numerous applicants whose emigration 
cases were denied have complained, some in writing, to ODP 
officials that they were intimidated by SRV officials being 
present during their interviews, and that the presence of these 
individuals encumbered their ability to openly disclose the 
extent of their involvement with the U.S., relevant information 
surrounding their persecution by the SRV, and related matters. 
Beyond that, reports from applicants whose cases were both 
approved and denied have charged that some SRV-provided 
employees have solicited bribes for favorable results, and 
offered threats or otherwise intimidated applicants who were 
not willing to pay.
    In reference to the involvement of SRV staff, the 
aforementioned report by the Chief Counsel of the House 
Subcommittee on International Operations and Human Rights 
states in part:

          ``I was already familiar with what this can do to the 
        integrity of the refugee programs. The presence of SRV 
        officials at the vast majority of UNHCR interviews with CPA 
        returnees has been an important factor in the derision with 
        which the UNHCR's `zero-persecution-on-return' assurances have 
        been greeted by Vietnamese-Americans, U.S. veterans' groups, 
        Ben Gilman, Chris Smith, et al. Also, many applicants have 
        written letters to ODP stating that they were afraid to tell 
        their stories in the presence of government-supplied 
        interpreters, and setting forth the `real' story in an almost-
        always-unsuccessful effort to get a denial reconsidered.''

    It has been reported that effective January 1, 1998 a 
private employment agency is being used to hire the 
interpreters and others who have been furnished by SRV. 
However, this has not been confirmed. It also appears that the 
cases of applicants who were adversely impacted based on the 
previous policy will not be re-interviewed, which is most 
unfortunate.
    The Resettlement Opportunities for Vietnamese Returnees 
(ROVR) program was not viewed favorably by The American Legion 
from the outset, and SRVs failure to hold up its end of the 
bargain--until just before the Jackson-Vanik Amendment was 
waived by the President--has been even more disconcerting. The 
purpose of ROVR was to create conditions under which ``Boat 
People'' would voluntarily return to Vietnam from the refugee 
camps in countries of first asylum. Those who met the U.S.-
defined criteria of ``refugee'' and returned to Vietnam, would 
be interviewed and, if found eligible, be granted passage to 
the United States. In turn, SRV agreed to not take reprisals 
against them for having fled the country, and to issue exit 
permits necessary for them to become involved with U.S. 
emigration officials in preparation of leaving Vietnam.
    SRVs cooperation in furnishing the U.S. with names of those 
who are to be interviewed has been sporadic. According to the 
latest available State Department statistics, the number of 
cases cleared for interview under ROVR has slowed considerably, 
as compared to SRV clearing 14,000 names during the three 
months prior to the President's waiver of Jackson-Vanik. This 
is typical Vietnamese manipulation.
    We understand that as of recently the exit permits are no 
longer required prior to seeking interviews from ODP, but they 
continue to be required at a later time during the process. 
With respect to the SRV pledge of no reprisals, the previously 
mentioned House Subcommittee report contains the following:

          ``The shocking extent of SRV involvement in the 
        administration of all our programs---as well as the UNHCR 
        monitoring program---makes highly suspect any assessment that 
        returnees are not facing political problems on their return. 
        The SRV internal security apparatus is pervasive. Maintenance 
        of control over the lives of ordinary citizens appears to be 
        among the government's highest priorities. Of the dozen or so 
        returnees we visited---some `officially' in the presence of SRV 
        personnel, others `unofficially' after satisfying ourselves 
        that we had managed to evade surveillance---all but three had 
        been denied household registration, which is the essential 
        prerequisite to a decent life in Vietnam. Several had been 
        frequently visited by security officials demanding to know 
        about their past political and/or religious activities and 
        warning them of severe reprisals for any further such 
        activities. All those whom the SRV government knew we intended 
        to visit had been interrogated in anticipation of our visit. 
        Several had been given detailed instructions about what to say 
        and what not to say. A few returnees are known to have been 
        imprisoned since their return---most for ostensibly 
        nonpolitical crimes such as illegal escape, others on overtly 
        political charges.''

    It is important to note that ROVR is not the only measure 
of Vietnam's cooperation on the emigration issue. The Orderly 
Departure Program is equally as important. We understand that 
the ODP, implemented nearly twenty years ago, potentially has 
nearly 95,000 applicants, with thousands of cases that are 
unresolved for one reason or another. These include cases of 
re-education camp survivors and their widows, former U.S. 
government employees, Amerasians, and others. All of them are 
individuals who did not leave the country at the urging of the 
U.S., based on promises that if they met the criteria, the U.S. 
would process them out. It has recently been reported that 
there is an artificially high ``no-show'' rate in the ODP, 
generated by the fact that many people who are eligible for 
interviews cannot get exit permits. Also, many who tried prior 
to the first of the year were either turned away by SRV staff, 
or the applicants refused to comply with the demands for 
bribes.
    It is interesting to note that while the clearance rate for 
the politically sensitive ROVR program increased considerably 
for the three months prior to the waiver of Jackson-Vanik, the 
much larger ODP program languished as a result of benign 
neglect on the part of the Clinton Administration.
    The examples set forth in this statement are only a 
snapshot of the abysmal SRV-controlled situations that exist 
within ROVR and ODP--programs that were established to assist 
refugees in emigrating--not forcefully prevent them from 
leaving a country where they are subject to harassment and 
persecution. The United States has a moral obligation to help 
these individuals in any way we possibly can. Extending the 
waiver of Jackson-Vanik would be the same as closing the door 
forever on the possibility that many of these deserving 
individuals could ever be resettled outside of Vietnam.
    In addition to the provisions of Jackson-Vanik, 19 U.S.C. 
2433 provides authority for the President to withhold 
nondiscriminatory trade treatment to countries based on 
cooperation with our efforts to account for American military 
and civilian POWs and MIAs in Southeast Asia. It is contingent 
upon cooperation to achieve a complete accounting of the POWs 
and MIAs, to repatriate such personnel who are alive, and to 
return the remains of such personnel who are dead to the United 
States.
    On a related issue, March 4, 1998, the President certified 
that Vietnam is ``fully cooperating in good faith'' with U.S. 
efforts to account for missing American soldiers from the 
Vietnam war, as required under section 609 of Public Law 105-
119. The American Legion does not agree with the President's 
determination. The certification would have been more credible 
if he would have waited to review the National Intelligence 
Estimate on the Vietnam POW/MIA issue which was released in 
May, but has yet to be declassified.
    The government of the Socialist Republic of Vietnam is not 
cooperating anywhere near the extent to which it can. A degree 
of cooperation is being offered in the conduct of joint field 
activities, in which our Joint Task Force--Full Accounting and 
Vietnam's Office on Seeking Missing Persons are excavating 
crash sites and other incident locations. Of course, the United 
States is paying Vietnam handsomely for that assistance.
    It is the unilateral cooperation by the central government 
that is not forthcoming. In August 1993, a high-ranking State 
Department official specifically asked the Vietnamese 
government to turn over remains and information relating to 
over eighty cases involving over ninety individuals categorized 
as Last Known Alive and Special Remains Cases. To the best of 
our knowledge, very little, if any information correlating to 
those cases has been turned over by the SRV government.
    National Commander Anthony G. Jordan and this witness met 
with several high ranking Vietnamese government officials in 
December 1997, and requested, among other things, increased 
unilateral cooperation in helping to resolve those cases where 
the incidents took place in the areas of Laos and Cambodia that 
were controlled by the Peoples Army of Vietnam during the war. 
The American Legion and others, including representatives of 
the families, have formally requested this as well as 
unilateral cooperation on other similar issues for several 
years. We continue to receive empty promises, but no 
substantial progress has been forthcoming.
    The third concern of The American Legion is Vietnam's 
abysmal record on human rights. It is necessary to remain 
mindful that the government of SRV continues to be a communist 
regime that actively suppresses the human rights of many of its 
citizens. Unfortunately, despite the lifting of the trade 
embargo and the normalization of diplomatic relations, there 
has been no appreciable improvement. The only apparent change 
is the diminished level of pressure that the U.S. government is 
placing on Vietnam to enhance its human rights practices. The 
SRV government continues to arrest and imprison political and 
religious activists and hold them at will. Hanoi does not 
suffer those who believe in freedom and democracy to espouse 
their feelings.
    In reviewing the State Department's Human Rights Report on 
Vietnam for 1997, it is interesting to note the comments that 
relate to one of the issues under consideration at today's 
hearing. Under the section of the report relating to the 
subjects of Emigration and Repatriation is the following:

          ``Citizens must demonstrate eligibility to emigrate to 
        another country and show sponsorship abroad, before the 
        Government issues exit permits. Citizens' access to exit 
        permits was frequently constrained by factors outside the law. 
        Refugee and immigrant visa applications to the Orderly 
        Departure Program (ODP) sometimes encounter local officials who 
        arbitrarily delay or deny exit permits based on personal 
        animosities or on the official's perception an applicant does 
        not meet program criteria, or in order to extort a bribe.''
          ``There are some concerns that members of minority ethnic 
        groups, particularly nonethnic Vietnamese such as the 
        Montagnards, may not have ready access to these programs. The 
        government denied exit permits for certain Montagnard 
        applicants for emigration.''

    The American Legion urged President Clinton in the 
strongest possible terms to refrain from even proposing a 
Jackson-Vanik waiver until considerable unilateral cooperation 
and improvement are advanced by the government of Vietnam in 
the three important areas that are discussed in this statement. 
These issues were totally ignored, and the Administration 
traded away the waiver for a bag full of empty promises from 
the Vietnamese.
    We now urge the Congress to disapprove any further 
extension of the waiver until such time that Vietnam makes 
significant meaningful improvements in its emigration policies, 
human rights, and unilateral cooperation on helping achieve the 
fullest possible accounting of our POWs and MIAs.
    The American Legion fully supports the enactment of H.J. 
Res. 120, which calls for the Congress to disapprove the 
Presidents waiver determination.
    Mr. Chairman, The American Legion thanks you for scheduling 
today's hearing on this important issue. That completes our 
statement.
      

                                


    Chairman Crane. Thank you, Mr. Sommer. Let me ask you all, 
collectively, what, in your estimation, are the best things 
that we could do to advance resolution of the POW-MIA question, 
advance market institutions, democratic institutions, human 
rights observance, all of the values that we believe in? What's 
the best way of trying to accomplish that with Vietnam?
    Mr. Sommer. Well, Mr. Chairman, what has happened, 
unfortunately, during this administration, is that, beginning 
with the lifting of the United States objections to economic 
assistance to Vietnam in 1993, the lifting of the trade embargo 
in 1994, the normalization of relations in 1996 or 1997, and 
then the waiver of the Jackson-Vanik amendment, all of these 
things have taken place without Vietnam making reciprocal 
steps, as was the case in the process that was mentioned 
earlier this morning in the roadmap that was in place some 
years ago, where Vietnam would make some steps in progress, and 
then the United States would take reciprocal action.
    Unfortunately, we've been rewarding Vietnam without holding 
them accountable for reciprocity. As far as the American Legion 
is concerned, that's what needs to be done. We can't keep 
throwing rewards to them without getting anything in return.
    The cooperation that was mentioned several times this 
morning with respect to the POW-MIA issue, for instance, 
they're speaking of the cooperation of the Vietnamese Office of 
Seeking Missing Personnel with our Joint Task Force Full 
Accounting in crash site excavations and the investigation of 
other such kinds of incidents. But what has not been brought up 
is the unilateral cooperation on the part of the Vietnamese 
Government that has not been forthcoming.
    That is, the Vietnamese Government turning over information 
that's been requested by the State Department as far back as 
1993 with respect to 80-some cases involving 98 individuals 
that were last-known-alive cases. This official request was 
made in August 1993, and to the best of our knowledge, very 
little information has been forthcoming from Vietnam on those 
cases, as of today. We don't call that cooperation.
    Chairman Crane. Mr. Burch.
    Mr. Burch. Mr. Chairman, the Clinton administration has 
made it very obvious that they want to respond to big 
businesses' concerns about entering that country, and the POW 
issue is an impediment, so what they have is a failed strategy 
of digging up crash sites and using statistics about the number 
of bones that they're returning, remains they're returning, as 
a showing of progress. This is a failed strategy, as we as a 
Vietnam veteran's movement want them to follow up on all these 
live-sighting reports.
    There are numerous live-sighting reports in the last 2 
years. They give them very little priority. They rarely go out 
to investigate them. When they get ready to interview 
witnesses, they come forward to give the Vietnamese their names 
first, and, of course, that dries up the source of information.
    Like the example we gave you of the military prison 
complex, which we thought was the best, defined by coordinates, 
prison that we had. And he said, we didn't go to that one. Why 
don't they go to the live prison sites or where these people 
are supposed to be, instead of digging up crash sites from 20 
years ago?
    It's a failed policy, but we believe they don't want to 
deal with that tougher one, that they want to show they've got 
the numbers by how many remains are returned. First, our 
government has got to change its emphasis to go and check out 
the live-sighting reports and try to find these people, and let 
the Vietnamese know we want to find them, be they deserters or 
stay-behinds or whatever they are. If it's anybody live over 
there that's unaccounted for, whether he wants to come home or 
not, they ought to get that answer first.
    And then once we as a government show that's our interest, 
then, I think, they'll respond because they need this trade 
thing. Now we've lost our biggest leverage point when we 
recognized them, so all we have left, unless we want to give 
them billions of dollars worth of war reconstruction aid, are 
these economic things, such as the economic guarantees for 
American investors, or most-favored-nation status. And, so, we 
want to withhold those things until--so we have some piece of 
leverage, otherwise they would have no way to ever--there is no 
reason in the world to let it be known they were holding these 
people because of all the progress that they made could be 
reversed because they would, of course, not be humanitarians.
    We have to change our policy. We have to let this 
administration know that there's not going to be more--any 
further relaxation as far as Congress is concerned. Until they 
change their emphasis on live people, and once we start making 
some progress on live people, then maybe we can start turning 
on the spigot a bit.
    Mr. Duggins. Mr. Chairman, I like to look at it in a little 
different perspective. One of the things that I think, the last 
time that I was in Hanoi, and I was with John, I felt, you 
know, some of our values, our values are good, but some of our 
values may not work for them because I felt safer in the 
streets of Hanoi than I do in the streets of DC. [Laughter.]
    So, maybe we ought to bring some of that here. But the 
point I want to make is, I think one of the things that would 
help a great deal is that our government play fair with us. You 
know, we've kicked the Vietnamese around a lot here. This 
report that I mentioned, this Special National Intelligence 
Estimate, is supposedly telling us that the Vietnamese are 
cooperating or not cooperating, has been out since May 22, and 
it's still classified. And we, as activists and who are 
responsible to a constituency, we have no way of telling them, 
you know, we can tell them, I got a feeling. But if we had this 
information from this report that is still classified, that is 
sitting on somebody's desk, that was prepared by the CIA, I 
think it would do a great justice to our cause to know that we 
can count on our government to play fair with us as well as the 
Vietnamese Government.
    Chairman Crane. Mr. Harder.
    Mr. Harder. Well, first question is, what can we do to try 
to improve our ability to get information about the POW-MIAs. I 
think the only answer to that is to stay engaged with the 
Vietnamese in a dialog about the information that we have, keep 
pressing them on the cases where we know we had last-known-live 
sightings, our priority cases where we know the people were 
alive on the ground, and to try to get definite answers on 
those. If we have any specific evidence that--of live 
sightings, we should be allowed to go there and check those 
out.
    I asked a question when we were in Vietnam in March 1998. I 
asked Joint Task Force Full Accounting Detachment II, which is 
there in Hanoi, what do you do when you get one of these live-
sighting reports, and I was told that, by the Detachment 
commander, that they investigate each and every one of those 
until they get the information resolved. And when I was there 
at that time, he told me there were no cases that had not been 
investigated yet. And I asked the specific question.
    On the second issue, dealing with the trade policies and 
how best can we get the Vietnamese to develop in a way that's 
favorable--a free-market economy, which kind of goes along with 
the democratic process, I don't see a way of doing that other 
than getting more Americans involved in Vietnam, getting them 
to understand the process of how a free-market economy works. 
So, therefore, I don't see that backing off and reinstituting 
some sort of an embargo or lessening trade and breaking off 
relations with them, gets us very far in that regard.
    Chairman Crane. Yes, Mr. Burch.
    Mr. Burch. I'm sorry, sir, I just want--this is my 
opportunity to make one last comment. Unfortunately, you have a 
problem by what you mean by live-sighting investigations. I 
recently talked to the DPMO office about this, and in most 
cases, it's just someone sitting behind a desk reviewing the 
papers and making a decision, whether they think it's valid or 
not. It's not going out in the field and interviewing people. 
That's the problem; they're not aggressive to really try to 
pursue the matter.
    Chairman Crane. Well, I thank you all for you testimony and 
appreciate your input, and please keep the flow of information 
going with us. And, with that, let me call up our last panel, 
and that is Diem Hoang Do with the Coalition Against Jackson-
Vanik Waiver, and Filong Levan, vice president, Vietnamese-
American Voters' Coalition, and Joel Joseph, chairman, Made in 
the USA Foundation.
    And if you gentlemen will try and keep your presentation, 
your oral presentations to 5 minutes, please do so. And any 
written statements or documents that you may have that you'd 
like to submit will be made a part of the permanent record.
    And we'll start with Mr. Do.

STATEMENT OF DIEM HOANG DO, COCHAIR, COALITION AGAINST JACKSON-
             VANIK WAIVER, WESTMINSTER, CALIFORNIA

    Mr. Do. Thank you, Mr. Chairman. Let me start by saying 
that this is not a discussion about whether or not we should 
have trade with Vietnam. It is the question of under what 
circumstances and with what conditions should we have trade 
with Vietnam. I believe that with Vietnam, the road to free 
trade should not be a toll-free highway, but we should exchange 
trade benefits with Vietnam in return for concrete economic and 
political reforms.
    Second, I want to state that the Vietnam-American 
communities here in America believe that extending the Jackson-
Vanik waiver and Ex-Im and OPIC benefits to Vietnam now are 
premature and shortsighted. And I do have a letter here from 30 
Vietnam-American communities from across the United States 
asking for support for H.J.R. 120 and disapproving the 
extension of Jackson-Vanik waiver, and I would like to submit 
that letter, if I may.
    Chairman Crane. All right. Without objection, so ordered.
    [No information had been received at the time of printing.]
    Mr. Do. Thank you.
    As of last year, Vietnam estimated that around 60 percent 
of foreign invested firms were yet to break even. Companies 
such as Coca-Cola and Proctor & Gamble lost money, and Chrysler 
pulled out altogether. This is because many obstacles exist in 
Vietnam such as:
    Corruption: This is a severe and pervasive problem that can 
be found in all levels of government.
    Absence of the rule of law: The reason that corruption in 
Vietnam is so rampant is because the rule of law does not 
exist.
    State-owned enterprises: These enterprises enjoy subsidies 
from the Vietnamese Government and other numerous advantages 
over the private sector. Such preferential treatment eliminates 
the level playingfield and does not allow the private sector to 
effectively compete against them.
    Half-hearted reform: The government only commits to reform 
when it means that they still retain power. Currently, a $500 
million package of loans, largely funded by IMF and the World 
Bank, remains on hold because Vietnamese officials refused to 
accept more comprehensive reforms.
    The lack of respect for basic human rights: Limitations on 
certain rights, such as freedom of the press, can have an 
adverse effect on the economy because it hinders the flow of 
information necessary for business activities.
    Increasing social unrest: Vietnam's economic reform has 
resulted in huge inequity in socioeconomic development. The 
result of this situation is increasing social unrest. Since 
December 1996, there has been numerous and unprecedented large-
scale protests throughout Vietnam.
    To summarize the business climate and obstacles facing 
foreign investors in Vietnam, let me quote Mr. James Rockwell 
of Vatico, Inc., the first American company licensed to operate 
in postwar Vietnam. After 6 years in Vietnam, Mr. Rockwell said 
that he is heading home because ``he has been worn down by the 
difficulty of arranging business contracts in Vietnam and the 
dim prospects for making money.'' He also said that if 10 
percent of foreign-invested companies in Vietnam are making a 
profit, he'd be surprised.
    Clearly, in order for Vietnam to escape economic crisis and 
for foreign investors to succeed in Vietnam, crucial changes 
are necessary, such as:
    Equitisation of State-owned enterprises: International 
institutions and leading economists have been calling for an 
acceleration of reforms and equitisation of the state-owned 
enterprises. Unfortunately, Vietnam is still reluctant and 
proceeding with the equitisation process at a snail's pace.
    Overhaul banking and legal systems: The entire banking and 
legal systems must be overhauled completely. At the direction 
of the Communist Party, Vietnam's banks have always lent money 
to state-owned enterprises which operate at losses. This can 
further damage the debt-ridden and capital-starved banking 
sector.
    Accountable government: The Vietnamese Government must be 
held accountable for its own action, however, accountable 
government can only be achieved if there is true popular and 
democratic rule.
    Civil society: A civil society where all basic human and 
civil rights are respected is absolutely needed in Vietnam. In 
addition, the rule of law must be established. Vietnam needs to 
have a civil society to minimize social unrest and create a 
more stable and constructive environment for businesses.
    In short, Vietnam needs to have sociopolitical reform, as 
well as economic reform. Recent events in Indonesia clearly 
indicated that economic reform must be accompanied by 
sociopolitical reform. For more than a decade, foreign 
investors in the international community have been pouring 
money into Vietnam with little success. That is because there 
is no real pressure to force the Vietnamese Government toward a 
more long-term and constructive path of reform.
    The approach taken by the Vietnamese Government since 1986 
has been more to stave off their own collapse, rather than 
rescuing the country. With billions of dollars already invested 
Vietnam, it is now time to take a different approach so that 
long-term growth and a business-friendly environment can be 
created.
    Leaving it up to the Vietnamese Government's goodwill to 
reform just does not work. The United States should use 
economic leverages, such as the Jackson-Vanik waiver, MFN 
status and other forms of preferential tariff treatment, to 
exchange for concrete, verifiable steps toward the necessary 
changes I just mentioned above. These benefits should only be 
given when Vietnam reciprocates with measurable steps toward 
full economic and political reforms.
    Finally, giving Ex-Im and OPIC benefits to Vietnam now will 
only put United States taxpayer dollars at risk, especially in 
light of the Vietnamese Government's unwillingness to proceed 
with true reform. I believe that such action together with the 
Jackson-Vanik waiver, without any real, tangible concessions 
from Vietnam, are premature at this point.
    Thank you.
    [The prepared statement follows:]

Statement of Diem Hoang Do, Cochair, Coalition Against Jackson-Vanik 
Waiver, Westminster, California

    Distinguished Members of Congress,
    I would like to express my appreciation for the opportunity 
to speak to you today on the major obstacles facing the 
business community in Vietnam, and how the United States can 
help to facilitate positive changes required for long term 
success. Hopefully the information and assessment I provide 
will serve to capture a more realistic picture of Vietnam. 
That, I believe, is absolutely necessary to understand how what 
happens in Vietnam can ultimately impact our trade and national 
interests.

                         Obstacles to Overcome

    Since the late 1980s when Vietnam launched ``doi moi,'' a 
policy of economic reform, foreign companies have been flocking 
to Vietnam hoping to take advantage of the new ``tiger 
economy.'' However, more than a decade later, an estimated 60 
percent of foreign invested firms have yet to break even 
according to official Vietnamese figures. Companies such as 
Coca-Cola and Procter & Gamble have lost money, while Chrysler 
pulled out altogether. In addition, Vietnam once again is on 
the verge of another major economic crisis. This is because 
Vietnam's current condition presents many obstacles such as:

1. Corruption

    This is a pervasive problem that can be found in all levels 
of the government. Just last October, the Vietnamese editor of 
Doanh Nghiep (Enterprise) magazine was arrested after a series 
of articles that exposed alleged high-level corruption at the 
customs department. Recently, reporter Kevin Bubel 
(International Herald Tribune, 5/30/98) wrote that ``opaque 
regulations and officials seeking bribes make Vietnam a rough 
sell. Investors also complain they are nickel-and-dimed to 
death as negotiations drag on.'' In 8/97, the Baltimore Sun 
also reported that foreign companies are rethinking their 
investments due to real problems such as red tape, pervasive 
corruption, a sketchy and unpredictable legal system, and very 
``clear signs of government hostility.''

2. Absence of the rule of law

    The rule of law, or the lack of it, can have profound 
impact on all aspects of society. In fact, the reason that 
corruption in Vietnam is so rampant is because the rule of law 
does not exist. Without the rule of law, businesses cannot 
reasonably expect that they will enjoy equal protection under 
the law. Just last year, American Rice company was fined 1.2 
million dollars and was demanded to dissolve its venture. This 
incident triggered Ambassador Peterson to send a letter to then 
Prime Minister Vo Van Kiet accusing Vietnamese officials of 
``arbitrary and discriminatory'' treatment.

3. State-owned enterprises (SOEs)

    In a 1997 report, the United Nations Development Program 
said that ``the advantages enjoyed by the SOEs, such as greater 
access to land, credit and other valuable resourcesas well as 
monopoly powers in some cases, are probably `crowding out' the 
development of a dynamic, non-state sector.'' Such preferential 
treatment eliminates a level playing field and does not allow 
the private sector to effectively compete against SOEs. Despite 
the special treatment, close to 70 percent of the 6,000 SOEs 
are still losing money or barely surviving due to corruption 
and mismanagement. As the government continues to pump hundreds 
of millions of dollars into these companies to keep them 
afloat, resources are drained from the treasury leaving it on 
the brink of bankruptcy.

4. Half-hearted reform

    For months since the beginning of the current crisis, the 
government has remained paralyzed, unwilling to implement 
radical economic reform that might continue high growth but 
diminish its control. The government only commits to reform if 
it means that they still retain power. Erik Offerdal of the IMF 
said that ``what is needed now is a comprehensive package of 
reforms. If they continue to do nothing, the country could go 
off a cliff.'' Currently, a $500 million loan package largely 
funded by the IMF and the World Bank remains on hold until 
Vietnamese officials accept more comprehensive reforms. On 
November 29, 1997, Singapore's Senior Minister Lee Kuan Yew 
issued a blunt criticism during his visit to Hanoi. He said, 
``I have spelled out to them the implications for our investors 
and for all other investors, and they are killing them. This is 
bad news for future investment.''

5. Lack of respect for basic rights

    Basic rights of the Vietnamese people are not respected by 
the government. In fact, they are blatantly violated. In the 
State Department's Country Human Rights Report, Vietnam 
continues to be classified as one of the worst violators. Such 
policy erodes the people's trust in government, and that 
distrust transpires into the economic arena making it more 
difficult for the government to mobilize people and resources. 
In addition, limitations on certain rights such as freedom of 
the press can have an adverse effect on the economy because it 
hinders the flow of information necessary for business 
activities. In a report titled East Asia: From Miracle to 
Crisis, the United Nations Development Program said that 
``Vietnam's economy remains one of the most information-starved 
in the world,'' and that ``Vietnam is in the midst of an 
information crisis that needs to be urgently redressed''

6. Increasing social unrest

    Vietnam's economic reform has resulted in huge inequity in 
socio-economic development. According to the World Bank, half 
of all Vietnamese live below the World Bank poverty standard of 
$100 dollars a year. Approximately 90 percent of the poor live 
in the countryside where the typical annual income hovers 
around $20 dollars per person. The result of this situation is 
increasing social unrest. Since December 1996, there have been 
numerous and unprecedented large scale protests throughout 
Vietnam. Andrew Steer of the World Bank noted that ``the 
problems are very acute. Income inequality is growing rapidly 
and social tensions are rising, Vietnam is at a crossroads.'' 
Some protesters have even turned to extreme measures. On June 
11, 1998, a Vietnamese war veteran died after setting himself 
on fire to protest against local corruption. This is the second 
such act in less than two months.
    To summarize the business climate and obstacles facing 
foreign investors in Vietnam, the experience of Vatico, Inc., 
the first American company licensed to operate in postwar 
Vietnam, is worth noting. After six years in Vietnam, James 
Rockwell of Vatico, Inc. said that he's heading home because 
``he has been worn down by the difficulty of arranging business 
contracts in Vietnam and the dim prospects for making money.'' 
He also said that ``if 10 percent of foreign-invested companies 
in the country (Vietnam) are making a profit, I'd be 
surprised.'' (International Herald Tribune, 5/30/98)

                       Changes Needed for Success

    Clearly, in order for Vietnam to escape economic crisis and 
for foreign investors to succeed in Vietnam, crucial changes 
are necessary such as:

1. Equitisation of SOEs

    The United Nations Development Program recommended that 
Vietnam must cut off aid to the ailing state enterprises and 
act swiftly to bring greater transparency to financial 
dealings. Leading economists have also been calling for an 
acceleration of reforms and equitisation of the SOEs. This is a 
much needed action to avoid bankruptcy and derailment of the 
country's growth plan. Unfortunately, Vietnam is still 
reluctant and proceeding with the equitisation process at a 
snail's pace.

2. Overhaul banking and legal systems

    The entire banking and legal systems must be overhauled 
completely. At the direction of the party, Vietnam's banks have 
lent money to money-losing SOEs at preferential rates, causing 
further damage to the debt-ridden, capital-starved banking 
sector. Currently, the country's foreign exchange reserves are 
estimated to be just enough to cover 8-9 weeks worth of 
imports. Financial transparency and legal reform have always 
been key elements demanded by foreign investors. However, the 
recent appointment of Deputy Prime Minister Nguyen Tan Dung to 
the post of Central Bank Governor defies any logic. Mr. Nguyen 
is a former security official who rose through the ranks to 
become Deputy Minister of Interior from 1992 to 1997. He has no 
training or experience in either economics, banking or finance.

3. Accountable government

    The Vietnamese government must be held accountable for its 
own actions. That means checks and balances must be in place so 
that the three branches of government--legislative, executive, 
and judiciary--are independent from each other, and most 
importantly from the complete control of the Communist party. 
Also, accountable government can only be achieved if there is 
true popular rule. Such a government is needed to ensure that 
the best course of action for the whole nation will be 
selected.

4. Civil society

    A civil society where all basic human and civil rights are 
respected is absolutely needed. A civil society ensures 
majority rule and protection of minority rights. In addition, 
the rule of law must be established. These are the ingredients 
critical for long term stability and development. Vietnam needs 
to have a civil society to minimize social unrest and create a 
more stable and constructive environment for business.
    In short, Vietnam needs to have socio-political reform as 
well as economic reform. One without the other will not work. 
Recent events in Indonesia clearly indicate that economic 
reform alone still leads to unrest and necessitates complete 
socio-political reform. Reporter Jeremy Grant of the London 
Financial Times wrote that given the current situation, western 
analysts believe that ``although Hanoi could muddle along for 
up to 12 months, nothing less than political reform will solve 
the long-term problem.'' Also, according to Robert Templer of 
the University of California: ``Policy making (in Vietnam) has 
ground to a halt to such a degree that there's no hope of 
serious economic reform without some sort of major shift in the 
political system.''

                        Approach Toward Vietnam

    Given the current political and economic conditions in 
Vietnam, the United States is in a perfect position to 
facilitate positive changes in Vietnam. Vietnam is facing 
increasing difficulties on all fronts and therefore should be 
more susceptible to pressures for changes. For more than a 
decade, foreign investors and the international community have 
been pouring money into Vietnam with little success. That is 
because there is no real pressure to force the Vietnamese 
government toward a more long term and constructive path of 
reform. The approach taken by the Vietnamese government since 
1986 has been more to stave off their own collapse rather than 
to rescue the country.
    With billions of dollars already invested in Vietnam, it's 
now time to take a different approach so that long term growth 
and a business friendly environment can be ensured. Leaving it 
up to the Vietnamese government's goodwill to reform no longer 
works. Pressures must be applied so that the right course and 
the right pace of reform are taken. The United States should 
use economic leverages such as the Jackson-Vanik waiver, MFN 
status, other forms of preferential tariff treatment and other 
benefits such as EXIM, OPIC, TDA to exchange for concrete, 
verifiable steps toward the necessary changes mentioned above. 
These benefits should only be given when Vietnam reciprocates 
with measurable steps toward full economic and political 
reforms.
    Finally, giving EXIM and OPIC to Vietnam now will only put 
U.S. taxpayers' dollars at risk especially in light of the 
Vietnamese government's unwillingness to proceed with true 
reform. I believe that such actions, together with the Jackson-
Vanik Waiver, without any real, tangible concessions from 
Vietnam are premature at this point.

                               Conclusion

    Free trade between the United States and Vietnam is 
necessary for long term development and prosperity of both 
countries, and even more so for Vietnam. However, I believe 
that free trade does not mean at any cost and without 
conditions. In the case of Vietnam, certain conditions must be 
met in order for meaningful, long lasting trade relations to 
develop. Free trade can only grow if the basic foundation for a 
mutually beneficial relationship has been created. Such a 
foundation is still missing in Vietnam.
    Lastly, I believe that the guiding principle of our country 
has always been cooperating and partnering with free 
governments, free countries, where human rights and values are 
respected. I believe that free trade should only be with free 
people. After all, that's what this great nation is all about.
      

                                


    Chairman Crane. Thank you, Mr. Do. Mr. Levan or Levan.
    Mr. Levan. Yes, sir, Levan.
    Chairman Crane. Levan.

STATEMENT OF FILONG LEVAN, VICE PRESIDENT, VIETNAMESE-AMERICAN 
           VOTERS' COALITION, LONG BEACH, CALIFORNIA

    Mr. Levan. Mr. Chairman, I would like to express my 
opposition, and that of the Vietnamese-American Voter's 
Coalition, to the waiver of the Jackson-Vanik amendment for 
Vietnam.
    The Jackson-Vanik amendment makes access to U.S. Government 
credit and investment guarantees dependent on freedom of 
emigration and progress in human rights. There has been little 
movement in either area in recent years. In fact, the Communist 
regime has, if anything, become even more repressive.
    The most substantial argument for the lifting of the 
Jackson-Vanik amendment has been that Vietnam no longer 
requires exit permits as a precondition for access to 
interviews under the United States Resettlement Opportunity for 
Vietnamese Returnees Program. In reality, however, Vietnam has 
not eliminated the necessity of an exit permit, but only 
delayed it until after the interview.
    Equally important, the human rights situation in Vietnam is 
not improving. As in the past, all opposition to the ruling 
Communist Party is ruthlessly suppressed and the country is 
dominated by an atmosphere of repression. The Communist regime 
continues to hold hundreds and probably thousands of political 
prisoners. Among the prisoners are members of the Movement to 
Unite the People and Build Democracy, which issued a manifesto 
calling for peaceful, gradual change in Vietnam. The group 
attempted to hold an international conference on democracy and 
development at the Metropole Hotel in Ho Chi Minh City in 
November 1993. That was to be attended by leading retired 
American officials, but the meeting was prevented by the arrest 
of the participants.
    There are many persons who argue that the waiver of the 
Jackson-Vanik amendment will promote a liberalization of 
Vietnamese society. Experience suggests, however, that it is 
insistence on the fulfillment of strict conditions in return 
for concessions that is able to promote change. The Jackson-
Vanik amendment facilitated the emigration of Soviet Jews 
because it was not lifted and the Soviet authorities, 
therefore, had an incentive to change their repressive 
policies.
    In the Vietnamese case, the waiver of the Jackson-Vanik 
amendment, would send a strong signal to the Vietnam Government 
and Vietnam society encouraging the Vietnamese leaders to think 
that they can continue the oppression of their own people and 
still reap the benefits of advantageous trade relations with 
the West.
    Vietnamese communism was victorious because it deceived and 
manipulated the Vietnamese people. It is for this reason that 
the present Vietnamese leaders are so afraid of free emigration 
and freedom of speech. Because of the regime's efficiency in 
stamping out dissent, the forces of the opposition in Vietnam 
are weak. But, they could become influential if political 
liberty was established in Vietnam and they were allowed to 
compete for power freely. This, however, will not happen 
without political support from abroad.
    Mr. Chairman, I therefore ask you to vote against the 
waiver of the Jackson-Vanik amendment for Vietnam and to 
continue to oppose it until the Vietnamese Government takes the 
first steps toward allowing real political liberty, including 
the removal of barriers to emigration and the freeing of all 
political prisoners. Thank you for letting me voice our 
concerns.
    [The prepared statement follows:]

Statement of Filong Levan, Vice President, Vietnamese-American Voters' 
Coalition, Long Beach, California

    Mr. Chairman:
    I would like to express my opposition and that of the 
Vietnamese-American Voters' Coalition to the waiver of the 
Jackson-Vanik amendment for Vietnam.
    The Jackson-Vanik amendment makes access to U.S. government 
credit and investment guarantees dependent on freedom of 
emigration and, more generally, on progress in human fights but 
there has been little movement in either area in recent years. 
Instead, the communist regime has, if anything, become even 
more repressive.
    The most substantial argument for the lifting of the 
Jackson-Vanik amendment has been. that Vietnam no longer 
requires exit permits as a pre-condition for access to 
interviews under the U.S. Resettlement Opportunity for 
Vietnamese Returnees Program (ROVR.) In reality, however, 
Vietnam has not eliminated the necessity of an exit permit but 
only delayed it until after the interview. Access to other 
programs, like the Orderly Departure Program (ODP) is 
restricted, passports are issued for only a single foreign trip 
and then must be reapplied for and people are not able even to 
travel freely inside Vietnam.
    Equally important, the human fights situation in Vietnam is 
not improving. As in the past, all opposition to the ruling 
communist party is ruthlessly suppressed and the country is 
dominated by an atmosphere of repression. In April, 1997, the 
Vietnamese government introduced a decree on adminstrative 
detention (31/CP) that officially authorizes village level 
Peoples' Committees and public security officials to detain 
individuals without trial for from six months to two years. 
This directive is intended to suppress freedom of speech 
because it specifically applies to those persons deemed to have 
violated the laws on national security but whose offense ``is 
not serious enough to be prosecuted criminally.''
    The Vietnamese government has also tightened its control of 
the press. There was a national press blackout regarding mass 
protests in the Thai Binh province from May to September, 1997 
and in general, the Vietnamese domestic media is used as a tool 
for Party propaganda and denied the freedom to develop into an 
independent force. Although, high ranking communist officials 
have emphasized the role of the mass media in fighting 
corruption, on October 8, 1997, Nguyen Hoang Linh, the editor 
of the business newspaper, ``Doanh Nghiep,'' was arrested and 
charged with ``revealing state secrets'' for reporting high 
level corruption within the Customs service in connection with 
the purchase of boats from Ukraine.
    Perhaps most important, the communist regime continues to 
hold hundreds and probably thousands of political prisoners 
whose only crime was their attempt to express themselves 
freely. Among the prisoners are members of the ``Movement to 
Unite the People and Build Democracy,'' which issued manifestos 
calling for peaceful, gradual change in Vietnam. The group 
attempted to hold an international conference on democracy and 
development at the Metropole Hotel in Ho Chi Minh City in 
November, 1993 that was to be attended by leading retired 
American military and intelligence officials but the plan for 
the meeting was foiled by the arrest of the participants.
    The group's leader was Professor Nguyen Dinh Huy, who spent 
seventeen years in 66 ``reeducation'' camps after 1975. He was 
sentenced, upon his arrest in 1993, to 15 years of additional 
imprisonment. Pham Tuong, Professor Huy's deputy, was sentenced 
to fourteen years; Nguyen Ngoc Tan, also known by the pen name, 
Pharn Thai, was sentenced to eleven years imprisonment; Dong 
Tuy, a teacher, was sentenced to eleven years; Bui Kim Dinh, 
was sentenced to twelve years; Nguyen Van Bien, was sentenced 
to eight years imprisonment and Nguyen Van Chau was sentenced 
to four years.
    Other well known political prisoners in Vietnam include 
Professor Doan Viet Hoat, who has now been imprisoned for 
almost 19 years for writing articles concerning human rights in 
a typewritten newsletter called, ``Freedom Forum.'' and Dr. 
Nguyen Dan Que, an endocrinologist who was arrested on May 1, 
1990 for issuing a manifesto calling on the Vietnamese 
government to respect basic human rights and was sentenced to 
twenty years imprisonment.
    There are many persons who argue that the waiver of the 
Jackson-Vanik amendment will promote the liberalization of 
Vietnamese society. Experience with communist regimes, however, 
suggests that exactly the opposite is the case. It is only 
insistence on the fulfillment of strict conditions in return 
for concessions that is able to promote change. The Jackson-
Vanik amendment played a key role in facilitating the massive 
emigration of Jews from the Soviet Union because it was not 
lifted and the Soviet authorities knew that it would not be 
lifted until they made convincing progress in the areas of 
emigration and human rights and therefore had an incentive to 
change their policy.
    In the Vietnamese case, the waiver of the Jackson-Vanik 
amendment could only send the wrong signal to the Vietnamese 
government and Vietnamese society. As the Vietnamese economy 
falters, the Vietnamese leaders again face the choice between 
maintaining tight internal security and introducing wider 
reforms. All indications are that they have made the decision 
in favor of security. The waiver of the Jackson-Vanik amendment 
now can only encourage the Vietnamese leaders to think that 
they can continue the oppression of their own people and still 
reap the benefits of advantageous trade relations with the 
West.
    Vietnamese communism was victorious because it deceived and 
manipulated the Vietnamese people. It is for this reason that 
the present Vietnamese leaders are so afraid of free emigration 
and freedom of speech. Because of their efficiency in stamping 
out opposition, the forces inside the country which stand for 
human rights are enfeebled. But they could become influential 
if political liberty were established in Vietnam and they were 
allowed to compete for power freely. This, however, will not 
happen without the help of political support from abroad.
    I therefore urge you to vote against the waiver of the 
Jackson-Vanik amendment for Vietnam and to continue to oppose 
it until the Vietnamese government takes the first steps toward 
allowing real political liberty, including the removal of all 
barriers to emigration and the freeing of all political 
prisoners.
      

                                


    Chairman Crane. Thank you, Mr. Levan. And, finally, Mr. 
Joseph.

    STATEMENT OF JOEL D. JOSEPH, CHAIRMAN, MADE IN THE USA 
                           FOUNDATION

    Mr. Joseph. Good afternoon, Mr. Chairman, and thank you for 
the opportunity to allow me to bring you the views of the Made 
in the USA Foundation.
    The foundation supports Congressman Rohrabacher's 
resolution, H.J.R. 120, to overturn the President's waiver of 
Jackson-Vanik. As Ambassador Peterson said, even if you do 
overturn the waiver, it won't affect the attempts to recover 
the remains of POWs and that movement.
    Does trade with Vietnam hurt the United States or help the 
United States? That's the key question to be answered during 
these hearings. For if trade with Vietnam is harmful, we could 
or should end it or change the terms of trading.
    Nike, Inc., an American corporation based in Beaverton, 
Oregon, is the largest exporter from Vietnam to the United 
States. Nike contracts with five footwear factories in Vietnam, 
all located in areas surrounding Ho Chi Minh City. Nike 
controls these plants even though they are owned, actually, by 
Taiwanese and South Koreans, like a plantation owner managing 
slaves. Nike workers are paid subsistence wages in violation of 
Vietnam law, working 65 hours a week for $10, or about 15 cents 
an hour.
    In addition, these plants are--have unsafe working 
conditions where workers breathe toxic fumes at extremely high 
levels. At one place, it was 177 times the level allowed by 
law.
    The overall scope with Vietnam compared with other nations 
in the world is very small. During 1997, the Commerce 
Department reports our exports to Vietnam were $228 million, 
and our imports were $388 million. The foundation estimates 
that Nike's exports from Vietnam are approximately $100 million 
per year, or more than 25 percent of Vietnam's total exports to 
the United States. The Commerce Department's statistics on 
Vietnam trade are woefully inadequate, and the foundation was 
forced to compile its own data.
    Because trade with Vietnam is so small, even if we were to 
cut off all trade, it would have virtually no noticeable effect 
on the United States economy. That's in stark contrast to trade 
with China.
    On paper, Vietnam's labor and safety laws look reasonably 
good. The problem is that they are not enforced, either because 
of bribery, corruption or incompetence.
    Nike is unique among American companies operating in 
Vietnam. Most American companies, as mentioned before, Ford 
Motor Co., pay better and have better working conditions than 
Nike provides. However, as the largest American employer in 
Vietnam, with approximately 25,000 workers, they manufacture 20 
million pairs of shoes annually.
    Workers in Vietnam have no freedom of speech. In fact, if 
they speak while they work, they are physically beaten. That 
was reported in the New York Times recently. That is how slaves 
are treated.
    The United States should push Vietnam to protect its 
workers and encourage workplace democracy. According to the New 
York Times, who relied on an Ernst and Young report, 77 percent 
of the workers at one of the Nike plants suffered from 
respiratory problems. That's more than three-quarters.
    Toluene exposure, which causes cancer, was found to be from 
6 to 177 times the legal limit at this plant where 9,200 
workers are at that plant and they produce 400,000 pairs of 
shoes a month.
    A team of MBA students from the Tuck Business School at 
Dartmouth studied Nike's operations in Vietnam and found that 
the average monthly income of Nike workers in Vietnam is $32, 
which is well below the legal minimum wage of from $35 to $45, 
and that varies according to provincial law.
    The average per capita income in Dong Nai province, where 
Nike operates, was $449 in 1995 and estimated to be $700 last 
year, double Nike's wages. So Nike is paying less than half the 
average wages in Vietnam.
    The Dong Nai department of labor reported average wages to 
be $90 for state-owned companies, that this man testified 
about, $60 for foreign firms in general, including most 
American firms, and $50 for small Vietnam companies. Nike pays 
an average of $41 a month in Dong Nai province.
    Is this fair trade? Should the United States--what should 
the United States do about working conditions and wages at 
plants controlled by American companies?
    The foundation proposes that exporters from Vietnam be 
required to certify that in the manufacture of products 
exported to the United States, that all Vietnam labor and 
occupational safety and health laws were complied with, and, 
two, certify that employees working to manufacture products 
exported to the United States are paid a certain minimum wage. 
We propose 25 cents an hour during 1998, rising to 35 cents an 
hour, and these, of course, are a pittance compared to what 
workers are paid elsewhere, and 50 cents an hour during the 
year 2000.
    The total current payroll for all Nike workers in Vietnam 
is $10 million. In contrast, Nike spends that amount on Super 
Bowl advertising every year, and pays Michael Jordan and Tiger 
Woods more than the entire payroll that it pays 25,000 workers.
    Thank you for the opportunity to let us provide this 
testimony. We summarize by saying that we urge you to vote in 
favor of Congressman Rohrabacher's H.J.R. 120.
    [The prepared statement follows:]

Statement of Joel D. Joseph, Chairman, Made in the USA Foundation

    Does trade with Vietnam hurt or help the United States? 
That is the key question to be answered during these hearings. 
For if trade with Vietnam is harmful to the United States, we 
could and should either end it or change the terms of trading.
    Nike, Inc., an American company based in Beaverton, Oregon, 
is the largest exporter from Vietnam to the United States. Nike 
contracts with five footwear factories in Vietnam, all located 
in areas surrounding Ho Chi Minh City, the city formerly known 
as Saigon. Nike controls these plants and the workers there 
like a plantation owner managing slaves. Nike workers are 
virtual slaves, paid subsistence wages in violation of 
Vietnamese law, working 65 hours a week for $10 or about 15 
cents per hour. In addition, these plants have unsafe 
conditions where workers breathe toxic fumes at extremely high 
levels.
    I am Joel Joseph, Chairman of the Made in the USA 
Foundation. I am both an economist and an attorney. The 
Foundation, started in 1989, has 60,000 members nationwide. 
Made in the USA is dedicated to promoting U.S. products in the 
United States and overseas. To further that goal, the 
Foundation believes that the playing field should be level, 
that trade should be fair and the American standards should not 
be undercut by nations who do not live up to our environmental, 
safety and health and labor standards.
    First of all, the overall scope of trade with Vietnam is 
very small. During 1997, the Commerce Department reports our 
exports to Vietnam were $228 million and our imports from 
Vietnam were $388 million. The Foundation estimates are that 
Nike, Inc.'s exports from Vietnam are approximately $100 
million per year or more than 25% of Vietnam's total exports to 
the United States. The Commerce Department's statistics on 
Vietnam trade are woefully inadequate and the Foundation was 
forced to extrapolate its own data.
    Because trade with Vietnam is so small, even if we were to 
cut off all trade with Vietnam, it would have a virtually no 
noticeable affect on the U.S. economy.
    On paper, Vietnam's labor and safety and health laws look 
reasonable. The problem is that they are not enforced, either 
because of bribery, corruption or incompetence.
    Nike, Inc. is unique among American companies operating in 
Vietnam. Most American companies pay better and have better 
working conditions than Nike provides. However, Nike is the 
largest American employer in Vietnam with approximately 25,000 
workers who manufacture about 20 million pairs of shoes 
annually.
    Workers in Vietnam have no freedom of speech. In fact if 
they speak while they work they will be physically beaten. This 
is how slaves are treated. The United States should push 
Vietnam to protect its workers and encourage workplace 
democracy.
    According to the New York Times, relying on a report by 
Ernst & Young, 77% of workers at the Tae Kwang Vina plant in 
Dong Nai province, suffered from respiratory problems because 
of insufficient ventilation. Toluene exposure at from six to 
177 times the legal limit was found at the plant where 9,200 
workers produce 400,000 pairs of shoes a month.
    A team of MBA students at Tuck Business School at Dartmouth 
College studied Nike's operations in Vietnam and found that the 
average monthly income of a Nike worker in Vietnam is $32, 
which is well below that legal minimum wage of from $35 to $45 
per month varying according to provincial law.
    The average income per capita in Dong Nai province, where 
Nike operates, was $449 in 1995 and estimated to be $700 in 
1997, double Nike's wages. The Dong Nai Department of Labor 
reported average wages to be $90 for state-owned companies $60 
for foreign firms (including most American firms) and $50 for 
small private Vietnamese firms. Nike pays an average of $41 in 
Dong Nai province.
    Is this fair trade? What should the United States do about 
the working conditions and wages at plants controlled by 
American companies?
    The Foundation proposes that exporters from Vietnam be 
required:
    1. To certify that in the manufacture of products exported 
into the United States that all Vietnamese labor and 
occupational safety and health laws were complied with; and
    2. To certify that all employees working to manufacture 
products exported to the United States were paid no less that 
twenty-five cents per hour during 1998, no less than thirty-
five cents per hour during 1999 and no less than fifty cents 
per hour during the year 2000.
    The total current payroll for all Nike workers in Vietnam 
is now approximately $10 million per year. (In contrast Nike 
spends that amount on Superbowl advertising and pays superstars 
Michael Jordan and Tiger Woods more annually than its entire 
Vietnam payroll) This workforce manufactures 20 million pairs 
of shoes annually. It doesn't take a rocket scientist to 
calculate that current labor costs in Vietnam to manufacture a 
pair of Nike shoes is now fifty cents. These shoes retail in 
the United States for from $50 to $150 a pair.
    Based on our proposal the labor costs for a pair of Nikes 
will rise to $0.83 per pair immediately, to $1.15 a pair in 
1999, and to $1.50 per pair in the year 2000. This labor cost 
increase will cause Retail prices in the United States to rise 
by about one percent per year.
    Compared with the modest impact in the United States, the 
result in Vietnam would cause the standard of living to rise 
enormously.
    How does this help the United States? Simply stated, if 
workers around the world are not paid more than subsistence 
wages, they cannot afford to buy American products.
    In 1914, when the United States was at about the economic 
stage that Vietnam is now, Ford autoworkers made $2.50 per day. 
Henry Ford overnight doubled his workers' wages to $5.00 a day 
and the U.S. economy has blossomed ever since. If workers can 
afford to buy the products that they make, everyone benefits.
    The United States can truly help the Vietnamese economy by 
requiring exporters to the U.S. to pay decent wages. Rather 
than subsidizing bailouts, the United States should do its part 
to make Asian economies generate more income from exports. If 
this was done in Indonesia before the current meltdown, the 
need for a bailout would have been prevented.
      

                                


    Chairman Crane. Well, we thank you all for your testimony, 
and the timing is perfect because they've rung the bells again 
and notified us that we have another vote on the floor. But I 
want to express appreciation to all who participated in this 
hearing today. And any ongoing information you want to 
communicate, please get in touch with the Subcommittee ASAP.
    And with that, the Subcommittee stands adjourned. Thank 
you.
    [Whereupon, at 2:55 p.m., the hearing was adjourned subject 
to the call of the Chair.]
    [Submissions for the record follow:]

Statement of the Office of the U.S. Trade Representative

    Obtaining the fullest possible accounting for POW/MIAs 
remains the Administration's top policy priority with respect 
to Vietnam, and all other policy decisions are considered with 
this in mind, including issues pertaining to economic 
normalization and trade relations. In fact, it was in the 
context of progress on POW/MIA accounting that President 
Clinton lifted our trade embargo in February 1994. Until that 
time, the United States had no trade relations with Vietnam. In 
July 1995, again in light of continued cooperation in 
accounting for POW/MIAs, the President normalized diplomatic 
relations with Vietnam, and directed that the process of 
economic normalization with Vietnam begin in accordance with 
relevant U.S. laws.
    With the lifting of the trade embargo in 1994, trade was 
allowed to flow between the United States and Vietnam, but not 
on normal terms. Vietnamese exports to the United States still 
face high tariffs in the range of 40%-80%. These high tariffs, 
known as ``Column 2'' rates, apply to the few countries that do 
not receive MFN treatment. Vietnam is one of only a small 
number of countries that are not currently eligible for normal 
trading status.
    Extending such most-favored nation trading status to 
Vietnam is governed by Title IV of the Trade Act of 1974. Title 
IV establishes two preconditions for extending MFN trading 
status to Vietnam:
     First, Vietnam must meet certain freedom of 
emigration requirements set out in the Jackson-Vanik amendment 
to the Trade Act. The President may waive these requirements 
annually upon a finding that issuing such a waiver would 
promote the freedom of emigration goals of the statute. The 
State Department has already addressed the granting of this 
waiver in March 1998 and its extension this month.
     The second precondition on extending MFN status to 
Vietnam is the conclusion of a bilateral trade agreement 
addressing, at a minimum, the issues of safeguards, 
intellectual property rights, the settlement of commercial 
differences and disputes, and trade promotion. A bilateral 
trade agreement with Vietnam may not enter into force until 
after Congress passes a joint resolution of its approval.
    If these two criteria are met, MFN treatment can be 
extended to Vietnam. However, under Title IV, the continued 
extension of MFN trading status to Vietnam is subject to an 
important caveat: if the President determines that Vietnam is 
not cooperating with our efforts to achieve a full accounting 
of military personnel lost during the Vietnam War, he may 
revoke its MFN trading status.
    From the beginning, the Administration's policy has been to 
conclude a solid, commercial agreement with Vietnam that 
fulfills three broad objectives:
     The agreement should be equitable and mutually 
beneficial. This means that in return for extending Vietnam our 
low ``column 1'' tariff rates, we expect equitable market 
access in Vietnam.
     The agreement should be on the basis of 
international norms and standards, primarily WTO standards, 
since these standards are the basis of our trade relations with 
practically every other country. In reality, because Vietnam is 
not yet a WTO member, the agreement will need to demonstrate 
that Vietnam is moving in a concrete and specific way toward 
WTO norms.
     The agreement should facilitate trade and 
investment. In other words, it should address to a reasonable 
degree the concerns expressed by U.S. firms interested in doing 
business in Vietnam.
    An agreement that meets these three criteria would benefit 
both the United States and Vietnam by establishing trade 
relations on the firmest possible footing. It would create 
business opportunities for exporters on both sides--by giving 
Vietnam access to the large U.S. market, and ensuring equitable 
access for the United States to Vietnam's growing market of 
over 70 million people. Such an agreement would also serve as a 
concrete indication of Vietnam's commitment to integrating into 
the world economy on terms accepted by nearly all other 
countries, and would thereby advance economic reform and 
liberalization in Vietnam. In contrast, over the long term, the 
lack of an agreement can be expected to result in the loss of 
opportunities for Americans in Vietnam's market, since 
virtually every other country already has normal trade 
relations with Vietnam.
    Negotiations on this comprehensive agreement are underway 
and making progress. In early 1997, after spending most of 1996 
discussing and analyzing Vietnam's trade and investment regime, 
the United States completed a detailed proposed text for the 
agreement. In April 1997, we successfully concluded negotiation 
of a bilateral copyright agreement that will give U.S. 
copyrighted works legal protection in Vietnam for the first 
time. In October 1997, Vietnam presented a first partial 
response to our proposed text of the trade agreement. This was 
followed in April 1998 by a detailed comprehensive Vietnamese 
response, that included all four substantive issues proposed by 
the United States: market access for goods, intellectual 
property rights, market access for services, and investment.
    In light of the comprehensive Vietnamese response, a round 
of negotiations was held in Washington in late May. Those 
negotiations served to highlight the areas where the gap 
between the two sides has narrowed, as well as areas where our 
views continue to diverge. We expect talks to continue actively 
in the coming months.
    It is difficult to predict when this agreement will be 
completed because there are still many substantive issues left 
to be resolved. The Administration is firmly committed to 
concluding this agreement, and to normalizing trade relations 
with Vietnam, but we have made it clear that the agreement must 
meet the substantive criteria outlined above for it to be in 
the commercial interests of the United States. We will continue 
to keep this Committee apprised of progress in the 
negotiations, and look forward to working with you to ensure 
the approval of the agreement after it is completed.
      

                                


Statement of Carlos Moore, Executive Vice President, American Textile 
Manufacturers Institute

    This statement is submitted on behalf of the American 
Textile Manufacturers Institute (ATMI), which is the national 
association of the textile mill products industry. ATMI's 
members collectively account for more than three-quarters of 
the textile fibers processed in the United States and are 
engaged in the manufacture and marketing of every kind of 
textile product.
    The trade relationship between the United States and 
Vietnam is of substantial importance to the U.S. textile 
industry and its workers. Vietnam has a large textile and 
apparel manufacturing sector, employing over 700,000 workers at 
some of the lowest wage rates to be found in the world. As the 
former country of choice for quality garment production for the 
Soviet bloc, Vietnam also offers a highly skilled and 
professional workforce.
    The combination of very low wages and a highly skilled 
workforce make Vietnam a force to be reckoned with in the 
international sourcing arena. Within three years of being 
granted Most Favored Nation (MFN) status by the European Union 
(E.U.), Vietnam had become the third largest exporter of 
textile and apparel products to the E.U. As a result of this 
enormous growth, the E.U. has instituted comprehensive quota 
controls on Vietnam in order to prevent damaging new surges. 
Today, textiles and apparel account for 70% of the E.U.'s 
imports from Vietnam.
    As an article in Textile Asia pointed out last year, the 
threat to the U.S. textile and apparel sector is very real:

          Vietnam's garment industry, already expecting a solid year 
        with over $1 billion in exports, is preparing to enter the 
        promised land: a trade agreement between the U.S. and Vietnam 
        accompanied by the granting of MFN trading status. That move . 
        . . would unleash Vietnam's garment exports on the U.S., the 
        largest apparel market in the world.\1\
---------------------------------------------------------------------------
    \1\ Textile Asia, April 1997, p. 9

    The granting of MFN status to Vietnam will reduce the 
apparel tariffs that Vietnam pays from an average of over 50% 
to around 18%. Average tariffs on fabrics will fall to even 
lower levels. The Vietnamese government has already laid the 
groundwork for enormous export growth to the United States by 
offering generous tax incentives and building leases of more 
than 50 years ``at excellent prices'' to overseas firms.\2\
---------------------------------------------------------------------------
    \2\ Women's Wear Daily, 5/12/93.
---------------------------------------------------------------------------
    Further, these same reports indicate that Vietnamese firms 
are already prepared to exploit these opportunities as soon as 
they present themselves. For example:
     Nisso Iwai, a large apparel exporter, is shipping 
garment samples to Nordstorms, Saks Fifth Avenue, K-mart and 
Target in anticipation of MFN status being granted.
     The deputy director of Huy Hoang, a large apparel 
exporter, reports that this company is poised to increase 
capacity once MFN is granted. The company has cleared land for 
a new plant that will ``have a capacity of one million jackets 
a year'' just for export to the United States.
     Minh Phung, another large exporter, is investing 
$3 million to build five new garment factories and projects 
sales of 500,000 pieces in the first year of MFN.
    Without adequate safeguards, it appears virtually certain 
that the granting of MFN status will cause a dramatic increase 
in low-priced textile and apparel imports into the United 
States--with the resulting loss of textile and apparel jobs in 
the United States. In addition, granting of MFN status could 
threaten successful and productive textile trade agreements 
currently in effect with the CBI nations and Mexico which have 
resulted in thousands of jobs being created across North 
America.
    The United States can, however, take steps to prevent a 
damaging surge in imports from taking place. This can be 
accomplished by requiring that Vietnam sign a comprehensive 
bilateral textile and apparel agreement before MFN is granted 
or as a part of any commercial bilateral agreement. The textile 
and apparel agreement should include the establishment of:
    1) Comprehensive quota restrictions on Vietnam's textile 
and apparel exports to the United States.
    2) Strong anti-transshipment measures, including the right 
for U.S. Customs to make unannounced inspections and audits of 
Vietnamese textile and apparel plants. Vietnam has already been 
caught by U.S. Customs illegally transshipping goods through 
third countries.
    3) A condition that if Vietnam joins the World Trade 
Organization (WTO) its quotas will be subject to a separate 10-
year phase-out beginning upon the date of its entry to the WTO.
    4) Effective market access for U.S. textile and apparel 
exports. This would include the reduction of Vietnamese tariff 
rates to corresponding U.S. rates and the removal of any non-
tariff barriers.
    As the Committee is aware, the U.S. textile industry is 
already undergoing a difficult period of time during which its 
WTO quotas are being phased out and its tariffs reduced. As a 
result, global access to the U.S. textile and apparel market 
has already been increased by over 30% during the last three 
and one-half years. It is critical that Vietnam, as a major 
force in textile and apparel trade, be restrained from adding 
to this burden by sending a new and damaging surge of textile 
and apparel products to the United States.
    Thank you for the opportunity to share our industry's 
position on this important matter.
      

                                


Statement of Bill Bell, Former Chief, U.S. Office for POW/MIA Affairs, 
Vietnam

    Mr Chairman, distinguished members of the Committee, thank 
you for the opportunity to submit testimony for today's 
important hearing on U.S.-Vietnam relations.
    Since the initial stages of our government's postwar 
relations with Vietnam, government officials responsible for 
the issue have had a keen awareness of Hanoi's long range 
negotiating strategy. An extensive Rand Corporation analysis of 
the French experience during that country's postwar development 
of relations with Vietnam provides a dramatic illustration of 
Hanoi's intent: ``Despite the substantial political and 
economic concessions the French have made to Hanoi since 1954, 
France has never received a full accounting for its missing and 
dead. The Vietnamese communist government has consistently 
circumvented and violated the terms of the 1954 agreement 
concerning the accounting for France's missing servicemen. 
Hanoi's actions clearly demonstrate that its only interest in 
the French military graves in Vietnam and the requests for 
remains by the families of the deceased is in the economic and 
political benefits that the Vietnamese Government can derive 
from control of these remains. We should keep this in mind in 
dealing with Hanoi. We can anticipate that Hanoi's objective is 
to obtain increasingly large economic and political concessions 
in exchange for piecemeal releases of remains and information 
about our missing servicemen.''
    Obviously our negotiators failed to heed this sound advice. 
But the reasons for this incompetence have never been closely 
examined. Today I will attempt to outline for your Committee 
the actual chain of developments that have motivated our 
government's postwar relations with Vietnam. Hopefully, a 
better understanding of such developments will assist your 
Committee in considering President Clinton's recent waiver 
under the Jackson-Vanik amendment to the Trade Act of 1974.
    As you may recall, prior to 1989 our government's most 
important issue concerning Vietnam was the achievement of a 
viable settlement in war torn Cambodia. Subsequent to the 
withdrawal of a politically acceptable number of Vietnamese 
forces from that country our focus shifted to the accounting 
for our missing and dead from the Vietnam War. At that time the 
policy of the Bush Administration dictated that the recovery of 
missing American servicemen was a matter of the ``highest 
national priority.'' This high priority supported a strategy of 
strict reciprocity at the national level, and a high quality 
investigative effort on the ground in Vietnam. This proactive, 
yet cautious approach to addressing the important POW/MIA issue 
precipitated Vietnam's realization that no matter how difficult 
the effort, our persistence and perseverance would not diminish 
and only genuine cooperation would be acceptable by our 
government. These factors enabled our personnel on the ground 
in Vietnam to make considerable progress without large 
expenditures of government funds. Trade and commercial ties 
were never a matter of consideration, because we were 
determined not to fall in the same expensive and ultimately 
futile rut left by the French.
    This strategy meshed well with our long term goal of a full 
accounting for our servicemen because Vietnam did not have 
financial incentive to retard progress on this important 
national issue. Moreover, due to the coincidental collapse of 
the Soviet Union, Vietnam also realized that significant 
economic assistance from its wartime allies would not be 
forthcoming. These conditions served to create a rare window of 
opportunity for our negotiators to elicit cooperation from 
Vietnam in not only accounting for our missing men, but the 
important human rights aspect as well.
    But Vietnamese Communists are well known for several 
attributes, not the least of which are cunning, tenacity and a 
high threshold for pain. During the war years although the 
Vietnam Communist Party (VCP) constantly spouted rhetoric 
concerning freedom and democracy, its primary goal was 
reunification of the country under totalitarian control by the 
Communist Party. After accomplishing its initial objective 
Hanoi's Politburo even changed the name of the country from a 
``democratic'' to a ``socialist'' republic. The word for 
democracy ``dan chu'' quickly disappeared from letterheads of 
all official government and party correspondence. Dictionaries 
printed by the government did not even include the word ``da 
dang'' (multi-party).
    After reunification Hanoi's design changed to development 
of the economy under the continued totalitarian control of the 
VCP. In assessing the outlook for reconstruction and 
development Hanoi's strategists came to the realization that 
although genuine cooperation on POW/MIA accounting would hasten 
the pace of relations and significant progress on human rights 
would bring economic benefits, such cooperation would 
inherently lead to a weakening of totalitarian control by 
(VCP). Faced with this dilemma, Hanoi's leadership turned to 
its highest-level decision-making body with responsibility for 
military affairs, intelligence, counterintelligence, foreign 
policy, economics, industry and strategic deception, the 
National Defense Council (NDC), for salvation. The NDC of 
Vietnam is modeled on similar organizations of the People's 
Republic of China and the former Soviet Union. I believe that 
those responsible for safeguarding missile and satellite 
technology will not find that thought comforting.
    In planning and implementing strategic deception, the most 
important organ in the communist system is the Proselytizing 
Department, which operates under the authority of the NDC. This 
department is a very secretive and subtle organization, and for 
the U.S. intelligence community, it is perhaps the least 
understood element of the Communist apparatus. The basic 
mission of the organization is penetration and subversion. 
During the war years the Proselytizing Department enjoyed 
considerable success in exploiting the anti-war movement in the 
U.S. and other countries around the world. Wartime Communist 
leaders have since expressed the opinion that the proselytizing 
effort, both in America and on an international scale, made the 
most important contribution toward winning the war.
    The concept by which the Proselytizing Department operates 
is quite simple: Obtain the active participation of a small 
segment of the population in order to gain the passive 
acceptance of the population as a whole. At the local level 
active participation can be obtained through intimidation. For 
example, during wartime years when armed propaganda teams were 
employed, if a member of a village chief's family were 
abducted, one of his ears would be sent to the family. Unless 
the village chief performed the deed requested of him by the 
communist forces, the head of the family member would soon 
follow. In dealing with foreign populations, however, active 
participation is more often achieved by subtle means. This 
includes playing on the emotions of a family whose loved one is 
being held prisoner-of-war, or by exploiting character defects, 
especially monetary greed, or what in intelligence terms is 
called ``a penchant for wealth.'' The Proselytizing Department 
is also responsible for both agitation-propaganda and the 
exploitation of U.S. POWs. This includes the remains and 
personal effects of American servicemen killed during the 
performance of their duties.
    By the time of the 1986 Party Congress, Hanoi's National 
Defense Council had outlined a plan for development of the 
economy while feigning cooperation on POW/MIA and human rights. 
This plan was veiled as ``an opening to the West'' and 
``renovation,'' what the Vietnamese call ``doi moi.'' In order 
to implement this plan, seasoned cadre from the Proselytizing 
Department were gradually transferred to positions dealing with 
individuals and organizations in the U.S. involved in commerce, 
human rights and veterans affairs.
    For example, Senior Proselytizing cadre Nguyen Chinh was 
transferred from Region 5 in Central Vietnam to Hanoi where he 
was assigned as the Deputy Director of Religious Affairs 
dealing with U.S. officials concerned with human rights. Cadre 
Nguyen Hung Tri, who had been one of numerous cadre responsible 
for the interrogation and exploitation of American prisoners in 
the South, was reassigned as Director of the Export Section of 
the National Petroleum Import-Export Department. LTG Tran Van 
Quang, the former Chief of the Proselytizing Department, was 
reassigned as head of the National Veterans Organization 
dealing with so-called ``Veterans Initiatives'' of the Veterans 
of Foreign Wars (VFW) and Vietnam Veterans of America (VVA). 
Cadre Dang Thuan Hoa, who was also responsible for the 
interrogation and exploitation of American prisoners in 
southern Vietnam during the war, was reassigned to the 
Commercial Affairs Office in Ho Chi Minh City dealing with 
American businessmen seeking to invest in projects there. 
Members of the Proselytizing Department's office in Central 
Vietnam were transferred to the State Petroleum Organization 
and shortly thereafter a plan to build an oil refinery in that 
area was announced. Ultimately, hundreds of cadre from 
Vietnam's Proselytizing Department were reassigned to positions 
placing them in direct contact with Americans in the targeted 
``influence groups.''
    After sufficient proselytizing cadre were in place Vietnam 
still faced one major obstacle, hard currency to finance the 
overall operation. Hanoi's strategists then devised a plan 
whereby large sums of hard currency could be collected. By 
forcing hundreds of thousands of its citizens to flee the 
country Hanoi was able to quickly establish a large community 
of overseas Vietnamese. Most of those departing under this 
program were required to transfer all personal and real 
property, as well as cash assets, to communist control. To 
manage this potential source of future revenue, Hanoi 
reassigned its former UN Ambassador in New York and Vice 
Foreign Minister, Ho Liem (aka Hoang Bich Son) as Chairman of 
the Committee for Overseas Vietnamese. Overseas Vietnamese then 
began to send money home to support relatives remaining in 
Vietnam. Hard currency mailed from the U.S., Canada, France, 
England, Australia and other countries back to Vietnam was 
intercepted by the Communist Party and converted into 
Vietnamese ``dong'' at a very unfavorable rate. Overseas 
Vietnamese seeking to return home for visitation, including 
emergency situations, were required to pay exorbitant visa 
issuance fees in hard currency to the relevant Vietnamese 
Embassy prior to commencement of travel. Unfortunately for the 
Vietnamese people at home, however, visa fees are not a problem 
because they cannot even acquire a passport to temporarily 
travel abroad. As a basis for comparison, in America and other 
democratic countries, it is far more simple to file for social 
security disability than for a Vietnamese citizen to obtain a 
passport.
    In much the same manner as the French experience on POW/MIA 
accounting, to develop yet another source of revenue Hanoi used 
its Proselytizing Department to create an illusion of 
profitable business opportunities, a ``last frontier'' if you 
will, in Vietnam. This skillful deception, which included what 
appeared to be very lucrative contracts to be implemented as 
soon as the Trade Embargo was lifted, resulted in increased 
pressure from the business community on U.S. politicians to 
rapidly remove the POW/MIA issue as an obstacle to the 
development of trade ties, regardless of the actual rate of 
progress in accounting for our men. To accomplish this feat, 
the Proselytizing Department worked hand-in-hand with key 
members of the U.S. business community, some members of 
Congress and veterans organizations to convince our military 
leaders that the best way to resolve the issue was a rapid 
expansion of our POW/MIA accounting effort in the field. This 
expansion consisted primarily of so-called ``activities,'' 
which included field cursory investigations and excavations of 
crash sites. These ``activities'' resulted in the rental of 
Russian supplied helicopters, real property rentals, the 
payment of salaries for cadre of the Proselytizing Department 
participating in the endeavor, drivers, laborers, organization 
fees, landing fees, damages caused by excavations and a host of 
other charges. I believe that by simultaneously exploiting 
emigration and the accounting for missing American servicemen 
Hanoi has managed to accumulate a considerable amount of hard 
currency. Such revenue gathering practices continue today as 
these hearings are being held, and quite frankly I believe they 
generate far more funds than what Export-Import Bank financing 
could provide.
    In 1991 the U.S. Senate established the Senate Select 
Committee for POW/MIA Affairs. The Chairman of this Committee, 
Senator John Kerry appointed his Legislative Assistant, Ms 
Francis Zwenig, as the Chief of Staff for the Committee. During 
the life of the Committee Senator Kerry worked most closely 
with Representative Douglas ``Pete'' Peterson to authorize 
funding for the new, expanded effort to account for missing 
American servicemen in Vietnam. As a result of these joint 
efforts, in January 1992 the Joint Task Force-Full Accounting 
was formed by the U.S. Pacific Command. In order to gain 
acceptance of the new plan in Vietnam Senator Kerry also 
coordinated his efforts with fellow committee member, Senator 
John McCain (R, AZ).
    In implementing Senator Kerry and Representative Peterson's 
plan, Ms Zwenig worked closely with Ms Virginia Foote, the 
President of the U.S./Vietnam Trade Council, Allen ``Gunner'' 
Kent, former Commander-in-Chief of the Veterans of Foreign Wars 
(VFW), and Mr Kenneth Steadman, at that time the Director of 
National Security of the VFW. As the Committee moved toward 
adjournment it became increasingly obvious that rather than 
account for missing American servicemen, the primary goal of 
the Committee was to remove the POW/MIA issue from the path of 
U.S./Vietnam relations. Members of the Committee pledged to 
continue to monitor the issue, but in reality only Senator Bob 
Smith kept his promise to the MIA family members and veterans 
here at home.
    During the time that key members of the POW/MIA Select 
Committee maneuvered to remove the Trade Embargo, large scale 
investors in Asia, who would ultimately become large scale 
campaign contributors in America began to support the 
activities of members of the Committee designed to create 
investment opportunities in Vietnam. In 1992, with a one-on-one 
limousine ride, Presidential candidate Bill Clinton began his 
relationship with Mr James Riady, a citizen of Indonesia and 
resident alien of the United States. Mr Riady is the son of 
Mochtar Riady who heads the multi-billion dollar Lippo Group. 
Acting on behalf of the Lippo Group Mr Riady formed a 
partnership with Mr Jackson Stephens, Chairman of Stephens 
Investment Inc., in order to purchase the Worthen Bank in 
Little Rock, AR. Mr Riady was subsequently installed as the 
director of the bank. Mr Riady then used his position to 
contribute or loan some $700,000.00 to President Clinton's 
campaign. Family friends and business partners of the Riadys, 
Ariel and Soraya Wiriadinata, also contributed $425,000.00 to 
the Clinton campaign. Rather than explain the source of these 
monies by testifying in congressional hearings, the 
Wiriadinatas have since returned to Jakarta, Indonesia.
    The Worthen Bank in Little Rock also owned the Hong Kong 
Chinese Bank where Mr John Huang was employed. Mr Huang was 
later transferred from Hong Kong to Los Angeles where he became 
head of Lippo's affiliate there. Records since made available 
to investigating committees of Congress indicate that in 
conjunction with his transfer to the U.S. Mr Huang was awarded 
a $700,000.00 bonus by the Lippo Group. Considering the 
position held by Mr Huang and the circumstances of his 
employment, the alleged bonus has raised questions regarding 
the intended purpose of the relatively large amount of cash, 
and whether or not it was properly declared for entry into the 
U.S. Moreover, in November 1992, China Resources Holding 
Company, a front organization for the Intelligence and Security 
Services of the Communist Party of China, purchased a 
controlling interest in the Hong Kong Chinese Bank. This 
transaction made available an even larger amount of money to Mr 
Huang in the U.S.
    During his election campaign President Clinton pledged to 
the American people that if elected he ``would not normalize 
relations with any country that is at all suspected of 
withholding information'' on missing Americans. After the 
election of President Clinton Mr John Huang was appointed as a 
Deputy Assistant Secretary under Commerce Secretary Ron Brown 
in a ``Top Secret'' trade post. When Mr Huang assumed his new 
position at the Commerce Department the very first meeting he 
held in his new office was oriented toward developing increased 
commercial relations with the Socialist Republic of Vietnam.
    Hearings held by the Senate Committee investigating 
campaign financing revealed that during the time he worked in 
the Commerce Department under Ron Brown, John Huang maintained 
steady contact with Mr A. Vernon Weaver, the Vice-President of 
Stephens Investment in Washington, D.C. In fact, Mr Huang was 
provided a cost-free office with telephone, facsimile and 
photocopy machine in the Stephens Building across the street 
from the Commerce Department. During the same time frame, 
Secretary Brown became the subject of a Justice Department 
investigation concerning allegations he accepted a $700,000.00 
bribe for his assistance in lobbying President Clinton to lift 
the Trade Embargo against Vietnam. The reports indicating that 
Mr Riady loaned the Clinton campaign $700,000.00, that John 
Huang received a $700,000.00 bonus from the Lippo Group, and 
that former Commerce Secretary Brown received a $700,000.00 
bribe may be coincidental, but considering the positions of 
those involved and their relationship to each other, I 
seriously doubt that this is the case.
    After repeated denials to the press, Secretary Brown did 
admit to having three meetings with Mr Nguyen Van Hao, a 
Vietnamese who was actively lobbying on behalf of Vietnam to 
have the Trade Embargo lifted. Mr A. Vernon Weaver was 
subsequently appointed as the U.S. Representative to the 
European Economic Union. The investigation of Mr Brown was 
terminated when he died on April 4, 1996 in an airplane crash 
while on an economic mission to Europe.
    After expanded accounting efforts were initiated in Vietnam 
senior U.S. officials first began praising Vietnam for its 
cooperation in accounting for our missing men during January 
1994 when Admiral Charles Larson, at that time the Commander-
in-Chief of Pacific Forces, returned from an inspection trip to 
Vietnam. It was Admiral Larson who first stated publicly that 
Vietnamese cooperation in accounting for missing Americans was 
``excellent across all fronts.'' Admiral Larson was a four star 
Admiral at the time and pending retirement because there were 
no four star slots available in the U.S. Navy.
    Based on Admiral Larson's assessment, in February 1994 
President Clinton lifted the trade embargo against Vietnam. 
Amazingly, between the time that President Clinton made his 
pledge that he would not normalize relations with Vietnam until 
there was a full accounting and the time he lifted the Trade 
Embargo only two Americans had been accounted for in Vietnam. 
Lifting the embargo opened the door for the multi-billion 
dollar corporation, Lippo Group with American business 
partners, such as Stephens Investment of Little Rock, AR to 
conduct business in Vietnam. Mr A. Vernon Weaver, at that time 
the Vice-President for Operations in the Pacific Rim of 
Stephens Investment and a member of the Board of Visitors at 
the U.S. Naval Academy was instrumental in arranging an upgrade 
of the position of Commandant of the U.S. Naval Academy from 
two stars to four stars. Former U.S. Navy officers, Senators 
John Kerry and John McCain supported this reorganization. 
Rather than the planned retirement, Admiral Larson was quickly 
transferred to begin a four year tour at the Naval Academy.
    President Clinton then appointed VFW Commander-in-Chief, 
Allen ``Gunner'' Kent of the VFW to a senior position in the 
Veterans Administration (VA). After working on the transition 
team of former Secretary Ron Brown at the Commerce Department, 
Ms Francis Zwenig was appointed as Vice-President of the U.S. 
Vietnam Trade Council. Shortly thereafter, the Council took 
control of the Mekong Digest, formerly the Vietnam Forum of the 
Vietnam Veterans Against the War. A friend of both President 
Clinton and Senator John Kerry and fellow anti-war activist 
from Georgia, Mr Charles Searcy, was appointed as a 
humanitarian aid representative for Vietnam, on a project 
jointly funded by the U.S. Government and the Vietnam Veterans 
of America Foundation headed by Mr Robert Muller, also a well-
known anti-war activist. Vietnam then announced that it would 
issue its first real estate license to Senator John Kerry's 
cousin, Mr Stuart Forbes, CEO of the Boston-based Colliers 
International. Representative ``Pete'' Peterson was appointed 
by President Clinton as Ambassador to Vietnam. Senator John 
McCain became Chairman of the Senate Commerce Committee.
    Mr John Huang, was ultimately appointed as Vice-Chairman of 
the national fund-raising committee of the Democratic Party. Mr 
Huang's fund raising efforts included a visit by Vice President 
Gore to a Buddhist Temple in California headed by Vietnamese 
born Summa Ching Hai, a long time associate of both Huang and 
Little Rock, AR restaurant owner Charlie Trii. Highly 
classified documents of the Vietnam Communist Party (VCP), 
recently declassified in the National Archives, indicate that 
the Religious Proselytizing Department of the VCP, code named 
V.417, successfully infiltrated cadre into the Buddhist Sect in 
the former Republic of Vietnam during the 1960's. According to 
the Chairman of the Washington, D.C., Maryland and Virginia 
Vietnamese Association, some of the cadre mentioned in the 
documents have since arrived in the U.S. as refugees. These 
same cadre, currently in leadership positions in the Buddhist 
Sect in California, now profess to be staunch anti-communists. 
Testimony from members of the staff at the temple involved in 
the fund-raising, as well as numerous others involved, indicate 
that those participating in the scheme of Huang were well aware 
that the sole purpose of the visit by the Vice President was to 
raise money for the Clinton-Gore campaign. In fact, the only 
person involved who has publicly claimed to be unaware that the 
event was a fund raiser is Vice President Gore himself.
    Although considerable questions remain unanswered some of 
the key people involved, Mr John Huang, Admiral Larson, Ms 
Virginia Foote, Ms Francis Zwenig or Mr A. Vernon Weaver have 
never testified in Congress. More recently the Justice 
Department has authorized the appointment of an additional 
Special Counsel to investigate allegations of illegal business 
transactions between Labor Secretary Alexis Herman and Vanessa 
Weaver. Hopefully, this investigation will uncover additional 
leads for Congressional Committees to follow in the days ahead.
    Contrary to the glowing assessments by the Clinton 
Administration, MIA family member organizations have maintained 
that Vietnam could rapidly account for many more missing 
servicemen if it made the political decision to do so. I 
believe that there is ample evidence in U.S. files that Vietnam 
does possess this capability. Against opposition by MIA family 
member organizations and major veterans organizations, 
including the American Legion, Vietnam Veterans of America, the 
National Vietnam Veterans Coalition, American Veterans, and the 
Disabled American Veterans, President Clinton recently waived 
the Jackson-Vanik Act in order to provide monetary benefits to 
Vietnam. Such benefits include Export-Import Bank financing and 
Overseas Private Investment Corporation (OPIC) insurance. 
Obviously, both important steps are directed at obtaining Most 
Favored Nation (MFN) trading status for Vietnam.
    During my tour as Chief of the U.S. Office for POW/MIA 
Affairs in Hanoi I was constantly mindful of the French 
experience in Vietnam. I was also painfully aware of the plight 
of some 70 million Vietnamese citizens regarding basic human 
rights. Relying on a wealth of information contained in U.S. 
Government files and based on my own experiences in dealing 
with Vietnam over many years I carefully evaluated the actual 
level of cooperation rendered by Vietnam on a routine basis. I 
truthfully and accurately reported those assessments to my 
superiors. At times, my candidness during congressional 
hearings here in Washington, D.C. resulted in my being denied a 
re-entry visa to return Vietnam from those hearings, and it was 
only intervention by your prestigious body that enabled me to 
resume my duties in Hanoi.
    Today I do not have to be concerned about how my remarks 
will be received by my superiors here in the U.S. Government, 
or by the Communist Party in Hanoi. Hopefully, I have provided 
some insight concerning how our political process can be 
manipulated by foreign entities. I am optimistic that this 
information, as well as information to be provided by witnesses 
involved in other aspects of the U.S.-Vietnam relationship, 
will help your Committee convince our leadership that profit 
must not come before principle in the development of commercial 
ties with the Vietnam.
    Organizations lobbying for increased financial benefits to 
Vietnam, especially Overseas Private Investment Corporation 
insurance are well aware that the Communist Party of Vietnam, 
not the government of Vietnam runs that country. They are 
clamoring for your Committee to move ahead in U.S.-Vietnam 
relations. They are telling the families of the missing men 
that they should trust the Communist Party to provide an honest 
accounting. They are telling the Vietnamese people that they 
should trust the Communist Party in future progress for human 
rights. Mr Chairman, if these lobbyists have so much trust in 
the Communist Party of Vietnam, then why do they need 
government sponsored insurance such as OPIC to protect their 
investments?
    You may recall that during the Proselytizing Department's 
campaign to rapidly normalize relations while feigning 
improvement on POW/MIA accounting and human rights glib 
statements such as ``its the economy stupid,'' and ``Vietnam is 
not a war, its a country'' were often attributed to a number of 
government officials and members of Congress returning from 
fact finding missions to Vietnam. I hope your Committee will 
agree that statements such as ``its the missing servicemen and 
human rights stupid,'' and ``Vietnam is not a war, its a 
socialist republic'' are far more appropriate statements to 
make.
    That concludes my testimony, I greatly appreciate the 
opportunity to testify before your distinguished Committee.
      

                                


Statement of Caterpillar Inc.

    Caterpillar Inc. is pleased that United States continues to 
take steps to strengthen the trade relationship between Vietnam 
and the US by seeking renewal of Vietnam's waiver under the 
Jackson-Vanik amendment to the Trade Act of 1974. This action 
stands to benefit the people of both countries.
    We're hopeful that trade relations between the United 
States and Vietnam--including export opportunities supporting 
U.S. jobs--will grow significantly over the coming years as 
relations between our two countries continue to improve.
    The first evidence of this growth is encouraging. Prior to 
the initial Jackson-Vanik waiver issued in March of this year, 
Caterpillar was at a distinct disadvantage in Vietnam due to 
the fact that most of our global competition had access to 
government-backed financing, credit or credit guarantees. Since 
the waiver, Caterpillar has applications pending with the Trade 
and Development Agency (TDA), Export-Import Bank (ExIm) and the 
Overseas Private Investment Corporation (OPIC) for projects 
that will improve the infrastructure of Vietnam and the quality 
of life of its people.
    These projects will not bear fruit if the Jackson-Vanik 
waiver is defeated. In light of the progress being made, 
Caterpillar strongly urges Congressional support for the waiver 
of Jackson-Vanik for Vietnam.
    Caterpillar Inc. is the world's leading manufacturer of 
construction and mining equipment, natural gas engines and 
industrial gas turbines, and is a leading manufacturer of 
diesel engines. Headquartered in Peoria, Ill., the company 
exported a record $6.12 billion worth of products from the 
United States during 1997.
      

                                


Statement of Hon. Lane Evans, a Representative in Congress from the 
State of Illinois

    Mr. Chairman, thank you for the opportunity to testify 
before the Committee.
    The Committee's upcoming vote on waiving the Jackson-Vanik 
amendment for Vietnam is among one of the more important you 
will consider this year. And it comes at a special moment in 
our relationship with Vietnam. If we make the right choice, we 
can encourage reforms that may lead to an open and prosperous 
Vietnam. However, if we make the wrong choice, we will send a 
signal that the US is not willing to follow through on its 
commitment to reward reform with better relations. That is why 
this vote is so important.
    We must remember that closer ties between our nations have 
been a catalyst for needed economic and societal reforms. They 
have also led to significant progress on issues our nation has 
been pursuing with the Vietnamese for some time. Of primary 
importance has been our efforts to account for our missing in 
action from the war. Vietnam has been providing a high level of 
cooperation in our efforts to account for our missing. The 
Joint Task Force-Full Accounting (JTF-FA), our military 
presence in Vietnam dedicated to this mission, is receiving the 
logistical support it needs from the Vietnamese in addition to 
access to witnesses and archival information. JTF-FA search 
teams are allowed to travel throughout the country at will to 
pursue leads or excavate for remains. These efforts have led to 
concrete results. Since 1993, 233 remains have been repatriated 
and 97 remains identified. In order to maintain the access that 
is so critical to the in-country mission of the JTF-FA, we must 
remain engaged with the Vietnamese government.
    In addition, our government has pushed the Vietnamese to 
reform its emigration policy under the Resettlement Opportunity 
for Vietnamese Returnees (ROVR) program. While there were 
initial concerns over the implementation of the program, 
Vietnam has made substantial progress. As of June 8, 1998 
Vietnam has cleared for interview over 15,000 of the almost 
19,000 (or 81 percent) of applicants for the ROVR program. As 
of this date, 3,119 Vietnamese have come to the US under the 
program, just over a year since the US and Vietnam signed the 
ROVR agreement.
    However, we cannot expect continued cooperation from the 
Vietnamese on these and other issues if we continue to promise 
better ties without taking steps to strengthen the relationship 
between our two nations. The waiver of the Jackson-Vanik 
amendment is crucial in this regard.
    This move will not prevent our nation from exercising the 
leverage necessary to pressure the Vietnamese for progress on 
important issues. Congress would still have to review the 
waiver annually. This would more than insure that Vietnam would 
have to carefully consider the ramifications of policy 
decisions, especially in the area of emigration, that effect US 
interests.
    While we fully recognize that Vietnam still has a long way 
to go in terms of improving its human rights record and 
achieving needed economic reforms, we believe that achieving 
closer relations is the best way to eventually achieve these 
goals as well as serve long-term US interests in the region. 
Now is the time to move forward, not backwards, in promoting a 
better climate between our two nations. Our former colleague 
and now Ambassador to Vietnam, Pete Peterson, recently stated: 
``America's constructive engagement with Vietnam benefits both 
nations. Renewing the Jackson-Vanik waiver is crucial for 
keeping that relationship on track: It will enhance our 
commercial ties and help our efforts to achieve fullest 
possible accounting for American POWs and MIAs.''
    As a former prisoner of war, Ambassador Peterson's support 
for promoting conciliation and closer ties speak volumes to the 
potential of what our nation can achieve in Vietnam. I hope 
that you take his thoughts to heart and support the waiver of 
the Jackson-Vanik amendment for Vietnam. Thank you.
      

                                


                                        Andre Sauvageot    
                                                      Hanoi
                                                      June 22, 1998

Congressman Philip M. Crane
Chairman, Subcommittee on Trade
House Committee on Ways & Means

    Dear Congressman Crane:

    I am Andre Sauvageot, residing in Hanoi, as the Chief 
Representative for General Electric in Vietnam. I have held this 
position for over 5 years. I am submitting the following information to 
assist the Committee in its decision regarding the renewal of the 
Jackson-Vanik waiver for Vietnam.

        I. Vietnam Experience Prior to Joining General Electric

    My involvement in Vietnam began in 1964 as a U.S. Army 
Captain assigned as a District Advisor in South Vietnam. This 
entailed participating in combat operations with small South 
Vietnamese units and afforded opportunities to learn about life 
and civil administration at the village level.
    From 1976 to 1978 I was assigned to the Department of 
Health, Education & Welfare, as an Assistant Director to the 
Indochina Refugee Assistant Program to help with the 
resettlement of Vietnamese refugees in the United States. In 
1984, I retired as a Colonel from the Army after 27 years of 
service.
    From 1982 to as recently as 1993, I served as the 
interpreter for the highest level American delegations visiting 
Hanoi. The initial focus was solely on the MIA/POW issue, but 
later broadened to include some of Vietnam's humanitarian 
concerns. Until December 1992, I was employed by the U.S. 
Embassy in Bangkok as the Regional Advisor for the 
Comprehensive Plan of Action designed to encourage voluntary 
repatriation of Vietnamese ``boat people'' back to Vietnam. 
This involved constant visits to the camps in Hong Kong and 
Southeast Asia with follow-up visits to returnees in Vietnam. I 
enjoyed steadfast support from Vietnam's Government throughout 
my mission.

       II. Lessons Learned from Experience Prior to GE Employment

    My long involvement in Vietnam has given me a profound 
respect for the Vietnamese. I believe that Vietnamese 
pragmatism, flexibility and intelligence makes it a country 
which is very amenable to constructive engagement. My own 
observation, supplemented by the opinion of Department of 
Defense experts working the issue full time have led me to 
conclude that cooperation on the MIA/POW issue is excellent and 
has increased as the U.S.-Vietnam relationship expands. The 
same is true on a range of other commercial and human rights 
issues. Progress on all issues is positively correlated with 
improvements in the overall relationship based on the principle 
of mutual benefit.

                    III. General Electric in Vietnam

A. Establishing the GE Representative Office

    After former President Bush permitted American companies to 
establish representative offices in Vietnam, GE was among the 
first ten American companies to seize the opportunity, having 
obtained a license by 18 June '93 for the main office in Hanoi 
and by 19 August '93 for a branch office in Ho Chi Minh City.

B. Difficulties and Opportunities in doing business in Vietnam

    (a) Difficulties--It comes as no surprise that doing 
business in Vietnam is tough sledding. How could it be 
otherwise? A country which has until comparatively recently 
been ravaged by war and constrained to meet continued 
challenges to its national security cannot move very quickly 
from feudalism through Soviet-style state socialism to a market 
economy.
    The specific problems with an underdeveloped banking 
system, underdeveloped legal and physical infrastructure, lack 
of transparency and corruption are serious and combine to make 
it relatively difficult to do business. American companies have 
the additional handicap of arriving behind foreign competitors 
which were not constrained by the U.S. Trade embargo against 
Vietnam.
    Added to that, the lack of domestic capital and severely 
limited national budgets constrain the Vietnamese and their 
foreign business partners or providers to providers to seek 
off-shore funding. Financing must often be in the form of 
Government to Government soft loans, as budget constraints may 
preclude commercial financing. It is a market for marathon 
runners with an in-country presence--not for sprinters, 
especially those who merely sprint in and out of Vietnam.
    (b) Opportunities--The good news outweighs the bad news. 
Vietnam offers a stable, predictable environment. The 
leadership's commitment to economic reform, its commitment to 
diversification of Vietnam's international relationships, the 
national unity behind the leadership on both of these major 
policies, the strong work ethic, a literate, intelligent, 
trainable workforce are durable, valuable and more significant 
than the ephemeral difficulties which so frustrate foreign 
companies doing business in Vietnam.
    These strengths are the ingredients by which Vietnam will 
effectively address its shortcomings. Vietnam will succeed. The 
only question is which companies from which countries will grow 
their businesses in Vietnam, in short will grow with the 
country.

C. Accomplishments by some GE Businesses

    To illustrate this, lets turn to the specific 
accomplishments and near-term opportunities of GE Businesses in 
Vietnam. Several of GE's 12 major businesses, each with its 
separate headquarters in the United States, have already 
successfully entered Vietnam's market.
    (a) GE Medical Systems (GEMS).--Medical Systems, a global 
Business, headquartered in Milwaukee, Wisconsin was the first 
of GE's 12 major businesses to begin doing business in Vietnam, 
because in April 1992, former President Bush exempted certain 
kinds of humanitarian items including medical equipment, from 
the Trade Embargo.
    Since 1993, GEMS has been selling ultrasound and x-ray 
equipment against stiff competition from long established 
foreign competitors including Siemens from Germany and some 
Japanese companies. Even so, GEMS has sold nearly $10 million 
worth of high quality medical equipment to Vietnamese hospitals 
throughout the country. This includes some very modern Magnetic 
Resonance Imaging (MRI) equipment manufactured in Wisconsin.
    (b) GE Aircraft Engines (GEAE).--GE Aircraft Engines, 
headquartered in Cincinnati, Ohio regards the Vietnam Airline 
(VNA) as an important customer with tremendous growth 
potential. VNA airline has selected GE engines with an 
aggregate value of some $162 million, to power its entire small 
fleet of Boeing and Airbus aircraft. Specifically,
    --CF6-80C2B7F engines on Vietnam Airlines (VNA) 3 Boeing 
767-300ER aircraft;
    --CFM56-5B4 engines on all 10 VNA Airbus Aircraft. This is 
a joint venture engine with SNECMA from France. Half the engine 
is manufactured in Cincinnati and half in France.
    (c) GE Capital Aviation Services (GECAS).--One of the 27 
major branches of GE Capital Services, headquartered in 
Stamford, Connecticut, GECAS has dry-leased 3 new Boeing 767-
300ER aircraft to the Vietnam Airline for a period of 5 years.
    (d) GE Power Systems (GEPS).--GE Power Systems, 
headquartered in Schenectady, New York, manufactures steam 
turbines and generators in New York and gas turbines in 
Greenville, South Carolina. During tough international bidding 
GETS won the following contracts in Vietnam:
    --First ever gas compressors ($12 million) for the White 
Tiger field to bring in gas from off shore;
    --Generator ($15 million) for Ham Thuan 300MW hydro plant 
(bid won February 1998);
    --Steam turbines and generators ($42 million) for Pha Lai-2 
600MW thermal, coal-fired power plant;
    (e) GE Transportation Systems (GETS).--Headquartered in 
Erie, Pennsylvania, GETS manufactures locomotives and parts and 
components for its locomotives. In Vietnam GETS has won 
international bids two years in a row (1996-'97) to provide 
parts/components to the Vietnam Railways (VR) for overhaul and 
upgrade of its old GE diesel locomotives.
    The VR appreciates the high quality and competitive price 
of GE's new locomotives. GE is trying to find a funding sources 
for a new locomotive purchase. GETS expects to present a 
proposal in August for an initial purchase of 5-7 new 
locomotives, for some $10-$15 million in turnover. Winning this 
contract would position GETS for down stream sales of some 80-
100 new locomotives, representing revenue in excess of $200 
million in revenue and continued jobs for workers in Erie.
    (f) GE Lighting (GEL).--GE Lighting, headquartered in 
Cleveland, Ohio is off to a reasonably good start with annual 
sales running over $1 million.
    (g) GE Industrial Control Systems (GEICS).--GE Industrial 
Control Systems is a global business, headquartered in Salem, 
Virginia. GEICS will provide the generator control equipment 
for the 300MW Ham Thuan hydro power plant.

D. Immediate GE Opportunities and Impact of Jackson-Vanik 
Waiver

    (a) Thac Ba Hydro Plant Upgrade.--Electricity of Vietnam 
(EVN) has decided to upgrade a 30-year old Soviet-built hydro 
power plant named Thac Ba. The project is ``supplier credit'' 
that is the contractor must present a competitive financing 
proposal. GE's competitors include ABB (Switzerland/Sweden); 
Siemens (Germany) and GEC Alstrom from France.
    GE is extremely competitive from a technical standpoint 
because of its high quality and because unlike ABB or Siemens, 
GE manufactures both the turbine and generator, as well as the 
turbine and generator control equipment and exciter units.
    GE requested financial assistance from Eximbank in support 
of its bid to supply equipment for the Thac Ba Project. 
Eximbank has provided GE a Letter of Interest which indicates a 
willingness of the Bank to consider making such assistance 
available if EVN should award a contract to GE and if an 
appropriate repayment guarantee is provided by the Government 
of Vietnam.
    The $10 million would be for the purchase of turbine and 
generator control equipment manufactured by American workers in 
Salem, Virginia. Moreover, winning this contract could help GE 
position itself for further wins in Vietnam's growing hydro 
power market. Thac Ba could be an important stepping stone to 
Son La, a giant 4,000MW hydro power plant for which the 
planning is already quite advanced.
    However, if the President's renewal of Jackson-Vanik is not 
sustained, GE would be immediately eliminated from further 
pursuit of this project. We would not even be able to recoup 
the money already spent on travel and conducting the 
feasibility study for the project. Worse, the contract would be 
awarded by default to a foreign company and GE's position for 
future contracts would be weakened.
    Currently, Vietnam has many alternatives. In the event that 
GE is eliminated from the project because the Jackson-Vanik 
waiver is not sustained, Vietnam will still be able to complete 
the upgrade on time with an acceptable, feasible proposal.
    (b) Other Large Projects.--Perhaps counter-intuitively, 
failure to sustain the President's renewal of the Jackson-Vanik 
waiver can greatly damage GE's chances against foreign 
competition on projects for which ODA funding is available and 
for which U.S. Eximbank financing is neither available nor 
desired.
    For example, assume Vietnam's largest donor country, Japan, 
is funding a large project and GE happens to be competing with 
a Japanese company in this context. Even though Japan's aid is 
``untied,'' should both the GE proposal and the Japanese 
company's proposal be technically and economically feasible, 
political considerations could become a factor in determining 
Vietnam's national interest. In summary, diminished U.S. 
involvement results in less U.S. leverage.

                             IV. Conclusion

    Experience strongly suggests that as the relationship 
continues to improve on the basis of mutual respect and mutual 
benefit, progress will continue on all fronts.
    We will continue to work closely with the U.S. Government 
and we highly appreciate the active support for American 
business and the American worker which we have received from 
Ambassador Peterson in Hanoi.
    We will also continue our active involvement with such 
organizations as the U.S.-Vietnam Trade Council; U.S.-Asian-
Pacific Council of American Chamber of Commerce in Vietnam.
    I believe that the most rigorous analysis suggests that 
there is no conflict in pursuit of GE's commercial objectives 
in Vietnam and other objectives. In fact, they are positively 
correlated.
      

                                


                       Jefferson Waterman International    
                                       Washington, DC 20005
                                                      June 23, 1998

The Hon. Phil Crane, Chairman
Subcommittee on Trade
Committee on Ways and Means
U.S. House of Representatives
1104 Longworth House Office Building
Washington, D.C. 20515

    Dear Chairman Crane,

    I am writing to express strong support for the continuation of the 
Jackson-Vanik waiver with respect to Vietnam. I urge the Committee to 
oppose any disapproval resolutions with respect to the Jackson-Vanik 
waiver for Vietnam.
    The President's initial waiver of this provision earlier this year, 
and his request to renew this waiver on June 3, are important to US 
firms for several reasons. First, the waiver paved the way for US firms 
to gain access to the Export Import (ExIm) Bank and the Overseas 
Private Investment Corporation (OPIC). With many of our fiercest 
competitors already doing business in Vietnam using their national 
export credit and investment finance agencies, US firms have been 
operating at a severe disadvantage. Unlocking Vietnam to US companies 
using the tools of the ExIm Bank and OPIC levels the playing field.
    Second, the waiver has strengthened our hand in negotiating a sound 
bilateral trade agreement, which will lead to the establishment of 
normal trading relations and, ultimately, Vietnam's accession to the 
WTO. By making this first step toward the normalization of commercial 
relations, the President has signaled his interest in fostering a 
strong economic partnership with Vietnam.
    The waiver is also important in advancing other foreign policy 
issues, such as those pertaining to refugees or cooperation with POW/
MIAs. Administration officials, including Ambassador Pete Peterson, 
have noted that the Government of Vietnam has dramatically increased 
its cooperation on these issues in recent years. I agree with the 
Administration that a continuation of the Jackson-Vanik waiver on 
Vietnam would advance this policy of engagement, which will bring about 
even closer relations.
    You should also remember that the Administration's decision to 
waive Jackson-Vanik with respect to Vietnam, thus lifting prohibitions 
on OPIC and ExIm Bank activity there, is a breath of fresh air in the 
increasingly stifling atmosphere on sanctions. As you know, the recent 
proliferation of unilateral economic sanctions has chilled much 
commercial activity at questionable benefit to US foreign policy. You 
have been a leader in congressional efforts to reform the process by 
which sanctions are imposed. The waiver on Vietnam is an important step 
in the right direction that must be enthusiastically embraced and 
vigorously defended.
    On a final note, I would point out that the Jackson-Vanik process 
has become increasingly anachronistic. Although it once reflected a 
cogent freedom of emigration policy directed at the Soviet Union and 
other communist states, this rationale seems to have crumbled along 
with the Berlin Wall. In an attachment, I have listed the 18 countries 
currently subject to the conditions and penalties of Jackson-Vanik. All 
but five have been granted full certifications acknowledging that they 
provide freedom of emigration. Three others have been granted waivers--
some for many years. Only Cuba and North Korea--two countries subject 
to layers of other federal sanctions--are feel the full penalties of 
Jackson Vanik. With this in mind, the Jackson-Vanik conditions seem to 
have lost their relevance.
    Moreover, the conditionality imposed by Jackson-Vanik is at odds 
with the unconditional application of MFN treatment for out WTO trading 
partners. So far, Mongolia is our only trading partner who is both a 
WTO member and whose MFN is conditioned by Jackson-Vanik. As a result, 
we cannot fully apply the WTO to that country. As more and more 
Jackson-Vanik countries accede to the WTO, we will be forced to assume 
non-application policies with other trading partners. For a country 
that has been a leader in formulating and implementing the WTO, and 
that has vigorously championed the concept of liberalized trade, this 
is unacceptable.
    I applaud you on your effort to update the term of ``most favored 
nation'' trading status. As the Jackson-Vanik amendment celebrates its 
25th birthday next year, I would encourage you to update this tired 
policy as well.

            Sincerely,
                                              Stephen Lamar
                                                 Sr. Vice President

Attachment
      

                                


Jackson-Vanik Countries

             Countries subject to full penalties under J-V

Cuba
North Korea

              Countries subject to annual June J-V waiver

Belarus (1)
China (2)
Vietnam (3)

 Countries that have been granted freedom of emigration determinations

Albania (4)
Armenia (5)
Azerbaijan (5)
Georgia (5)
Kazakhstan (6)
Kyrgyzstan (6)
Moldova (5)
Mongolia (7)
Russia (8)
Tajikistan (6)
Turkmenistan (6)
Ukraine (5)
Uzbekistan (6)

                                 Notes:

    1. The President granted an initial Jackson-Vanik waiver on April 
16, 1992.
    2. The President granted an initial Jackson-Vanik waiver on October 
23, 1979. Although Congress has had several opportunities to vote to 
overturn this waiver, it has never succeeded in doing so.
    3. The President granted an initial Jackson-Vanik waiver on March 
11, 1998.
    4. The President determined that Albania was in ``full compliance'' 
with Jackson-Vanik on December 5, 1997.
    5. The President determined that these countries were in ``full 
compliance'' with Jackson-Vanik on June 3, 1997.
    6. The President determined that these countries were in ``full 
compliance'' with Jackson-Vanik on December 5, 1997.
    7. The President determined that Mongolia was in ``full 
compliance'' with Jackson-Vanik on September 4, 1996. Legislation (HR 
2133, S. 343) is now pending that would remove Mongolia from the list 
of countries subject to Jackson-Vanik.
    8. The President determined that Russia was in ``full compliance'' 
with Jackson-Vanik on September 21, 1994.

    Source: Legis; Jefferson Waterman International; Compilation of US 
Trade Statutes, House Ways and Means Committee, 1997; Presidential 
Documents from White House Web Site.

    Last Updated: May 6, 1998
      

                                


                  National Association of Manufacturers    
                                  Washington, DC 20004-1790
                                                      June 17, 1998

The Honorable Phil Crane, Chairman
Subcommittee on Ways and Means
U.S. House of Representatives
1104 Longworth Building
Washington, DC 20515

    Dear Chairman Crane,

    On behalf of the members of the National Association of 
Manufacturers (NAM), I am writing to express strong support for 
continuation of the Jackson-Vanik waiver for Vietnam.
    The President's renewal of this waiver is important to U.S. 
manufacturers for several reasons. First, the waiver allows American 
businesses access to the services of the Export Import (Ex-Im) Bank and 
the Overseas Private Investment Corporation (OPIC), which is crucial to 
the success of U.S. exporters and investors. Continued Ex-Im and OPIC 
financing means that U.S. firms would be able to compete on a level 
playing field with those foreign firms that are already conducting 
business in Vietnam with the full support of their governments.
    Second, the waiver shows the commitment and interest of the United 
States in normalizing economic relations with Vietnam. By granting 
most-favored-nation status to Vietnam, the United States strengthens 
its position in negotiating a solid bilateral trade agreement, which 
will eventually lead to Vietnam's accession to the World Trade 
Organization (WTO). Both of these mechanisms are vital to Vietnam's 
becoming a sophisticated, market-oriented and responsible player in the 
world marketplace.
    The waiver is also important to advancing other key foreign policy 
issues, such as those pertaining to human rights. Vietnam has 
noticeably increased its cooperation in recent years on these matters. 
By continuing the Jackson-Vanik waiver, the United States would remain 
actively engaged with Vietnam, which would help to strengthen the 
bilateral relationship.
    Therefore, we urge you and the members of the Committee to vote 
against disapproval resolutions with respect to the Jackson-Vanik 
waiver for Vietnam.

            Sincerely,
                                           Howard Lewis III
                                    Vice President, Economic Policy
      

                                


                 Vietnam Veterans of America Foundation    
                                       Washington, DC 20009
                                                      June 18, 1998

The Honorable Philip M. Crane
Member, House of Representatives (R-Illinois)
Chairman
Subcommittee on Trade
House Ways and Means Committee
Washington, D.C. 20515

    Dear Mr. Crane,

    The purpose of this testimony is to voice Vietnam Veterans of 
America Foundation's (VVAF) full support for the extension of the 
waiver of the Jackson-Vanik amendment for Vietnam. Extension of this 
waiver is a critical step as the United States and Vietnam continue to 
develop trusting and mutually beneficial diplomatic relations and 
strive for normalized economic relations. By not extending this waiver, 
the United States will severely harm American economic and political 
interests in Vietnam. It will also send the wrong message to the world 
that our country will not provide consistent leadership to developing 
and reform-minded countries who look to the United States for guidance 
and support during these often difficult transitions.
    VVAF has been returning to Vietnam on a regular basis for over 17 
years and opened an office in Hanoi in 1995. Beginning with the 
establishment of a children's rehabilitation clinic in Hanoi three 
years ago, VVAF continues to operate and develop humanitarian programs 
to help the Vietnamese people improve their standard of living. VVAF 
will soon open an adult prosthetics clinic and is establishing a mobile 
medical outreach program to serve disabled persons residing in outlying 
provinces. VVAF leadership in the United States and in Vietnam 
continues to work with American and Vietnamese governmental, 
educational and humanitarian organizations to improve relations at all 
levels.
    Beginning with trips to Vietnam in the 1980s, through the present, 
we have seen Vietnam make great progress on many important issues. 
Progress has significantly increased in recent years as the United 
States decided to engage rather than isolate Vietnam. Since the United 
States opened a dialogue with Vietnam to attempt to resolve MIA, 
emigration, and other issues, the Vietnamese have responded in a 
positive and pro-active manner. Excellent progress has been made in 
every area and the pursuit to attain the fullest possible accounting 
for American service persons missing in action in Vietnam has become a 
normalized process for both sides.
    As an organization that has been involved in many important issues 
between Vietnam and the United States for nearly twenty years, we are 
familiar with strong feelings by individuals and groups with differing 
views on relations with Vietnam. As it has been a full generation since 
our military involvement in Vietnam, it is critical that as we move 
toward the future, we base our relationship with Vietnam on shared 
values and common interests, not on historical political differences. 
If we continue to be haunted by the ghosts of the past, a constructive 
relationship will never develop.
    American companies entered the Vietnamese market late and are just 
beginning to catch up to their European and regional competitors. Not 
renewing this waiver would set these companies back considerably. In 
the midst of the Asian financial crisis, American companies have unique 
opportunities to provide leadership and stability in the region. 
Additionally, American companies operating in Vietnam provide 
considerable support for VVAF humanitarian projects in Vietnam. Not 
renewing this waiver would result in a significant decrease in U.S. 
corporate support for VVAF's programs, ultimately hurting the 
Vietnamese people.
    I urge you, Mr. Chairman, to carefully consider the many 
consequences associated with a non-renewal of the Jackson-Vanik 
amendment waiver for Vietnam. The victims of a non-renewal would 
include American citizens who are looking toward a better future, 
American companies that depend on U.S. governmental support to compete 
in the global market, Vietnamese citizens who receive humanitarian aid 
or work for U.S. companies, and the integrity of the American political 
system. Extending this waiver will create winners instead of victims 
and will show America, Vietnam and the world that the United States is 
committed to providing dependable and predictable global leadership.

            Sincerely,
                                           Robert O. Muller
                                                          President
      

                                


Statement of Willard A. Workman, U.S. Chamber of Commerce

    The U.S. Chamber of Commerce appreciates the opportunity to 
submit this statement of strong support for the extension of 
the Jackson-Vanik waiver for Vietnam. I am Willard A. Workman, 
Vice President of the International Division at the U.S. 
Chamber.
    The U.S. Chamber believes that building a solid commercial 
foundation for our relationship with Vietnam will encourage 
cooperation on the full range of issues in our bilateral 
relationship, from emigration to a full accounting of American 
POWs and MIAs. Cooperation could be put at risk if the Jackson-
Vanik waiver were withdrawn. For these reasons, we applaud the 
Trade Subcommittee's vote on June 23 to report adversely the 
resolution to disapprove the Jackson-Vanik waiver.
    The U.S. Chamber is the world's largest business 
federation, representing more than three million businesses and 
organizations of every size, sector and region. Many U.S. 
Chamber members are reentering Vietnam for the first time in 20 
years. Other members are entering Vietnamese markets for the 
first time ever.
    The U.S. Chamber is doing its part to foster commercial 
ties with Vietnam. To accommodate the growing interest of our 
members in Vietnam and Southeast Asia, the U.S. Chamber has 
added staff and devoted new resources to expanding our Asia 
division. We also have facilitated business contacts by hosting 
events at the U.S. Chamber for officials from the U.S. embassy 
in Vietnam and the Vietnamese embassy in Washington, DC. In the 
fall, the U.S. Chamber plans to switch roles from host to 
visitor and send a delegation to Vietnam to meet with American 
companies operating locally.

                    Potential of the Vietnam Market

    The attraction to the Vietnamese market is simple: it holds 
huge potential for American business. At present, two-way trade 
is worth approximately $1 billion. This modest number reflects 
the fact that the trade embargo was lifted only a few years ago 
and that the average GNP per capita in Vietnam is barely over 
$300, according to World Bank figures. Yet, annual growth rates 
have averaged 8 to 9 percent despite the limitations of a 
centrally planned economy. This growth rate coupled with a 
population of 78 million, the second largest in Southeast Asia, 
presents large market opportunities over the long term.
    In addition, there are significant demographic and cultural 
changes in Vietnam that could benefit American business. Over 
half of Vietnam's population is under the age of 25 years old. 
The younger generation has been exposed to foreign consumer 
brands in stores, on the radio and even on MTV. Increasingly, 
the brands are American. In addition, English has replaced 
French and Russian as the second most common language in 
Vietnam, largely because of the interest of the younger 
generation. This will help American business target the younger 
generation as they become more prosperous.
    If we fail to remain engaged with Vietnam, we will cede the 
potential of this market to competitors in Europe, Japan and 
other parts of Asia. Foreign firms operating in Vietnam already 
have a head start over American companies. The United States is 
only the eighth largest investor in Vietnam with $1.2 billion 
worth of capital. Singapore, Taiwan, Hong Kong and Japan are 
the top investors with an average of $4 billion worth of 
capital.
    In addition, American companies operating in Vietnam only 
recently have obtained access to U.S. trade promotion programs 
at the U.S. Export-Import Bank (ExIm) and the Overseas Private 
Investment Corporation (OPIC). These agencies require the 
Jackson-Vanik waiver in order to extend their programs to 
Vietnam. If the waiver were revoked, access to U.S. trade 
promotion programs would end, and American companies would be 
placed at a competitive disadvantage in relation to foreign 
competitors.
    Like China, the Vietnamese economy will continue to grow at 
a rapid pace provided that Vietnam's leadership remains firmly 
committed to carrying out economic reform. The financial crisis 
in Asia could strengthen the hand of those who do not support 
market-opening. Conservative party members in Vietnam argue 
currency and capital controls have sheltered the country's 
economy from the turmoil in the region. Commercial engagement 
sends a countervailing message that there are benefits from 
opening markets.

          Challenges Confronting American Companies in Vietnam

    The U.S. Chamber understands the challenge of doing 
business in Vietnam. The Vietnamese economy is undergoing a 
slow transformation from a centrally planned economy, which has 
resulted in confusing and contradictory regulations, foreign 
exchange shortages, new taxes and red tape. Corruption also 
continues to be a problem in many areas. The frustrations of 
some U.S. Chamber members have been widely publicized.
    Commercial engagement with Vietnam works on two levels to 
address these problems. At a local level, U.S. Chamber members 
help to promote fundamental rights wherever they operate by 
establishing benchmarks for corporate practices in such 
critical areas as personnel management, corporate citizenship, 
fairness and equal opportunity. Many companies have made their 
commitments explicit through a corporate statement of 
principles. This has had a positive impact on Vietnamese 
workers and local government officials.
    In addition, the United States and Vietnam are engaged in 
the process of negotiating a broad commercial agreement, which 
is a prerequisite to extending most-favored-nation (MFN) status 
on a mutual basis. (MFN status is the normal trade treatment 
that the United States provides to almost all of its trading 
partners.) The commercial agreement will have four major 
components: market access, services, investment and 
intellectual property. It will impose trade-related disciplines 
on Vietnamese authorities and bring Vietnamese law closer to 
international trade norms. The agreement also will lead to 
greater transparency in commercial dealings.
    Because Congress will have an opportunity to vote on the 
final agreement, we urge Members to make it clear that the 
Administration should seek commitments from Vietnam that are 
compatible with the disciplines under the World Trade 
Organization (WTO), especially in the areas of investment, 
technical barriers to trade, subsidies and intellectual 
property. Not only will this provide more protection for 
American businesses in Vietnam, but it also will facilitate 
Vietnam's accession to the WTO and avoid the marathon 
negotiations that have characterized bilateral talks with China 
over WTO accession.
    Failure to extend the Jackson-Vanik waiver, however, could 
undermine progress made to date in our trade negotiations. It 
also could send the message to the Vietnamese government that 
we are not committed to continuing on the path to full 
normalization, which might jeopardize progress on other 
bilateral issues. Attached are two recent letters from the U.S. 
Chamber to the leadership in the Senate and House voicing this 
concern.

      Commercial Engagement with Vietnam Yields Political Benefits

    The U.S. Chamber is sensitive to the legacy of the Vietnam 
War. The U.S. government's priority is, and should continue to 
be, obtaining the fullest possible accounting of American 
servicemen missing from the war. Concerns also exist about 
emigration, human rights and religious freedoms in Vietnam.
    Commercial engagement provides the United States with 
leverage to encourage continued cooperation. Vietnam has 
already demonstrated its desire to shed its outsider past. It 
has joined the Association of Southeast Asian Nations; will 
accede to the Asia-Pacific Economic Cooperation (APEC) forum 
this fall; and has tabled its first substantive proposal as 
part of negotiations to join the WTO. In addition, the 
Vietnamese government has expressed a strong interest in 
obtaining MFN status from the United States.
    There is strong evidence that the policy of commercial 
engagement has worked. The purpose of the Jackson-Vanik 
amendment is to encourage a free emigration policy in communist 
countries. Since the Administration normalized relations with 
Hanoi, Vietnam has cleared for interview over 80 percent of all 
remaining applicants of the Resettlement Opportunity for 
Vietnamese Returnees agreement. On the day that the President 
announced his decision to extend the Jackson-Vanik waiver, the 
Vietnamese government announced that it would permit U.S. 
officials to interview all emigration applications under the 
Orderly Departure Program for an ethnic group known as the 
Montagnards.
    Commercial engagement also provides the United States with 
several ``sticks'' to use in the unlikely event that Vietnam 
abruptly changes its policies. Even after a commercial 
agreement is completed and approved by Congress, the President 
may still revoke MFN treatment if he determines that Vietnam is 
not cooperating with U.S. efforts to achieve a full accounting 
of military personnel lost during the Vietnam War.

                               Conclusion

    The U.S. Chamber strongly endorses extending the waiver of 
the Jackson-Vanik amendment to Vietnam. The decision will 
strengthen U.S.-Vietnam commercial ties to the benefit of U.S. 
Chamber members across America and their employees. Commercial 
engagement also provides a solid foundation for progress on 
other bilateral issues such as the conclusion of unsolved POW/
MIA cases, emigration matters and human rights. Clearly, 
revoking the waiver at a time when Vietnam has been willing to 
cooperate on a broad spectrum of issues could jeopardize future 
progress and undermine U.S. leverage.
    On behalf of the U.S. Chamber of Commerce, thank you for 
providing the opportunity for us to express our support for 
upholding the Jackson-Vanik waiver for Vietnam and continuing a 
policy of commercial engagement. 

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