[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
UNITED STATES-VIETNAM TRADE RELATIONS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON TRADE
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
JUNE 17, 1999
__________
Serial 106-20
__________
Printed for the use of the Committee on Ways and Means
U.S. GOVERNMENT PRINTING OFFICE
59-940 CC WASHINGTON : 2000
------------------------------------------------------------------------------
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
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 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
WES WATKINS, Oklahoma LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
A.L. Singleton, Chief of Staff
Janice Mays, Minority Chief Counsel
______
Subcommittee on Trade
PHILIP M. CRANE, Illinois, Chairman
BILL THOMAS, California SANDER M. LEVIN, Michigan
E. CLAY SHAW, Jr., Florida CHARLES B. RANGEL, New York
AMO HOUGHTON, New York RICHARD E. NEAL, Massachusetts
DAVE CAMP, Michigan MICHAEL R. McNULTY, New York
JIM RAMSTAD, Minnesota WILLIAM J. JEFFERSON, Louisiana
JENNIFER DUNN, Washington XAVIER BECERRA, California
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
Advisories announcing the hearing follow......................... 2
WITNESSES
Peterson, Hon. Douglas ``Pete,'' U.S. Ambassador to Vietnam...... 28
______
Asia-Pacific Council of American Chambers, and Craft Corporation,
Greig Craft.................................................... 83
Blumenauer, Hon. Earl, a Representative in Congress from the
State of Oregon................................................ 24
Boat People S.O.S., Nguyen Dinh Thang............................ 40
Citigroup Inc., Lionel C. Johnson................................ 54
Coalition Against the Jackson-Vanik Waiver, Diem H. Do........... 68
Kerry, Hon. John F., a U.S. Senator from the State of
Massachusetts.................................................. 8
Montagnard Human Rights Organization, Y Tin Hwing................ 52
National Alliance of Families for the Return of America's Missing
Servicemen, Lynn O'Shea........................................ 78
Rohrabacher, Hon. Dana, a Representative in Congress from the
State of California............................................ 14
US-ASEAN Business Council, Inc., Ernest Z. Bower................. 57
U.S. Chamber of Commerce, L. Craig Johnstone..................... 71
U.S.-Vietnam Trade Council, Virginia B. Foote.................... 43
Vietnamese American Business Council, Trung Trinh................ 64
SUBMISSIONS FOR THE RECORD
American Chamber of Commerce in Vietnam, Hanoi Chapter, Hanoi,
Vietnam, Peter Ryder, statement................................ 89
American Legion, John F. Sommer, Jr., letter..................... 90
Boeing Company, Arlington, VA, statement......................... 91
Caterpillar Inc., statement...................................... 92
General Electric Company, Hanoi, Vietnam, Andre Sauvageot,
statement...................................................... 92
Liberty Flame Foundation, Westminster, CA, Nguyen Pham Tran,
letter......................................................... 96
McCain, Hon. John, a U.S. Senator from the State of Arizona,
letter......................................................... 97
Minnesota League of POW/MIA Families, White Bear Lake, MN,
Richard Daly................................................... 98
National League of Families of American Prisoners and Missing in
Southeast Asia, Ann Mills Griffiths, letter and attachments.... 99
Nguyen, Dan, Sacramento, CA, letter.............................. 112
Veterans of Foreign Wars of the United States, Bruce R. Harder,
statement...................................................... 113
Vietnamese-American Voters' Coalition, Long Beach, CA, Tanette
Nguyen McCarty, statement...................................... 116
Vietnamese Nationalist Community of Austin and Vicinity, Austin,
TX, Khanh K. Chau, and Hung Quoc Nguyen, letter................ 118
UNITED STATES-VIETNAM TRADE RELATIONS
----------
JUNE 17, 1999
House of Representatives,
Committee on Ways and Means,
Subcommittee on Trade,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:30 a.m., in
room 1100, Longworth House Office Building, Hon. Philip Crane
(Chairman of the Subcommittee) presiding.
[The advisories announcing the hearing follow:]
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON TRADE
FOR IMMEDIATE RELEASE CONTACT: (202) 225-1721
June 4, 1999
No. TR-12
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 17, 1999, in the main Committee hearing room,
1100 Longworth House Office Building, beginning at 10:00 a.m.
Oral testimony at this hearing will be from both invited and public
witnesses. Invited witnesses will include the Honorable Douglas
``Pete'' Peterson, U.S. Ambassador to Vietnam. 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 normal trade relations (NTR), including normal tariff
treatment, as well as access to U.S. Government credits, or credit or
investment guarantees, to nonmarket economy countries ineligible for
NTR treatment as of the enactment of the Trade Act. A country subject
to the provision may gain NTR treatment and coverage by U.S. trade
financing programs only by complying with the freedom of emigration
provisions under the Act. The extension of NTR 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 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 Douglas ``Pete'' Peterson as U.S.
Ambassador to Vietnam. In 1997, the Office of the United States Trade
Representative began negotiations, which are still ongoing, toward the
conclusion of a bilateral commercial agreement with Vietnam.
Because Vietnam has not yet concluded a bilateral commercial
agreement with the United States, it is ineligible to receive NTR
tariff treatment. However, if the President determines that a Jackson-
Vanik waiver would substantially promote the freedom of emigration
objectives under the Trade Act of 1974, U.S. exporters to Vietnam are
given access to U.S. Government credits, or credit or investment
guarantees, such as those provided by the Overseas Private Investment
Corporation, the Export-Import Bank, and the U.S. Department of
Agriculture, provided that Vietnam meets the relevant program criteria.
On March 9, 1998, the President first determined that a Jackson-
Vanik waiver for Vietnam would substantially promote the freedom of
emigration objectives under the Trade Act of 1974. On April 7, 1998,
the President issued Executive Order 13079, under which the waiver
entered into force. 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. On
June 3, 1998, the President renewed Vietnam's waiver for the next 12-
month period. On June 3, 1999, the President again issued a 12-month
waiver. The waiver authority will continue 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.
In the 105th Congress, a resolution of disapproval, H.J. Res. 120, was
considered and failed by a vote of 163 to 260.
In 1998, two-way trade between the United States and Vietnam was
valued at $827.6 million. United States exports to Vietnam last year
totaled $274.2 million, and U.S. imports from Vietnam equaled $553.4
million. Top U.S. exports included machinery and transportation
equipment, and chemicals and related products. Top U.S. imports from
Vietnam in 1998 included food and live animals, and miscellaneous
manufactured articles.
In announcing the hearing, Chairman Crane stated: ``This hearing
will provide the Subcommittee with an opportunity to review Vietnam's
Jackson-Vanik waiver and the progress that has been made on pending
emigration cases of concern to the United States. It is also an
occasion to assess progress made in cooperation on POW/MIA accounting.
In addition, Vietnam is a significant potential market of 78 million
people to U.S. firms and workers in the important Southeast Asian
region. I look forward to this chance to review the status of the
ongoing negotiations with Vietnam toward a bilateral trade agreement,
which must be concluded and approved by Congress before normal trade
relations can be extended to 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 SUBMISSION OF WRITTEN COMMENTS:
Requests to be heard at the hearing must be made by telephone to
Traci Altman or Pete Davila at (202) 225-1721 no later than the close
of business, Thursday, June 10, 1999. 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 15, 1999.
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
22, 1999, 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, by close of business the day before the hearing.
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.
***NOTICE--CHANGE IN TIME***
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON TRADE
FOR IMMEDIATE RELEASE CONTACT: (202) 225-1721
June 14, 1999
No. TR-12-Revised
Change in Time for Subcommittee
Hearing on U.S.-Vietnam Trade
Relations Thursday, June 17, 1999
Congressman Philip M. Crane (R-IL), Chairman of the Subcommittee on
Trade of the Committee on Ways and Means, today announced that the
Subcommittee hearing on U.S.-Vietnam trade relations, previously
scheduled for Thursday, June 17, 1999, at 10:00 a.m., in the main
Committee hearing room, 1100 Longworth House Office Building, will now
begin at 10:30 a.m.
All other details for the hearing remain the same. (See
Subcommittee press release No. TR-12, dated June 4, 1999.)
Chairman Crane. Will everybody please take their seats so
we can start our hearing.
Good morning, and welcome to this hearing of the
Subcommittee on Trade on United States-Vietnam trade relations.
Since the early nineties, the United States has taken gradual
steps to normalize our relations with Vietnam, contingent upon
Vietnam's full cooperation with us to achieve the fullest
possible accounting for our missing servicemen and women. The
steps toward normalization have been marked most significantly
by the 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.
Last year, the President first issued a waiver for Vietnam
from the freedom of emigration criteria in the Jackson-Vanik
amendment to the Trade Act of 1974, the provision of law which
governs U.S. trade relations with nonmarket economy countries,
including the extension of normal trade relations. Earlier this
year, or this month rather, the President renewed Vietnam's
Jackson-Vanik waiver for another year, finding that the waiver
would continue to substantially promote the emigration
objectives in the statute. Because Vietnam is not yet eligible
for NTR, normal trade relations, trade status in its relations
with the United States, the practical effect of the waiver has
been to enable U.S. Government agencies, such as the Overseas
Private Investment Corporation, the Export-Import Bank, and the
U.S. Department of Agriculture, to provide financing to
Americans interested in doing business with Vietnam, provided
that Vietnam meets the relevant program criteria. This is a
necessary first step on the way to full normal trade relations
with Vietnam.
This week, the Office of the U.S. Trade Representative is
engaged in the latest round of negotiations with the Vietnamese
on a bilateral commercial agreement which will serve as the
foundation for an extension of reciprocal NTR after the
agreement is concluded and approved by Congress. In recent
months, there has been significant progress in the
negotiations, and I am hopeful that an agreement can be reached
in the near future which will provide U.S. firms and workers
with access to the Vietnamese market, which is the 12th most
populous in the world. As we anticipate the conclusion of the
bilateral agreement, continued full cooperation by Vietnam in
all areas of our bilateral relationship is absolutely essential
to prepare for congressional consideration of the agreement on
its merits, and the subsequent extension of NTR.
I look forward to our witnesses' testimony on a broad range
of bilateral issues and policy objectives in U.S. relations
with Vietnam. I now recognize Mr. Levin, the Ranking Minority
Member of the Subcommittee, for an opening statement.
Mr. Levin. Thank you, Mr. Chairman. Thank you for this
hearing today on the important subject of United States-Vietnam
trade relations. It goes without saying that our relationship
with Vietnam is a complicated one. It is bound up with very
deeply felt emotions about the recent past. It cannot easily be
separated from the task of building commercial ties that will
carry us into the future. But it is important that we pursue
that task. Building the foundation for a strong commercial
relationship is not only in our national economic interest, it
is also in our security interest and our diplomatic interest.
In helping to develop the foundations for a market economy and
a democratic society in Vietnam, we can make an important
contribution to fostering regional stability.
There are two questions, one near-term and another long-
term, for this Subcommittee and the Congress as a whole. The
near-term question, do we support the President's renewal of
the Jackson-Vanik waiver for Vietnam? The longer-term question,
will we support a bilateral trade agreement and full
normalization of trade relations with Vietnam?
I support the President's renewal of the waiver for
Vietnam. In 1994, we took an important step towards repairing
relations between our two countries. In recognition of
Vietnam's efforts to locate missing United States servicemen
and women in Southeast Asia, we lifted the comprehensive
embargo that we had imposed on that country since 1975. We took
another step in 1995 when we reopened the United States embassy
in Hanoi. We took a further step last year in terms of the
waiver. The House rejected the disapproval resolution by a vote
of 163 to 260. We are making progress. It would be a mistake to
go backward. Rejecting the waiver would send the wrong message,
and would only hinder our efforts to improve relations and to
encourage the development of a free market and the rule of law
in Vietnam.
Further normalization of trade relations is a much
different issue. Here, while negotiators are making progress, a
number of important issues remain outstanding. I look forward
to hearing from all of our colleagues on both sides of the
rotunda and to our former colleague, Ambassador Peterson. In
that, in particular, we must ensure that United States rights
are enforceable in evolving economies like Vietnam, where laws
are not always administered in transparent ways. One area of
particular concern in the case of Vietnam is the slow pace of
economic reform. I expect that several witnesses will testify
today about the problems of corruption, piracy of intellectual
property, lack of reliability in government-published economic
data, and other obstacles. These problems must be fully
addressed in a trade agreement.
Another area of importance is the potentially distorting
effects that evolving economies' labor market structures may
have on competition, as when core worker rights are not
enforced. For example, Vietnam estimated in 1997 that
approximately, and ``29,000 children below the age of 15 were
victims of exploitative labor.'' And ``that estimate may have
been low,'' according to the State Department's most recent
report on Vietnam.
In addition to raising the critical human rights concern,
the prevalence of child labor in Vietnam raises a significant
concern about the terms on which Vietnamese companies compete
with U.S. companies. The President said in his State of the
Union Address and last weekend at the University of Chicago
that our trade policy should encourage, as he said, a leveling
up, not a leveling down. Consistent with that goal, he
expressed American support for an international convention
banning abusive child labor in his address yesterday to the
ILO, International Labor Organization. Normalization of United
States trade relations with Vietnam must be predicated on,
among other conditions, significant progress towards the
elimination of child labor practices in that country.
I understand that our trade negotiators are working hard at
putting together a bilateral trade agreement with Vietnam. I
hope that in addition to insisting on commitments such as
reductions in tariffs, liberalization of investment rules, and
expansion of trading rights, they will also insist on
commitments in the areas that I have touched upon. Again, we
look forward to the testimony of our three distinguished
colleagues, the Ambassador, and other witnesses.
Thank you, Mr. Chairman.
Chairman Crane. Thank you. We have a full schedule today.
In the interest of time, I ask our witnesses to please limit
your oral testimony, to 5 minutes each. Any longer written
statements will be made a part of the permanent record.
Our first panel will consist of our colleagues, Senator
John Kerry of Massachusetts, Congressman Dana Rohrabacher of
California, and Congressman Earl Blumenauer of Oregon. I know,
Senator Kerry, that you are on a tight time constraint. So
after your testimony, if our other two witnesses would hold
just a second for any questions that anyone may have of Senator
Kerry, and then he can be excused to return to other business
at some other chamber here on the Hill.
We'll start with you, Senator Kerry.
STATEMENT OF HON. JOHN F. KERRY, A U.S. SENATOR FROM THE STATE
OF MASSACHUSETTS
Senator Kerry. Mr. Chairman, Ranking Member Levin, thank
you very much. I appreciate your courtesy. I will be brief. I
have already given my full text to the clerk. I thank you for
including that in the record. Thank you for inviting me to
testify again. I regret that my good friend and colleague,
Senator McCain, was unable to join me this morning, but he, I
know shares the point of view that I will express and ask that
I so state.
Mr. Chairman, I very strongly support the President's
decision to renew the waiver of Jackson-Vanik. May I say that I
think the Congress of the United States made the correct
decision last year not to interfere with that decision.
Everything that has happened in the course of the last year, in
my judgment, underscores why that was the right decision and
important. In point of fact, the last year arguments were made
to you, as a rationale for not extending it, that cooperation
on a number of fronts would stop. On its face, those arguments
were proven wrong by virtue of continued, in fact increased,
cooperation in a number of areas and continued cooperation in
others.
I would just say to the Subcommittee with all respect and
candor, that we continue to have a very broad range of
interests in Vietnam. Needless to say, first and foremost,
obtaining the full fullest possible accounting of American
servicemen missing from the war, promoting freedom of
emigration, promoting human rights and freedoms, encouraging
them to maintain a course of economic reform, and opening their
markets to American companies, and ultimately to adopt a much
more open society.
We care about stability in the region. We have interests
with respect to China, the South China Sea, commerce in the
region, ASEAN, a host of similar interests with respect to
Cambodia, the influence Vietnam can provide with respect to the
Khmer Rouge accountability question, and so many others. I
suggest there are a broad range of issues on the table.
Let me just say very quickly, Mr. Chairman, for 20 years we
had no progress at all on MIA/POW, none. No progress, no
accountability, no family learned the fate of their loved one
for 20 years. It wasn't until we began a process of careful,
staged, step-by-step engagement with Gen. Vesse, with President
Bush, with Gen. Scowcroft, and continued that through this
administration, that families have begun to be able to learn
what happened to their loved ones. The fact is that in the last
6 years, there have been 33 joint field activities to
repatriate remains, 266 sets of remains have been repatriated
and 117 of them have been identified. They have provided
reports on their unilateral investigations to help us on 162
different cases.
The fact is that since we requested that they be set up,
Vietnam has provided assistance through unilateral document
search teams. Those could stop tomorrow. If we want to go
backward, we can go backward. But every official involved with
the process believes we are making gains by proceeding
forwards. The search teams have handled over documents in some
14 separate turnovers, 300 documents, some 500 to 600
untranslated pages, and we are working on those now. In
addition, the Government of Vietnam has identified 31 witnesses
and 40 more in the future to participate in investigations on
the borders. They have proven to be crucial in our
accountability efforts in Laos.
When I began as Chairman of the POW/MIA Committee, Mr.
Chairman, we had 196 individuals who were on the list of ``last
known alive cases.'' We had no identification of them at all.
We are now at a state where we have determined the fate for all
but 43 of those 196 on the list. The only way we did that was
with cooperation.
Let me just say a final comment. The record shows that last
year's waiver in fact created an incentive for further
cooperation. Since the waiver was renewed last year, Vietnam
has made substantial and consistent progress on emigration
issues, particularly on the ROVR agreement, where we are up to
96 percent now of all people interviewed. We have had
resumption of the Orderly Departure Program for former U.S.
Government employees which we had suspended in 1996, and we are
making enormous progress there.
I will acknowledge, I would like to see them do more and
move faster, particularly in human rights. I would like to see
China do more. I would like to see a host of countries on this
planet do a lot more faster. But the fact is, that while it
isn't everything we want it to be, liberalization continued
over the course of last year. Vietnamese now have access to the
Internet, with some limitations. Participation in religious
activity has increased, even for some groups such as Buddhists
and Catholics that had been the targets of government
repression.
On the labor front, we all wish their labor law would
embrace more. But the fact is, that there were 60 organized
strikes, including strikes against state-owned enterprises that
were allowed to take place. That is a change. That is a
difference. The Vietnamese Government is now drafting
legislation on freedom of association. Since the extension of
the Jackson-Vanik waiver last year, 24 prisoners of conscience
were released. Now there isn't one of us sitting here who
wouldn't like it to be zero prisoners of conscience, and that
there are complete laws adopted. But every one of us
understands that even in this country, there was a 200-year
road developing our own labor relations, developing our own
rights to strike, developing our own extension of rights to
people. It was only in our lifetime and some of our public
service that everybody in this country even got the right to
vote, in the sixties with the Voting Rights Act. We have still
got things to fight about.
I think it is important to measure this progress
appropriately. To move back on Jackson-Vanik would be to sort
of turn the clock back in a way that I think would be
counterproductive to the efforts we are making. I hope, Mr.
Chairman, that this Subcommittee and the Full House will
recognize that the road is sometimes rocky, but at least we are
on the road and moving in the right direction.
I thank the Chair.
[The prepared statement follows:]
Statement of Hon. John F. Kerry, a U.S. Senator from the State of
Massachusetts
Mr. Chairman, it is an honor for me to testify again this
year before the Subcommittee on the President's decision to
renew the waiver of the Jackson-Vanik amendment for Vietnam. As
you know, I supported the President's decision last year to
renew the waiver, and I support his decision this year to
extend the renewal. I continue to believe that our national
interests are promoted by waiving the amendment and that
overturning the waiver would have serious negative consequences
for our bilateral relations with Vietnam and our larger
interests in Southeast Asia.
The United States continues to have important and varied
interests in Vietnam and in the region. First is the 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 particularly 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.
As the twelfth largest country in the world with a
population of 78 million, Vietnam is a potentially significant
market for American goods and services. It is in our interest
to help Vietnam develop that market by continuing the course of
economic reform that it began in the late 1980s.
Vietnam is an integral part of Southeast Asia--a region
where political stability has been sporadic at best. The region
is still recovering from the impact of the Asian financial
crisis, and although the situation in Cambodia has improved
over the last year, Cambodia and Burma continue to be potential
flash points. Our interests in promoting stability in this
often volatile region dictate that we have an active presence
and effective working relationships with all of the countries
including Vietnam.
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 Prime Minister Hun Sen. China
has 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, as I emphasized in my
testimony last year, 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 I indicated in my testimony last year, that policy was a
complete failure and the history of the POW/MIA issue clearly
demonstrates this point.
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.
We have made 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 six years American and Vietnamese personnel have conducted
33 joint field activities (JFAs) in Vietnam to recover and
repatriate remains. 266 sets of remains have been repatriated
and 117 remains have been identified. In addition to working
jointly with the United States on remains recovery, the
government of Vietnam since 1993 has provided reports on their
unilateral investigations of 162 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. We have now determined the fate 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.
Since agreement was reached in December 1994 on joint U.S.-
Vietnamese-Lao trilateral investigations in Laos, 31 Vietnamese
witnesses have participated in operations in Laos; the
government has identified another 40 to participate in future
investigations, eight of these identified since the beginning
of December 1998. 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. In the
last year a Vietnamese witness has also participated in an
investigation in Cambodia.
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. Over 28,000 archival documents have been
reviewed and photographed by joint research teams. We have
conducted over 260 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
14 separate turnovers totaling 300 documents of some 500-600
untranslated pages. Most recently the Vietnamese provided 12
documents in two separate turnovers in support of our study of
Vietnam's collection and repatriation of American remains.
These teams have undertaken research not only in archives in
Hanoi but also in archives in more than 19 provinces in the
country.
Mr. Chairman, last year those who opposed the waiver of the
Jackson-Vanik amendment suggested that progress on POW/MIA
accounting would decrease. That simply has not been the case.
Cooperation has continued, and we have made further progress on
this issue. Joint field activities continued. More remains were
repatriated. The Vietnamese continued to conduct unilateral
investigations and document searches and to cooperate in the
trilateral investigations. Leads that might help to resolve the
outstanding discrepancy cases continued to be investigated by
Vietnamese and American teams.
During my tenure as Chairman of the Senate Select
Committee, I spent countless hours and made numerous trips to
Vietnam 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 continues to be
to engage the Vietnamese and to follow our present policy of
step by step normalization of bilateral relations with Vietnam.
The waiver of the Jackson-Vanik amendment is a modest but
important step in the continued normalization of our relations
with Vietnam. It simply enables the Export-Import Bank and OPIC
to operate 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, or as it is now called NTR
(normal trade relations), to Vietnam. That step will come only
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, and 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 waiver of the Jackson-Vanik amendment has served as an
incentive for continued 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.
In the last year Vietnam has made substantial 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. Processing of eligible cases
accelerated dramatically in 1998 to the point that the program
is almost at completion. Last year at this time the government
of Vietnam had cleared about 78 percent of ROVR applicants for
interview. As of the beginning of this month, 19,975, or 96
percent, had been cleared. INS has approved 15,833 of these for
admission to the U.S. as refugees, most of whom have already
left for the United States.
Last May Vietnam had taken no action on 1353 ROVR cases; as
of this June, that number was reduced to 79. Similarly the
number of cases denied clearance by the Vietnamese government
has fallen from 776 last May to 422 this June. Most of these
were cases in which addresses for the applicant were incorrect
or the eligible individuals failed to attend a clearance
interview. Once we provided the Vietnamese government with
updated information, many of these cases were resolved. In
fact, the main obstacle to ROVR processing at this point is not
lack of cooperation by the government but rather failure of
some cleared applicants to appear at our ODP (Overseas
Departure Program) office for the INS interview.
Similarly the waiver has encouraged increased Vietnamese
cooperation on the Orderly Departure Program (ODP) under which
over 500,000 Vietnamese have emigrated as refugees or
immigrants to the U.S. since the 1980s. As a result the
Administration expects that it will complete processing of
nearly all ODP caseloads, including ROVR, by the end of this
fiscal year. The Vietnamese Government has made a commitment to
achieve this goal for all U.S. refugee programs including ROVR
and Montagnard cases. Since the waiver was extended last year,
Vietnamese cooperation on the Montagnard cases has accelerated.
220 individuals have been cleared for interview; of these INS
has approved 118 for resettlement in the United States. In 1996
our government suspended the ODP program for former U.S.
government employees in Vietnam. The Vietnamese government has
agreed to our recent request to resume that program. Finally, I
would note that continued Vietnamese cooperation has enabled us
to make progress on the so-called ``HO'' program for former re-
education camp detainees.
Clearly Vietnam has made substantial and measurable
progress in the area of emigration. Frankly, its record in the
area of human rights is not as impressive. Vietnam continues to
be a one-party state that tolerates no organized political
opposition and denies or curtails many basic freedoms, such as
freedom of the press or speech.
Human rights is and must continue to be on our bilateral
agenda with 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. The
seventh session of that dialogue is about to be scheduled. I
know that Ambassador Peterson repeatedly raises human rights
issues with the highest levels of the Vietnamese government,
and that Secretary Albright raised these issues with the Deputy
Prime Minister when he was in Washington in December. 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. In the last year some
24 prisoners of conscience were released in two amnesties. In
addition liberalization continues to take place slowly by
degrees.
There is no question that Vietnam is changing as it
exposure to and interaction with other countries increases.
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. Vietnamese now have
access to the Internet, although with some limitations.
Vietnamese generally are free to practice their religion; in
fact, participation in religious activities increased in the
last year, even for some groups such as Buddhists and Catholics
that have been the targets of government repression. On the
labor front, there is no question that Vietnam's labor law and
practice fall short of international standards. But the fact
that last year, 60 organized strikes including strikes against
state-owned enterprises were allowed to take place is a
positive step. The Vietnamese government is now drafting
legislation on freedom of association.
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 nine 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.
Let me turn briefly to the economic relationship. Clearly
Vietnam wants to normalize economic relations with the United
States and to join the WTO. Without undertaking serious
economic reforms, Vietnam can achieve neither. Over the past
year I have had numerous conversations with high level
Vietnamese leaders about the importance of undertaking these
reforms, which are necessary for the development of Vietnam's
economy and the conclusion of a bilateral trade agreement with
us. Not surprisingly there is some reticence about taking such
politically sensitive steps. Nevertheless, I believe that the
Vietnamese leaders now understand that they have no choice if
they want to modernize their economy. This is reflected in the
fact that the negotiations for a US-Vietnam trade agreement
have increased in pace and improved in substance.
If these negotiations are brought to a successful
conclusion, Vietnam will be obligated to undertake major
changes in its trade and investment regimes that will greatly
benefit American companies by increasing their access to the
Vietnamese market. The Jackson-Vanik waiver, which enables
Eximbank and OPIC to continue operations in Vietnam, serves as
an important incentive for Vietnam to take these steps and to
stay on the economic reform course. If we remove that
incentive, we run the risk of setting that process back as well
as the ongoing negotiations for a bilateral trade agreement.
I know that the Subcommittee will hear testimony this
morning from some who argue that Vietnam has not cooperated
fully on the POW/MIA issue. Obviously I disagree, but let me
repeat two important points that I made when I testified before
the Subcommittee last year. First, during my many 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 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 extension
of the waiver 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 extend the waiver
for another year. Congress should let that decision stand.
Chairman Crane. Thank you, Senator Kerry.
Do we have any questions for Senator Kerry before he
departs?
Mr. Neal.
Mr. Neal. Mr. Chairman, as the junior Senator from
Massachusetts, not only is he a terrific Senator, but he has
special credibility I think on this issue. He has been a
leader. He has never shirked once his responsibility. He has
not been afraid of the criticism that he has run up against on
this issue. But that is part, I think, of the challenge of
leadership that John Kerry has demonstrated time and again. A
great friend, and as I indicated before, a terrific U.S.
Senator.
Senator Kerry. Thank you, very much.
Mr. Levin. Mr. Chairman. I don't really have any questions,
maybe because I agree with the Senator. But I do think you not
only have special credibility, but a sustained interest. It is
really helpful. I do think we need this kind of discussion. I
think it is very healthy that we have it. We are here talking
about an annual waiver. We are not discussing anything more
than that. These issues will continue to be before us and the
pressure will continue from a lot of us that there be continued
progress. Where there is retrogression, we will speak out. I
think your moving on beyond your special credibility has lended
a lot to this discussion. On the House side, I think I speak
for people maybe on both sides of this question or on all
sides. We hope you will continue to find time to help us
engage.
Senator Kerry. I thank you, Congressman. Let me just say I
was over there earlier in the year and met with the key
leaders, as I have tried to do each time I'm there. I have
impressed on them as hard as I know how the concerns that my
colleagues express, and in addition to that, the need for the
economic reforms. I mean it is very clear that WTO membership
and the conclusion of the trade agreement are dependent on the
adoption of the sort of moving upward, as you mentioned
earlier, that the President has cited.
I am happy to say that subsequent to those conversations we
had, there has been significant progress. I think there has
been a reengagement on the trade issue. That is the way I think
we will raise a number of standards and ultimately meet our
interests. So I intend to continue to do that.
I thank the Congressman for his comments.
Chairman Crane. And we thank you, Senator Kerry, for your
participation today and your ongoing participation and
involvement. We regret your tight time constraints.
Senator Kerry. My apologies, Mr. Chairman.
Chairman Crane. Well, we appreciate the fact that you made
it.
Senator Kerry. Thank you for your courtesy, and I thank my
colleagues for their courtesy.
Chairman Crane. Thank you.
Our next witness then will be Congressman Dana Rohrabacher.
STATEMENT OF HON. DANA ROHRABACHER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Rohrabacher. I remember, before the Senator leaves, I
remember the Senator----
Chairman Crane. Senator Kerry.
Mr. Rohrabacher [continuing]. I remember the Senator
calling our Vietnamese counterparts across the table to task on
the idea of how can you have Leninism when you don't have
Marxism. What justification is there any more, calling them to
task on their own philosophical inconsistencies. I remember
that very well.
Thank you very much, Mr. Chairman. It has been 1 year since
President Clinton issued the Jackson-Vanik waiver for Vietnam.
The legislation I have sponsored, House Joint Resolution 58,
disapproves of the extension of that waiver. During the past
year, rather than open up its state-managed economy, the
Vietnamese Communist regime has further tightened its grip on
civil liberties, religion, and freedom of expression. There has
been no move, I repeat, no move toward free and fair elections
in Vietnam. We are not on the right road. We are not on any
road at all when it comes to free and fair elections.
Nor has there been any move toward establishing an
independent judicial system, no move in that direction. Instead
of implementing honest economic reforms, Communist
mismanagement, corruption, and the dominance of state-run firms
have turned off most investors who only a short time ago were
so optimistic about Vietnam. In fact, international
businesspeople polled by the Hong Kong-based Political and
Economic Risk Survey, rates Vietnam as the most stressful
country in Asia for foreigners because of its stubborn
bureaucracy. The survey noted a substantial exodus of
expatriate investors who find doing business in Vietnam not
worth the effort. A recent study, completed by the U.S. General
Accounting Office at my request, concluded that because of
Communist secrecy and corruption, there is no independent means
to verify real economic and financial statistics in Vietnam or
to effectively identify and resolve economic and financial
problems.
The Jackson-Vanik provision was intended to be a tool for
improving migration and human rights in Communist and fascist
regimes. The President's Jackson-Vanik waiver enables U.S.
companies to be eligible for U.S. tax-payer supported trade
finance programs such as those provided by the Export-Import
Bank and OPIC, the Overseas Private Investment Corp. That is
the essence of what we are talking about today, whether or not
those taxpayer-supported financing programs should be made
available to American companies doing business in this
dictatorship in Vietnam.
My cosponsorship of the resolution, and has been joined by
Chris Smith and Loretta Sanchez, and these cosponsors will
focus on the ongoing abuses and corruption that deny fair
migration to Vietnamese and Montagnard people. The sponsor of
the Senate version of this resolution, Bob Smith, will
articulate the many problems that exist in obtaining the
fullest accounting for American prisoners of war and those who
are still missing in action. I would respectfully disagree with
Senator Kerry. There has not been full cooperation in this
area. A number of demands we made about records long ago, that
I personally made in the presence of Senator Kerry, about the
records of their prison system, for example, have not been made
available to us.
My focus today will be on the repressive political and
economic policies of the Vietnamese Communist leaders that make
Vietnam and its dictatorship one of the worst investment risks
in the world. It is outrageous to back ill-advised business
ventures with American tax dollars. Again, that is what we are
talking about when we have this waiver. We are opening up these
subsidies and these guarantees by American taxpayer dollars to
these companies.
Business investment should be made in democratic countries.
Let these companies invest in the Philippines, for example,
where they are struggling for democracy. If companies choose to
invest in Vietnam or other dictatorships, they should do so at
their own risk, not having their bets backed by American
taxpayer guarantees and subsidies. There is no real evidence to
support the claims that Vietnam is liberalizing. As I say, this
is the reason that you are going to liberalize through this
international investment and commercial investment in the
country.
To the contrary, Vietnamese Communist leaders have issued
new decrees that ban opposition within their party and continue
their ban on an independent media and dissent in Vietnam
itself. Hanoi has continued to jam the broadcasts of Radio Free
Asia and has arrested Vietnamese-Americans who attempt to bring
prodemocracy literature into Vietnam. In the recent words of
one of Vietnam's most famous dissidents, the Communist Party
Politburo has ``immersed the whole population in stagnancy,
corruption, and poverty.''
There are more reasons why investing in Communist Vietnam
is bad for America and sets back democratic reforms, actually,
setting back democratic reform, giving these leaders the idea
they can continue these policies and still get these taxpayer
guarantees for investment in their country. Since 1993, Hanoi
has been pledged some $13.1 billion in international
development assistance, but the Communist backsliding on
reforms have caused the donors to reconsider their future
pledges.
Economic growth this year is predicted to be half of what
it was in 1997. In May, the Vietnamese Communists' Prime
Minister, Nguyen Tan Dung, said that Vietnam faced tough times
ahead, with a gross national product expected to decline, while
industrial output is at its lowest level in several years. He
also spoke of an unhealthy situation in the financial and
monetary systems, particularly Hanoi's international payment
balance, debts to foreign borrowers, and a high amount of
overdue debt.
Reuters News Agency recently reported that private industry
in Vietnam is growing at an alarmingly low rate because of the
country's firms, they are lacking in confidence to invest in
business. Many private companies complain about high taxes and
government policies that favor bloated state firms. Hanoi's
leaders recently proclaimed that state-run industries would
play ``a leading role'' in the economy. A 1998 World Bank
report showed that the Vietnamese private sector amounted to
less than 3 percent of industrial output.
What are we trying to subsidize these people for? They
aren't even making the moves necessary for their own success.
Corruption is rampant, on top of that. That is what happens
when you don't have a free press and you only have a one-party
system. You have corruption. Vietnam has received $1.7 billion
in low-interest loans from foreign donors last year, yet you
have this corruption. This week, an Australian expert stated
giving the Vietnamese government money to spend makes it easier
for them to prop up state-supported industries and to slow down
the liberalization process. Again, when we are talking about
Export-Import Bank loans and such subsidies, that is what comes
with the waiver we are talking about today.
I am enclosing for the record, and I would ask permission
to enclose, this GAO report on Vietnam Economic Data for the
record.
Chairman Crane. Without objection.
[The information follows:]
U.S. General Accounting Office Report to Congressional Requesters
June 1999 VIETNAM ECONOMIC DATA, Assessment of Availability and
Quality, GAO/NSIAD-99-109, GAO/NSIAD-99-109
U.S. General Accounting Office
National Security and International Affairs Division
Washington, D.C. 20548
June 1, 1999
The Honorable Dana Rohrabacher
The Honorable Zoe Lofgren
House of Representatives
B-279772
The recent financial crisis in East Asia and the overall importance
of the region to the United States has highlighted the need for
reliable and timely economic and trade data on individual countries in
the region. In recent years, the United States has taken several steps
to normalize relations with Vietnam and is currently negotiating a
long-term trade agreement with its government. You asked us to examine
economic data on Vietnam, which has been experiencing considerable
economic growth and development as it transitions from a centrally
planned to a more market-based economy. To respond to your requests, we
examined the availability, transparency, and quality of published
economic and trade data on Vietnam.
Results in Brief
Vietnam has released data on a number of key economic
indicators such as the gross domestic product (GDP), imports
and exports, foreign investments, and growth rates. However, it
has not made available some other important data on the
economy. For example, it does not publish the state budget and
does not provide standard financial information used by the
International Monetary Fund (IMF) for its monthly International
Financial Statistics (IFS) publication. Virtually all countries
in the world, including transitional economies and the poorest
countries, publish their country pages in the IFS.
When data is available, it is highly aggregated and
difficult to interpret because the data collection, analysis,
and reporting methods used to produce it are not transparent or
readily available to users. While the quality of the data has
improved in recent years, published indicators such as GDP
contain weaknesses because they do not include important
components of the economy. For example, small businesses, the
service sector, and remittances from overseas are
underreported, while growth and foreign investment estimates
may be overestimated. Without more accurate data, it is
difficult to effectively evaluate economic conditions in
Vietnam and identify economic and financial problems that may
be occurring. Several international agencies, such as the IMF
and the World Bank, have recognized that data deficiencies
exist and are currently providing technical and financial
assistance to the Vietnamese government to help it improve the
availability and quality of its data.
Background
Data on Vietnam's economy and trade originates primarily
from the General Statistical Office (GSO), a Vietnamese
government agency. Other agencies such as the Ministry of
Industry and the State Bank of Vietnam also provide some data.
The GSO publishes monthly and annual reports on the economy and
population that include information on the labor force, GDP,
foreign investment, industrial sectors, retail sales, prices,
and inflation rates, among others.
The IMF, the World Bank, and the United Nations also
publish economic and trade data on Vietnam, but as a standard
practice they rely primarily on the government for much of the
information. The IMF has a permanent representative in Vietnam
who monitors economic conditions, and the Fund periodically
sends missions to Vietnam to collect additional information and
provide technical assistance. As it does with most other
countries, the IMF summarizes Vietnam's economic and financial
condition in periodic staff reports that are available to the
public and generates confidential studies that examine specific
topics such as banking.
For its part, the World Bank publishes the World
Development Indicators (WDI) in collaboration with 26 other
public and private agencies, including the IMF, the
International Labour Organization, the United Nations, the
World Trade Organization, Moody's Investors Service, Price
Waterhouse, and Standard and Poor's Rating Services. The 1998
WDI includes a broad range of economic, population, and
environmental data on 210 countries from 1960 to 1996. The
United Nations publishes National Accounts Statistics on
different countries, including Vietnam, each year. The United
Nations Development Programme (UNDP) also issues a number of
reports and evaluations of poverty and economic conditions in
Vietnam. There are other publications with a narrower focus,
such as the IMF's Direction of Trade Statistics Yearbook and
the United Nations' Monthly Bulletin of Statistics.
U. S. agencies such as the Departments of Treasury,
Commerce, and State and the Trade and Development Agency rely
mainly on international agencies for data on Vietnam's economy.
However, several U. S. federal agencies jointly publish an
annual report on Vietnam, the Country Commercial Guide, written
by an in-country expert. The Department of Commerce also
releases data on bilateral trade between the United States and
its trading partners, including Vietnam. The United Nations
publishes similar bilateral trade data reported by member
states.
Several economic magazines and journals also provide
economic and trade data on Vietnam. The Vietnam Business
Journal, for example, publishes indicators of Vietnam's
economy, foreign investment, imports, and exports, using the
government and international agencies as its sources. The
Economist Intelligence Unit Ltd., also issues quarterly reports
on the Vietnamese economy and covers major economic and trade
indicators. It pools data from various sources, including its
own estimates.
Gaps in Availability of Data
Although the government does publish many key economic
indicators, there are major gaps. For example, by law,
Vietnam's state budget is classified as a secret document and
therefore cannot be made available to the public. Under much
pressure from international agencies and donors, in 1998 top
government officials indicated they would release the budget,
but as of March 1999, they had not yet done so. The government
includes some estimates of the budget in its aggregate economic
indicators, but it does not provide a breakdown of the data,
making it difficult to determine specific allocations. In
addition, although the GSO did publish aggregate budget figures
in its 1994 Statistical Yearbook, it did not do so in 1996.
State-owned enterprises (SOE) are a key component of the
budget and of the country's overall economy. The government has
traditionally granted SOEs special advantages over other
businesses through greater access to credit, control over
markets, and other forms of indirect support. The IMF has
reported that SOEs may account for as much as 40 percent of
Vietnam's GDP. However, the government releases very little
information about how much it spends to support SOEs and their
true financial conditions. Some donors have raised concerns
about the financial viability of SOEs in Vietnam and have
warned that without reliable information, financial problems
may develop undetected.
Furthermore, the IMF's monthly IFS reports do not contain a
country page for Vietnam because the government has not
released certain key indicators and other needed statistics.
Country pages generally include data on exchange rates, money,
banking, interest rates, production, prices, foreign reserves,
international trade, balance of payments, and government and
national accounts. Virtually all countries in the world publish
their country pages in the IFS. According to IMF officials, the
Vietnamese government has not done so in part because for many
years Vietnam used a national accounts system modeled after
that of the former Soviet Union and different from
international reporting standards (the 1993 System of National
Accounts) advocated by the IMF, the United Nations, and the
World Bank. Vietnam adopted these standards in the late 1980s
but has not fully implemented the system and has not been
willing to release some statistics.
In 1998, the IMF said it was waiting for the government to
approve publication of Vietnam's country page that the IMF had
prepared. Neighboring Cambodia and Lao PDR, both of which have
also transitioned from the Soviet accounting system, have
published their country pages since April 1996. Rwanda and
Ethiopia, which had the lowest per capita incomes in the world
\1\ (about a third of Vietnam's), have also been publishing
their country pages.
---------------------------------------------------------------------------
\1\ Human Development Report, UNDP, 1997.
---------------------------------------------------------------------------
The amount of information reported in the WDI provides
another indication of a country's overall data availability.
The WDI contains up to 526 series of data indicators for
individual countries, covering economic and trade conditions as
well as other demographic, environmental, and social
indicators. Vietnam and Lao PDR, for example, provided data for
only about 250 indicators between 1990 and 1995, while China,
the Philippines, and Thailand provided over 400 indicators
during the same period (fig. 1). In 1995, the median number of
indicators available for the 63 countries that the WDI
classified as low income was 322. Vietnam provided 256
indicators for that year. Only 10 of the other low-income
countries provided fewer indicators than Vietnam.\2\
---------------------------------------------------------------------------
\2\ Afghanistan, Bosnia-Herzegovina, Cambodia, Eritrea, Lao PDR,
Liberia, Myanmar, Somalia, the Sudan, and Tajikstan.
[GRAPHIC] [TIFF OMITTED] T9940.001
[GRAPHIC] [TIFF OMITTED] T9940.002
Transparency of Data Collection and Reporting Methods
If the accuracy and quality of published economic and trade
data are to be properly assessed, the methods used by the
sources of the data to collect, analyze, and present the data
must be transparent. In other words, data transparency means
that methods should be clearly defined and explained and made
readily available to data users. Without such information,
users cannot adequately determine the value and meaning of the
published figures. For example, data can be very different
depending on whether it is developed through expert opinion,
sampling, or census. If an agency relies on other agencies for
data, it is also important that it disclose the sources and
methods it uses to review and revise the data.
In the case of Vietnam, information on data collection and
reporting methods generally is either missing or unclear. The
GSO does not publish the methods used to collect and process
economic and financial figures and does not identify potential
data limitations or gaps. International agencies that re-
publish the GSO's figures in their reports also do not disclose
the methods they use to evaluate or revise the data. This
process is consistent with how these agencies report data for
other countries. Most tables we reviewed cited their sources as
the GSO or another Vietnamese agency and staff estimates. But
the methods used to produce these staff estimates were not
specified. We also found that even when staff estimates were
cited, the published data often did not differ from the
original GSO figure. However, the IMF recently reported
estimates that differed from those published by the GSO.
The Country Commercial Guide primarily cited unofficial
estimates as its sources, without reporting the data collection
methods used, but its figures matched those we found in GSO
publications.
Quality of Available Data
Although many of the published figures from the GSO, IMF,
the World Bank, and the Asian Development Bank corresponded
with each other, one should not interpret this to mean that
they are valid or correct, but simply that they came from the
same source the Vietnamese government (see app. I).
According to international agency officials and other
experts, the quality of available data on Vietnam has improved
in recent years. They all agreed, however, that data on many
key indicators such as GDP, growth rate, and foreign
investments still contained several weaknesses. In a June 1998
assessment of economic conditions in Vietnam, the UNDP
concluded that Vietnam ``is in the midst of an information
crisis which needs to be urgently redressed to avert financial
crisis \3\ and advocated more reliable data on the banking and
corporate sectors in particular. Most banks are partially or
wholly state owned, and information on their debt levels, loan
portfolios, and investments is not available in sufficient
detail or is of questionable reliability. Some international
agency officials, for example, have raised concerns that these
banks have made many large loans to SOEs whose assets are
largely overstated. The IMF has indicated that the banking
sector in Vietnam is in worse condition than what the official
data shows. Moody's has also cited weaknesses with the banking
system and considerable uncertainty [arising] from the lack of
transparency in the reporting of official foreign exchange
reserves as key factors in giving Vietnam a low-credit
rating.\4\
---------------------------------------------------------------------------
\3\ East Asia: From Miracle to Crisis, Lessons for Viet Nam, UNDP
Viet Nam, 1998. Italics in the original.
\4\ Global Credit Research: Vietnam, Moody's Investors Service,
1999.
---------------------------------------------------------------------------
Vietnam does not effectively measure certain components of
the economy in its calculations of GDP, which is a measure of
the total output of a country's goods and services. For
example, GDP figures do not accurately reflect the large
informal economy, small businesses, telecommunications, or the
service sector. Similarly, official trade estimates do not
include illegal smuggling of consumer goods, which has been
estimated to account for a significant portion of the economy,
according to IMF and other international agency officials. A
State Department official also noted that this reporting
problem occurs in other developing countries.
Other indicators reported by the government, on the other
hand, may be overestimated. For example, the government
announced that the economy grew at a rate of 5.8 percent in
1998, but IMF officials made their own in-country assessment
and estimated a growth rate of between 3 and 4 percent. The
government also reported $1.9 billion in disbursements of
foreign direct investments in 1998, but the IMF estimated only
$600 million, and Moody's estimated $800 million. According to
a State Department official, Vietnam counts the value of land
it contributes to joint business ventures as part of a foreign
direct investment. The IMF does not. This may account for part
of the discrepancy between official and independent estimates.
It also illustrates the importance of transparency in data
collection and reporting methods.
There are also a number of unexplained differences between
reports published by different international agencies and even
between those published by the same agency. One example is the
average employment (the average number of employees per
enterprise) in the private sector, an important component of
Vietnam's economy in terms of growth and development. According
to the 1996 IMF staff report, average employment between 1992
and 1995 was between 7.4 and 5. 1 employees. In another IMF
staff report 16 months later, the average employment for the
same period was reported as between 1.8 and 1.2 employees. It
is not clear why a 1992 figure was revised in 1998, but agency
officials noted that there are often long delays and frequent
adjustments of prior data by Vietnamese government sources. The
data series cited its sources as the GSO and staff estimates.
International agencies have various efforts underway to
help Vietnam with its data collection and reporting. The Asian
Development Bank is developing a project to assist Vietnam in
preparing its state budget and calculating GDP. The IMF has
also been helping Vietnam develop its IFS country page. This
aid has included providing preliminary analytical tables
necessary for completing the country page in accordance with
IMF methodology. Other ongoing assistance is geared mainly
toward the collection of social and demographic data. Further
monitoring will be needed to determine whether these efforts
are effective in improving the quality of data.
In the late 1990s, the IMF developed and issued two sets of
standards for data production and dissemination by its member
states. The key objectives of one set of standards (known as
the General Data Dissemination System) are to improve data
quality; provide a framework for evaluating needs and setting
priorities for data improvement; and guide countries in the
provision of comprehensive, timely, accessible, and reliable
economic, financial, and sociodemographic statistics. A more
detailed set of standards (the Special Data Dissemination
Standard) focuses on specific elements of data quality. A
number of countries in East Asia, including the Philippines and
Thailand, have voluntarily subscribed to the Special Data
Dissemination Standard, but Vietnam and none of the poorest
developing countries receiving loans from the World Bank's
International Development Agency have subscribed to this
standard.
Agency Comments and Our Evaluation
We sent a draft of this report to the Departments of
Treasury and State and to the Central Intelligence Agency
(CIA). Treasury and the CIA indicated that they had no
comments. The Department of State provided oral comments.
Generally, State concurred with our overall findings and
conclusions. It also provided some technical comments, which we
incorporated where appropriate.
Scope and Methodology
To assess the availability, transparency, and quality of
published economic and trade data on Vietnam, we met with
officials from a number of U. S. and international agencies,
including the Departments of Commerce, State, and the Treasury,
the Trade and Development Agency, the CIA, the IMF, the World
Bank, the United Nations Statistics Division, and the UNDP. We
conducted a literature search and contacted researchers in the
field. In addition, we contacted the Embassy of Vietnam in
Washington, D. C., and the U. S. Embassy in Hanoi.
We requested information on the methods agencies use to
evaluate data and on the strengths and limitations of the data.
We also compared data from different sources and from different
time periods, concentrating on 1992, 1994, and 1996. Although
we did not conduct a systematic comparison of Vietnam's data
with that of other countries, we did make some comparisons with
readily available data in the WDI.
We did not travel to Vietnam, although we did meet with a
Vietnamese embassy counselor in Washington, D.C. We limited the
documentation for this report to nonclassified information. In
addition, we did not address perspectives from the business
community regarding the availability and quality of Vietnam's
economic data.
We performed our review from March 1998 to March 1999 in
accordance with generally accepted government auditing
standards.
We are sending copies of this report to the Honorable
Madeleine K. Albright, Secretary of State; the Honorable Robert
E. Rubin, Secretary of Treasury; the Honorable William M.
Daley, Secretary of Commerce; and appropriate congressional
committees. Copies will also be made available to others upon
request.
Please contact me at (202) 512-3092 if you or your staff
have any questions or would like additional information. Major
contributors to this report were John Oppenheim, L Xun Hy, and
Stan Kostyla.
Kwai-Cheung Chan
Director, Special Studies and Evaluations
Mr. Rohrabacher. The report underscores that Vietnam is one
of the only countries in the world where discussing or
publishing economic figures is a crime, punishable by prison or
labor camp confinement. We cannot have normal or free trade
relations with a country that refuses to disclose its basic
financial and trade statistics.
Mr. Chairman, the resolution I introduced, disapproving the
Jackson-Vanik waiver for the Vietnamese dictatorship, does not
intend to isolate Vietnam, nor stop U.S. companies from doing
business in Vietnam. We can do that--they can do that anyway.
They can go sell American products over there. However, if
private banks or insurance companies will not back up or insure
private business ventures in Vietnam, American taxpayers should
not be asked to recklessly do so. Instead, my resolution sends
a strong message to the Hanoi regime that the United States
will stand by our democratic principles. Those were the
principles that we have the Jackson-Vanik regulations for in
the first place. We shouldn't ignore those principles that
helped democratize the Soviet Union.
The Vietnamese Communists have manipulated American and
international generosity to further impoverish and repress
their own people. I ask my colleagues to suspend the
President's waiver for the coming year, and support my
resolution of disapproval.
Thank you.
[The prepared statement follows:]
Statement of Hon. Dana Rohrabacher, a Representative in Congress from
the State of California
It has been one year since President Clinton issued a
Jackson-Vanik waiver for Vietnam. The legislation I have
sponsored, House Joint Resolution 58, disapproves of the
extension of that waiver.
During the past year, rather than open up its state-managed
economy, the Vietnamese communist regime has further tightened
its grip on civil liberties, religion and free expression.
There has been no move toward free or fair elections in
Vietnam, nor has there been any move toward establishing an
independent judicial system. Instead of implementing honest
economic reforms, communist mismanagement, corruption and the
dominance of state-run firms have turned off most investors,
who only a short time ago were so optimistic.
In fact, international business people polled by the Hong
Kong-based Political and Economic Risk Survey rates Vietnam as
the most stressful country in Asia for foreigners because of
its stubborn bureaucracy. The Survey noted a substantial exodus
of expatriate investors who find doing business in Vietnam not
worth the effort.
A recent study completed by the U.S. General Accounting
Office, at my requests, concluded that because of communist
secrecy and corruption, there is no independent means to verify
real economic and financial statistics in Vietnam, or to
effectively identify and resolve economic and financial
problems.
The Jackson-Vanik provision was intended to be a tool for
improving migration and human rights in communist or fascist
regimes. The President's Jackson-Vanik waiver enables U.S.
companies to be eligible for U.S. taxpayer-supported trade
financing programs such as Export-Import Bank and OPIC. My co-
sponsors of the resolution, Chris Smith and Loretta Sanchez,
will focus on the ongoing abuses and corruption that deny fair
migration of Vietnamese and montagnard people. The sponsor of
the Senate version of this resolution, Senator Bob Smith, will
articulate the many problems that exist in obtaining the
fullest possible accounting for American prisoners of war and
those who are still missing in action.
My focus will be on the repressive political and economic
polices of the Vietnamese communist leaders that makes Vietnam
a dictatorship and one of the worst investment risks in the
world. It is outrageous to back ill-advised business ventures
with American tax dollars. Business investments should be made
in democratic countries. If companies choose to invest in
Vietnam, they should do so at their own risk, not having their
bets backed by taxpayer guarantees and subsidies.
There is no real evidence to support claims that Vietnam is
liberalizing through international aid and commercial
investment. To the contrary, Vietnamese communist leaders have
issued new decrees that ban opposition parties, independent
media and dissent within the Communist Party.
Hanoi has continued to jam the broadcasts of Radio Free
Asia and has arrested Vietnamese Americans who attempted to
bring pro-democracy literature into Vietnam. In the recent
words of one of Vietnam's most famous dissidents, the Communist
Politburo has ``immersed the whole population in stagnancy,
corruption and poverty...''
Here are more reasons why investing in communist Vietnam is
a bad for America and sets back democratic and economic reform:
Since 1993, Hanoi has been pledged some 13.1
billion in international development assistance but the
communists' backsliding on reforms have caused donors to
considering conditioning future pledges. Economic growth this
year is predicted to be half of what it was in 1997.
In May, Vietnamese communist Deputy Prime Minister
Win Tan Dung said that Vietnam faced tough times ahead, with
the gross domestic product expected to continue declining,
while the industrial output is at its lowest level in several
years. He also spoke of an unhealthy situation in the financial
and monetary system, particularly Hanoi's international payment
balance, debts to foreign borrowers and a high amount of over-
due debt.
Reuters news agency recently reported that private
industry in Vietnam is growing at an ``alarmingly low rate''
because the country's firms lack confidence to invest in their
business. Many private companies complain about high taxes and
government policies that favor bloated state firms.
Hanoi leaders recently proclaimed that state-run
industries would play a ``leading role'' in the economy. A 1998
World Bank report showed the Vietnamese private sector
accounted for less than 3 percent of industrial output.
Corruption is rampant. Vietnam received $1.7
billion in low-interest loans from foreign donors last year.
This week, an Australian expert stated, ``Giving the Vietnam
Government money to spend, makes it easier for them to prop up
state-supported industries and to slow down the liberalization
process.''
I am enclosing for the record of this hearing the
GAO report, Vietnam Economic Data: Assessment of Availability
and Quality.'' The report underscores that Vietnam is one of
the only countries in the world where discussing or publishing
economic figures is a crime, punishable by prison or labor camp
confinement. We cannot have ``normal'' or ``free'' trade
relations with a country that refuses to disclose its basic
financial and trade statistics.
Mr. Chairman, the resolution I introduced, disapproving of
the Jackson-Vanik waiver for the Vietnamese dictatorship, does
not intend to isolate Vietnam or stop U.S. companies from doing
business in Vietnam. However, if private banks or insurance
companies will not back-up or insure private business ventures
in Vietnam, American taxpayers should not be asked to
recklessly do so. Instead, my resolution sends a strong message
to the Hanoi regime that the United States will stand by our
democratic principles.
The Vietnamese Communists have manipulated American and
international generosity to further impoverish and repress
their people. I ask my colleagues to suspend the President's
waiver for the coming year and support my resolution of
disapproval.
Chairman Crane. Thank you, Mr. Rohrabacher.
STATEMENT OF HON. EARL BLUMENAUER, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF OREGON
Mr. Blumenauer. Thank you, Mr. Chairman. I appreciate the
opportunity to join you once again. Although I respect my
colleague from California, I couldn't disagree more with his
assessment. This is not about reckless investment policies on
the part of organizations like OPIC. What we are talking about
is an attempt to be realistic in terms of dealing with Vietnam
and our relationship with that country. Although I sort of
smile as I think about some of the situations that have
occurred in Singapore, where people have been imprisoned for
revealing economic data that would be very simply accepted here
in the United States. I think about some of the situations that
are occurring in Malaysia and Singapore where despite some of
our best interests, there are things in the political arena
that we wouldn't feel very comfortable with. Reading the
Straits Times is not exactly my version of a free press. But I
do think that for us to be realistic about how we are going to
promote our values, our goals and economic, not just economic
prosperity, but in terms of human relations, we need to take a
step back, take a deep breath. I respectfully suggest that
rejecting this resolution of disapproval is a step in the right
direction.
Last year on the eve of the Jackson-Vanik waiver vote, I
received a call from my daughter who was traveling in Vietnam,
a college student visiting her brother over there, who was
struck by the kindness of the Vietnamese people, who was amazed
at the energy and vitality that she witnessed, and who was
learning more about the tragic history of the relations between
our two countries, and was amazed at how positive the attitudes
and feelings were. I went from that conversation with a college
junior to the floor of the House, and heard people who were
really describing two different worlds. I feel like some people
are frozen in amber in terms of what happened a generation ago.
I feel that we have an opportunity here to try and repair
not just economic opportunities for a significant and growing
country, but to deal with a tragic period of the history of
both our countries. On the known terms for evaluating the
Jackson-Vanik waiver, it should, in fact, be extended. Senator
Kerry made that reference I thought, eloquent and well. We
have, in fact, made progress in each of these areas. I know our
friend, former Member Pete Peterson, the Ambassador is going to
be able to document that. I have been struck in the
conversations with him with the work that he has been able to
do. We are on the verge of approving a trade agreement that
will open up even more opportunities between the two countries
and accelerate the progress even further.
There are problems that occur, that continue, no doubt
about it. But opportunities on things like human rights,
transparency of economic activities, where we can make more
progress. The Jackson-Vanik waiver, in continuing this process,
is going to allow us to make more progress, not less. The
United States, frankly, has made a history of much of the last
half century, of making the wrong judgments on Vietnam. We were
on the wrong side of history in terms of the colonial struggle.
We ended up making an enemy that we didn't have to make, and we
paid a tragic price for it.
Today, Vietnam is changing rapidly. An overwhelming
majority of the people in Vietnam weren't even alive during the
Vietnam war. A transfer of power is taking place slowly with
the new generation. It has a transformational effect.
Disallowing the waiver will not give us more leverage. It will
not make it easier for Ambassador Peterson to make progress. It
will not hasten democratic behavior. I think the record is
clear that we have made more progress in documenting what
happened to our missing in action in Vietnam than any other war
in our history, not just the progress that we have made here.
The record I think is clear and it is because of the hard work
of people like Senator Kerry and Ambassador Peterson, and to
somehow ignore that, to try and go back, making that way
harder, is going to set that back.
If we want to put an end to the practices of child labor,
which are not simple in developing countries, which can make
the difference sometimes between a family being able to survive
or not, to be able to promote economic interchange between
those countries will hasten the end of child labor and make it
easier to make those transitions, give us more levers in which
to work.
I think this resolution presents a major opportunity to
either accelerate the repositioning and redefinition of our
relationship or to take a step back. I personally hope that we
will reject this resolution, that we will support the extension
of the waiver, and that your Subcommittee will continue the
important work of providing a framework for this to occur.
Thank you, Mr. Chairman.
Chairman Crane. Thank you, Mr. Blumenauer.
Mr. Levin.
Mr. Levin. Well, it is useful to have the two of you here
and present very different perspectives. Maybe the best thing
is now to hear from the Ambassador. I don't know if you have
time to stay, you probably have to go onto other matters. I do,
in this debate, hope that we can have some challenging
discussion about each other's arguments. For example, in terms
of OPIC and Ex-Im, I think we should understand that we don't
quite guarantee the results here that we eliminate risk. There
is still considerable risk, even with OPIC and Ex-Im. It isn't
as if the taxpayers are assuming all the risk. I think you know
that.
Mr. Rohrabacher. But what we are doing is assuming a large
portion of the risk. My point is this. When you are talking
about dictatorships, and I don't care if it's Vietnam or China
or elsewhere, why are we encouraging businesses by assuming
some of the risk or subsidizing the interest rates that they
have to get for loans to do business in these countries? Why
are we encouraging businesses to do that when we have the
Philippines and other countries struggling to be democratic
societies and we're encouraging them? That way, they don't--
we're actually directing the flow of capital investment into
the dictatorship, and by the way, away from our country. That
makes no sense.
Mr. Levin. As you know, I am kind of hardnosed about the
conditions that we should insist on in these negotiations. I
have a broader view than some. I think we should drive a hard
bargain mainly because of the impact on our own economy, but
also because we are trying to move or help move these countries
toward free markets, both capital and labor. We are trying to
move them toward a rule of law. The question becomes how do we
most effectively do that? I don't think the line can be a
strict one, if they are a state economy, we don't engage them.
Because the whole purpose is to move them away from it. It is a
matter of judgment. My only point is I think we need to look
hard at the facts and kind of avoid the kind of automatic
choosing up of sides here, and make a considered judgment
whether to involve ourselves will reach our objectives. I can
understand there are differences.
Mr. Rohrabacher. The reason Jackson-Vanik is part of the
law is because we were faced with a similar challenge in the
past generation or 20 years ago. We had to face the Soviet
Union, which was of course a major hostile, totalitarian power.
The reason there is a Jackson-Vanik restriction is because we
realized that by waiving that restriction, the Soviet Union
would not become more democratic. Congress put this in place
because of the very principle, as you make a standard, and then
these dictatorships will move toward the standard if you have
that present.
What we are telling the Vietnamese, we are going to waive
the standard even though you are not complying. We moved the
Soviet Union toward democracy, not by giving most-favored-
nation status, but by denying these type of loans from Export-
Import Bank and OPIC and others.
Mr. Levin. I will finish. True there are some on this panel
who were never in favor of Jackson-Vanik and would have
abolished it immediately. I think it served a useful purpose.
But the question is whether Vietnam today is the Soviet Union
of 30 years ago, and whether an annual waiver here, we're
talking about an annual waiver, might be a useful instrument to
help move that country toward free capital and labor markets,
and toward a rule of law. There can be differing and are
different judgments, but I think that is the framework we ought
to have that discussion within.
Mr. Blumenauer. If I may, OPIC is not about reckless
investments. They have not lost any taxpayer money. The
portfolio is managed to turn a profit, and people are assuming
risks themselves when they go there.
Mr. Levin. They clearly are. I support it. We'll carry on
this debate on the floor. But you have helped to kick it off.
I think the Ambassador, Mr. Chairman, is now raring to go,
our former colleague. So maybe with deference to our
distinguished colleagues from Oregon and California, we can
call on our former colleague.
Chairman Crane. Well, just a moment.
Mr. Rangel, do you have any questions?
Mr. Rangel. No, Mr. Chairman. Thank you, my colleagues. I
regret that saving Social Security prevented me from being
here, but thank you.
Chairman Crane. Well, we thank you both for your testimony
and appreciate your appearance today.
Our next witness is Hon. Douglas Pete Peterson, U.S.
Ambassador to Vietnam, and a former colleague.
Proceed when ready, Pete.
STATEMENT OF HON. DOUGLAS ``PETE'' PETERSON, U.S. AMBASSADOR TO
VIETNAM; AND FORMER MEMBER OF CONGRESS
Ambassador Peterson. Thank you very much, Mr. Chairman,
distinguished Members of the Subcommittee, my very good
friends. Good to see you again.
I appreciate very much the opportunity to return to discuss
the President's provision to waive Jackson-Vanik for Vietnam
for 1 additional year. Last year I told you that our engagement
policy in Vietnam was working, and had in fact produced major
progress on U.S. top priority goals, policy goals for Vietnam.
This year too has been marked with significant progress. In the
MIA search efforts, in the freedom of emigration, of which this
is all about, over the improved respect for human rights, which
I will speak a little bit more about later, and certainly, in
promoting regional stability, and without a doubt has helped to
open up the markets of Vietnam.
The Jackson-Vanik waiver remains an essential element in
our policy of engagement. Without it, it takes away the very
tools that I need to work with Vietnamese to reach the very
policy goals that I have referred to. I am confident that the
extension of Jackson-Vanik will further advance the national
interests of the United States in Vietnam.
In June of last year, frankly, we had very little evidence
to judge the impact of Jackson-Vanik renewal because we just
had too short a track record. In fact, most of our comments
were based on hopes rather than on pure evidence. This year,
though, I can bring to you clear evidence, and without
reservation say that the Jackson-Vanik waiver has resulted in
positive progress in every way. Certainly, it has promoted
greater freedom of emigration, and all of the details are in
the testimony of which I have submitted for the record. I refer
that to you for greater detail.
It has helped move the MIA cooperation to a level of what I
now refer to as a partnership, a significant partnership, given
the fact that we are on a two-way street. We are helping the
Vietnamese determine the losses that they sustained, up to
300,000 MIAs in this case. It has helped open the markets by
giving American business a level playingfield, if you will, in
working in the very difficult, I might add, business
environment in Vietnam.
The U.S. policy engagement with Vietnam has assisted our
old--the Vietnamese to work the political and reform projects
that have actually helped them to work to the integration of
Vietnam into the family of nations. It has led, frankly, to the
recent admission to Vietnam into APEC, the Asia Pacific
Economic Cooperative, a very significant accomplishment, I
might add. Though it may not solely have been a consequence of
Jackson-Vanik, our engagement in Vietnam was a major party to
that membership.
It must be noted too that we have observed some
improvements in Vietnam's human rights performance, though the
picture is still mixed, to be honest with you. The Vietnamese
last year released over 7,000 prisoners, many of them, 24
persons of significant concern to us as a nation as persons of
conscience. Mr. Que, Mr. Hoat, and Thich Do are among those. I
might just parenthetically say Dr. Que, who still lives in Ho
Chi Minh City, has recently released a statement that said that
he is in favor of our bilateral trade agreement and has also by
virtue of that, suggested support of the Jackson-Vanik waiver
as well.
I think too, according to my records and observation, there
has been an improvement in religious freedom efforts as well.
We will hopefully have Mr. Seiple and Mr. Freeman go out to
Vietnam to talk human rights issues and religious rights issues
in July.
The areas of emigration, though, which is what we are
examining here today, there has been huge success. Five hundred
thousand Vietnamese immigrated to the United States. Just last
year, nearly 10,000 individuals had immigrant visas issued to
come to the United States. We expect nearly 30,000 applicants
for immigrant visas to come to us in the year 2000. We place
great priority on the HO Program, the program for former
reeducation camp detainees, and the ROVR Program, the
Resettlement Opportunity for Vietnamese Returnees, the both of
which have had significant success. In fact, I would say we are
coming to a completion of those programs, though not to suggest
that we're done with the refugee efforts in Vietnam.
I might add also that recently, the Vietnamese have agreed
to open a program that we suspended having to do with former
government employees. We have that program essentially ongoing
at this moment.
Let me jump to the MIA issue. It remains our first priority
and of great personal interest to me. The cooperation is indeed
excellent. We have had three JFAs and new access to documents
this year. We have repatriated six remains this year, and we
have planned and have the potential to repatriate seven in
July. We have had nine identifications and we have had
significant progress on the no-further-pursuant cases, 598
cases of which the Vietnamese have reviewed for us, and have
submitted us specific evidence on each of these cases of which
we might very likely be able to close in the near future.
The worker rights, of which Mr. Levin had noted, is a
special interest to all of us, but I want to reiterate a point
that Senator Kerry made, having to do with the fact that we do
have in Vietnam, Vietnam does have a strong worker rights law.
The Vietnamese had 60 strikes last year in the various
capacities, and not against just foreign institutions I might
add.
The economic development in Vietnam is moving on very, very
well. We are hoping that we will in fact be able to conclude a
bilateral trade agreement this year. It's certainly not
absolute, but the negotiators are in Washington this week
trying to find solutions to some of the outstanding problems.
There still are some issues that are very, very troublesome,
but I hope that we will in fact be able to do that.
But our objective through an engagement policy is to create
a prosperous Vietnam. Why? Certainly, because we want to sell
American products to Vietnam. But to be honest with you, the
major issue is to find a vehicle in which to ride over to the
goals, the policy goals that the United States has having to do
with the rule of law, the acceptance of greater standards,
higher standards of human rights, the integration of Vietnam
into the world community, and the adoption of international
standards throughout their whole society, and certainly to
conclude our MIA Program.
Renewal of Jackson-Vanik now will continue the successful
process of reconciliation that we have started. It will
facilitate development of our now very solid relationship with
Vietnam, and I am convinced that the Vietnamese are committed
to further pursuit to a peaceful and constructive relationship
with the community of nations. I would point out finally that
the 1999 snapshot of Vietnam bears virtually no resemblance to
the isolated, bankrupt, and highly controlled society of just a
decade ago. Our relationship is continuing to become very
complex, and with that complexity will bring obviously some
disagreements, but we can work them out.
The policy of engagement and Jackson-Vanik being a part of
that, and very important part of that engagement, will continue
to bring us enormous success, a historical success, I might
add. Our policy in Vietnam is exactly correct. We are exactly
where we should be. We are doing the right thing in Vietnam
finally. Renewal of Jackson-Vanik will take us to the next
steps of our relationship. I strongly, as strongly words can
express, ask your support for us to do the right thing. That is
to renew Jackson-Vanik for Vietnam this next year.
Thank you very much.
[The prepared statement follows:]
Statement of Hon. Douglas ``Pete'' Peterson, U.S. Ambassador to
Vietnam; and Former Member of Congress
Mr. Chairman, I would like to thank you for once again
inviting me to consult with you about the President's decision
to discuss Vietnam's Jackson-Vanik waiver for another year.
Last year, I told you that U.S. engagement with Vietnam had
produced progress on top-priority U.S. foreign policy goals in
Vietnam. This year, too, has been marked by progress in the
effort to account for our missing from the Vietnam War (MIA
issue), freedom of emigration, improving respect for human
rights, promoting regional stability and opening markets for
U.S. business. Since it was first granted in March 1998, the
Jackson-Vanik waiver has been an essential component our policy
of engagement and has directly furthered progress with Vietnam
on these and other U.S. policy goals. I am confident that
extension of the waiver this year will continue to advance U.S.
national interests in Vietnam.
In June 1998, when we asked Congress to support the waiver,
we had only a very short track record to judge the impact of
the Jackson-Vanik waiver in achieving the results it was
intended to achieve. We had more hopes than we had evidence. We
promised then to review our achievements after one year. Now, a
year later, clearer evidence is in, and overall our hopes have
been well-rewarded. The results have been very positive. We
have made good progress on emigration issues and expect
imminent completion of a number of special refugee programs in
Vietnam. The waiver, itself, has substantially promoted greater
freedom of emigration from Vietnam, the primary objective of
the Jackson-Vanik amendment. The waiver has helped the U.S.
government influence Vietnam's progress toward an open, market-
oriented economy. It has also benefited U.S. business by making
available a number of U.S. government trade promotion and
investment support programs that enhance their ability to
compete in this potentially important market. At the same time,
Vietnam has continued to work with us closely on the MIA issue
where we are moving from cooperation to what we hope will be a
partnership. The U.S. policy of engagement has built on
Vietnam's own policy of political and economic reintegration
with the rest of the world which led most recently to Vietnam's
admission to the Asia Pacific Economic Cooperation (APEC)
forum. We also have seen some improvements in Vietnam's human
rights performance, although the picture there is still mixed.
President Clinton decided on June 3 to extend Vietnam's
Jackson-Vanik waiver because he determined that doing so would
substantially promote greater freedom of emigration in the
future in Vietnam. He based this determination on the country's
record of progress on emigration and on Vietnam's continued and
intensified cooperation on U.S. refugee programs. Overall
Vietnam's emigration policy has opened considerably in the last
decade and a half. As a consequence, over 500,000 Vietnamese
have emigrated as refugees or immigrants to the United States
under the Orderly Departure Program (ODP), and only a small
number of refugee applications remain.
Thousands of Vietnamese have left Vietnam and gained
admission to the United States under our immigration laws. In
1998, 9,742 immigrant visas were issued to Vietnamese under
ODP. The Department of State expects that over 25,000
Vietnamese will apply for immigrant visas in this fiscal year
and projects that number to rise to 30,000 in fiscal year (FY)
2000.
Understandably, greater scrutiny has been given to
Vietnam's performance on those special refugee programs
established by the United States as part of our humanitarian
response to the consequences of the war including the program
for Former Re-education Camp Detainees (``HO'') and the
Resettlement Opportunity for Vietnamese Returnees (ROVR). I am
pleased to be able to inform you that Vietnam's cooperation has
intensified in the last year, in large part as result of the
Jackson-Vanik waiver. Consequently, we anticipate that we will
complete processing of nearly all the current ODP caseloads,
including ROVR, before the end of this fiscal year. Vietnam has
pledged to take all necessary steps to meet this goal.
Moreover, the Vietnamese government recently agreed to help
implement our decision to resume the ODP program for former
U.S. government employees that we suspended in 1996.
After getting off to a disappointing start, ROVR processing
accelerated dramatically in 1998 and is nearly completed. As of
June 1, 1999, the Government of Vietnam (GVN) had cleared for
interview 19,975 individuals, or 96 percent of the ROVR
applicants. By contrast, at this time last year, the GVN had
cleared 78 percent of applicants. The Immigration and
Naturalization Service (INS) has approved 15,833 ROVR
applicants for admission to the United States as refugees,
14,715 of whom have departed Vietnam.
At the end of May 1998, the GVN had not yet taken action on
1,353 ROVR cases. By June 1 of this year, the GVN reduced that
number to 79 cases. Likewise, progress has been made on cases
initially denied clearance for interview by the GVN. As of May
1998, 776 cases were listed by the Vietnamese as having been
denied clearance for interview. Most were denied because of
incorrect addresses or the failure of individuals eligible for
ROVR to attend a clearance interview. ODP provided updated
information to the GVN, and as result, many denials were
reversed and the number of cases denied clearance fell to 422
cases by the beginning of this month.
ODP has given particular attention to completion of the HO
program for applicants detained for at least three years in a
re-education camp because of their association with the USG. As
of the end of May, there were only 287 HO cases involving 1,480
individuals who had not yet been interviewed by the INS. A sub-
group of the HO program consists of applicants covered by the
``McCain amendment,'' which includes eligible sons and
daughters of former re-education camp detainees who were
approved for entry into the United States as refugees before
April 1, 1995. At the end of May, there were only 558 cases
remaining. The primary obstacle to processing the remaining HO
and McCain Amendment case loads is failure of the applicants to
apply to the GVN for exit permission, a factor beyond the
control of either the Vietnamese or the U.S. governments.
As these programs draw to a close, U.S. officials will work
closely with the Vietnamese to ensure that all interested
applicants have the opportunity to be interviewed, and if
qualified, emigrate to the United States. Completion of ODP and
ROVR programs will not mean the end of U.S. refugee processing
in Vietnam. We are designing a new program to address the
rescue needs of individuals who have suffered recent
persecution on account of race, religion, nationality,
membership of a particular social group, or political opinion.
In sum, I expect Vietnam's cooperation on immigration will
continue and be reinforced with the extension of the Jackson-
Vanik waiver.
Whenever consideration is given to taking any action with
respect to the normalization of our bilateral relationship with
Vietnam, we must review progress on obtaining the ``fullest
possible accounting'' for our missing from the Vietnam War.
This remains our highest priority with Vietnam, one of great
personal interest to me. Here, I am pleased to be able to say
Vietnam's cooperation on obtaining the fullest possible
accounting of our missing from the Vietnam war continues to be
excellent. As a result, the President once again issued, on
February 3, a determination that Vietnam is ``fully cooperating
in good faith with the United States.'' Since the President
made his annual review for this determination, the United
States and Vietnam have conducted three Joint Field Activities;
we have repatriated six remains and identified remains of nine
individuals representing eight cases; and Vietnamese teams have
provided reports regarding their unilateral investigations of
38 cases. In addition, the Vietnamese recently provided 12
documents in two separate turnovers to support a U.S. study of
Vietnam's collection and repatriation of American remains.
Also, since December 1, 1998, Vietnam has identified eight
witnesses for participation in future trilateral investigations
in Laos.
The Administration remains very concerned about Vietnam's
performance on human rights. Vietnam continues to deny or
curtail basic freedoms to its citizens. The government
maintains an autocratic one-party state that tolerates no
organized opposition. A number of people remain in jail or
under house arrest for the peaceful expression of their
political or religious views. And, the country's labor
practices fall short of international standards.
Nonetheless, we have seen some improvements which we
believe can be attributed to deepening U.S. engagement with
Vietnam as well as to Vietnam's increased contact with the
outside world. In recent years, increased citizen-to-citizen
contacts through the media, internet, trade and investment,
travel and cultural and educational exchanges have exposed the
Vietnamese people to international standards and values.
Let me tell you about several important gains that have
been made. Last fall, as part of two large amnesties of
prisoners, the GVN released a number of prisoners of
conscience, including several leading dissidents such as Doan
Viet Hoat, Nguyen Dan Que and Thich Quang Do.
The conditions for individual religious observance also
have improved recently. Worshipers associated with officially-
recognized sects practice their religion with few restrictions.
Places of worship are being repaired and renovated, often with
funding from abroad. Attendance at regularly scheduled and
holiday services is high and in many cases growing. However,
restrictions on religious institutions themselves remain in
place, including on clerical appointments, seminary activity
and transfers of clergy.
Vietnam also is making progress in the area of worker
rights. In 1998, 60 independently organized strikes protesting
unfair wages and working conditions occurred. That these
strikes were unofficially supported at local and provincial
levels by the Vietnamese General Confederation of Labor, the
party-dominated umbrella labor organization, suggests
perceptible progress in the regime's attitude toward
independent worker activities. The GVN is currently drafting
legislation on freedom of association. Improvements are also
being made in collective bargaining. Multi-year contacts are
increasingly being negotiated. And, labor leaders are more
responsive to worker concerns in selecting the issues to
address in contracts.
We have both ongoing and regularly scheduled dialogues with
Vietnam on the issue of human rights. These discussions offer a
constructive forum where the U.S. government can inform Vietnam
of U.S. views and concerns and to press for progress. The next
human rights dialogue is scheduled for July 12-14. We will
raise freedom of speech, association and religion, Vietnam's
administrative detention decree, prison conditions, labor
rights, information on former prisoners of conscience, as well
as specific detention cases of concern.
Between rounds, the pressure on the Vietnamese does not
abate. My staff and I, as well as State Department officials
here in Washington, raise human rights concerns at every
opportunity and at the highest levels. Secretary Albright
discussed human rights with Vietnamese Deputy Prime Minister
and Foreign Minister Nguyen Manh Cam when he met with her last
October. Ambassador for Religious Affairs Robert Seiple plans
to visit Vietnam next month. The objective of all of these
encounters is to engage the Vietnamese and persuade them to
make positive changes. The more we engage, the greater
opportunity we have to urge greater respect for human rights.
Vietnam faces many serious economic issues as it enters the
21st century, ones with significant social and political
ramifications. It must cope with globalization by integrating
into the regional and world economy. It must promote
development of the private sector to increase economic
productivity and sufficient growth to meet the aspirations of a
young and growing population. It must develop a transparent,
predictable business climate based on the rule of law. And it
must complete the transition from a centrally planned to a
market economy. The Vietnamese leadership has recognized the
need to pursue these goals, and gradually, progress is being
made.
U.S. business still finds Vietnam a tough place to operate.
Reform has not progressed at the pace that many had hoped.
Nonetheless, U.S. businesses continue to view this nation of
nearly 78 million as an important, potentially lucrative
market. They believe that the U.S. government has an important
role to play in encouraging the GVN to accelerate and broaden
its program of economic reform. For business too, the answer is
engagement not isolation.
Bilateral trade negotiations and WTO accession provide
additional leverage, holding out the prospect of normal trade
relations. These processes provide us with the opportunity to
obtain from the Vietnamese commitments to undertake necessary
economic reforms and to make changes to their trade and
investment regimes that will directly benefit U.S. businesses.
This week in Washington, another round of negotiations on the
bilateral trade agreement is taking place, and I feel that an
agreement may be within reach in the coming weeks. This
agreement is necessary if we are to fully normalize our
bilateral relationship extending normal trade relations to the
country. It also will act as a catalyst to simulate fundamental
and far-reaching economic reforms improving the transparency
and predictability of its business regime and moving Vietnam
significantly closer to WTO and other international economic
standards. In fact, prominent dissident Nguyen Dan Que, in a
June 13 communique, announced his support for a bilateral trade
agreement based on his belief that the agreement would be a
force for change in Vietnam. And it will be open up Vietnam's
economy creating new, commercially meaningful opportunities for
U.S. firms. Withdrawal of the waiver at this time would
certainly derail these negotiations at a critical juncture.
U.S. business also benefits from continued access to U.S.
government export promotion and investment support programs
such as those offered by the Export-Import Bank (EXIM), the
Overseas Private Investment Corporation (OPIC), the U.S.
Department of Agriculture (USDA) and the Trade and Development
Agency (TDA). U.S. manufacturers, farmers and workers stand to
gain significant opportunities from these programs, including
opportunities that lead to the development of jobs in the U.S.
OPIC financing and insurance programs are available for U.S.
investors and several potential projects are currently in the
pipeline. EXIM is putting the finishing touches on agreements
which will allow it to make a range of export support programs
available to U.S. exporters. USDA also has made available
grants and credit guarantees that will open the Vietnamese
market to increased U.S. agricultural exports. TDA has made
numerous grants for feasibility studies that will give U.S.
companies the leg up to win project bid. These programs have
just begun operating since last year as a result of the
Jackson-Vanik waiver, and we now stand poised to reap the
considerable benefits they have to offer. Withdrawal of the
waiver would end the availability of these programs to our
businesses operating in Vietnam, restricting their ability to
compete on a level playing field with Asian and European
competitors who have access to similar programs.
A prosperous Vietnam integrated into world markets and
regional organizations will contribute to regional stability.
The U.S. seeks to encourage Vietnam along the path of reform so
that as it enters the 21st century, it will become a reliable
and peaceful regional and international player. The best way to
achieve this is to work with other nations to increase trade,
the free flow of information and know-how, and people-to-people
exchanges with Vietnam. Vietnam itself decided over a decade
ago to embark on an economic reform program, known as doi moi,
and a policy of political and economic reintegration with the
world. Already a member of ASEAN since 1995, Vietnam took
another step forward when it joined APEC in November 1998. As
Vietnam increasingly integrates itself into these regional
organizations and the rest of the international community, it
gains a greater stake in being a constructive world player.
Vietnam has also placed high priority on improving relations
with the United States. It is in our national interest to
respond positively to these overtures.
To those who would argue that rather than incrementally
normalizing our relationship with Vietnam, we should eschew
further contact with the country and its communist regime and
withdraw the Jackson-Vanik waiver from Vietnam, I would reply
that to do so would be to deny ourselves the most effective
tool we have to encourage the process of change in Vietnam. As
Vietnam has opened to the world, permitting foreign goods,
ideas, people and investment to enter its borders, tangible
change has occurred. Vietnamese society in 1999 bears little
resemblance to the isolated, bankrupt and tightly-controlled
society of a decade ago. With continued opening of the economy,
the middle class will grow, the population will become more
educated and exposed to more ideas, and Vietnam will continue
to evolve to become a more open society. But change comes in
increments. By extending the Jackson-Vanik waiver and taking
other steps along the path of normalization, including
extension of normal trade relations, the U.S. will advance our
interest in encouraging Vietnam's on-going transition.
Chairman Crane. Thank you, Mr. Ambassador. You were here to
listen to the testimony of our colleague from California, Mr.
Rohrabacher. He made in his testimony some charges about what's
been going on in Vietnam since we had the last time to have an
exchange, the last year on this. I am curious, he says the
Communist regime has further tightened its grip on civil
liberties, religion, and free expression. You have been there
present to witness what's happening. How would you evaluate
that?
Ambassador Peterson. Clearly, the civil liberties have not
been tightened. Clearly I would say the religious rights issue
has not been tightened. The press issue is mixed. In fact, they
did pass a law recently which we haven't truly evaluated just
yet, nor do I think have they. But there is a problem with
freedom of the press. It's not what we want it to be, but we
are on the inside tinkering with policy with them, and making
strong suggestions that this is one area that they have
absolutely every opportunity and to the benefit of the nation
to open up and to allow the whole process to be more
transparent. Transparency is a major point of every meeting
that I have with any Vietnamese leader, large or small.
He also made a point about the lack of free elections. I
would like to just walk through what the last election for the
national assembly looked like. The election had roughly 800
candidates, something like that, it may have been a little
more. There are 450 seats in the national assembly. When the
election was over, the cross-section of the national assembly
was changed dramatically. Sixty-one members of the national
assembly are not party members. Three of the members that were
elected to the national assembly do not belong to any
organization. They are totally independent. They ran as
independents. Just came off the street, ``I want to run.''
Chairman Crane. Jesse Venturas.
Ambassador Peterson. Perhaps. One of those three members is
a former major in the South Vietnamese Army. It was rather
cute, actually. Of those three members, the papers had a review
and said ``and three members were elected with no political
support at all,'' which in their thought was I thought rather
interesting. But what they have now is a national assembly that
is assuming a much greater role, because now it's constituency-
based. It has taken a greater role in policy. Its cross-
section: 26.6 percent women, all of the minorities are
represented, they have a much better cross-section of the
religious activities, labor, all of those activities are
represented in that body.
I don't know that it's a free election like the one we'll
have next year, but it is clearly changed. I think that we
should give credit to that and encourage them to move further
on that point.
Chairman Crane. Another quote from his testimony,
``Repressive political and economic policies of the Vietnamese
Communist leaders makes Vietnam a dictatorship and one of the
worst investment risks in the world.'' How would you evaluate
that?
Ambassador Peterson. Well, the United States has well over
400 companies, a number of them represented here today, of
which you will hear testimony. They are a better measure of
risk than I. Clearly they recognize Vietnam as an opportunity.
If in fact the conditions were so severe as that, they wouldn't
be there. That's the first point.
The second point is though, to be honest with you, doing
business in Vietnam is quite difficult, as it would be for any
country that is under major transition as this country, and
where a country is trying to find its way in becoming a party
to the global economic regime. Their effort and their
commitment with us in the negotiations with our bilateral trade
agreement have really been incredibly fruitful in them
addressing some of the most onerous issues that you could ask
any former Communist government or a Communist government to
look at in looking toward the development of free market. They
are opening their market. They are changing tariffs. They are
having to build new institutions. It is a whole different
ballgame. While we are not talking here today about the trade
agreement, I hope to do that later this year. It would be a
major hope on my part. But from the standpoint of Vietnamese
taking on the difficult issues, they clearly have done so. I
think that the businessmen would be better qualified to answer
that question in greater detail.
Chairman Crane. One final question was his statement that
Hanoi has continued to jam the broadcasts of Radio Free Asia.
Ambassador Peterson. Frankly, I believe they continue to
try to. I think it's a left-handed effort. They are certainly
not being totally successful and are being quite intermittent
about it, because our people are intercepting it and listening
to it, my staff. So it's not something that isn't getting
through. It does get through. I think that that is becoming a
much less of concern, even to the Vietnamese. I hear them not
talking about that very much.
I would add another point that one of the things that my
friend Congressman Rohrabacher made a point about, we shouldn't
do business with anyone that isn't a democracy. I hope everyone
recognizes that if we ever had adopted such a plan, we wouldn't
be the nation we are. Nor would a whole host of other nations
be who they are, because we just have had such a huge success
by engagement and bringing those nations into the window of
democracy. So I think that clearly by engagement that
opportunity exists in Vietnam as it did in Chile and a whole
host of other countries of which we have had I think great
success.
Chairman Crane. Thank you, Mr. Ambassador.
Mr. Levin.
Mr. Levin. Let me just ask you I think a question, a
general one that our constituents ask. There has been much
discussion about engagement, and at times, deprecation of that
term and what it means. So based on your tenure so far, if you
were talking to our constituencies, you have talked in the past
years and in a sense the whole American people are now your
constituency, but based as your tenure, what is the case for a
waiver for continued involvement, the progress you have seen,
the road ahead? Sum it up based on your on-the-ground
experiences in Vietnam, your experience as Ambassador.
Ambassador Peterson. Sandy, since I have been there, I have
seen significant improvement across the whole spectrum of
issues and goals, objectives that the United States has
interest in Vietnam. They have become much more open. They are
willing to conduct a dialog on virtually any subject no matter
how tough it is, how unpleasant it might be. They are looking
for solutions. They want very much to be friends to America.
They recognize America, like so many other nations do in the
world, as the symbol of freedom and the society that they would
like to pattern their country after, I believe.
What I see in the generational transition is significant,
as was noted by Congressman Blumenauer, that 80, 85 percent of
the population is under age 40. Over 40 percent of the
population is under age 18. These are people who want a better
quality of life, and they are looking to America to help them
to do that. Our MIA search effort has indeed come down to a
partnership. It's not just cooperation any more. There is a lot
of unilateral work that the Vietnamese are giving to us. They
are suggesting ways for us on how to do things better and how
to save money in the process of doing it. They have shown a
deference to our concerns having to do with the incarceration
of individuals who have broken Vietnamese law in their frame of
reference, but it's law, which frankly, should be changed. With
our expression of concern, we have encouraged them to settle
these disputes rather than incarceration by administrative
procedure, and they have done that.
Two years ago, they wouldn't have done that. Those are just
a few examples of the changes that are taking place in Vietnam.
I noted that if you were to take a snapshot of Vietnam in 1999,
it has no resemblance of anything in the past of even 1 month
ago, because things are changing so much and so fast.
Mr. Levin. Thank you.
Chairman Crane. Mr. Rangel.
Mr. Rangel. Ambassador, we are so proud to have an American
like you represent us, but even more proud that you are a
former Member of this House. I was just speaking with
Congressman Neal, who commented that after all you have been
through, to hear you testify on behalf of a country that you
were held captive for 6 years, makes you a very, very special
human being. I know that you do it not just for them or for us,
but for humankind as we try to improve the quality of life for
them. Of course, we all benefit.
Throughout your testimony, in my mind, I just struck out
North Vietnam and substituted Cuba. We have had Americans lose
their life in Japan, and Germany, and Vietnam, and Korea, and
certainly I have been shot by Chinese. Yet we think that it
helps democracy by exposing them, by engaging them, by showing
them how it works, and everything that you have said, I will
take your word for it because it's working, because it's just
so easy to be vindictive and want to get even.
What is the difference with Cuba? Why would it not work the
same way with Cuba? Why can't we let our businesspeople
showcase democracy and competition at its best? They too love
Americans, if not our government. What are your thoughts about
free trade with as many people as you have said, where would we
be today if we were just restrictive in looking at the type of
government, oh we didn't trade with them unless they were ``a
democracy.'' What are your views, Ambassador, on that?
Ambassador Peterson. Well, that may be above my pay grade
to answer that in specific terms. However, I would only suggest
that the successes that we have found in Vietnam have come
because we have engaged, because we have had a very
professional and constructive dialog with them on virtually
every issue of which we have had outstanding. I think that
success is telling. Clearly, in order to find solutions, one
has to talk to the parties and air out those differences and
come to those compromises and conclusions, of which we have
done in Vietnam.
We are not finished in Vietnam. I don't want to leave that
impression. We have a long way to go. We are working very, very
hard. I am very proud of my staff and the desk officers here
and a lot of departmental officers within the administration,
because we have to be committed in order for them to have a
commitment in return. We have to be inspiring and we have to
lead. We have to be out front. We're the big guy. I am very
proud that we have taken that opportunity and enhanced our
relationship with Vietnam to where we can in fact move to the
future and exploit these wonderful opportunities to raise the
quality of life for 80 million people, and by so doing, give
them an opportunity to have a big bite of the apple that all
the rest of us enjoy in America.
Mr. Rangel. We're proud of you. Thank you, Mr. Chairman.
Chairman Crane. Mr. Neal.
Mr. Neal. Thanks, Mr. Chairman. I think Charlie summed it
up pretty well. The emotion that you evoke when you come back
to the House, Pete, you were a great pal while you were here
and it's terrific to see you in your new role.
Two questions. One of the hardest things for Members of
Congress which you experienced for 6 years and probably because
of your history, you know better than everybody, when you go to
the events that memorialize Vietnam, that question of prisoners
of war is still a burning issue for many, many of the troops
that served and their families. Senator Kerry gave a pretty
good accounting this morning, I thought, of numbers. But would
you care to shed some light on how you feel that that is moving
and progressing?
Ambassador Peterson. I think the MIA search efforts, POW
search efforts in Vietnam have been successful in historic
proportions. Never before in mankind history, that I know
about, have two former belligerents gone back to the
battlefield and attempted to do what we are doing.
We have now brought this list of missing down
substantially. I believe the number is roughly 2,060 in all of
Southeast Asia, and in Vietnam it's roughly 1,540. But as I
noted in my testimony, in those cases of no further pursuit,
the Vietnamese have just handed a result back to an
investigation of which we are now going back through our
records. It appears that we could in fact resolve roughly 600
cases if it is accurate, if the information we have is accurate
and we can in fact fulfill all of the legal requirements
associated with that, which would bring down these numbers even
more substantially.
But I can assure you that this commitment that we are
involved with to reach the fullest possible accounting is of
the most serious, and the first priority that we have in our
mission in Vietnam.
I would say too that this work that we are doing is not
just for those who we lost. It is for those who are wearing the
uniform today, because it's a demonstration of the commitment
of our Nation to make that determination and to their families
that we will get answers as to whatever loss that might be
sustained in a future combat role. So, I am very proud of this.
We could cite all the members. I think it's actually in my
testimony. But if there's any program that I am most proud of,
frankly, it is that one.
We have recently commissioned a film, a short film, that
shows exactly how we do it and goes through the whole process
that I will try to send you a copy, that I think you would find
very rewarding. I hope that you would be able to share that
with some of your constituents as well.
Mr. Neal. Second question, the Asian financial crisis. We
keep seeing inconsistent information in data that are delivered
here. What is your read on the impact of that so-called ``Asian
flu?''
Ambassador Peterson. Well, I have just finished a
nationwide tour of really five cities in which we have
discussed that with all sorts of various groups in America. We
have tried to bring the message that it appears in some of the
countries in Asia that the financial crisis seems to be
bottoming out. It looks like we will probably get some
generally positive GDP growth rates next year. But none of
these countries is out of the woods.
Vietnam was less negatively impacted and has maintained a
positive growth rate throughout this whole process because it
was less subjected to this process because it didn't have a
stock market nor convertible currency. Nevertheless, it has
lost its export markets, it has lost a lot of its FDI, and it
is struggling. But if you look at Thailand, you look at
Malaysia, you look at, certainly, Korea, those countries are
certainly coming back. Singapore wasn't really hurt by this.
Now with the elections in Indonesia, that looks promising as
well. The Philippines has done very well, as well. So we are
very optimistic about the prospects of having administered the
proper medicine to the financial crisis by the world community.
We see a recovery certainly in the next year.
Mr. Neal. Thanks, Pete.
Chairman Crane. Well again, let us express our appreciation
to you, Mr. Ambassador, for your willingness to continue to
serve faithfully, both in your tour of duty in Vietnam as well
as coming back here and giving us updates. Your insights are--
oh, excuse me. Mr. Watkins has a question before you leave.
Mr. Watkins. Thank you. Mr. Ambassador, let me say how
pleased I am to hear you, and I think speaking for nearly all
Americans, I would say all, that we are delighted you are
serving as Ambassador there. We know the American people are
served well.
I have two questions I would like to ask. What do you feel
and see are the trade barriers that we have there with our
trade relations with Vietnam? What do you see on the ground
there in Vietnam?
Ambassador Peterson. Well, the trade agreement of which we
are negotiating with Vietnam right now is essentially a WTO
principle-based trade agreement. All of the barriers that have
been in place in Vietnam to protect the state-owned enterprises
and to essentially control the domestic market are in place.
With the BTA, the bilateral trade agreement, we are negotiating
removals of those barriers. There are many and varied. Even
with that, however, as I noted, 400 American companies or 400-
plus American companies are already doing business there and
have found ways to overcome some of those barriers. Some of
those companies are doing quite well, I might add.
So the tariff structure, the licensing structure, the
closure of some sectors of the market, and frankly, just the
slowness of the Vietnamese to react to business requests.
Mr. Watkins. That kind of leads me to the second question
there. Do you feel you, through the Embassy there, that we are
being able to expedite and overcome those things there? Do we
have the kind of corporation there that helps us--I know we
have got to work toward a bigger trade agreement, but we know
those kind of engagements, as you were talking about, but are
those various barriers, are they willing to work with you?
Ambassador Peterson. Yes, they are. In fact, they are not
just working with us. Obviously there are many other foreign
nations who are doing business there.
Mr. Watkins. Right, exactly.
Ambassador Peterson. The donors community has been very
effective, I think, in bringing forth recommendations for
accelerated reforms in removing of those barriers. But so far
as American business and American interests are concerned, our
best effort, our best opportunity is to negotiate a conclusion
to the bilateral trade agreement, and then bring it up to you
and bring it through the process of confirmation here.
Mr. Watkins. That's all I have, Mr. Chairman.
Chairman Crane. Well again, thank you, Mr. Ambassador. We
look forward to your testimony in the future since we have to
renew the Jackson-Vanik waiver annually.
Ambassador Peterson. Thank you, Mr. Chairman, I appreciate
it, and all the Members.
Chairman Crane. With that, the Subcommittee will stand in
recess subject to call of the Chair. We have one 15-minute and
two 5-minute votes. We will reconvene after that.
[Recess.]
Chairman Crane. Will everybody please take seats. The
Subcommittee will reconvene. I now would like to invite our
next panel. Nguyen Dinh Thang, executive director, Boat People
S.O.S.; Virginia Foote, president, U.S.-Vietnam Trade Council;
Y Tin Hwing, member, Montagnard Human Rights Organization;
Lionel Johnson, vice president and director, InterNational
Government Relations of Citibank; and Ernest Bower, president,
U.S.-ASEAN Business Council.
I would like now to yield to our distinguished Ranking
Minority Member, Mr. Rangel, who wants to make a special remark
or one of our witnesses.
Mr. Rangel. I just want to thank Lionel Johnson, as well as
the Majority for giving us an opportunity to be involved in
this panel. We were fortunate that Mr. Johnson, who is the vice
president, director, of InterNational Government Relations with
Citibank was able to join with us. I want to thank the Chair.
Thank you for being here.
Chairman Crane. Let me tell our witnesses to please try and
confine your oral presentations to under 5 minutes. Any printed
statements, however, will be made a part of the permanent
record. With that, we shall then proceed in the order I
presented you here.
I am not pronouncing it right, probably. Is it Thang or
Thang?
Mr. Thang. The first try is pretty good.
Chairman Crane. OK. You go first.
STATEMENT OF NGUYEN DINH THANG, EXECUTIVE DIRECTOR, BOAT PEOPLE
S.O.S., MERRIFIELD, VIRGINIA
Mr. Thang. Thank you, sir. Mr. Chairman and Members of the
Subcommittee, last year President Clinton granted Vietnam the
waiver for the Jackson-Vanik amendment with the promise that it
would substantially promote free and open emigration. Other
witnesses before me have brought up other issues such as MIA/
POWs, trade relations with Vietnam, child labor, constructive
engagement; all those issues are very important. But for the
moment, I would like to focus your attention on the gist of the
Jackson-Vanik amendment, which is free and open emigration. The
waiver should be evaluated based on whether it has
substantially promoted free and open emigration, or not.
The statutory definition of free and open emigration is
that no citizen should be denied the right or opportunity to
emigrate, and that no citizen should be made to pay more than a
nominal fee on emigration or on the visas or other documents
required for emigration. According to that definition,
emigration in Vietnam has become less free and less open since
last year's waiver because of more rampant corruption.
According to our own survey of refugees arriving in the U.S.
over the past 6 months, on the average, each of them must pay
$1,000 U.S., or four times the annual per capita income in
Vietnam, for access to interviews and exit permission. That is
clearly more than a nominal fee.
One refugee arriving in Texas earlier this year was
demanded $10,000 U.S. As he could not afford the money, he was
coerced by the authorities into a false marriage with a lady
who agreed to pay the required sum. He had to take this woman
and her child to the U.S., leaving behind his own child in
Vietnam. Another applicant was demanded $40,000 U.S. As he did
not have that kind of money, how could he, the authorities
demanded that he marry a woman with four children and bring
them all to the U.S. He refused because he had taken the
Buddhist vow of celibacy. He is now under arrest, I mean under
house detention in Vietnam.
According to our estimates there are some 10,000 otherwise
estimates, eligible individuals who have been denied access to
various U.S. refugee programs because of corruption. This
estimate is conservative. At a meeting with a delegation of
Vietnamese-American leaders and several congressional staffers
in late 1997, our Ambassador to Vietnam, Pete Peterson, placed
the number at around 20,000 to 30,000 individuals. None of
those cases has been resolved.
It is obvious that considering the extremely corrupt system
in Vietnam, there cannot be free and open emigration. Neither
can any trade relations with Vietnam be normal in its true
sense.
The U.N. Development Program 2 days ago reported that 40
percent of its aid to Vietnam for an ongoing project had been
lost. Its report recommends that all proposals in the pipeline
should be annulled. The UNDP also estimates that only 5.5
percent of the $5 billion in international development aid to
Vietnam actually goes to the Vietnamese citizens. That's not
normal. Last month, Vietnam's ministry of finance reported that
one-third of the country's total civil service assets, worth
$5.8 billion, are unaccounted for. That is not normal.
Reacting to a growing number of public allegations of
corruption against its leaders, the Communist party earlier
this year issued an order prohibiting its members from
criticizing their leaders. Since then, many anticorruption
crusaders among its own rank have been harassed, intimidated,
or even arrested and detained. The politburo member accused by
these crusaders of high level corruption now heads the party's
anticorruption campaign. That's not normal.
At yesterday's meeting with international donors and
foreign investors in Vietnam, Vietnamese Government officials
rejected calls for more transparency and less bureaucracy. The
director of the World Bank in Vietnam made the following
observation. ``Last year, we met at a time when we were very
concerned. Today the situation is more serious than it was last
year.''
Over the past 12 months, Mr. Chairman, the Vietnamese
Government has become more corrupt, less tolerant, more
repressive, less transparent. This Congress has championed the
cause of less government and more power to the people in
America. The people of Vietnam deserve no less. United States
policy toward Vietnam should empower the people, not strengthen
the government's grip on power. For the past year, the Jackson-
Vanik waiver has achieved exactly the opposite. I therefore
recommend that this Subcommittee disapprove the renewal of the
waiver until and unless Vietnam has taken concrete steps to
reform its stifling and corrupt bureaucracy, make its fiscal
and administrative system transparent and accountable to the
people, and respect open and free emigration.
Proponents of the waiver present a different picture. To
find out for yourselves, I suggest that this Subcommittee
request the General Accounting Office to conduct a survey of
refugees arriving from Vietnam to this country over the past 6
months about the extent and level of corruption they were
subjected to in Vietnam, and another survey of all United
States businesses and governmental organizations with
activities in Vietnam about the extent and level of corruption
they have been subjected to. Then you will have a true story
and a real picture.
Thank you, Mr. Chairman.
[The prepared statement follows:]
Statement of Nguyen Dinh Thang, Executive Director, Boat People S.O.S,
Merryfield, Virginia
The Jackson-Vanik Amendment stipulates that a communist
country must honor free and open emigration of its citizens as
precondition for certain economic privileges from the U.S. The
President may waive this requirement if he can certify that the
waiver promotes the objective of the amendment.
The statute gives specific definition of what it means by
free and open emigration: No citizen should be denied the right
or opportunity to emigrate, and no citizen should be made to
pay more than a nominal fee on emigration or on the visas or
other documents required for emigration.
We have interviewed many refugees arriving to the U.S.
within the past six months. They had to pay on the average US
$750 for access to the interview, and then US $250 apiece for
an exit permit. At the airport, they again paid between $100 to
$150 in order to get on the plane. These are huge sums of
money, considering that the annual salary of an average
government worker is $250 a year. Most of these refugees
arrived in the U.S. with large debts. Emigration is clearly not
free in Vietnam. Those who did not pay saw the door to U.S.
refugee programs shut until they paid. Emigration is clearly
not open in Vietnam.
Corruption has many grave consequences on US refugee
programs and on the refugees themselves. One refugee, now in
Texas, was demanded US $10,000 in exchange for access to the
Resettlement Opportunity for Vietnamese Returnees (ROVR)
program. Of course he did not have that kind of money. The
Vietnamese authorities then forced him to enter into a false
marriage with a woman who agreed to pay the required sum.
Without any choice, this man had to leave his own child behind
and take the woman and her child to the U.S. instead.
That is not the most outrageous example. For the past three
years we have tried to help a repatriated boat person get a
ROVR interview. He is demanded a bribe of US $40,000. Like the
one above, this man is being coerced into a false marriage with
a woman with four children. He has resisted so far because he
has taken the Buddhist vow of celibacy. The police currently
keeps him under house detention. This man is among the 650
returnees still denied interview clearance despite promises of
cooperation by Vietnam.
Even in the ROVR program, which is of high priority to the
US government, corruption has thrived. The consequences of
corruption are much more aggravating in other U.S. refugee
programs inside Vietnam. According to our conservative
estimate, corruption has effectively denied some 10,000
otherwise eligible individuals access to the Humanitarian
Operation program for former political prisoners and the U11
program for former U.S. government employees. They do not have
the financial means to secure required documents in order to
apply. Some have managed to apply but the Vietnamese
authorities have refused to forward their applications to the
US government. These victims of persecution, economically,
socially, and politically marginalized because of their
alliance with the US during the war, are being left behind.
The Administration has ignored these blatant violations of
the Jackson-Vanik Amendment in its rush to establish normal
trade relations with Vietnam.
The level and extent of corruption in Vietnam makes trade
with that country anything but normal. Before taking a stand,
members of this subcommittee need to carefully review the
following recent events.
Late last year, Edouard Wattez, the U.N.
Development Program (UNDP) representative in Hanoi, made public
his concern that very little (5.5 per cent) of the $5 billion
in international development aid to Vietnam actually goes for
basic social services to Vietnamese citizens, and that such aid
might have hindered genuine economic reforms. (Cash handouts
slow economic reform process, South China Morning Post, Nov.
25, 1998.)
In a report released two days ago, UNDP estimates
that 40 percent of its money spent on a project in Vietnam was
lost. It recommends that ``all proposals in the pipeline should
be annulled'' (UN Report Shows Wasted Vietnam Aid, The
Associated Press, June 14, 1999). Vietnam's Ministry of Finance
recently admitted that one third of the country's total civil
service assets, worth 5.8 billion US dollars, are unaccounted
for (Vietnam Sets Stage for New Government Purge, STRATFOR's
Global Intelligence Update, May 25, 1999).
In its latest report, the Hong Kong-based
Political and Economic Risk Consultancy (PERC) noted that
Asia's economic crisis has resulted in greater transparency for
most Asian economies. Vietnam, however, remains far in the
negative end of the spectrum: scoring 8.50, where 0 is the best
possible score and 10 the worst (Asia crisis results in greater
transparency-PERC,T1 05:57 a.m. Nov 30, 1998 Eastern). In its
report to Congress released two weeks ago, the General
Accounting Office concluded that Vietnam lacks fiscal
transparency and that financial and trade data published by its
government are unreliable. (Vietnam Economic Data: Assessment
of Availability and Quality, GAO, June 1999)
Survey results released last week by Business
Software Alliance and Software & Information Industry
Association ranks Vietnam top in the world in software piracy;
97% of all software applications used in Vietnam are pirated
(Two-fifths of installed software pirated-survey, Reuters,
09:57 a.m. Jun 07, 1999 Eastern). One should note that most of
the computer systems in Vietnam are operated by government
agencies or state-owned enterprises (SOEs).
At the meeting with government officials two days
ago, international donors and foreign investors expressed
concern over the lack of transparency among SOEs and over the
opaque bureaucracy that breeds corruption. Their calls for
concrete reforms were rejected. At the conclusion of the
meeting, Andrew Steer, director in Vietnam for the World Bank,
publicly expressed his frustration: ``Last year we met at a
time when we were very concerned. Today the situation is more
serious than it was last year.'' (Disappointed donors see
Vietnam slowing reforms, Reuters, Jun 15, 1999.)
Three months ago, the public security police
arrested Dr. Nguyen Thanh Giang, an anti-corruption crusader,
and harassed 11 communist veterans who had written to the
Communist Party alleging politburo member Pham The Duyet of
high-level corruption. The politburo has since issued an order
prohibiting party members from publicly criticizing their
leaders (Vietnam Clamps Down on Free Speech, The Associated
Press, June 7, 1999). The accused politburo member is presently
in charge of Vietnam's anti-corruption campaign.
Considering the extremely corrupt system in Vietnam, there
can not be free and open emigration; trade relations with
Vietnam can not be normal.
This Congress has advocated for less government and more
power to the people--the people in America, that is. The people
of Vietnam deserves no less. U.S. policy toward Vietnam should
empower the people, not strengthen the government's grip on
power. For the past year, the Jackson-Vanik waiver has achieved
exactly the opposite.
I would like to recommend that the Subcommittee on Trade
request the General Accounting Office to conduct a survey of
refugees arriving from Vietnam over the past 6 months about the
extent and level of corruption they were subjected to request
the General Accounting Office to conduct a survey of all U.S.
businesses and non-governmental organizations with activities
in Vietnam about the extent and level of corruption they have
been subjected to hold off the renewal of the Jackson-Vanik
waiver until the Vietnamese government takes concrete steps to
reform its stifling and corrupt bureaucracy, make its fiscal
and administrative system transparent, and respect open and
free emigration.
Chairman Crane. Thank you.
Ms. Foote.
STATEMENT OF VIRGINIA B. FOOTE, PRESIDENT, U.S.-VIETNAM TRADE
COUNCIL
Ms. Foote. Chairman Crane, Congressman Rangel, I am very
pleased to be here today, as representing the United States-
Vietnam Trade Council. I testify in strong support of the
renewal of the Jackson-Vanik waiver for Vietnam. If there are
no objections, I would like to submit my full statement into
the record, which includes two fact sheets we have put together
on the importance of this waiver and of NTR's status for
Vietnam.
Chairman Crane. Without objection, so ordered.
Ms. Foote. Thank you. And a letter also that we sent
recently to Ambassador Barshefsky on the bilateral trade
agreement talks signed by 144 American companies and trade
associations, and a chronology of the overall normalization
process between the United States and Vietnam which began in
the Reagan administration.
The trade council was founded in 1989 as an association
with strong membership from the American business community. We
have offices in Washington and Hanoi, and have worked through
our educational affiliation, the United States-Vietnam Forum,
to improve relations between the U.S. and Vietnam with
educational exchange programs, conferences, congressional
delegations. We are now providing technical assistance on some
of the difficult issues that are raised by the bilateral trade
agreement.
I would like to address why I think it is very important
for you to vote to renew the Jackson-Vanik waiver for Vietnam
again this year. Beginning in the late eighties, Vietnam
embarked on a bold economic reform program, which has shown
impressive results. From 1988 to 1996, over $28 billion in
foreign investment was committed to Vietnam. Because
normalization with the United States was far slower than with
other nations, American involvement in Vietnam has lagged
behind other nations, and still operates under severe
handicaps. Without NTR status, a trade agreement, and initially
without trade support programs, American companies and
individuals nonetheless 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 dollars' worth of two-
way trade. As of May 1999, the United States was the ninth
largest investor, with $1.37 billion committed in foreign
projects, and down to $830 million in two-way trade. Americans
are traveling to Vietnam in great numbers. In 1997, Vietnam
issued 98,000 visas for Americans traveling to Vietnam. This
year, the number is 180,000.
But by 1997, Vietnam's impressive growth rate had peaked. A
downturn set in. Foreign investment has dropped off
dramatically and hit a low last year of $1.37 billion for the
year. Although Vietnam is in one sense a step removed from the
Asia financial crisis because of its nonconvertible currency
and plans for the stock market still in the works, 70 percent
of the investment in Vietnam is from other Asian countries, and
nearly 70 percent of its international trade comes from the
region as well, and the crisis has hit them hard.
It is in this difficult environment that the United States
is now negotiating a trade agreement with Vietnam, and once
again discussing the annual waiver of the Jackson-Vanik
renewal. The United States has pegged the Jackson-Vanik waiver
to progress on the ROVR Program specifically, and on emigration
in general. On the merits of progress on the ROVR Program
alone, Jackson-Vanik ought to be renewed. In assessing the
Orderly Departure Program for emigration over all, Jackson-
Vanik ought to be renewed.
On the economic front, the renewal of Jackson-Vanik is
equally important for achieving U.S. goals. American
involvement in the economic integration process in Vietnam is
welcome, and is extremely important to the overall development
of Vietnam in the long run. American companies and American
government negotiators are setting a high standard for trade,
investment, labor, and business practices. American companies
are actively involved in training programs through my council
and individually. American products are popular in Vietnam. The
population of 77 million, half of them under 25, they are well
educated, and there is a potential for Vietnam to be a
significant trading partner.
In the process of negotiating a comprehensive trade
agreement with Vietnam, the two sides have agreed to general
principles and they are working on the very difficult task of
designing phase-in schedules. Vietnam has been very welcoming
of technical assistance from the United States. In response to
this, the Department of State, AID, USIA, and with the
involvement of the private sector of AIG, Citibank, Oracle, New
York Life, Raytheon, and other companies, the trade council has
been running very successful technical assistance programs,
providing legal expertise to the Vietnamese through the firm of
Powell, Goldstein, to work with them on building the legal
infrastructure needed to deal with these difficult and complex
issues of reform.
The United States should stay involved in this process. It
is in our interest to see a strong and healthy Vietnam in
Southeast Asia. Yes, Vietnam has a corruption problem. Yes,
Vietnam is bogged down by its own bureaucracy. Yes, they are
fearful of massive unemployment if they let the state
enterprise system go. Yes, they worry about the lessons of the
region of the economic crisis. But are these problems unique to
Vietnam? No, they are not.
Vietnam has set out on an economic reform path that many
countries began years ago. It is a process that is taking place
more slowly than many hoped for Vietnam, and with American
companies coming in late, it has not been easy for them. But
companies are confident that progress is being made. There are
major infrastructure projects in the pipeline, and with the
help of Ex-Im and OPIC, American companies are in a strong
position to win important contracts in this next year. With
fully normalized relations, the United States could become one
of the top investors in Vietnam.
In addition, since the initial waiver of Jackson-Vanik, the
Vietnamese have greatly sped up the process of trade
negotiations, and we have set an ambitious goal to finish the
agreement this year, and hopefully get it to you in Congress.
The issues on the table, such as liberalizing trade and
investment regimes, and the strengthening of intellectual
property rights, these are issues of great importance to anyone
doing business in Vietnam, now or in the future, and to anyone
hoping to see the standard of living increase in Vietnam.
Vietnam is strategically and economically important, and
will be greatly affected by United States policy overall, and
by the course of bilateral relations, even in the short run.
The Jackson-Vanik waiver has produced important results since
it was initially waived by President Clinton in March 1998. It
is crucial that the waiver be renewed again this year.
Thank you very much.
[The prepared statement follows:]
Statement of Virginia B. Foote, President, U.S.-Vietnam Trade Council
Chairman Crane, members of the Committee, I am pleased to
be here today representing as President of the U.S.-Vietnam
Trade Council to testify in strong support of the Jackson-Vanik
waiver renewal for Vietnam. If there are no objections, I would
like to submit for the record two fact sheets we have put
together on the importance of this waiver and NTR status, a
letter we sent recently to Ambassador Barshefsky on the
bilateral trade agreement talks signed by 144 American
companies and trade associations, and a chronology of the
overall normalization process between the United States and
Vietnam which began in the Reagan Administration.
The U.S.-Vietnam Trade Council, founded in 1989, is a trade
association with strong membership from the American business
community. 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 in foreign investment
was committed. And with a very low per capita income of only
$250 per year in the early 1990's, the international donor
community began generous overseas development assistance
programs reaching pledges of $2.7 billion in 1998, adding to
the approximately $10 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 worldwide. In this area, Vietnam has had
tremendous success in establishing relations in Europe, within
Asia and with the United States. Vietnam joined ASEAN in 1995
and APEC last year, and is committed to joining WTO.
The Reagan and Bush administrations recognized Vietnam's
goal of ending its international isolation and responded with a
policy of normalizing relations with Vietnam through 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 including the
initial waiving of the Jackson-Vanik amendment last year. 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 integration.
But because the U.S. normalized relations far more slowly
than other nations did, American business involvement in the
Vietnam has lagged behind other nations and still operates with
severe handicaps. Without NTR status,* a trade agreement, and
initially without trade support programs, American companies
and individuals nonetheless 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 with $1 billion worth of
two way trade. As of May 1999, the U.S. was ninth largest
investor with $1.37 billion commitment to foreign investment
projects, and $830 million in two way trade.
* Only 6 countries do not have NTR status: Afghanistan,
Cuba, Laos, North Korea, Serbia, and Vietnam
And Americans are traveling to Vietnam in great numbers. In
1997 Vietnam issued 98,000 visas for Americans wishing to
travel to Vietnam, over 66,000 for Vietnamese Americans wanting
to visit their homeland. In 1998, Vietnam issue 180,000 for all
Americans.
But by 1997, Vietnam's impressive growth had peaked. A
downturn set in. Foreign investment dropped by 40% in 1997 and
hit a low of 1.37 billion for all of 1998. The growth rates in
1998 dropped to around 5%. The easy parts of economic reform
had been accomplished. Harder issues loom large. And although
Vietnam was 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 is nearly
70% of its international trade.
It is in this difficult environment that the U.S. is now
negotiating a trade agreement with Vietnam and once again
discussing the annual waiver of the Jackson-Vanik amendment.
U.S. policy has pegged the Jackson-Vanik waiver to progress
on the ROVR program specifically and immigration in general. On
the merits of progress on the ROVR 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 and by this time last year there were some
7,000 applicants left to be processed. The State Department now
thinks they will be able to close all but a handful of ODP
cases by the end of 1999. As of this time last year another
2,500 ROVR cases out of a universe of nearly 20,000 were left
to be cleared for interview, with an estimated half of these
cases missing due to address or name errors. The State
Department again says the government of Vietnam has now cleared
over 96% of the ROVR cases. 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 a Jackson-Vanik
waiver is equally important for achieving U.S. goals. American
involvement in the economic integration 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 phase-in schedules. It has
been very welcoming of technical assistance on these issues
from the U.S. In response to this, with support from the
Department of State, AID, and USIA, and from the private sector
including AIG, Citibank, Oracle, New York Life, and Raytheon,
the Trade Council has run a successful technical assistance
program with legal expertise from the law firm of Powell,
Goldstein, Frazer and Murphy. The negotiations involve
difficult and complex issues.
The United States should stay involved in this process. It
is in our interest to see a stronger and economically healthy
Vietnam in the Southeast Asian region. Yes, Vietnam has a
corruption problem. Yes, Vietnam is bogged down by its
bureaucracy. Yes, they are fearful of massive unemployment if
they let the state enterprise system go. Yes, they worry about
what lessons are to be learned from the economic crisis in the
region. But are these problems unique to Vietnam? They are not.
Vietnam has 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 our companies to operate in Vietnam. But
companies are confident that progress is being made, and the
major infrastructure projects are in the pipe line, and with
the help of Exim and OPIC American companies are in strong
positions to win important contracts this year. With fully
normalized economic relations, the United States could well
join the top ranks of investors in Vietnam.
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 this year. 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 very 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 1998 year and it is crucial that the waiver
be renewed again this year at this important time in our
relationship.
Thank you.
ATTACHMENT A--THE JACKSON-VANIK AMENDMENT FOR VIETNAM
What is the Jackson-Vanik Amendment? On March 11,
1998, President Clinton issued a Jackson-Vanik waiver for
Vietnam based on the country's improvements of emigration
procedures, particularly its cooperation on the Resettlement
Opportunity for Vietnamese Returnees (ROVR). On July 30, 1998,
the U.S. House of Representatives voted 260-163 in favor of
extending the waiver for Vietnam. When the waiver was first
issued in March 1998, American projects in Vietnam became
potentially eligible for trade and investment support programs
from the Export-Import Bank of the U.S. (EXIM) and the Overseas
Private Investment Corporation (OPIC).
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 Jackson-Vanik waiver also allows the U.S.
Department of Agriculture and the U.S. Maritime Administration
to make their trade support programs available for projects in
Vietnam. The ability of U.S. companies to utilize these
programs 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 continued availability of EXIM and
OPIC financing.
What role does Congress play now? 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, and a decision to continue
waivers for individual countries where he determines this will
substantially promote freedom of immigration from that country.
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. If Congress does not act
the authority is automatically renewed.
What the 1999 Jackson-Vanik waiver for Vietnam
does not do: The waiver does not grant Normal Trading Relations
(NTR, formerly MFN) status to Vietnam as the Jackson-Vanik
waiver is only one step in the NTR process. A bilateral trade
agreement must first be negotiated and signed and then Congress
must vote whether or not to approve the granting of NTR status
to Vietnam. Vietnam is currently negotiating its bilateral
trade agreement with the U.S. It is hoped that will be
concluded by mid-year 1999 and that a request for NTR could be
submitted to Congress in the Fall of 1999.
ATTACHMENT B--VIETNAM NTR STATUS AND THE BILATERLATERAL TRADE AGREEMENT
Why does the U.S. need a bilateral trade agreement
with Vietnam? A bilateral trade agreement with Vietnam is
important to the U.S. because together with a Jackson-Vanik
waiver, it allows for Normal Trade Relations (NTR) status to be
extended to U.S. goods entering Vietnam, and reciprocally to
Vietnamese goods entering the U.S. The bilateral trade
agreement, which addresses issues relating to trade in goods,
trade in services, intellectual property rights and foreign
investment, not only guarantees NTR but creates more open
market access, and greater transparency for U.S. exporters and
investors in Vietnam. Through this trade agreement and
provision of NTR status, the U.S. will receive the same status
that Vietnam affords its other trading partners such as the EU,
Australia and Canada.
How does Vietnam receive NTR status under U.S.
Law? In order to receive NTR status from the U.S., the
following criteria must first be met under Title IV of the
Trade Act, as amended: 1) A waiver of the Jackson-Vanik
Amendment must be renewed annually by the President; and 2) the
U.S. and Vietnam must conclude a bilateral trade agreement.
Once a bilateral trade agreement is concluded by the two
governments, it will be submitted to Congress with a request
for the granting of NTR for Vietnam. Nondiscriminatory
treatment can only be extended through a joint ``approval
resolution'' passed by both the House and the Senate. NTR
status for Vietnam would then be subject to annual renewal each
summer through the continuation of the Jackson-Vanik waiver.
Currently, countries that do not have NTR status include
Afghanistan, Cuba, Laos, North Korea, Serbia & Montenegro, and
Vietnam.
What are the Congressional procedures? Pursuant to
Section 152 (b) of the Trade Act of 1974, as amended, an
approval resolution for NTR status is first introduced (by
request) to the House and the Senate and then is referred to
the House Ways and Means Committee and the Senate Finance
Committee. Both the House and the Senate must vote in favor of
NTR for it to be granted. Because Vietnam is a JacksonVanik
country, the NTR request has built in procedures for
Congressional consideration--the agreement cannot be amended
and the request must be voted on by the House and the Senate
within 60 session days from when the President's request is
submitted to Congress, with a maximum of 45 legislative days in
committee and 15 days on the floor within which time a vote
must be taken. Debate on the floor is limited to 20 hours each
for both Houses.
What is the optimal time frame? As other issues
could potentially crowd the agenda for next year, the hope is
the trade agreement can be concluded by summer of 1999 so that
congressional approval process can be completed by the end of
the calendar year.
ATTACHMENT C
March 15, 1999
Ambassador Charlene Barshefsky
United States Trade Representative
600 17th St, NW
Washington, DC 20503
Dear Ambassador Barshefsky,
As members of the American business community, we applaud the hard
work and effort of you and your staff on obtaining a comprehensive
trade agreement with Vietnam and urge that steps be taken towards its
timely completion.
We have been following closely the developments surrounding the
negotiations and feel that a critical juncture has been reached. As
other issues could potentially crowd the agenda for next year, we hope
that real and substantial progress toward the agreement's conclusion
can be made in the next few months so that congressional approval can
be completed this year. This, as you know, is very important for
American companies since the conclusion of a trade agreement, with the
reciprocal extension of Normal Trade Relations (NTR), is an essential
building block for the development of economic ties.
It is our understanding the U.S. has responded positively to
Vietnam's recent proposal which shows progress by the Vietnamese on key
issues. We hope the next round of talks in March 1999 will lead to even
further progress towards reaching agreement.
We look forward to working with you and your staff and stand ready
to actively support your efforts to conclude a comprehensive trade
agreement with Vietnam and to complete congressional approval this
year.
Sincerely,
American Companies:
ABB Inc. Amata (Vietnam) Company Ltd.
America Frontier
American International Group
American Rice American Vietnam Veterans Ltd.
Amrepro Inc.
American Standard Sanitaryware Inc.
American President Lines, Ltd.
Arthur Andersen Vietnam
Asian Fame Development
Baker & McKenzie
Bayer Agritech Saigon
Berkeley Mills
Black & Veatch
The Boeing Company
British-American Tobacco Vietnam
Cargill
Carrier Vietnam Ltd
Caterpillar
Chadwick Marketing Ltd.
Chase Manhattan Bank
Chicago Bridge and Iron Company
CIGNA International
Citigroup
Coca-Cola Indochina
Columbia International Clinic
Commerce Advisory Partners
Connell Bros. Co. Ltd.
CPC Vietnam Ltd.
Craft Corporation
Dat Thanh Ltd. Co.
Delta Equipment and Construction Co.
Dragon Capital Ltd.
Direct Line Cargo
Eastman Chemical Company
Eastman Kodak Company
East West Trade & Investment Inc.
Ecology and Environment Inc.
Ellicott International
Esso Vietnam Estee Lauder
Fashion Garments Ltd.
Fila USA, Inc
Finansa Ltd.
Ford Motor Company
GEMCO Industries
General Electric
Guidant Corporation
Hoffman La Roche
HTE (Vietnam) Co. Ltd.
Iambic, Ltd.
IBM
IPAC Vietnam
Indochina Assg. Management
Industrial Associates
International, Inc.
International Business Center Corporation
International Business Consulting Group
John Hancock Mutual Life Insurance Co.
KHM, Inc.
Law Offices of David Day Leif J. Ostberg, Inc.
Lukemax Company
M & T Vietnam
Malichi International Ltd.
Manna Consultants Inc.
Marriott Hotel Saigon
Manolis & Company Asia
McDermott, Inc.
Mekong Research
Merevry Int'l Group
MIDAS Agronomics Company, Ltd.
Millar and Ngo at Law
Mobil Corporation
Monsanto Motorola, Inc.
New York Life International
NIKE
Novelty (Vietnam) Ltd. Co.
Oracle
Ohsman and Sons Company, Inc.
Otis Saigon Elevator Company Limited
Pacific Architects and Engineers, Inc.
Pacific View Partners, Inc.
Pacmar Inc.
Pac-Mark Pact, Inc.
PAI Corporation
Patton and Co.
Petroleum Equipment Supplies Association
Phu My Hung Corporation
Picnpay Stores Inc.
Polaris Co. Ltd.
Procter & Gamble Pragmatics, Inc.
Price Waterhouse Coopers
Raytheon Company
Rhone-Poulenc Rorer Bangladesh Ltd.
Right Stuff, Inc.
Rollins International
Saigon Investment GAA Ltd.
Saigon Travel Service
Salland Industries Ltd.
Samuels International
Sanofi Vietnam
SAIS-John Hopkins Southeast Asia Studies
Scientific Atlanta Sealand Services, Inc.
Shea and Gardner, Esq.
Sofitel Plaza Saigon
Thermco Hawaii, Inc.
Trade Span International
Transworld Ventures Group Inc.
Triumph International (Vietnam) Ltd.
Unisys Corporation
United Technologies Corporation
Universal Leaf Tobacco Co.
Universal Semiconducter, Inc.
U.S. Trading & Investment Company
VACO Corporation Vietnam Management Fund
Vietnam Venture Group Inc.
Trade Associations:
American Chamber of Commerce, Hong Kong
American Chamber of Commerce, Philippines
American Chamber of Commerce, Shanghai
American Chamber of Commerce, Thailand
American Chamber of Commerce, Vietnam
California-Southeast Asia Business Council
Direct Selling Association
Footwear Distributors & Retailers of America
International Farmers Aid Association
National Association of Manufacturers
National Retail Federation
San Francisco Global Trade Council
Sporting Goods Manufacturers Association
Telecommunication Industry Association
Toy Manufacturers of America, Inc.
US-ASEAN Business Council
U.S. Chamber of Commerce
U.S. Council for International Business
U.S.-Vietnam Trade Council
U.S. Wheat Association
Vietnamese American Business Council
Vietnamese-American Chamber of Commerce of Hawaii
ATTACHMENT D
Chronology of U.S.-Vietnam Relations
------------------------------------------------------------------------
------------------------------------------------------------------------
April 30, 1975............................ North Vietnamese forces take
over the Southern part of
Vietnam, ending the war and
unifying the country.
Washington extends embargo
to all of Vietnam and
breaks diplomatic
relations.
1978...................................... Secret talks between Hanoi
and Washington on
normalizing relations break
down
1988...................................... Under the Reagan
Administration, Vietnam
begins cooperation with
United States to resolve
fate of American servicemen
missing in action (MIA)
September 1989............................ Vietnam completes Cambodia
withdrawal.
April 1991................................ Under the Bush
Administration, Washington
presents Hanoi with
``roadmap'' plan for phased
normalization of ties. The
two sides agree to open
U.S. government office in
Hanoi to help settle MIA
issues.'
April 1991................................ U.S. begins humanitarian aid
projects for war victims to
be administered by U.S.
Agency for International
Development (USAID).
October 1991.............................. Vietnam supports U.N. peace
plan for Cambodia.
Secretary of State James
Baker announces Washington
is ready to take steps
toward normalizing
relations with Hanoi.
December 1991............................. Washington lifts ban on
organized U.S. travel to
Vietnam.
1991...................................... U.S. Congress authorizes the
United States Information
Agency (USIA) to begin
exchange programs with
Vietnam.
April 1992................................ Washington eases trade
embargo by allowing
commercial sales to Vietnam
for basic human needs,
lifts curbs on projects by
U.S. non-governmental and
non-profit groups and
allows establishment of
telecommunications links
with Vietnam.
July 2, 1993.............................. President Clinton clears way
for resumption of
international lending to
Vietnam.
Sept. 13, 1993............................ Clinton eases economic
sanctions to let U.S firms
join in development
projects.
Jan. 27, 1994............................. Senate in favor of a
resolution urging the
Administration to lift
embargo, saying this would
help get a full account of
MIAs.
Feb. 3, 1994.............................. President 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............................. President Clinton announces
``normalization of
relations'' with Vietnam.
Aug. 6, 1995.............................. Secretary of State Warren
Christopher visits Hanoi
and officially opens U.S.
embassy.
May 1996.................................. U.S. presents Vietnam with
trade agreement blueprint.
July 12, 1996............................. U.S. National Security
Adviser Anthony Lake visits
Hanoi to mark first
anniversary of
normalization and press
forward on slow-moving
economic and strategic
ties, stressing that MIA
issue tops Washington's
agenda.
April 7, 1997............................. U.S. Treasury Secretary
Robert Rubin and Finance
Minister Nguyen Sinh Hung
sign accord in Hanoi for
Vietnam to repay debts of
approximately $145 million
which Vietnam assumed from
former government of South
Vietnam.
April 10, 1997............................ Senate confirms Douglas
``Pete'' Peterson, Vietnam
War veteran and former
prisoner of war, as
Ambassador.
April 16, 1997............................ United States and Vietnam
reach agreement on
providing legal protection
for copyright owners.
May 9, 1997............................... Peterson takes up post as
U.S. Ambassador in Hanoi.
May 9, 1997............................... Vietnam's Ambassador to the
United States, Le Van Bang,
arrives to take up post in
Washington, DC
June 1997................................. Secretary of State Madeleine
Albright attends ceremony
to lay cornerstone for U.S.
consulate in Ho Chi Minh
City.
August 1997............................... U.S. government under the
U.S. Agency for
International Development
(USAID) begins a commercial
law program.
October 1997.............................. Vietnam institutes new
processing procedure in
ROVR program significantly
improving progress.
November 1997............................. Vietnam opens consulate in
San Francisco, CA
March 1998................................ U.S. opens talks on a Civil
Aviation Agreement held.
March 10, 1998............................ President Clinton issues
waiver of Jackson-Vanik
Amendment for Vietnam,
paving the way for OPIC,
EXIM, USDA and MARAD
operations.
March 26, 1998............................ Minister of Planning &
Investment Tran Xuan Gia
and Ambassador Pete
Peterson finalize signing
of the OPIC bilateral for
Vietnam.
July 23, 1998............................. The U.S. Senate votes 66-34
to continue funding for the
U.S. Embassy in Vietnam
based on ongoing
cooperation on the POW/MIA
issue.
July 30, 1998............................. The U.S. House of
Representatives votes to
renew the Jackson-Vanik
waiver for Vietnam by a 260
to 163 vote margin.
October 1998.............................. Deputy Prime Minister and
Foreign Minister Nguyen
Manh Cam makes Vietnam's
highest level visit to
Washington since
normalization.
October 1998.............................. Deputy Prime Minister Hanh
visits U.S. for planning
meeting on military-to-
military activities.
October 1998.............................. U.S. and Vietnam agree to
negotiate a Science &
Technology Agreement.
December 28, 1998......................... Bilateral Copyright
Agreement enters into
force.
January 1999.............................. EXIM team visits Vietnam to
negotiate an EXIM bilateral
agreement.
January 29, 1999.......................... The U.S. receives a proposal
from the Vietnamese
indicating substantial
progress on the U.S.-
Vietnam bilateral trade
negotiations.
March 1999................................ The most recent round of
trade talks are held in
Hanoi.
------------------------------------------------------------------------
Chairman Crane. Thank you, Ms. Foote.
Mr. Hwing.
STATEMENT OF Y TIN HWING, MEMBER, MONTAGNARD HUMAN RIGHTS
ORGANIZATION, GREENSBORO, NORTH CAROLINA
Mr. Hwing. Mr. Chairman and Members of the Subcommittee, my
name is Y Tin Hwing. I am a member of Montagnard Human Rights
Organization. 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
participate in today's hearing on the President's proposed
renewal of Vietnam's waiver under Jackson-Vanik amendment to
the Trade Act of 1974.
I arrived in the United States as a refugee just a few
months ago, on February 12, 1999. It has taken me years to get
my exit permission. When I mean years, 7 years, from Vietnam,
from the Vietnamese Government. I now live in Greensboro, North
Carolina, with my wife and two children. I have five children
remaining in Vietnam. During the war with Vietnam, I worked as
a Special Forces combat interpreter, and later I worked for the
U.S. Embassy personnel in Daklak Province. I rose to the rank
of captain. My last job before Saigon fell was protocol liaison
for the Ministry of Ethnic Minorities in Saigon. I was arrested
and put in prison for 9 years as a result of my work with the
United States during the war. The war was so terrible for our
people. More than 1 million Montagnard men, women, and children
were killed, and 85 percent of our villages were destroyed or
abandoned. After the fall of South Vietnam, 20 percent of our
Montagnard people were killed by the Communist forces. Sixty
percent were imprisoned, like myself, and 20 percent joined the
Montagnard Resistance Force.
I think you know the United States Government asked our
people to stand by her in the Vietnam War. We stood side-by-
side, toe-to-toe with our American brothers and sisters with
pride. We sacrificed our lives for the principle of freedom and
American values. Today, your great country is our only hope of
getting our remaining eligible families out of Vietnam. In the
last year since the Jackson-Vanik waiver, the conditions of
emigration for our people are worse. Families continue to
suffer, separated from loved ones.
It is such a privilege to be here today in this free
country. In Vietnam, my Montagnard people and other Vietnamese
citizens do not have the freedom to speak out. Most of our
people live in fear because Vietnam is a police state.
I have with me today, which I will give to the
Subcommittee, the statements of several Montagnard families who
were forced to pay large amounts of money to get their exit
permission. In some cases, they were forced to substitute
Vietnamese children or spouses illegally. Our people are so
poor. Please, understand that they are desperate when they are
split apart from their families and leave a loved one behind.
They only do this because they do not have enough money or land
to sell to the person who offers to help with their exit
papers. Please, understand too, that this process is happening
with the full knowledge from the Vietnamese Government. The
immigration bureau knows who of our people are eligible and
they inform the Vietnamese who are rich to buy a chance for
their child to come to the United States for education. Our
people suffer because they often are afraid. They are
desperate. They lack knowledge. Finally, they see it as the
only way they can get their family out of Vietnam. This is not
right. We should not have to sell our opportunity for a life of
freedom in the United States, after all the suffering our
Montagnard people have endured.
I would like also to mention that the U.S. immigration
policy has made it very difficult too. INS often requires
extensive paper and documentation that our Montagnard people
never had because of our culture and traditions. Many of our
people missed the deadline because they never heard about the
program. They didn't know how to apply, and especially, they
didn't have money to pay the bribe in order to get their exit
permits.
For all these reasons, dear Subcommittee Members, we
Montagnard people need your help to leave Vietnam. We need help
with United States policy and also with the Vietnamese policy
also. Nothing is more precious than families being together.
The Vietnamese Government knows this. It should stop punishing
our people and truly promote goodwill, economic normalization,
and friendship between our two great countries. We came here
today to tell you the truth about the conditions experienced by
our Montagnard people. We sincerely hope that you will hear our
voice. The United States is our best hope for our families and
our people. God bless you and the United States of America.
Thank you.
[The prepared statement follows. Attachments are being
retained in the Committee files.]
Statement of Y Tin Hwing, Member, Montagnard Human Rights Organization,
Greensboro, North Carolina
Mr. Chairman and Members of the Subcommittee. My name is Y
Tin Hwing and I am a member of the Montagnard Human Rights
Organization. I represent the Montagnard people living both in
the U.S. and in the Central Highlands of Vietnam. I would like
to thank Congressman Crane 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.
I arrived in the United States as a refugee just a few
months ago on February 12, 1999. It has taken me years to get
my exit permission from the Vietnamese government. I now live
in Greensboro, North Carolina with my wife and two children. I
have five children remaining in Vietnam. During the war with
Vietnam I worked as a Special Forces combat interpreter and
later worked for U.S. Embassy personnel in Daklak Province. I
rose to the rank of Captain. My last job before Saigon fell was
protocol liaison for the Ministry of Ethnic Minorities in
Saigon. I was arrested and put in prison for nine years as a
result of my work with the United States during the war. The
war was so terrible for our people. More than a million
Montagnard men, women and children were killed and 85% of our
villages were destroyed or abandoned.
After the fall of South Vietnam, 20 % of our Montagnard
people were killed by Communist forces, 60% were put in prison
(like myself) and 20% joined the Montagnard Resistance Force.
I think you know the U.S. government asked our people to
stand by her in the Vietnam War. We stood side by side with our
American brothers and sisters with pride. We sacrificed
ourselves for the principles of freedom and American values.
Today, your great country is our only hope of getting our
remaining eligible families out of Vietnam. In the last year
since the Jackson-Vanik waiver, the conditions for emigration
for our people are worse. Families continue to suffer separated
from loved ones.
It is such a privilege to be here today in this free
country. In Vietnam, my Montagnard people and other Vietnamese
citizens do not have the freedom to speak out. Most of our
people live in fear because Vietnam is a police state.
Those of you on the Trade Subcommittee, along with
Honorable Ambassador Peterson, are concerned about investment
in Vietnam, economic normalization and the United States and
Vietnam being partners in the global community. This is a good
thing. We are for this, too. What you may not realize is that
fear, greed, corruption and distrust control everything in
Vietnam. These negative things are controlling the emigration
process, too.The corruption is not good for business, and it is
not good for Vietnam's people. Vietnam has not fully cooperated
in the last year. Many of our same families still cannot leave
Vietnam because they cannot afford the bribes.
Vietnam has not honored its commitment for free emigration
for all its citizens. If we really want to help Vietnam be an
equal partner in the world community, is it not right to expect
it to honor its word? That is good business. We want Vietnam to
develop fully with trade. Yet, we also want the country of our
birth to honor its word and live up to agreements set forth
between the U.S and Vietnam. Families have a right to be
together.
I have with me today which I will give to the Committee,
the statements of several Montagnard families who were forced
to pay large amounts of money to get their exit permission. In
some cases they were forced to substitute Vietnamese children
or spouses illegally. Our people are so poor. Please understand
that they are desperate when they split apart their families
and leave a loved one behind. They only do this because they do
not have enough money or land to sell to the person who offers
to help them with their exit papers. Please understand, too,
that this process is happening with full knowledge from the
Vietnamese government. The immigration bureau knows who of our
people are eligible and they inform Vietnamese who are rich to
buy a chance for their child to come to the U.S. for education.
Our people suffer because they often are afraid, they are
desperate, they lack knowledge and finally, they see it as the
only way they can get their family out of Vietnam. This is not
right. We should not have to sell our opportunity for a life of
freedom in the U.S. after all the suffering our Montagnard
people have endured.
I would like to also mention that the U.S. immigration
policy has made it very difficult, too. INS often requires
extensive paperwork and documentation that our Montagnard
people never had because of our culture and traditions. Many of
our people missed the deadline because they never heard about
the program, they didn't know how to apply and especially, they
didn't have the money to pay the bribes in order to buy their
exit permits.
For all these reasons, dear Committee members, we
Montagnard people need your help to leave Vietnam. We need help
with U.S. policy and with Vietnam's policy. Nothing is more
precious than families being together. The Vietnamese
government knows this. It should stop punishing our people and
truly promote goodwill, economic normalization and friendship
between our two great countries. We came here today to tell you
the truth about the conditions experienced by our Montagnard
people. We sincerely hope that you will hear our voice. The
United States is our best hope for our families and our people.
Chairman Crane. Thank you, Mr. Hwing.
Mr. Johnson.
STATEMENT OF LIONEL C. JOHNSON, VICE PRESIDENT AND DIRECTOR,
INTERNATIONAL GOVERNMENT RELATIONS, CITIGROUP INC.
Mr. Lionel Johnson. Thank you, Mr. Chairman. I would like
to express my appreciation for the opportunity to appear before
the Subcommittee today regarding United States and Vietnam
trade relations, and specifically, the proposed renewal of the
President's waiver of Jackson-Vanik. I would like to
particularly thank the distinguished Member from New York, Mr.
Rangel, for his very kind words of introduction.
I have prepared a written statement setting forth the
details of our largest subsidiary, Citibank's, operations in
Vietnam. Given today's lengthy witness list, I would ask that I
be permitted to submit it for the record. I will at this moment
make just a few very brief comments.
Mr. Chairman, disapproval of the President's Jackson-Vanik
waiver for Vietnam at this time would be devastating. Despite
many fits and starts, we have made very significant progress in
our bilateral relationship over the past few years. We have
done so with the bipartisan support of the Congress of the
United States. The Vietnamese have worked diligently to address
many concerns that we have raised during this process, and
disapproval would undermine the progress and would undercut the
efforts of Vietnamese reformers who are advocating for more
openness, more engagement for the international community, and
more liberalization in economic affairs.
It is important that we focus as well on the next major
issue coming down the pike. That is the bilateral trade
agreement that the Ambassador earlier indicated could be
reached this year. This agreement is critical to continued
progress in our bilateral economic relationship, and concluding
the negotiations will be a complicated exercise, but I believe
the U.S. negotiators under the able leadership of Joe Damond of
USTR are up to the task. They are to be commended for the great
progress that they have made thus far under very challenging
circumstances.
I am acutely aware, however, that the trade accord will
face a tough road in Congress. It will require strong
leadership from this Subcommittee and others in Congress to
move it forward to enactment. I urge you to make that effort,
however, and I assure you that we in the business community
will make every effort to support you and will be there working
along side you.
Mr. Chairman, and Members of the Subcommittee, the decision
the Congress will make on these issues will have a significant
and lasting impact on our bilateral relations with Vietnam. As
a representative of Citigroup, I urge you to reject the
resolution of disapproval and allow the President's waiver of
the Jackson-Vanik amendment to stand.
Thank you.
[The prepared statement follows:]
Statement of Lionel C. Johnson, Vice President and Director,
International Government Relations, Citigroup Inc.
Mr. Chairman, members of the subcommittee, my name is
Lionel C. Johnson, and I am Vice President and Director of
International Government Relations of Citigroup Inc. I
appreciate this opportunity to appear before you regarding the
importance of normalizing U.S.-Vietnam trade relations. I wish
to specifically address the importance of renewal of the
President's waiver of the Jackson-Vanik Amendment with regard
to Vietnam.
Citigroup's largest subsidiary, Citibank, has operated 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 for business there in January 1995. Since that
time, 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 services. Negotiations toward a trade agreement have
been moving forward at a significant pace and, as Ambassador
Peterson has underscored, we may even see an agreement
concluded this year.
In less than four years, Citibank has become the largest
foreign bank in the country. We also have played a leading role
in the American business community and have fully encouraged
normalized relations between our two countries. We believe that
our efforts have helped the Administration to make progress in
other areas, as well, including achieving the fullest possible
accounting of POW/MIAs.
Vietnam holds great 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 infrastructure
and human development needs, Vietnam is a country that deserves
our attention, and more importantly, our support for the reform
process currently underway.
Although significant opportunities exist for firms seeking
to do business in Vietnam, U.S. companies have been
disadvantaged in comparison to our competitors from other
countries for several reasons.
First, because the United States did not have diplomatic
relations with Vietnam until 1994, our business engagement
lagged behind that of companies from other parts of the world
that had been there for several years.
Second, the lack of a bilateral trade agreement and normal
trade relations 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.
Third, U.S. firms have been hampered by their inability to
access government-backed financing and insurance from the
Export-Import Bank and the Overseas Private Investment
Corporation. America's private sector would simply not be
competitive in Vietnam without access to Eximbank and OPIC
programs. Our European and Asian competitors have dedicated
significant government resources 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 produced in the
United States. And that means the jobs that would have been
created here to build those products will instead go to those
countries.
Since the President issued his waiver of Jackson-Vanik last
spring, we have made significant strides toward providing U.S.
companies with financing support in Vietnam. OPIC is now
operating in Vietnam, and Ex-Im is moving toward completion of
the steps needed to begin operations.
Mr. Chairman, disapproval of the President's Jackson-Vanik
waiver for Vietnam at this time would be devastating. Despite
many fits and starts, we have made significant progress in our
bilateral relationship in the past few years. And we have done
so with the bipartisan support of the United States Congress.
The Vietnamese have worked diligently to address the many
concerns that we have raised during this process. Disapproval
would undermine this progress and would undercut the efforts of
Vietnamese reformers who are advocating for more openness, more
engagement with the international community, and more
liberalization in economic affairs.
It is important that we focus as well on the next major
issue coming down the pike--the bilateral trade agreement that
the Ambassador indicated could be reached this year. This
agreement is critical to continued progress in our bilateral
economic relationship. Concluding the negotiations will be a
complicated exercise but I believe that our negotiators, under
the able leadership of Joseph Damond, are up to the task. They
are to be commended for the great progress they have made so
far, under challenging circumstances.
I am acutely aware, however, that the trade accord will
face a tough road in Congress. It will require strong
leadership from members of this subcommittee and others in
Congress to move it forward to enactment. I urge you to make
that effort, and I assure you that we in the business community
will be working alongside you.
Mr. Chairman and members of the subcommittee, the decision
that Congress makes on this issue will have significant and
lasting impact on our bilateral relations with Vietnam. As a
representative of Citigroup, I urge you to reject the
resolution of disapproval and allow the President's waiver of
the Jackson-Vanik Amendment to stand.
Thank you.
Chairman Crane. Thank you, Mr. Johnson.
Mr. Bower.
STATEMENT OF ERNEST Z. BOWER, PRESIDENT, US-ASEAN BUSINESS
COUNCIL, INC.
Mr. Bower. Mr. Chairman, thank you for the opportunity to
testify before your Subcommittee today. I am the president of
the US-ASEAN Business Council, which represents over 400
American companies and States. We have members in every state
of this country.
ASEAN is the Association of South East Asian Nations,
including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar,
the Philippines, Singapore, Thailand, and last, Vietnam. That
10-country market is our third largest market for the United
States, and Vietnam is an important part of that market.
On behalf of the more than 400 member companies of the
council, I would like to say that we are committed to building
and strengthening the United States-Vietnam relationship. We
view strong commercial relations as an integral part of that
bilateral relationship.
We have seen progress in Vietnam in the last 10 years. I
would like to note that we have seen the regularizing of
diplomatic relations in 1995, Vietnam joined ASEAN in the next
year. We have exchanged United States Ambassadors and
Vietnamese Ambassadors in 1997, and Vietnam joined APEC, the
Asia Pacific Economic Cooperation Forum, which Ambassador
Peterson mentioned, in 1998, just last year.
We do see change in Vietnam. I was there in November with
10 senior officers of American corporations. We had extensive
talks with Vietnam's leadership, including political, trade,
and business leadership. We saw there a commitment to reform
and to integrate into the regional market and to the world
market. We want to support this commitment to reform. We hope
that you will do so by renewal of the Jackson-Vanik waiver for
Vietnam.
I have made more extensive comments in my testimony, which
I hope to submit to the record. I will try to be brief in light
of so many witnesses. But I would like to make several points.
We believe that the waiver promotes United States commercial
interests in Vietnam in the following ways. Without the support
of Ex-Im and OPIC, U.S. companies would be at a distinct
disadvantage vis-a-vis our competition, which rely heavily on
their own export credit agencies in the market.
Also, failure to renew the Jackson-Vanik waiver would put
U.S. policy and U.S. commitment to an important member of the
ASEAN group in question among the ASEAN members. The U.S.
companies would be hurt in their ability to take advantage of
the ASEAN free trade area market, which as I mentioned earlier,
consists of 10 countries, original market of well over 500
million people, a GDP approaching $1 trillion. As I mentioned
before, ASEAN is our third largest overseas market, and it is
our fastest growing major market, taking a 150-percent increase
in U.S. exports to that region between 1990 and 1997.
We also believe that the waiver for Jackson-Vanik is a
crucial step to the accelerating momentum for the completion of
a bilateral trade agreement this year. The United States-
Vietnam trade agreement sets high standards in the area of
labor practices, market openness, and investment
protections. With this formal government-to-government
agreement in place, Vietnam would have the framework to change
policy. This is important because we believe that they do want
to change their policies, but they need our help to make that
possible. Without the waiver, the U.S. business community faces
the prospect of a delay in the trade agreements' long-awaited
provisions on reform of tariff levels and nontariff barriers,
intellectual property rights, investment and services. By
renewing the waiver, the United States creates a positive
environment for Vietnam to commit the necessary economic
reforms, and complete the negotiations this year.
I would finally like to say that one thing this council
stands very strongly for is the fact that United States
companies, when operating in Southeast Asia, and Vietnam is no
exception, raise the level of commitment to areas such as
environmental rights, worker rights, labor practices, fair
labor standards, and human rights. We believe that a job is a
human right. We believe that by participation in the rest of
Southeast Asia, that U.S. companies have raised the levels in
these important areas in the last 30 years. U.S. companies
train workers and transfer technology more readily than our
competitors, and we promote democratic values, set a positive
example, and improve the general quality of life by providing
fair pay, safe working conditions, and health and education
benefits.
The Jackson-Vanik waiver is an essential component for our
continued progress in the bilateral relationship in the areas I
have just mentioned, and in the advancement of United States
commercial, social, and political interests in Vietnam. For
these reasons, the U.S. business community represented by the
US-ASEAN Business Council, stands firmly in support of the
waiver.
Thank you, Mr. Chairman.
[The prepared statement follows:]
Statement of Ernest Z. Bower, President, US-ASEAN Business Council,
Inc.
Thank you, Mr. Chairman, for the opportunity to testify
before your Subcommittee. My name is Ernest Z. Bower. I am the
President of the US-ASEAN Business Council, a private, non-
profit organization which works to expand trade and investment
between the United States and the member countries of ASEAN, an
acronym for the Association of Southeast Asian Nations. ASEAN
members include Brunei Darussalam, Cambodia, Indonesia, Laos,
Malaysia, Myanmar (Burma), the Philippines, Singapore,
Thailand, and Vietnam.
On behalf of the more than four hundred companies and
states the Council represents, many of whom are heavily
involved in the development of Vietnam's market economy, the
US-ASEAN Business Council has long promoted strong US-Vietnam
commercial relations. We view strong commercial relations as an
integral part of the bilateral relationship.
Despite Vietnam's great potential and the qualitative ways
the U.S. private sector can contribute to the country's
economic development, the prospects for the U.S.-Vietnam
commercial relationship have until recently been somewhat
stagnant. These times have tested the patience of those wanting
to become more involved in the country's development. The
government of Vietnam continues to deliberate on how much
economic and political control it should cede as the country
makes the difficult transition between a centrally planned
system and a true market economy, and as it becomes more
involved in the international marketplace.
The encouraging news is that the government of Vietnam
has--within the last six months--given clear signals to the
foreign business community that it wants to be more responsive
to investor concerns. Consultations with government officials
are becoming more commonplace and systematic, while the tenor
of these discussions has become more frank and open. This
progress has taken place within the context of increased levels
of understanding and cooperation between both our countries to
produce a viable Bilateral Trade Agreement (BTA).
To sustain this momentum, and in light of its benefits to
the US-Vietnam bilateral relationship, U.S. commercial
interests, and the promotion of U.S. socio-political objectives
in Vietnam, the US-ASEAN Business Council fully supports
renewal of the Jackson-Vanik waiver.
1. The waiver promotes continuing normalization of
bilateral relations between the U.S. and Vietnam--an objective
of all parties.
Throughout the process of normalization of relations
between the United States and Vietnam, both sides have sought
to build confidence by undertaking actions that show commitment
to progress. For the Vietnamese, this has included working
toward adapting their commercial and legal practices to be more
in line with international standards. President Clinton's
decision to waive the Jackson-Vanik amendment last year
signaled to the Vietnamese our willingness to further normalize
our relations. Failure to renew the waiver would send a
negative message to Hanoi and call into question our
intentions. Renewing the waiver will signal U.S. confidence
that our two countries can work together on areas of mutual
benefit toward conclusion of the BTA and beyond.
2. The waiver promotes U.S. commercial interests in a large
emerging market by:
a. Supporting the competitiveness of US business in
Vietnam. The Jackson-Vanik waiver allows for the operation of
the Export-Import Bank of the United States (Ex-Im) and the
Overseas Private Investment Corp. (OPIC) in Vietnam. Without
the support of these government agencies, U.S. companies would
be at a distinct disadvantage to foreign companies which rely
heavily on their own export credit agencies for market
penetration. There is a close correlation between the
activities of trade support agencies and market share.
b. Distributing to both countries the benefits of increased
bilateral trade and investment. Allowing Ex-Im and OPIC to
continue to operate in Vietnam would undoubtedly increase the
level of commerce between the two countries, benefiting each.
For the Vietnamese, greater interaction means more products for
their consumers, access to technology and capital, and new
investment. For the United States, we look forward to increased
export and investment opportunities, more export-related jobs,
and greater confidence in long-term business prospects. US
companies would also be able to take advantage of Vietnam's
commitment to the ASEAN Free Trade Area (AFTA) and other
regional economic cooperation agreements to access ASEAN's ten
(10) country market, which comprises over 500 million people
with a GDP approaching US $1 trillion dollars.
c. Accelerating the momentum for completion of a Bilateral
Trade Agreement this year. The U.S.-Vietnam trade agreement
sets high standards in the areas of labor practices, market
openness and investment protections. With this formal
government-to-government agreement in place Vietnam would have
the framework to change policy. Without the waiver, the US
business community faces the prospect of a delay in the Trade
Agreement's long-awaited provisions on reform of tariff levels
and non-tariff barriers, intellectual property rights,
investment, and services. By renewing the waiver, the United
States creates a positive environment for Vietnam to commit to
necessary economic reforms and complete the BTA negotiations
this year.
d. Encouraging Vietnam, and by extension the other members
of ASEAN, to maintain trade and investment liberalization
commitments. Vietnam has made progress in adapting to
requirements of regional groupings such as ASEAN and the Asia-
Pacific Economic Cooperation (APEC) which it joined late last
year. The Jackson-Vanik waiver, coupled with a trade agreement,
will bring home to Vietnam the advantages of this commitment as
it qualifies for Normal Trading Relations status with the
United States.
3. The waiver promotes the activities of US corporations
that facilitate the sociopolitical reform process. Engagement
is the most effective way for the United States to contribute
to real improvements in human rights, workers rights and the
standard of living in Vietnam. With the Jackson-Vanik waiver
supporting Ex-Im and OPIC operations and the completion of the
trade agreement, US companies can increase their engagement and
improve their competitive position.
The presence of U.S. companies abroad helps to promote the
values we as a nation espouse, including human rights,
environmental protection and fair labor standards. U.S.
companies train workers and transfer technology more readily
than any of their competitors. American companies promote
democratic values, set a positive example, and improve the
general quality of life by providing fair pay, safe working
conditions, and health and education benefits. Please note that
these efforts to promote American values help our companies
become more profitable in foreign countries. Open societies and
economies are more transparent and wealthy, creating more
opportunities and customers for American goods and services.
American foreign investment is an extremely effective means
of advancing economic and social development, and should not be
abandoned in favor of measures which have no chance of success.
Indeed, impeding what economic engagement America has with
Vietnam by revoking the Jackson-Vanik waiver will have no
positive impact on the daily lives of the people there and may,
in fact, hurt the cause of political reform by removing an
incentive for liberalization.
The Jackson-Vanik Waiver is an essential component for
continued progress in the bilateral relationship and the
advancement of US commercial and socio-political interests in
Vietnam. For these reasons, the US business community stands
firmly in support of the waiver.
Thank you for the opportunity to share my thoughts with you
today.
Chairman Crane. Thank you. For the entire panel, how do you
think the Vietnamese would respond if the President's Jackson-
Vanik waiver were overturned?
Mr. Thang. Mr. Chairman, we are not talking about denying
Vietnam permanently that waiver. We are only suggesting that we
should postpone the approval of the waiver until after Vietnam
has taken steps to reform its system, very corrupt system.
Other presenters have mentioned about disadvantages to
United States companies in doing business in Vietnam without
the waiver. However, I think that the greater disadvantage is
caused by corruption. It is illegal under our law to pay bribes
to foreign governments. It is not the same standard for other
ASEAN companies doing business in Vietnam. We're being placed
at disadvantageous situation there.
I am just asking that we should request preconditions to
granting the waiver to Vietnam. That would be an incentive for
Vietnam to move forward with reforms.
Ms. Foote. I obviously have a different view. I think it
would be an enormous shock to Vietnam if we did not renew the
Jackson-Vanik waiver. I think it would send the bilateral
relationship into a complete tailspin. It is a small thing in
that it does not, unlike China, it does not grant Vietnam MFN
status. In a sense, we have not achieved a lot of what Jackson-
Vanik will be about a year from now. Ex-Im and OPIC have small
programs going on in Vietnam. They are not big programs.
On the other hand, it is a crucial part of the overall
process of normalization that has been worked on by the two
governments together for 10 years. It has been step-by-step,
inch-by-inch sometimes. To now pull out a piece that was worked
on so hard and which has proven to have been the right decision
a year ago, there are, as Ambassador Peterson and Senator Kerry
pointed out, there are concrete things to point to that have
happened in the last year on POW issue, on emigration, and on
trade, that have been steps very much in the right direction,
very much in favor of continuing the normalization process. For
us to pull out this peg now I think would be devastating.
Chairman Crane. Mr. Hwing.
Mr. Hwing. Sir, I think it is a good opportunity for the
United States to have some sort of trade with Vietnam, because
Vietnam in general has suffered badly during the war. So now I
think it is about time to reconcile and then get things back on
track.
Thank you, sir.
Chairman Crane. Mr. Johnson.
Mr. Lionel Johnson. Mr. Chairman, I think that the waiver
of the Jackson-Vanik with regard to Vietnam undergirds the very
important relationship that we have between our two countries,
a relationship that is clearly at a crossroads. We have a great
opportunity to continue moving it forward toward full
normalization.
I would agree with Ms. Foote that the denial would set our
relationship back many, many years, and I think would send a
signal to Vietnamese reformers that their efforts have not been
understood and appreciated in the West, and particularly by the
United States, a country with whom most Vietnamese would like
to have a very strong bilateral relationship.
Chairman Crane. Mr. Bower.
Mr. Bower. I would just say that it is not easy work being
involved in the process of change. Vietnam is clearly a country
that is undergoing enormous change right now. U.S. companies by
being involved and the U.S. Government by their involvement,
led by Pete Peterson, are doing very hard work. We need the
Jackson-Vanik waiver to be able to do that hard work. If we
failed to renew, I think the Vietnamese would--we would be
sending them a mixed signal that would not only send efforts to
extend cooperation and engagement backward probably several
years, but it would also send the same signal, as I mentioned
in my testimony, to their neighbors in Southeast Asia, which as
I hope I have made the case, is a very important market to this
country, and will be the source of a lot of creation of jobs
and wealth for us and for them in the coming decade.
Chairman Crane. Thank you.
Mr. Rangel.
Mr. Rangel. Mr. Johnson, what effort, if any, is Citibank
conducting in normalization of our trade relations with Cuba?
Mr. Lionel Johnson. I think what we have done with regard
to Cuba, I think has to be regarded in the context of our
overall efforts to bring some rational thinking and new
thinking, fresh approach to the use of unilateral economic
sanctions as an instrument of foreign policy. We have, over the
last 3 years since I have been in this position, been a leader
of USA Engage Coalition, which has been in the forefront, Mr.
Rangel, of efforts to change the means by which the U.S.
Government, that is, the executive branch and the legislative
branch, impose sanctions.
Mr. Rangel. That's generally. But have you done anything
specifically as it relates to Cuba?
Mr. Lionel Johnson. As it relates to Cuba, we have
participated in a number of discussions here in Washington and
in the community in Florida, where we have a large operation,
about the political developments there. We have not, however,
we do not have operations, we do not have a presence clearly in
Cuba. But we have been in the forefront of the dialog that has
been taking place in policy circles here in the United States
to take a fresh approach to the use of sanctions and
particularly with regard to the Helms-Burton law, which we
regard as----
Mr. Rangel. Please send to me all of the efforts that
Citibank has made as it relates to Cuba.
[The information was not available at the time of
printing.]
Mr. Rangel. Ms. Foote, what is the requirement to be a
member of the council that you represent?
Ms. Foote. Membership dues. It is a membership
organization, like other bilateral trade associations.
Mr. Rangel. They must have a vested interest in businesses
in Vietnam or just an interest in wanting to do business in
Vietnam?
Ms. Foote. I would say most of our members are actually
doing business or have an office in Vietnam. They may be
representative offices. They might not have contracts yet, but
they are certainly all interested in doing business there.
Mr. Rangel. But would some of these be multinationals doing
business in other countries?
Ms. Foote. I would say all of them are multinationals.
Mr. Rangel. My question to you and Mr. Bower will be very
much what I am asking Mr. Johnson. That is, most everything
that you have said about the good that can come to the
Vietnamese people through exchange and engagement and trade,
and I assume that the same thing should apply to Cuba.
Ms. Foote. I don't know much about the Cuba relationship,
but I do know that I have been asked by----
Mr. Rangel. When did you learn about Vietnam, when they
hired you? I mean did you have any training at all in trade and
what it means or is it just that you----
Ms. Foote. On international trade issues. I only learned
about Vietnam starting 10 years ago when I was part of founding
the organization. Actually there are quite a few companies that
are interested in forming a similar council to the United
States-Vietnam Trade Council who have come to me recently
asking for information on what are the similarities, how did we
operate.
Mr. Rangel. But you are an international trade expert, not
just one?
Ms. Foote. I would say I have become a Vietnam trade
expert, though.
Mr. Rangel. But you put in your testimony the countries
that we don't have----
Ms. Foote. Yes. There is a list of non-MFN countries, yes.
Mr. Rangel. I'm asking, do you know of any reason why all
of the good that can come to Communist Vietnam, why the same
thing wouldn't apply to Communist Cuba?
Ms. Foote. Personally, I agree with you.
Mr. Rangel. Mr. Bower
Mr. Bower. I agree too. I think Lionel Johnson mentioned
the effort through USA Engage to fight sanctions. I would stand
up behind this engagement argument. I, like Ms. Foote, am not
familiar in detail about the Cuba relationship, spending most
of my time on Southeast Asia, but I think we could give a lot
of examples to people who were interested in Cuba about how
engagement has really facilitated change in the countries that
I work on.
Mr. Rangel. It is my personal and political opinion that
trade associations could enhance their credibility if they
brought to this Congress how expanded trade and engagement
helps the United States of America rather than the specific
self interests that businesses would have as it relates to a
particular country. Because it could very well be that if you
are paid just to represent countries in order to expand their
trade and profits, then the argument as to what good it is to
America as opposed to what good it is to your clients may be
lost.
But if indeed what you are saying is that for a better
world and a stronger America, that what you are saying about
Vietnam is true with most countries that we are trying to
expand our influence by showcasing American capitalism, then we
would know that in addition to representing your clients, that
you are representing the best interests of the United States.
I think businesses, unlike politicians, who have to go for
votes, don't have to bend to what's popular, but can stick to
what really works for business and explaining what works for
us.
Thank you all so much for your testimony.
Dr. Thang.
Mr. Thang. Yes. I would like to request 1 minute to make a
comment on the previous question by the Chairman. I agree with
Ms. Foote that disapproval of the waiver at this moment would
send a shock to the Vietnamese Government. I believe that it is
time for the Vietnamese Government to get a shock treatment.
Here are the reasons why. Vietnam, based on some of the
statistics that I have here, Vietnam has the highest piracy
rate in the world, standing at 97 percent. Vietnam is the least
transparent system in the region. Vietnam has the least freedom
of the press in the region, much worse than even China,
Communist China.
I would like to quote some of the authorities on Vietnam
issues. For instance, Edouard Wattez, the UNDP representative
in Hanoi, in an interview with South China Morning Post in
November 1998, said that ``Ironically and worrisome when
looking back, the pace of reform appears to have slowed since
1993, when aid began to arrive in large amounts to Vietnam.''
Another quote from former Prime Minister of Vietnam, Pham
Van Dong, ``There are many bad people who occupy high positions
in the party, state organs, and mass organizations, who have
power in their hands. They are degraded, they are chasing
power, money, and benefits.'' That statement was made on May
15, 1999.
Finally, a statement by the representative of the European
Union, Wolfgang Erck. ``Reform policy has been slowed down and
economic policy is less courageous than it was at the beginning
of the nineties. We have the impression that there is less
tolerance now, more limitations for the press and religious
communities, and we have concerns of other sectors such as
political prisoners.'' He made this statement last week.
To wrap up, I believe that it is time to send a very strong
signal to Vietnam that they will have to be very serious, they
cannot thumb their nose at us. They cannot flaunt our laws.
They cannot continue to victimize the refugees. Corruption, the
rampant corruption in the emigration process, may undermine our
national security.
Thank you, Mr. Chairman.
Chairman Crane. I want to thank you, and I want to thank
all of the witnesses for your presentations today. We
appreciate the input, and just because you won't be sitting in
a panel before the Subcommittee does not mean we don't want
your ongoing input. So please stay in communication with us
all.
With that then, let me adjourn this panel and invite our
final panel to come to the dias: Trung Trinh, executive
director, Vietnamese American Business Council; Diem Do,
cochairman, Coalition Against the Jackson-Vanik Waiver; L.
Craig Johnstone, senior vice president, International,
Economic, and National Security Affairs, U.S. Chamber of
Commerce; Lynn O'Shea, New York State director, National
Alliance of Families for the Return of America's Missing
Servicemen, and Greig Craft, vice chairman, Asia-Pacific
Council of the American Chambers of Commerce.
If you will all be seated in the order in which I
introduced you. Let me remind you all again, if you can please
keep your oral presentations to 5 minutes or less. Your written
statements will all be made part of the permanent record. We
will proceed in the order in which I presented you.
Mr. Trinh, you are first.
STATEMENT OF TRUNG TRINH, EXECUTIVE DIRECTOR, VIETNAMESE
AMERICAN BUSINESS COUNCIL
Mr. Trinh. Good afternoon, Chairman Crane, and Congressman
Rangel. My name is Trung Trinh. I am the executive director of
the Vietnamese American Business Council. Thank you for giving
me the opportunity to speak with you on the United States-
Vietnam trade relations.
VABC was established in 1998 to provide members with
networking opportunities in order to develop businesses in
Vietnam. VABC members are small and medium-sized American
companies, many of which have been doing business in Vietnam
since the lifting of the United States trade embargo in 1994. A
list of our members and individuals of VABC has been provided
with our written statement.
I came to this country in 1981 as a refugee. I settled in
Northern Virginia with my family and worked for the Fairfax
County government for 8 years as a human resources specialist,
and then for various organizations and companies before
starting my own business in 1990. As a Vietnamese-American
entrepreneur, I was excited at the decision of the United
States Government to lift the trade embargo with Vietnam in
1994. Seeing the potential, I decided to go back to Vietnam to
explore business opportunities.
In 1995, I opened and operated the first American product
showroom in Ho Chi Minh City with the cooperation of the
Foreign Trade and Investment Development Center in that city.
One of the goals of the showroom was to provide small and
medium-sized American companies with a cost-effective way to
display and market their products there. The showroom was not
successful for a number of reasons. The most obvious reason was
the lack of financing. Vietnamese buyers could not afford to
buy the products. Hopefully, this problem will be alleviated
with the help of OPIC and Ex-Im Bank.
I was also involved with the negotiation of a joint venture
project to set up an aircraft component repair and overhaul
station in Vietnam. The negotiation was successful. A business
cooperation contract was signed between an American company and
a Vietnamese aircraft repair station. However, the project has
been canceled due to the lack of financing on the American
part.
Lately, recognizing the need for business training in
Vietnam, myself and a number of organizations in the United
States have implemented a hotel management internship program
in which Vietnamese students are placed in an on-the-job
training program in the United States. The program has been
very successful and it's still going on.
During the course of doing business in Vietnam, I
recognized the challenges and the frustration of small and
medium-sized American companies in developing business in
Vietnam. One of the main reasons is the lack of money in
Vietnam for financing and for the purchase of American goods
and services. My former country remains a poor country over 25
years after the war. Another reason is the lack of practical
experience in Vietnam. Small American companies cannot afford
to put the people on the ground in Vietnam for a long period of
time just to gain the experience.
VABC was founded in February 1998 by a group of American
companies and entrepreneurs. It is a response to the need that
I saw in trying to do business in Vietnam just after the
embargo was lifted. VABC provides a vehicle for our small and
medium-sized members to share their experiences and avoid
costly mistakes. In spite of difficulties in doing business in
Vietnam, VABC and its members are committed to pursuing
business opportunities in Vietnam. Our members are currently
involved in over 15 projects. I have submitted a list of the
more important projects to the Subcommittee.
Trade is a two-way street. For Vietnam to do business with
the United States, it needs hard currency that it will only
obtain by economic development. Exports will play a larger role
in this development. By normalizing the trade relations with
Vietnam, Vietnam will be able to export. By exporting, Vietnam
will be able to afford American products and services which
they want very much. Therefore, we urge you to consider the
renewal of the waiver of the Jackson-Vanik amendment, and that
you support the successful negotiations of the bilateral trade
agreement.
We believe that a mutually beneficial trade relationship is
important to both countries and should be given a high
priority. We should stop dwelling on the past and move forward
to the future. Again, I appreciate the chance to speak in front
of you on behalf of the Vietnamese American Business Council.
Thank you.
[The prepared statement follows:]
Statement of Trung Trinh, Executive Director, Vietnamese American
Business Council
Good morning. My name is Trung Trinh. I am the Executive
Director of the Vietnamese American Business Council (VABC).
Thank you for giving me this opportunity to speak with you on
US Vietnam trade relations.
VABC was established in 1998 to provide its members with
networking opportunities in order to develop businesses in
Vietnam. VABC members are small and medium-sized American
companies many of which have been doing business in Vietnam
since the lifting of the US trade embargo in 1994. A list of
the member companies and individuals of VABC has been provided
with our written statement.
I came to this country in 1981 as a refugee. I settled in
Northern Virginia with my family and worked for the Fairfax
County government for 8 years as a Human Resource Specialist
and then for various organizations and companies before
starting my own business in 1990 .
As a Vietnamese American entrepreneur, I was excited at the
decision of the US government to lift the trade embargo with
Vietnam in 1994. Seeing the potential, I decided to go back to
Vietnam to explore business opportunities.
In 1995, I opened and operated the first American product
showroom in Ho Chi Minh City with the cooperation of the
Foreign Trade and Investment Development Council of the city.
One of the goals of the showroom was to provide small and
medium-sized American companies with a cost-effective way to
display and market their products there. The showroom was not
successful for a number of reasons. The most obvious reason was
lack of financing. Vietnamese buyers could not afford to buy
the products or set up inventories. Hopefully, this problem
will be alleviated with the help of OPIC and the EXIM Bank.
I was also involved with the negotiation of a joint venture
project to set up an aircraft component overhaul and repair
station in Vietnam. The negotiation was successful. A Business
Cooperation Contract was signed between the American company
and a Vietnamese aircraft repair station. However, the project
has been cancelled due to the lack of financing.
Lately, recognizing the need for business training in
Vietnam, I have implemented a Hotel Management Internship
program in which Vietnamese students are placed in an American
On the Job Training program. This program has been very
successful.
During the course of doing business in Vietnam, I
recognized the challenges and the frustrations of small and
medium-sized American firms in developing business
opportunities there. One of the main reasons is the lack of
money in Vietnam for financing and for the purchase of US goods
and services. My former country remains a poor country over
twenty years after the war. Another reason is the lack of
practical experience in Vietnam. Small US companies cannot
afford to put people on the ground in Vietnam for long periods
just to gain experience.
VABC, which was founded in February of 1998 by a group of
American companies and entrepreneurs, is a response to a need
that I saw in trying to do business in Vietnam just after the
embargo was lifted. VABC provides a vehicle for our small and
medium-sized company members to share their experiences and
avoid costly mistakes.
In spite of difficulties in doing business with Vietnam,
VABC and its members are committed to pursuing business
opportunities in Vietnam. Our members are currently involved in
over 15 projects. I have submitted a list of the more important
projects to the Committee.
Trade is a two way street. For Vietnam to do business with
the US, it needs hard currency that it will only obtain by
economic development. Exports will play a large role in this
development. By normalizing the trade relations with Vietnam,
Vietnam will be able to export and by exporting Vietnam will be
able to afford American products and services, which they want
very much.
Therefore, we urge you to consider the renewal of the
waiver of the Jackson-Vanik amendment and that you support the
successful negotiation of the bilateral trade agreement.
We believe that a mutually beneficial trade relationship is
important to both countries and should be given a high
priority. We should stop dwelling in the past and move forward.
Again, I appreciate the opportunity to speak on behalf of
the Vietnamese American Business Council.
Attachment A
PARTIAL LIST OF VABC'S MEMBERS AND ASSOCIATES
Ablondi, Foster, Sobin and Davidow, Washington DC
Charter Resources International, LC, Richmond, VA
Council on International Educational Exchange, Hong Kong
Engineering Management Services, Inc., Vienna, Virginia
Global Spectrum, Washington DC
J.R. Short Milling Co., Chicago, IL
MC Pacific, Westminster, California
Ocoran Corporation, Arlington, Texas
Pacific Affairs Associates, Honolulu, Hawaii
Pacific Trading Company, Portland, OR
Peter Vogt & Associates, Inc., Washington DC
Prolific Systems, Freemont, California
PV Hotel International Consultants, Washington DC
SouthEast Services, Westminster, California
Vietnam Development Partners, LLC, Denver, Colorado
Vietnam Resource Group, Washington DC
VINA Express Corporation, New York, New York
Vitech, Seattle, Washington
Worldwide Marketing Group, Inc., Rockville, Maryland
Individual Members:
Leo Dorsey, Harrisburg, PA
Jeff Farrell, Coldwell Banker, Santa Barbara, CA
Quang Nguyen, San Jose, CA
Phung Vu, Washington DC
Non-resident Members:
Central Club of Directors, Ha Noi, Vietnam
Hoang Le Corporation, Ha Noi, Vietnam.
Phuong Hong Pte., HCM City, Vietnam
Attachment B
TYPICAL PROJECTS COORDINATED BY VABC MEMBERS
Completed Projects:
Project Management Training for Vietnamese officials,
funded by the World Bank in 1994 (Engineering Management Services,
Vienna, VA)
Export Training in Ha Noi in 1994 and in 1998 (Ablondi,
Foster, Sobin and Davidow, Washington DC)
Opened and operated the first American Product Showroom in
Vietnam in 1995-1996 (Vietnam Resource Group, Washington DC).
Opened the first US travel agency in Vietnam in 1997
(Global Spectrum, Washington DC)
Successfully negotiated a business cooperation contract to
set up and operate a aircraft component Repair station in Vietnam in
1997 (Vietnam Development Partners, LLC, Denver, CO)
Hosted various trade delegations from Vietnam (Vietnam
Resource Group).
Coordinated 8 trade missions to Vietnam for small and
medium sized American companies (Vietnam Resource Group).
Coordinated an internship program for Vietnamese students
in Orlando, Florida in 1997 (PV Hotel International Consultants,
Washington DC)
Current Projects:
Coordinate with the Training Center of the Ministry of
Planning and Investment to set up a training program designed to
provide Vietnamese executives with business management training.
Cooperate with the Department of Planning and Investment
both in Ha Noi and HCM cities to organize a Conference on Trade and
Investment in which American companies could be issued business
licenses to explore the market without going through time-consuming
bureaucratic procedures.
Continue working to introduce various trade shows in the
US to Vietnamese companies.
Proposal for a documentary film promoting a new Vietnam
Import food products from Vietnam
Introduce MBA training programs to Vietnam
Promote educational exchange programs.
Continue developing internship programs in different
fields ie: Hotel/Tourism, Agriculture, Information Technology, Banking.
Chairman Crane. Thank you, Mr. Trinh.
Mr. Do.
STATEMENT OF DIEM H. DO, COCHAIRMAN, COALITION AGAINST THE
JACKSON-VANIK WAIVER, WESTMINSTER, CALIFORNIA
Mr. Do. Mr. Chairman, Congressman Rangel, first I would
like to express my appreciation for the opportunity to address
this Subcommittee today. I would like to summarize my extended
testimony which has been submitted to the Subcommittee. The
Coalition Against Jackson-Vanik Waiver, representing 30
organizations and communities across the Nation, strongly
opposes the waiver of the Jackson-Vanik amendment for Vietnam
for the following reasons:
First, the Vietnamese Government has not made sufficient
progress toward free emigration to warrant the waiver. Second,
the Vietnamese Government continues to deny its citizens all
basic human rights. Third, Vietnam's transition to a market
economy has slowed down significantly and remains incomplete.
Now I would like to elaborate more on the reasons why we
oppose the waiver.
On free emigration, Vietnam claimed that it had dropped the
exit permit requirement in the ROVR Program. This is a step
toward satisfying the free emigration requirement under
Jackson-Vanik amendment. The reality is that Vietnam has not
dropped its requirement for exit permits. It has only delayed
this requirement until after the applicant is interviewed and
approved by the U.S. interviewing team, at which time the
problem with exit permits will resurface.
In addition, a large number of eligible applicants have
been denied exit permits or not processed because they are
former political prisoners, former U.S. Government employees,
or religious leaders.
On human rights, the very first sentence of section 402(a)
of the Trade Act of 1974 said that the amendment is to assure
the continued dedication of the United States to fundamental
human rights. With that in mind, clearly Vietnam's human rights
record does not warrant the waiver of the Jackson-Vanik
amendment.
Just 2 months ago on April 19, 1999, the Vietnamese
Government issued Administrative Decree 26, titled ``Decree of
the government concerning religious activities.'' In this 29-
article-long decree, the Vietnamese Government laid out some
serious restrictions on religious freedom. This contradicts
both Senator Kerry and Ambassador Peterson's observation that
religious freedom has improved. Following are just two examples
of the most blatant violations committed by this decree.
Article 20 dictates that the consecration of those who
carry the title of Hoa Thuong in the Buddhist religion, of
cardinals, bishops, administrators in the Catholic Church, and
of dignitaries of equivalent function of other religions, must
receive the approval of the prime minister. Article 25 of the
same decree dictates that in order to organize a particular
gathering within a place of worship, it is necessary to obtain
authorization from the president of the People's Provincial
Committee. Just weeks after the Administrative Decree 26 was
issued, on May 7, 1999, Reverend Tran Dinh Ai and 19 others
from the Vietnamese Assemblies of God Church were detained
after police burst in on their second day of a 3-day spiritual
retreat and bible study session in Hanoi. Currently, Reverend
Tran Dinh Ai is still being detained. He is currently, seeking
help for himself and his family to leave the country.
It is important to note that human rights violations in
Vietnam are not limited to religious freedom. Two years ago, on
April 14, 1997, the Vietnamese Government issued administrative
decree 31, titled ``Government administrative detainment
policy,'' which gives the police the power to detain anyone
suspicious of infringing on the national security from 6 months
up to 2 years without trial. Numerous well-known and outspoken
dissidents have fallen victim to this draconian decree.
On transition to a market economy, one of the reasons that
the United States chose to pursue the policy of engagement with
Vietnam is to facilitate Vietnam's transition to a market
economy. Such a transition can be beneficial to both countries.
However, since the lifting of the trade embargo, Vietnam's
economic reform has slowed down significantly to the point of
inaction. In an article on May 21, 1999, Ari Kokko, a Vietnam
expert from the Stockholm School of Economics said that, ``I
think the lack of reform has made it clear Vietnam is really
still a command economy at heart in spite of the changes over
the past years.'' Even our Ambassador Peterson was quoted in
the same article that, ``Vietnam had an opportunity to seize
some initiative, but Vietnam failed to do so because it became
frightened about the impact of such reform, and they
essentially opted for the status quo.''
In conclusion, Vietnam has clearly regressed, not
progressed. Waiving the Jackson-Vanik amendment now and then
hope and pray that the Vietnamese Government will reform just
does not work. With billions of dollars already invested, it is
time to take a more effective approach. Pressure must be
applied. The United States should use economic leverages to
exchange for concrete, verifiable steps toward reforms. We
strongly believe that waiving the Jackson-Vanik amendment now
is premature. The Jackson-Vanik waiver should only be given
after Vietnam reciprocates with measurable steps toward full
economic and human rights reforms.
Thank you.
[The prepared statement follows:]
Statement of Diem H. Do, Cochairman, Coalition Against Jackson-Vanik
Waiver, Westminster, California
Distinguished Members of Congress,
First, I would like to express my appreciation for the
opportunity to address this committee today. The Coalition
Against Jackson-Vanik Waiver, representing 30 organizations and
communities across the nation, strongly opposes the waiver of
the Jackson-Vanik amendment for Vietnam for the following
reasons:
(1) the Vietnamese government has not made sufficient
progress towards free emigration to warrant the waiver,
(2) the Vietnamese government continues to deny its
citizens all basic human rights, and
(3) Vietnam's transition to a market economy has slowed
down significantly and remains incomplete.
Maintaining the Jackson-Vanik amendment in the case of
Vietnam will help to put pressure on the Vietnamese government
for more concrete reforms in the areas outlined above. Now, I
would like to elaborate more on the reasons why we oppose the
waiver.
Free emigration
Vietnam claimed that it had dropped the exit permit
requirement in the Resettlement Opportunity for Vietnamese
Refugees (ROVR) program. This is a step towards satisfying the
free emigration requirement under Jackson-Vanik amendment.
The reality is that Vietnam has not dropped its requirement
for exit permit. It has only delayed this requirement until
after the applicant is interviewed and approved by the U.S.
interviewing team, at which time the problem with exit permit
will resurface. In addition, a large number of eligible
applicants have been denied exit permit or not processed
because they are former political prisoners, former U.S.
government employees or religious leaders.
Beside administrative roadblocks, pervasive corruption at
all levels of government creates additional obstacles to free
emigration. In many instances, applicants to U.S. resettlement
programs are demanded huge amount of money that they cannot
afford. This in effect violates the spirit of the Jackson-Vanik
amendment that requires a country not to impose ``more than a
nominal tax, levy, fine, fee, or other charge on any citizen as
a consequence of the desire of such citizen to emigrate to the
country of his choice.''
Human Rights
The very first sentence of section 402(a) of the Trade Act
of 1974 said that the amendment is ``to assure the continued
dedication of the United States to fundamental human
rights...'' With that in mind, clearly Vietnam's human rights
record does not warrant the waiver of the Jackson-Vanik
amendment.
Just two months ago, on April 19, 1999, the Vietnamese
government issued Administrative Decree 26, titled Decree of
the Government Concerning Religious Activities. In this 29-
articles long decree, the Vietnamese government laid out some
serious restrictions on religious freedom. Following are
examples of the most blatant violations committed by this
decree:
Article 20 dictates that ``the consecration of those who
carry the title of `Hoa Thuong' in the Buddhist religion, of
cardinals, bishops, administrators in the Catholic Church, and
of dignitaries of equivalent function of other religions, must
receive the approval of the Prime Minister.''
Article 21 reads that ``the nomination and transfer of
clergy, religious and specialists in religious activities must
obtain the approval of the Peoples Committee whose
administrative management covers the territory of their
activities.''
Article 24 requires that ``religious organizations and
officials, in order to invite to Vietnam religious
organizations and officials from abroad, must obtain the
authorization of the Bureau of Religious Affairs.''
Article 25 dictates that ``in order to organize a
particular gathering within a place of worship, it is necessary
to obtain authorization from the President of the Peoples'
provincial committee.''
Just weeks after Administrative Decree 26 was issued, on
May 7, 1999, Reverend Tran Dinh Ai and 19 others from the
Vietnam Assemblies of God Church were detained after police
burst in on their second day of a three-day spiritual retreat
and bible study session in a Hanoi hotel. Of this 20 people, 18
were released on May 9, 1999 after being charged with breach of
the peace. The remaining two, Evangelist pastor Lo Van Hen's
whereabouts were currently unknown and Reverend Tran Dinh Ai is
still being detained in a hotel with four guards. He has
appealed for help for himself and his family to leave the
country.
It is important to note that human rights violation in
Vietnam is not limited to religious freedom. Two years ago, on
April 14, 1997, the Vietnamese government issued Administrative
Decree 31, titled Government Administrative Detainment Policy,
which gives the police the power to detain anyone suspicious of
``infringing on the national security'' from 6 months up to 2
years without trial.
More recently, Reuters reported on 5/20/99 that the
government ``has amended its strict press law to tighten state
control over official media and set rules that all reporting
must be of benefit to the country.'' Not only they clamped down
on free speech for every citizen, the Vietnamese Communist
Party restricted their own party members' free speech. On 6/7/
99, the Associated Press reported that the Politburo decided to
ban party members from ``distributing documents that question
party policies and decisions, and may not write anonymous
letters or make accusations against people they disagree
with.''
Transition to a market economy
One of the reasons that the United States chose to pursue
the policy of ``engagement'' with Vietnam is to facilitate
Vietnam's transition to a market economy. Such a transition can
be beneficial to both countries. However, since the lifting of
the trade embargo in 1994 and more recently since the Jackson-
Vanik waiver in 6/98, Vietnam's economic reform has slowed down
significantly to the point of inaction.
In a Reuters article on 5/21/99, Ari Kokko, a Vietnam
expert from the Stockholm School of Economics, said: ``I think
the lack of reforms has made it clear Vietnam is really still a
command economy at heart, in spite of the changes...over the
past few years.'' That same article also reported that
investors still moan about incomplete laws, tough foreign
exchange rules, tight labor laws, lengthy licensing procedures,
restricted access to certain sectors of the economy, corruption
and a lack of infrastructure.
Even our Ambassador Pete Peterson was quoted in the same
article that Vietnam had an opportunity to seize some
initiative, ``but Vietnam failed to do so because they became
frightened about the impact of such reforms and they
essentially opted for the status quo.''
In an article on 5/25/99, reporter Ken Dilanian of the
Inquirer quoted Kazi Matin, chief economist of the World Bank
in Vietnam, that ``the economy is certainly in a tailspin,''
and ``(new) foreign investment has virtually disappeared.'' In
fact, big companies are leaving Vietnam in droves such as Cigna
and Chrysler just to name a couple.
The same article reported that there is still a state board
that sets the prices of staple products such as cement and
steel. In fact, Mr. Bradley LaLonde, director of Citibank's
Vietnam operations, who testified last year before this same
committee in favor of waiving the Jackson-Vanik amendment, was
quoted in that same article saying that ``Vietnam is run by a
group of people who are resistant to change. They want a
government-controlled economy.''
Clearly, investors are becoming increasingly disillusioned
with a government that makes Vietnam one of the world's most
frustrating places to do business. Obviously, pressures are
needed to push Vietnam forward in the transition to a market
economy.
Conclusion
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 rescuing the country.
Waiving the Jackson-Vanik amendment now, and then hope and
pray that the Vietnamese government will reform just does not
work. With billions of dollars already invested in Vietnam, it
is now time to take a different approach so that long-term
growth and a business friendly environment can be ensured.
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 reforms.
We strongly believe that waiving the Jackson-Vanik
amendment for Vietnam without any real, tangible concessions
from Vietnam is premature at this point. Trade benefits should
only be given when Vietnam reciprocates with measurable steps
toward full economic and human rights reforms.
In summary, I believe that free trade does not mean trade
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. The guiding principle of
our country has always been cooperating and partnering with
free government, free country where human rights and values are
respected. Let's not betray that principle by making Vietnam an
exception.
Chairman Crane. Thank you.
Mr. Johnstone.
STATEMENT OF L. CRAIG JOHNSTONE, SENIOR VICE PRESIDENT,
INTERNATIONAL, ECONOMIC AND NATIONAL SECURITY AFFAIRS, U.S.
CHAMBER OF COMMERCE
Mr. Craig Johnstone. Thank you, Mr. Chairman. Particular
thanks to you and the Members of this Subcommittee for giving
the U.S. Chamber of Commerce the privilege of testifying before
you on Vietnam and on the extension of the Jackson-Vanik
waiver. I also want to thank the American Chamber of Commerce
in Vietnam for the hard work it has done to promote U.S.-
Vietnam trade, and to thank the Asia-Pacific Association of
American Chambers of Commerce for the strong support they have
given to analysis and advocacy on this issue.
I am not going to belabor the points I have made in my
written testimony. Allow me to highlight the essential
elements. First, the U.S. Chamber of Commerce strongly supports
the extension of the waiver of Jackson-Vanik. Extension makes
good business sense. It contributes to the creation of jobs in
our own country and in Vietnam. It allows us to compete fairly
with other countries, countries that would continue to do
business with Vietnam even if we did not.
Second, the U.S. Chamber is strongly supportive of the
efforts of our trade negotiators to work out a bilateral trade
agreement with Vietnam. We understand that these negotiations
have made good progress. If a good agreement is reached, and by
that I mean an agreement that would truly open Vietnamese
markets to U.S. goods, the Chamber will be in the forefront of
those giving it our support.
Third, we would hope that we can move toward Vietnam's
accession to the WTO, a process that would bring Vietnam more
fully into the community of international trading nations in
ways that would further open markets and create jobs in
America. Our position on these three objectives is unambiguous.
But quite frankly, these are not the neuralgic issues in
the United States-Vietnam relationship. There are three major
other issues that transcend the business interests. First is
the issue of our POWs and MIAs. I served as the United States
Government negotiator with the Vietnamese Government in Paris
from 1978 to 1980. I am all too familiar with this issue and
the cruel and insensitive way in which the Government of
Vietnam manipulated it to seek political advantage. I have
nothing but contempt for how the matter was handled in its
early days by the Vietnamese Government. But there has been a
wholesale change in Vietnamese conduct on this issue. I can't
speak in detail in the same sense that Ambassador Peterson was
able to on this issue, but quite frankly, if he, our Ambassador
to Vietnam and a former prisoner of war, is satisfied that the
best way to get full accountability on POWs and MIAs is by
staying the course in our Vietnam relationship, then that is
good enough for me, and I think it ought to be good enough for
just about everyone.
Second, on human rights. This, in my view, is also not a
close call. We do not approve of many of the policies of the
Government of Vietnam and how it conducts itself. Read through
the State Department Human Rights Report and ask yourself
whether you could condone all of the actions of the Government
of Vietnam. No American could. But this isn't really the issue.
We have a choice of working to integrate Vietnam more fully
into the community of nations, chipping away at bad practices
and letting the power of open markets and open communications
stimulate the growth of democracy. Or we can reverse course and
try to coerce or isolate Vietnam. Quite frankly, coercion and
isolation offer no chance of success. By all accounts, openness
and integration are working slowly, but tangibly. We need to
stay the course, not despite our human rights concerns, but
because of them.
Finally and most importantly, there is a legacy of the war.
It hangs over us all. I worked in Vietnam from 1965 to 1970. My
first job there was in Chau Doc Province, where I was assigned
with one other civilian and the Special Forces A Team. My job
was to advise the local Vietnamese Government and to assist
refugees fleeing communism in the mountain areas of Chau Doc.
The Special Forces team commander was Major John Arnn, a
wonderful man who took me, fresh out of college, under his wing
and taught me how to survive in an often hostile environment.
He became my first and best friend in Vietnam.
In December 1965, Major Arnn volunteered to deliver some
supplies to one of my refugee camps. On the way, he was
ambushed and killed. Around Memorial Day each year, I visit the
Vietnam Memorial and touch his name on the wall, along with the
names of other dear friends that died in the war. It would be
easy for me to say forget Vietnam, keep it isolated, we owe
that to the men and women who fought and died there. Quite
frankly, that was my view for some time. I will admit to you
that it was fueled in part by my conviction and resentment that
we lost that war.
The military historians describe Vietnam as a war in which
we won all the battles and lost the war. But I think they
missed the point. Vietnam was not really a war in its own
right. It was one of the many battles in the cold war. A better
way of looking at it is to recognize that we lost the battle,
but we won the war.
The issue before us is whether to live in the past,
dwelling on the lost battle, or to move to consolidate the
gains of cold war victory. We won the cold war. Will we win the
winning? Engagement, trade, steady pressure on democracy and
human rights, accountability on POWs and MIAs, increased
contacts and exchanges, these are the tools needed to win the
cold war winning. We do not honor our Vietnam heros by trying
to isolate Vietnam. We honor them by realizing the fruits of
their hard fought cold war victory.
Thank you.
[The prepared statement follows:]
Statement of L. Craig Johnstone, Senior Vice President, International,
Economic and National Security Affairs, U.S. Chamber of Commerce
Thank you, Mr. Chairman, for the opportunity to testify
today before this Subcommittee on Trade on the critical issue
of U.S. trade relations with Vietnam. I am Craig Johnstone,
Senior Vice President for International, Economic and National
Security Affairs at the U.S. Chamber of Commerce.
The U.S. Chamber of Commerce is the world's largest
business federation, representing more than three million
businesses and organizations of every size, sector and region.
We also count among our members 85 American Chambers of
Commerce abroad, including those in Hanoi and Ho Chi Minh City.
Since the embargo was lifted in 1994, many of our corporate
members are reentering Vietnam for the first time in 20 years.
Other members, many of them small and medium-sized businesses,
are entering Vietnamese markets for the first time ever.
The U.S. Chamber of Commerce believes that normalization of
trade relations with Vietnam is in the long-term interest of
the United States. Last year, Congress upheld the Jackson-Vanik
waiver for Vietnam when it resoundingly defeated a disapproval
resolution by a vote of 260 to 163. The U.S. Chamber of
Commerce urges Congress to uphold the Jackson-Vanik waiver
again this year.
Although a powerful gesture, the waiver of the Jackson-
Vanik amendment for Vietnam is only the first step in
normalizing trade relations. The U.S. Chamber of Commerce
supports the completion of a bilateral commercial agreement
that provides meaningful market access to the American business
community. Moreover, we want to integrate Vietnam into the
global trading system by broadening and binding its market-
opening commitments as a member of the World Trade Organization
(WTO).
Legacy of the U.S.-Vietnam Conflict
Before discussing future U.S.-Vietnam economic relations,
it is imperative to acknowledge our common past. From my own
experience, I know that few Americans can address the topic of
Vietnam without feeling a strong set of emotions. Many U.S.
citizens still struggle with the idea that we should see
Vietnam as more than just a war, but as a country and a people
of considerable potential.
The U.S. Chamber of Commerce is sensitive to the legacy of
the U.S.-Vietnam conflict. The U.S. government must continue to
assign top priority to obtaining the fullest possible
accounting of American servicemen missing from the war.
Concerns about emigration, human rights and religious freedom
must be discussed openly as well.
The best policy to secure Vietnamese cooperation on these
issues is through political and economic engagement. In today's
global economy, Vietnam's leaders have no choice but to
participate in and adhere to the rules of the international
trade and investment community, providing us with significant
leverage to effect positive change. The opposite route--turning
our back on Vietnam--almost certainly will result in an abrupt
end to cooperation, recriminations on both sides, and a
strengthening of the position of hard-liners in the Vietnamese
government who do not want to open the country to foreign goods
and ideas.
In addition, attempting to isolate Vietnam is pointless in
light of the number of countries that have already normalized
relations with Hanoi. We would risk ceding the potential of
this market to competitors in Europe, Japan and the rest of
Asia. We also would lose our opportunity to reach out to the
younger generation--Vietnamese who were not born when the war
ended account for over half of the population--who are
receptive to new ideas from outside their country.
Engagement with Vietnam Works
There is strong evidence that engagement with Vietnam
works. Since the United States normalized relations with Hanoi,
Vietnam has cleared for interview 96 percent of all applicants
under the Resettlement Opportunity for Vietnamese Returnees
(ROVR) agreement. In the last year alone, the number of
outstanding ROVR cases dropped from 1,353 in May 1998 to 79 as
of the beginning of this month.
Likewise, the Vietnamese government last year announced
that it would permit U.S. officials to interview emigration
applications for the Montagnards under the Orderly Departure
Program. Since that time, 220 individuals have been cleared by
the Vietnamese government for interview by the U.S. Immigration
and Naturalization Service.
Cooperation in both of these areas is important in meeting
the legal requirements for a waiver of the Jackson-Vanik
amendment. The statute is meant to encourage movement toward a
free emigration policy in countries with non-market economies.
The Vietnamese government has clearly met the conditions for a
waiver.
Engagement is working in other areas. With respect to human
rights in Vietnam, commercial engagement has yielded some
results. At the 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. This has had a positive impact
on Vietnamese workers and local government officials. Still,
despite these positive signs, we are under no illusions that
Vietnam has a long way to go on human rights and falls
desperately short of our own standards of freedom and
democracy.
More importantly, Vietnam has given top priority to
cooperating with the United States in seeking the fullest
possible accounting of POWs/MIAs. Efforts by the Vietnamese
government have resulted in the recovery and repatriation of
the remains of several American MIAs in the last year alone.
Vietnamese officials also continue to provide the United States
with key documentation in other cases.
Potential of the Vietnamese Market
Why is the American business community so interested in a
country that bristles with tariffs, excise taxes and
surcharges, import quotas and other quantitative restrictions
such as licenses, and foreign exchange controls?
The answer is simple: the Vietnamese market holds huge
potential for American business. At present, two-way
merchandise trade is $830 million. 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 7 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, holds large
market opportunities over the long-term.
The Vietnamese economy is undergoing a slow transformation
from a centrally planned economy to one based on open markets.
We will likely be frustrated with the pace of this
transformation, but the U.S. Chamber of Commerce has been
active in encouraging the Vietnamese government to do more.
In October 1998, U.S. Chamber President & Chief Executive
Officer Tom Donohue visited Hanoi as part of a four-nation tour
of Asia to assess the impact of the Asian financial crisis.
After being briefed by U.S. Ambassador Peterson, Donohue met
with two of the most powerful men in Vietnam: Prime Minister
Phan Van Khai and Secretary General of the Communist Party Le
Kha Phieu. Donohue advised the Vietnamese leaders that American
companies want to invest in Vietnam, but are being held back by
the country's snail-paced approach to market reforms,
corruption, and the lack of transparency in the banking and
legal sectors. American capital--desperately needed and wanted
in Vietnam--simply will not stay in the country unless it is
treated well.
Our affiliate organization--the Center for International
Private Enterprise--has been working in Vietnam since 1993 to
promote greater understanding of market economics and the
benefits that a strong, growing and open private sector can
bring to the national economy. Earlier this year, CIPE began
assisting the National University of Ho Chi Minh City in airing
radio call-in broadcasts on issues of interest to private
firms. In addition, CIPE is helping the Vietnam Chamber of
Commerce and Industry transform itself into an independent
voice of fledgling private entrepreneurs in Vietnam and the
leading advocate of further reform.
Jackson-Vanik Waiver
The first step in normalizing trade relations with Vietnam
is the Jackson-Vanik waiver. The U.S. Chamber of Commerce
strongly believes that the United States should continue to
extend the waiver for three reasons:
Vietnam has met the legal requirements for the
Jackson-Vanik waiver. As mentioned, Vietnam has cooperated
closely with the United States in clearing applicants under the
ROVR program.
The waiver paves the way for the U.S. Export-
Import Bank and the Overseas Private Investment Corporation to
operate in Vietnam. Foreign firms operating in Vietnam already
have access to trade promotion programs in their home
countries. This has given them a head start over American
companies. If the waiver is revoked, access to these trade
promotion programs would end, and American companies would once
again be placed at a competitive disadvantage in relation to
foreign competitors.
The Jackson-Vanik waiver enables the negotiation
of a commercial agreement. Maintaining the waiver conveys the
message to Vietnam's leadership that the United States is
committed to completing the negotiations. Without a commercial
agreement, U.S. companies will be unable to obtain meaningful
access to the Vietnamese economy.
Possible Commercial Agreement
U.S. companies seeking to do business in Vietnam must
contend with a broad range of tariff and non-tariff barriers to
goods, services, agricultural products and investment. We have
an opportunity to level the playing field by completing a
commercial agreement with Vietnam that provides meaningful
market access to U.S. companies. Coincidentally, a delegation
of 20 Vietnamese negotiators are in town this week to talk with
Administration officials about an agreement.
Last November, the U.S. Chamber's Board of Directors
identified ingredients for a commercial agreement that would
provide meaningful market access to the business community.
While those ingredients are summarized below, the Board's
entire statement is attached to my written testimony.
Reduce tariffs. Vietnam must agree to significant
tariff reductions as part of the commercial agreement.
Non-tariff measures. In the course of negotiating
the commercial agreement, Vietnam must agree to publish all
non-tariff measures (NTMs). Vietnam must commit to fixed
endpoints to phase out the NTMs. A measure not included in this
group should not be permitted to be claimed as an NTM later.
Trading rights. Trading rights essentially are a
hidden NTM. Vietnam must permit the right to trade in key
industries. To the extent that discriminatory trading rights
remain, they should be linked to the NTM list.
Abolish import licenses and quotas. These
administrative measures add unnecessary costs to doing
business, distort market allocations, and encourage smuggling.
Furthermore, they are inconsistent with the norms and
principles of the WTO.
Open service sectors to foreign participation.
Vietnam should permit greater foreign participation in its
service sectors, including retail and wholesale distribution,
leasing, banking and insurance, telecommunications,
professional services and others.
Provide full protection of intellectual property
rights. Vietnam must agree to protect U.S. intellectual
property rights and proactively combat piracy.
Eliminate performance requirements. Vietnam should
agree to refrain from imposing performance requirements (e.g.,
local content, technology transfer, export requirements) on
foreign-invested enterprises.
Future Steps
Once a commercial agreement is completed that provides
meaningful access to American business, it will be submitted to
Congress for an up-or-down vote. I mention this because it is
possible that an agreement could be completed in the near
future and that you will be asked to consider it.
Congressional approval of a commercial agreement also will
pave the way for the United States to extend normal trade
relations (NTR) status to Vietnam. This will further strengthen
our leverage over Vietnam. It is important to note that even
after a commercial agreement is completed and approved by
Congress, the President may still revoke NTR status 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 of Commerce strongly endorses a policy of
engagement with Vietnam. We urge Congress to once again uphold
Vietnam's Jackson-Vanik waiver. We also encourage Congress to
take advantage of visits by Ambassador Peterson, briefings by
officials from the Office of the U.S. Trade Representative, and
meetings with the business community to become familiar with
negotiations over a commercial agreement. We believe we have an
historic opportunity here at the end of the millenium to set
the U.S.-Vietnam relationship on the path to a constructive and
positive future.
Mr. Chairman, this concludes my formal presentation. I
would be happy to respond to any questions.
U.S. CHAMBER OF COMMERCE BOARD OF DIRECTORS' STATEMENT ON NORMALIZATION
OF TRADE RELATIONS WITH VIETNAM
The U.S. Chamber of Commerce believes that normalization of
trade relations with Vietnam is in the long-term interest of
the United States. Since 1993, Vietnam has recorded annual
growth rates averaging 8 percent despite the limitations of a
transitional economy. With a population of 78 million, the
twelfth largest in the world, Vietnam has the potential to
become a large market for U.S. goods and services if market-
opening reforms are implemented.
The United States and Vietnam each must contribute to
ensure that normalization of trade relations produces mutual
benefits. The United States must continue to waive the Jackson-
Vanik amendment for Vietnam. In turn, Vietnam must embark on
substantive reforms to foster the development of a free-market
economy and to participate fully in the global trading
community.
A. Continued Waiver of the Jackson-Vanik Amendment for Vietnam
The U.S. Chamber believes that the United States must continue to
extend the Jackson-Vanik waiver to Vietnam for the following reasons:
Vietnam has met the legal requirements for the waiver. The
Jackson-Vanik amendment is meant to encourage movement toward a free
emigration policy in countries with non-market economies. Since the
1980s, Vietnam has allowed the emigration of tens of thousands of its
citizens under the Orderly Departure Program. In 1998, the Vietnamese
government cleared for interview over 80 percent of the close to 20,000
applicants for emigration under a U.S.-endorsed program known as
Resettlement Opportunities for Vietnamese Returnees.
The Jackson-Vanik waiver supports U.S. companies. The
waiver paves the way for U.S. companies operating in Vietnam to obtain
access to trade promotion programs of the U.S. Export-Import Bank, the
Overseas Private Investment Corporation and the Trade Development
Agency. The programs are vital to meet the challenges of doing business
in Vietnam's emerging market. Without them, Vietnamese companies in
many cases could turn to suppliers in Japan and Europe.
The Jackson-Vanik waiver enables bilateral negotiations
seeking commitments from Vietnam on market access, services,
intellectual property and investment. The United States and Vietnam
currently are negotiating a commercial agreement as part of the process
for granting Vietnam normal trade relations (NTR). Maintaining the
Jackson-Vanik waiver conveys the message that the United States is
committed to concluding the trade negotiations, which will include
meaningful market access for U.S. companies.
B. Reform of Vietnam's Trade and Investment Regime
The U.S. Chamber believes that Vietnam must start now to
reform substantially its trade and investment regime. U.S.
companies seeking to do business in Vietnam must contend with a
broad range of restrictions including tariffs, excise taxes and
surcharges, import quotas and other quantitative restrictions
such as licenses, and foreign exchange controls. In addition,
the lack of transparent regulations has added administrative
burdens to doing business in Vietnam and provided cover for
corruption to flourish. The initial optimism that many foreign
investors felt about the economy of Vietnam has been dispelled
by the difficulty of doing business there. Foreign direct
investment in Vietnam dropped to $4.5 billion last year
compared to $8.5 billion in 1996 and $6.6 billion in 1995. It
continues to drop in 1998.
The U.S. Chamber notes that Vietnam should wean itself from
currency and capital controls in favor of broader macroeconomic
measures to deal with external shocks. In the absence of
further reform, Vietnam's exports will decline because of low
consumer demand in other Southeast Asian countries and Japan. A
further decline in foreign direct investment and an
increasingly scarce supply of foreign currencies could result
in lower growth in real incomes and higher unemployment.
Moreover, Vietnam risks losing even more ground to its
Southeast Asian neighbors who are undertaking reform.
The U.S. Chamber will only endorse a U.S.-Vietnam
commercial agreement that satisfactorily addresses the
following issues:
Make regulations more easily available to the
public. Regulations in Vietnam are often unpublished or subject
to change without notice. The lack of transparency encourages
corrupt practices. Vietnam should ensure that regulations are
easily accessible and applied with consistency on the basis of
the principle of national treatment and nondiscrimination. In
addition, Vietnamese agencies should adopt a uniform process
for permitting public comment and review of proposed changes in
regulations.
Base regulations on a ``permissive'' system. Under
the current regulatory system in Vietnam, there is a
presumption of illegality unless something is expressly
permitted. Government officials thus are reluctant to make
decisions because of concerns that they will be held
responsible if the decision is later deemed to be
inappropriate. Vietnam instead should adopt a regulatory system
whereby everything is assumed to be ``permitted'' unless
expressly prohibited. A ``permissive'' system would reduce the
amount of regulations and still allow the Vietnamese government
to enumerate cultural concerns regarding public safety, morals,
etc.
Abolish import licenses and quotas. These
administrative measures are inconsistent with the norms and
principles of the World Trade Organization (WTO). They add
unnecessary costs to doing business, distort market
allocations, and encourage smuggling.
Reduce tariffs. Vietnam should agree to binding
reductions in its import duties as requested in the U.S.
government's tariff request.
Use the transaction value of imports instead of
government reference prices for customs purposes. Vietnam
Customs imposes tariffs on 34 broad product categories,
including consumer goods, based on reference prices established
by the government rather than c.i.f. prices declared by the
importers. The reference prices are often higher than the
c.i.f. price because they are meant to remedy alleged under-
invoicing of imports. Vietnam should adopt the disciplines of
the WTO Agreement on Customs Valuation.
Reform system of land-use rights. At present,
land-use rights in Vietnam consist of leases that are not
transferable without government approval. In addition to
granting approval, the government also sets the price for the
transfer. This process keeps the price of land use artificially
high and adds greatly to the cost of doing business. Moreover,
banks are unable to accept land as collateral because of the
non-transferability.
Ease foreign exchange controls. Foreign investors
have few ways of obtaining foreign currency to import raw
materials and other supplies except through income earned on
export sales. Restrictions on the repatriation of profits
should be eased. Vietnam should also take steps to make the
dong convertible.
Open service sectors to foreign participation.
Vietnam should permit greater foreign participation in its
service sectors, including retail and wholesale distribution,
leasing, banking and insurance, telecommunications,
professional services and many others.
Provide full protection and enforcement of
intellectual property rights. The completion of a copyright
agreement between the United States and Vietnam is a welcome
development. The U.S. Trade Representative should closely
monitor Vietnam's implementation and enforcement.
Eliminate performance requirements. Vietnam should
not impose performance requirements (e.g., local content,
technology transfer, export requirements) on foreign-invested
enterprises. It should adopt fully the disciplines contained in
the WTO Agreement on Trade-Related Investment Measures.
Privatize state-owned enterprises. The Vietnamese
government has embarked on a program of ``equitizing''
(partially privatizing) state-owned enterprises. To date,
however, only 150 to 200 state-owned enterprises have been
registered for ``equitization'' out of a total 6,000. This
process should be accelerated to improve the strength of state-
owned enterprises (and hence lower the need for protectionist
measures) and provide some relief to Vietnam's banking system.
Phase out state-directed lending. State-directed
lending distorts the efficient allocation of capital. In
addition, the practice provides little incentive for state-
owned enterprises, the main recipients of the loans, to
rationalize their operations in order to attract capital.
Vietnam should also end the practice of permitting state-owned
enterprises to borrow from banks on the basis of state
guarantees and without collateral.
Develop and use international ``best practices''
in infrastructure development. The Vietnamese government should
use standard joint-venture regulations and common contractual
terms so that foreign investors can understand the rules and
more easily arrange financing for infrastructure projects.
The U.S. Chamber believes that Vietnam's commitment to
undertake these reforms is a prerequisite to taking the next
steps to normalize trade relations. These steps include (1)
extension of NTR to Vietnam and (2) Vietnam's accession to the
WTO. The U.S. Chamber supports both objectives.
Chairman Crane. Thank you.
Ms. O'Shea.
STATEMENT OF LYNN 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. Rangel, I thank you for the
opportunity to be here today to express the total opposition of
the National Alliance of Families to the waiver of the Jackson-
Vanik amendment as it applies to trade with Vietnam. At the
close of the war, there were 2,583 American servicemen
unaccounted for. The families of our POW/MIAs have
traditionally accepted the fact that a significant number of
those cases may never be resolved. But as a practical matter,
Members of Congress should know that more than 800 of our POW/
MIAs were simply presumed to be dead based solely on the
passage of time, with no real evidence of death. In fact, in
many of those cases, there was evidence of capture and
captivity. These are men that the Vietnamese could readily
account for and these men became the discrepancy case list that
Senator Kerry referred to earlier.
As Senator Kerry spoke, he mentioned that there were only
47 of those cases left, indicating that that showed great
progress by the Vietnamese in helping us account for these men.
What Senator Kerry did not say was that those men for the most
part were accounted for administratively. They have not been
accounted for by the recovery of their remains or a proper
identification of remains. They have been accounted for on
paper only.
This Subcommittee has heard testimony from witnesses to the
effect that Communist Vietnam is doing everything it reasonably
can to account for our POW/MIAs. These witnesses also say that
Vietnam is cooperating in full faith and the family members
should trust the Government of Vietnam to be honest and fair in
achieving a fullest possible accounting. They might also say
that our former allies, the South Vietnamese, should trust the
Vietnam Communist Party to promote progress in human rights.
This is not happening.
Recently, the U.N. issued a report citing increased
religious oppression in Vietnam. We cannot reward a nation that
is moving backward. That is what Vietnam is doing. They are not
cooperating on the POW/MIA issue, and their human rights record
is abominable.
Now there are witnesses that state we should give them
more, more trade, more money, more loan guarantees, the
business to go over there. Why? Who gives the reward before the
reward is deserved? That is what we would be doing if we
extended the waiver of Jackson-Vanik.
The businesses here today are asking for loan credits and
guarantees so that taxpayers' money will back up their
investments in Vietnam. While we realize that that backup is
not 100 percent, that is still taxpayers' money that is being
gambled with. These corporations are not willing to go to
Vietnam and gamble their own capital. They want a backup. They
do not trust the Vietnamese, yet they expect the families of
our POW/MIAs to trust the Vietnamese to provide a full and
proper accounting, when past history has shown that is not what
the Vietnamese do.
We believe that there are only two key issues remaining
between the U.S. Government and Communist Vietnam that must be
resolved before Congress can favorably consider any further
concessions in advance to Hanoi. These two issues are the fair
and honest accounting of our missing men and democracy for the
Vietnamese people.
I would also like to bring up one point when I think it was
Ambassador Peterson was discussing remains, repatriation, and
how many remains identification have been made over the last
several years. I think it is important for this Congressman to
know that the phrase ``remains identification'' and accounting
has been applied very, very loosely. There are headstones in
Arlington National Cemetery with names on them that have no
remains underneath. These are administrative identifications.
They are burying names, not remains. They are pointing to this
reduction of the list of missing as progress that is being made
with the Vietnamese in a full accounting. It's not happening.
In closing, all I can say is on behalf of our membership,
the mothers, fathers, sons, daughters, wives and children of
our missing men, we should not further reward Vietnam with any
concessions until Vietnam takes the proper steps in the
accounting of our missing and shows vast progress in human
rights.
Thank you.
[The prepared statement follows:]
Statement of Lynn O'Shea, New York State Director, National Alliance of
Families for the Return of America's Missing Servicemen, Bellevue,
Washington
Mr. Chairman, distinguished members of the Committee, thank
you for the opportunity to testify today. Renewal of the
Jackson Vanik Waiver, as it applies to trade with Vietnam is a
matter of great importance not only to POW/MIA family members
and veterans, but to the American people as well. I am hopeful
that this hearing will lead to a better understanding of the
concerns of POW/MIA family members at this critical juncture of
our nation's postwar relationship with Communist Vietnam.
At the close of the war 2583 American servicemen remained
unaccounted for. As family members of the POW/MIA's we have
traditionally accepted the fact that a significant number of
POW/MIA cases may never be resolved. But as a practical matter,
members of Congress should carefully consider the fact that
more than 800 of our loved ones were simply ``presumed'' to be
dead, based solely on the passage of time, with no real
evidence of death.
Mr. Chairman, in considering the men who were ``presumed''
dead we should not lose sight of the fact that young servicemen
captured during the 1970's would only be in their 40's today,
and in the absence of evidence to the contrary, the National
Alliance of Families can only assume that at least some of
these men are still alive. As a matter of policy, the US
Government does not rule out the possibility that American POWs
could still be held.
Intelligence reports indicate that at the time of their
loss, some 305 Americans were either known to be alive and in
the custody of communist forces, or lost in close proximity to
communist units. In the early stage of our postwar relations
with Communist Vietnam this 305 member grouping became known as
the ``Discrepancy Case List,'' which was designed as a
yardstick to measure the level of cooperation afforded us by
Communist Vietnam in resolving the overall issue. Thus far, the
remains of only about 50 of the men on this crucial list have
been returned and identified. Over 250 American servicemen who
were on the initial list have never been returned, nor have
their identifiable remains been recovered and identified. This
is totally unacceptable.
Additionally, only a small number of the remains of 47 of
our loved ones who died while being held in prison camps in
South Vietnam during the war have been returned. Moreover,
although over 80% of US losses in Laos and 90% of those in
Cambodia occurred in areas occupied by Vietnamese forces during
the war, Vietnam continues to ignore repeated US requests for
case-specific records on our missing men lost in these
countries. Although Vietnam has provided thousands of
documents, records, photographs and other material to our
government, most of this material pertains to Americans who
have been accounted for, and only a very small percentage of
such material pertains to those who are still missing.
Today this distinguished Committee might hear testimony
from witnesses to the effect that Communist Vietnam is doing
everything it reasonably can to account for our loved ones.
These same witnesses might say that Vietnam is cooperating ``in
full faith,'' and POW/MIA family members should trust the
government of Vietnam to be honest and fair in achieving a
fullest possible accounting. They might say that our former
allies, the South Vietnamese, should trust the Vietnam
Communist Party to promote progress in human rights. Communist
Vietnam currently enjoys a surplus of more than 50% in trading
with America while our nation is subjected to a more than 50%
deficit. And even though Hanoi's trade negotiators have
declined to conclude a fair and equitable bilateral commercial
agreement with the United States, your Committee might hear
testimony favorable to Vietnam calling for even broader
commercial and economic ties.
We find it confusing that those lobbying for increased
trade with Vietnam are calling upon the U.S. Government to
provide credits and investment guarantees, and other conditions
before their private capital investments are ventured.
Concerning the aspect of ``credits,'' what the lobbyists seem
to be saying is that they want members of Congress to help
their constituent corporations with so called ``credits'' from
the taxpayer funded U.S. Export Import Bank. But as you are
probably aware the Communist Party of Vietnam currently equips
and maintains one of the largest military and police forces in
the entire world. As a result Vietnam currently has very
limited capacity to purchase American products, unless it also
receives loans from some taxpayer funded entity. But being a
police state, Vietnam is unlikely to reduce the size of its
forces, and is, therefore almost certain to default on any such
loans.
Concerning the ``guarantees'' sought by lobbyists,
apparently they are referring to insurance protection from the
U.S. taxpayer funded Overseas Private Investment Corporation
(OPIC), which as you know is similar to the Federal Deposit
Insurance Corporation (FDIC). The obvious question that comes
to the minds of POW/MIA family members is: if American
businessmen do not trust the Communist Government in Vietnam
with their investments, how can they expect those whose loved
ones are still missing to trust that same government in
providing an honest accounting for their sons, husbands,
fathers and brothers. This is perhaps the most obscene aspect
of the on going debate concerning U.S. Vietnam relations.
In essence, we believe that there are only two key issues
remaining between the United States and Communist Vietnam that
must be resolved before Congress favorably considers any
further concessions in advance to Hanoi, especially OPIC and
Export Import Bank financing. These two issues are a fair and
honest accounting for our missing men, and democracy for the
Vietnamese people. We have no objections to American firms
conducting trade with any nation, but trade and Commerce are
private matters and those engaging in such trade with Communist
Vietnam should do so at their own risk.
In looking at the degree of rigidity of the Communist Party
of Vietnam, especially its insistence that only a one party
system will be tolerated, we find it equally unfair to expect
the Vietnamese people to trust the Communist Party of Vietnam
to move forward with progress toward democracy. Over the past
few years we have heard considerable rhetoric concerning human
rights, but we believe that without democracy as a foundation,
it is impossible to insure basic human rights in any nation.
Concerning emigration by Vietnamese citizens from that country,
the process has severely hampered by bribery and corruption.
Applicants are routinely forced to pay bribes in exchange for
required documents, clearances and exit permits. Traditionally
the emigration process has been tightly controlled by the
Ministry of the Interior, formerly the Ministry of Public
Security. This premier intelligence and security organization
of the Vietnam Communist Party is almost entirely funded by
monies extorted from citizens seeking to leave Vietnam, and the
acquisition of passports and exit permits is an extremely
cumbersome process.
We can all remember a time, not too long ago, when America
supported and encouraged democracy around the world. Next to
God, duty, honor and country, were the most important things in
our lives, and your Committee would have had to search far and
wide in order to find even one witness to come here and lobby
on behalf of a Politburo led dictatorship such as Vietnam. But
money is a powerful force, and the current attitude of profit
before principle is prevalent throughout the highest levels of
our government and national corporate community.
We believe that this situation is indicative of the decayed
and degraded state of moral and patriotic feeling that has
gradually spread across the nation. Our government is racked by
scandals, illegal political contributions are rampant, and
senior officials have been convicted of selling our nation's
most important secrets to foreign countries, not because of
their ideology, but based entirely on monetary greed. We need
only look at the recent unprecedented actions of our children
in schools across America to fully comprehend the impact of the
profit before principle attitude on our society as a whole.
In the past few years POW/MIA families have watched closely
as various Committees of Congress conducted inquiries
concerning illegal campaign contributions, as well as the
impact of such contributions on American foreign policy. We
feel frustrated, however, that most of these investigative
efforts have been focused on China, with very little apparent
interest in Vietnam. This is despite the fact that former
Deputy Assistant Secretary of Commerce, Mr. John Huang, and
others associated with the Indonesian based Lippo Group, have
clearly been implicated in influencing U.S. policy toward
Vietnam, but only recently have they been indicted. The Lippo
Group, with close ties to businesses in Arkansas, is one of the
largest investors in Vietnam and this organization realized
considerable advantage from increased commercial and economic
ties between the U.S. and Vietnam. POW/MIA family members are
concerned that Congress has not undertaken its responsibility
for oversight in scrutinizing motivation for quickly lifting
the trade embargo against Vietnam in 1994, as well as the
granting of diplomatic recognition to Vietnam in 1995.
On our Independence Day in July, 1995 POW/MIA family
members were appalled when Senators Bumpers of Arkansas and
Harkin of Iowa traveled to Hanoi to gauge the potential for
establishing diplomatic relations with Communist Vietnam.
Shortly after their return to the U.S. both gave the proverbial
``green light'' to President Clinton. Senator Harkin also
called for guarantees for investors in Vietnam by the OPIC.
POW/MIA family members were disheartened to learn that Senator
Harkin's wife is the head of the OPIC. Shortly after the trade
embargo was lifted Vietnam granted its first and only real
estate license to Collier-Forbes International, and POW/MIA
family members would like to when and how negotiations for this
agreement occurred, and just exactly who was involved. We are
also keenly interested in congressional scrutiny of the
activities of the U.S. Vietnam Trade Council during the period
1991 to 1996.
Family members of the missing throughout the years have
become fully aware of Communist Vietnam's expertise in
political struggle, especially concerning the art of deception.
In exploiting character defects, such as greed, Hanoi's
strategists are fully capable of working with large
contributors to gain the cooperation of some key officials here
in the United States to develop influence groups. In such
instances groups traveling to Vietnam receive special
treatment, such as travel assistance, transportation, briefings
and meetings by both U.S. and Vietnamese officials are not
unusual.
POW/MIA family members fully support the general concept of
healing tours, but we must remind those involved that we will
not tolerate anyone taking advantage of this tragic situation
in order to heal themselves or further their own agenda. When
sensitive investigations are conducted into the fates of those
on the Discrepancy Case List, or those who have been
``presumed'' dead, we not only expect, but demand that rather
than amateurs, such investigations be supervised and conducted
solely by experienced, qualified, professional investigators
with formal agency level training.
In addition to a long term experience factor, we expect
that personnel conducting such investigations, including the
Joint Task Force-Full Accounting (JTF-FA) will not only be
certified through formal training, but proficient in the art of
interrogating witnesses and fluent in the language pertinent to
the area of loss. A thorough knowledge of Vietnamese Communist
policies and procedures regarding the capture, evacuation,
detention and exploitation of foreign personnel should also be
considered a basic requirement for qualification.
We also expect those involved in the remains identification
process be fully qualified in the science of forensic
anthropology. The Central Identification Laboratory Hawaii
(CIl-HI) make their identifications based on remains recovered.
They must stop their no remains ``death by association''
identifications. U.S. officials must stop referring to these no
remains identification as remains recovered. Burying names
without remains is creative accounting to further foster the
myth of Vietnamese cooperation.
One important unilateral step by our own government POW/MIA
family members would like to see taken, prior to any further
concessions in advance to Vietnam, is the declassification of
all POW/MIA related information not directly associated with an
ongoing live sighting investigation.
We believe it imperative that family member organizations
have access to all such information. We are dismayed that prior
to September 1997, information regarding the Source of U.S.
remains, as well as information as to whether remains had been
stored in warehouses by Vietnam prior to repatriation was
provided to us. However, subsequent to the resignation of BG
James Wold, the head of the Defense Prisoner of War and Missing
Personnel Office (DPMO) in August 1997, this information has
purposely been withheld.
In all honesty I must tell you that a great deal of
skepticism exists among members of our organization. The
general consensus is that regardless of what transpires during
this hearing, additional concessions by our government to
Communist Vietnam in advance of a full accounting will be a
proverbial ``done deal.''
Mr. Chairman, there are many great people in our
organization. We should all remember that we cannot judge the
greatness of people by measuring what it takes to get them
going, we can only judge the greatness of people by measuring
what it takes to make them stop.
I can assure you that even if Congress is not willing to
support us by disapproving the President's waiver of the
Jackson-Vanik amendment, we, at the National Alliance of
Families for the Return of America's Missing Servicemen will
not stop until we have achieved our goal, the return of our
live prisoners of war, a truthful accounting of the missing and
the proper identification of remains. Thank you for the
opportunity to testify.
Chairman Crane. Thank you.
Mr. Craft.
STATEMENT OF GREIG CRAFT, PRESIDENT, CRAFT CORPORATION; MEMBER,
BOARD OF GOVERNORS, AMERICAN CHAMBER OF COMMERCE IN HANOI,
VIETNAM; AND VICE CHAIRMAN, ASIA-PACIFIC COUNCIL OF AMERICAN
CHAMBERS
Mr. Craft. Mr. Chairman, Mr. Rangel, thank you for the
opportunity to testify today before you. Like my colleagues, in
an effort to be brief, my testimony which is submitted, will
elaborate on a lot of the points that I will not cover right
now, but I would like to highlight a few things.
In my capacity as vice chairman of APCAC, which is the
acronym for the Asia-Pacific Council of American Chambers, we
represent 40,000 businessmen and women in the region. We
represent 6,600 companies, including Vietnam, and our
membership manages trade volumes in excess of $200 billion. I
note this only because we are out there in the region, and I
think we recognize what is going on in the region, and being at
the forefront of a lot of these issues, I think we have the
experience to share with you some of our experiences.
I think it is also important to note that business is
sometimes unfairly accused of only being in the region to make
money, to make profits, and that we overlook the issues of
MIAs, the POWs, human rights. I think nothing could be further
from the truth. On the contrary, we do believe that the
engagement that we are involved in does help promote democracy
and does help promote a lot of the ideals that America is
trying to put forth in many of these areas.
As an example of what business does, I think we cannot
overlook the technology transfers, the training programs that
go on, and education that happens by bringing young Vietnamese
as an example to the United States and the training that goes
on in those countries. We do believe that we serve America's
national interest by fueling the growth of American jobs in
exports which have contributed so significantly to our American
economic success in the past few years. It is our position that
Vietnam, with its young and well-educated population of nearly
80 million people, offers significant opportunities to help
sustain this economic growth, provided American companies can
remain competitive.
I think it is unfair to categorize programs such as OPIC
and TDA or Ex-Im as corporate welfare or only looking to the
American taxpayer to guarantee risk that maybe we are not
otherwise prepared to make. In the case of many companies, we
have SMEs, we have large corporations, Fortune 500 companies in
Vietnam, are taking enormous risk in making investment there.
They have made that investment well before we had access to
OPIC, Ex-Im and TDA.
However, as a personal example, I can tell you, our company
since 1995 has led the development of Vietnam's first direct
reduced iron plant. This is a $300 million project, which will
be the first American involvement in Vietnam's emerging steel
market. It is product that can also be used here in the United
States. More importantly, this American-led consortium which
will include companies such as Raytheon and Midrex, will use
U.S. technology, services and equipment.
We awarded the first TDA grant to Vietnam in 1997, and we
have submitted an application to OPIC for financing. It does
not mean that we are only looking for an elimination of the
risk in order to pursue this project, but on the contrary, what
happens, without access to some of these government programs?
What happens is the Vietnamese have no recourse but to turn to
foreign suppliers, foreign suppliers of raw materials, foreign
suppliers of financing, and indeed, ultimately foreign
ownership.
Denial of the programs available with the Jackson-Vanik
extension will only force Vietnam to go to other countries for
their investment. It also misses the point that it punishes
Vietnam, but it does not change anything. They will have access
to many, many other countries, programs, financing programs,
and offer opportunities for their companies to step in and fill
voids that we are simply cut out of. So in effect, denial of
these programs becomes a form of unilateral sanctions, which in
the end, hurts everyone, both Vietnamese and Americans. We do
not believe this should be our policy.
Last year, I testified before this Subcommittee and stated
denying Jackson-Vanik waiver was the wrong action at the wrong
time. Today, I say to you that renewing the Jackson-Vanik
waiver is the right action at the right time.
Thank you very much.
[The prepared statement follows.]
Statement of Greig Craft, President, Craft Corp.; and Member, Board of
Governors, American Chamber of Commerce in Hanoi; On Behalf of Asia-
Pacific Council of American Chambers, Hanoi, Vietnam
Mr. Chairman and committee members--good morning. My name
is Greig Craft. In my capacity as Vice Chairman of APCAC (Asia-
Pacific Council of American Chamber) I am honored to be here
today to share our position on extension of Jackson-Vanik, as
well as to provide you first hand observations as a result of
several years of residency in Hanoi. First, let me state
unequivocally that all American business people in Vietnam
share the fullest possible accounting of American servicemen
missing from the war. Second, all American business people have
an interest in promoting freedom of emigration, which the
Government of Vietnam has made significant progress. Lastly, in
addition to pursuing commercial opportunities, we all have an
ongoing interest to promote human rights and democratic freedom
throughout the world. The process of economic development bodes
well for eventual political liberalization in Vietnam as well.
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. 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 our national psyche 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 our national interest.
The members of APCAC represent more than 40,000 businessmen
and women, and more than 6,600 companies in 18 Asia-Pacific
countries, including Vietnam. Our membership manages trade
volumes in excess of $200 billion and investments of over $50
billion in the region. We serve American's national interests
by fuelling 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 80 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 over $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.
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 know
American brands are already market leaders in many instances.
Access to television programming such as MTV, CNN and NBC only
adds to this consumer brand awareness. Vietnam's strategic
location on China's southern border cannot be overlooked--this
makes it of pivotal political importance to the United States
as well. Vietnam's desire to join the world community is
evidenced by it's entry into ASEAN and APEC, and preparations
to join the WTO. However, as a part of its globalization
initiative Vietnam want 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. If further developed, it
will not only help sustain economic growth in America, but
equally important, will provide stability in the region. We in
the business community can help further this process, and
ultimate 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 foreign companies who enjoy
sovereign financing and support from their respective
governments. Continuation of the Jackson-Vanik waiver is
therefore essential to maintain ongoing American involvement in
Vietnam, for the benefit of American enterprises.
On a personal note, since 1995 our company Craft
Corporation, have led the development of Vietnam's first Direct
Reduced Iron plant--a $300 million project which 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 led consortium,
including involvement of US companies such as Raytheon 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 in 1997
and have submitted an application to OPIC for financing and
insurance. However, without access to these government programs
there would be no alternative but to turn to foreign financial
sources, foreign equipment and ultimately foreign ownership.
Denial of the programs available with the Jackson-Vanik
extension will only force Vietnam to go to other countries for
their investment, raw materials and trade. 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. Last year I testified before this committee
and stated ``denying the Jackson-Vanik waiver extension is the
wrong action at the wrong time.'' Today I say to you: Extending
Jackson-Vanik waiver is the right action at the right time.
Thank you for considering our views.
Chairman Crane. Thank you. For all of our panelists, what
potential opportunities are there for U.S. firms in the
Vietnamese market? Does anyone have a view on that? Yes, Mr.
Johnstone?
Mr. Johnstone. Mr. Chairman, it has an enormous population
base, some 78 million people, the second largest country in
Southeast Asia. I think as it grows economically, one can
expect there to be a substantial increase in the potential
market for American exporters there. So there is no question,
and I think you can see it from the standpoint of the interest
that American business has in being there, their willingness to
take risks in being there because it is a difficult place to do
business. Still, we see a substantial potential for Vietnam as
an export market for American goods and to create American
jobs.
Chairman Crane. Any other? Yes, Mr. Do.
Mr. Do. Mr. Chairman, I have a very different viewpoint. We
have to keep in mind that the average per capita income for a
Vietnamese is hovering between $250 to $300 maximum. We all
know that the wealth in Vietnam resides within the party
membership. The 100 richest people in Vietnam are all party
members and officials. With that kind of scenario, it is
doubtful that the Vietnamese population, the general population
that I'm speaking about can have the resources or money to
afford to buy any kind of goods or export that we might be able
to export over there.
I think the best way to benefit American business interest
in the long run is to help Vietnam to build a stable,
democratic society, ruled by the rule of law, so that everyone
has equal opportunity for prosperity. Only then can we have a
truly potentially beneficial export market.
Chairman Crane. Yes, Mr. Trinh?
Mr. Trinh. I would just like to add one fact into the
discussion. Annually there are about 200,000 Vietnamese
overseas going back to Vietnam to visit their country and their
relatives. Regardless of the political belief of different
people, the fact that the Vietnamese-Americans are going back
to Vietnam is a good way to introduce the people in Vietnam to
democracy, the new way of thinking, and that is something
that's intangible, but it is coming. People in the country,
they appreciate that. We know that we have about a million
Vietnamese-Americans here in the United States. That population
is very important. Thank you.
Chairman Crane. Yes, Mr. Craft.
Mr. Craft. I would like to add, Mr. Chairman, the question
that you asked on opportunities there. It is interesting, there
also sometimes is a misperception in the United States about
what is going on in Vietnam currently. It is interesting to
note we have, as Ambassador Peterson mentioned, over 400
companies there. These include Fortune 500 companies such as
Coca Cola, Pepsi, and Ford Motor Co. which has an automobile
assembly plant. Also the statistics of saying, as Mr.
Rohrabacher mentioned, that there has been a study done that
there is an exodus of companies leaving Vietnam, U.S.
companies, I think that is a little bit inaccurate. We have
over $1.2 billion invested there, only in 4 years since the
embargo has been lifted. That is an incredible number.
I think the press sometimes inaccurately portrays this.
What is happening is that because of the Asia recession, you
have got a lot of companies that are consolidating operations.
So they may be consolidating a lot of operations to Singapore,
or Bangkok, or Hong Kong, so it doesn't necessarily represent a
wholesale exodus from Vietnam.
Chairman Crane.
Mr. Rangel.
Mr. Rangel. Thank you.
Mr. Do, can you tell me briefly, something about the
organizations you represent, the membership?
Mr. Do. Yes. Right. The coalition, like I said, represents
about 30 organizations in communities across the U.S. Just to
name a few, the Vietnamese-American Community in southern
California----
Mr. Rangel. How many people are members of these
organizations, the membership?
Mr. Do. The total Vietnamese-American population in
southern California is roughly 350,000 people.
Mr. Rangel. And do you have the cities that they are
located in?
Mr. Do. I'm sorry?
Mr. Rangel. Do you have the cities where they are located?
Mr. Do. Westminster is the base, in Orange County.
Mr. Rangel. Are all of the organizations in California?
Mr. Do. No. They are stretching from Minnesota to Portland,
Oregon, to San Jose, Houston, the local community here, just to
name a few.
Mr. Rangel. Could you send me some information so that we
would know more about them?
Mr. Do. I certainly can submit a list of all of the
members.
Mr. Rangel. Good. So that we will know the Congresspeople
who represent them.
Mr. Do. Certainly.
[The following was subsequently received:]
MEMBER ORGANIZATIONS
Vietnamese Interfaith Council in the USA
Vietnamese Community of Oregon
Vietnamese Community of Seattle, Washington
Vietnamese Community of Southern California
Vietnamese Community of Clark County, WA
Vietnamese American Community of Illinois
Vietnamese Community of Boston, MA
Vietnamese Community of Georgia
Vietnamese-American League of San Diego
Vietnamese Community of New York
Vietnamese Community of Houston & Vicinity
Vietnamese Community of Oklahoma
Vietnamese Community of Louisiana
Vietnamese Association of Charlotte, NC
Alliance of Vietnamese Associations in Northern California
Vietnamese Community of Minnesota
Vietnamese Community of NW New Jersey
Vietnamese Community of NW Pennsylvania
Vietnamese Community of Syracuse, New York
Vietnamese Community of Endicott, New York
Vietnamese Community of Utica, New York
Vietnamese Community of Dallas, Texas
Vietnamese Community of Fort Worth, Texas
Vietnamese Community of San Joaquin Valley
Vietnamese Community of Jacksonville, Florida
Vietnamese Community of Orlando, Florida
Vietnamese Community of South Florida
Vietnamese Community of Florida
Vietnamese Community of Los Angeles
Vietnamese Community of Washington, D.C., Virginia, and Maryland
Mr. Rangel. Ms. O'Shea, I gather from your testimony that
you heard the testimony of Ambassador Peterson, who is a
patriot and a hero, and enjoyed a great reputation for truth
and honesty as a Member of the Congress. He had indicated that
great progress was being made with MIAs, with religious
freedoms, and all of those areas. Does your organization have
any reason to challenge his testimony?
Ms. O'Shea. Well, we disagree, yes. Within the last month,
month-and-a-half, the United Nations Committee on Religious
Tolerance issued a report. They were highly critical of Vietnam
and their oppression of religious freedoms. They said that, and
I'm sorry I don't have the report with me to give you the exact
wording, but it said that they were taking a step backward and
that they were cracking down on new religious freedoms.
Mr. Rangel. But your major thrust of the National Alliance
is with the missing servicemen.
Ms. O'Shea. That is correct.
Mr. Rangel. And he went into great detail as to progress he
thought was being made in this area.
Ms. O'Shea. Well, it's the definition of progress. If you
consider it progress that they are burying people without
remains and considering those people accounted for fully, I
guess you could consider that progress. The members of our
organization do not. We believe to account for someone, you
must have identifiable remains, and that is what is returned to
the family for burial.
Mr. Rangel. Is your organization in direct communication
with our Ambassador?
Ms. O'Shea. Not that I know of, no. Actually though, I do
believe that during the recess, some of our members did speak
with Ambassador Peterson on several points.
Mr. Rangel. What would you think could possibly be a better
source as to what is going on in North Vietnam than the United
States Embassy? Where would you get your information?
Ms. O'Shea. Well in the past, prior to having an embassy
there, the information was funneled----
Mr. Rangel. Now that we have an outstanding representative
there of the greatest reputation, who was a prisoner for 6
years.
Ms. O'Shea. We are not challenging Ambassador Peterson's
reputation. The POW issue, the negotiations on POW/MIAs has
historically been handled through the joint task force full
accounting in Hanoi, and not as a matter at the embassy level.
Mr. Rangel. But don't you think at least as it relates to
your organization, that it would be helpful to at least test
the information that you have with our representatives in North
Vietnam?
Ms. O'Shea. I am not sure I understand what you mean by
testing information.
Mr. Rangel. Don't you think the Ambassador could help your
organization have a better understanding of the problems that
we are having in Vietnam?
Ms. O'Shea. I am sure he has a great insight on those
problems. But I am only questioning the statement he made about
remains identification and accounting for men when we know for
a fact that they are burying names and not remains. People are
getting headstones with no remains under them.
Mr. Rangel. I am just saying I think it would make a lot of
sense for some communication to be had by your alliance with
the Ambassador. That is all I am suggesting.
With the Chamber of Commerce, I know that the Chamber has
participated in efforts to remove the embargo from Cuba. It
would help me, Mr. Johnstone, if you could just put together
all of those efforts and forward it to me, because most
recently I think it included some humane and religious
organizations that were embarked under the leadership of the
Chamber.
Mr. Craft, while your chamber concerns itself with Asia and
the Pacific, there's hardly anything that you have said that
your business interests, I mean the humane interests and
bringing democracy, you have no reason to believe that that
would not pertain to Cuba if we removed the embargo and
engaged? Is there any reason you believe that we cannot be
equally as successful in Cuba?
Mr. Craft. Absolutely not. I think it certainly could be. I
think Vietnam in a way has been an idea model for you to
follow. I think furthermore, it's very interesting that--by the
way, one of our APCAC priority positions that we have been
bringing to the Hill this week is that we do not support
unilateral sanctions. We feel that they are counter-productive,
and of course an embargo such as this is a form of unilateral
sanctions.
Mr. Rangel. Is your group a part of the U.S. Chamber of
Commerce?
Mr. Craft. Yes. We are.
Mr. Rangel. OK, good. Because they have been doing good
work.
Thank you, Mr. Chairman.
Mr. Do. Mr. Chairman, can I just have 1 minute to address a
question you asked the previous panel?
Chairman Crane. Yes, indeed.
Mr. Do. Thank you. On the potential impact of withholding
the Jackson-Vanik waiver, I just want to add two more points.
History has taught us that the Vietnamese Communists are very
smart, very shrewd negotiators. For the last few years, at
least since the lifting of the trade embargo, they have been
getting a free ride from the United States. By withholding the
waiver right now, I think we will send a very strong message
that we as a nation are very serious about negotiating with
them on our own terms, not their terms.
Second, I think by putting a little bit of pressure on them
right now, it will help to strengthen the hands of the
reformers within the Vietnamese Government who are pushing
forward with more reforms. So pressure will help the reforming
effort in Vietnam, not hinder it. Those are the two points I
wanted to add. Thank you.
Chairman Crane. Well, I thank you. I thank all of you
panelists for your participation. As I told the previous panel,
even though you may not be sitting here at the dias all the
time, will you please stay in touch and keep communications
flowing to us, because we need all the input we can get.
With that, with the bells going off again, the Subcommittee
will stand adjourned.
[Whereupon, at 1:43 p.m., the hearing was adjourned.]
[Submissions for the record follow:]
Statement of Peter Ryder, American Chamber of Commerce in Vietnam,
Hanoi Chapter, Hanoi, Vietnam
Mr. Chairman, thank you for the opportunity to speak today
in support of the re-waiver of the Jackson Vanik Amendment as
it affects Vietnam.
My name is Peter Ryder and I am the President of LukeMax
Company, a privately held U.S. firm that has established and
invested in a number of businesses and projects in Vietnam. I
have been actively involved in the Vietnamese market since
1992, and during this period I have witnessed first-hand the
extraordinary socio-economic changes that have taken place as
Vietnam has begun the process of transformation from an
internally-oriented demand-driven economy to a globally-
connected market-oriented economy. From my first days in
Vietnam, through to today, I have believed that Vietnam as a
market holds great potential for American investors, American
exporters, and American service providers, and I have been at
the forefront of American efforts to see that this potential is
realized. In our own small-scaled but not insignificant way, my
company has begun to realize some of this potential as an
investor and business developer in the fields of real estate,
information technology, engineering, consumer products,
finance, and education.
Today I come to you with the opinions of not just one
businessperson in Vietnam, but as a Governor and representative
of the American Chamber of Commerce in Vietnam. This
organization was founded in 1994 to develop trade, commerce and
investment between the United States and Vietnam. The
association now has over 550 members working towards this
mission. The members hail from across the U.S. and represent
Fortune 50 companies to small entrepreneurs representing
construction, energy, telecommunications, agriculture, tourism,
manufacturing and reforestation among others. The one belief we
all hold true is that in a country of 78 million people, rich
with natural resources there is a market for American products
and ingenuity.
However, in order for each of these enterprises to succeed,
American companies need to be on a level playing field with
other foreign investors. To date over 1.2 billion U.S. dollars
have been invested or pledged in Vietnam. To protect and grow
this investment, assistance from trade promotion programs is
required. For example, when American businesses bid for a
project they are often competing against other OECD countries,
such as Japan, England, France and Belgium, which have ten year
financing from their trade support organizations. Without some
assistance it is virtually impossible for American companies to
compete, please do not take the support away. Without the
Jackson-Vanik waiver American businesses would be put a major
disadvantage, one that may not be recoverable.
The second opportunity for growth for American companies is
by completing the Bilateral Trade Talks, which are being
discussed this week. Ratification of a trade agreement between
the U.S. and Vietnam will not only improve the situation for
the companies already based in Vietnam, but it could open doors
for other American companies. Companies that have petitioned
for the trade agreement include IBM, Arthur Andersen, CIGNA,
Motorola, Cargill, Finasa, Procter & Gamble, Unisys, John
Hancock and Triumph. Currently, Vietnam is one of the few
countries that does not have normal trade relations with the
United States. To move forward in the bilateral trade
negotiations and eventually reach agreement the Jackson-Vanik
waiver is required. The proposed agreement would transition
Vietnam towards the WTO standards and encourage them as a
player in the world economy.
There is still a third mechanism by which supporting
American businesses in Vietnam can in turn put pressure on the
Vietnamese government to reform. By having American
businesspeople on the ground in Vietnam we are able to
influence new legislation. For example, last year AmCham was
one of the twenty business groups that formed a Private Sector
Forum. This association now meets quarterly with Deputy Prime
Minister Nguyen Manh Cam to improve the business environment
for foreign investors. If there were not support for American
businesses we would not be part of the foreign community
influencing the rules governing the business environment in
Vietnam.
As you can see it is vitally important to American business
interests and the development of the Vietnamese market economy
to waive Jackson-Vanik amendment again this year. Without this
waiver we will fall far behind the other investors in
developing a market for American goods and loose any impact on
future legislation.
The American Legion
Washington, D.C. 20006
June 22, 1999
Honorable Phillip M. Crane, Chairman
Subcommittee on Trade, Committee on Ways and Means
U.S. House of Representatives
Longworth
Washington, DC 20515
Dear Mr. Chairman:
It is unacceptable to The American Legion for the United States to
put business concerns over the fate of Vietnamese citizens who fought
alongside us during the Vietnam war, and who have sacrificed so much
for so long and are still unable to freely emigrate to this country.
The American Legion recognizes that the U.S. business community is
concerned with maintaining and strengthening economic ties in Vietnam,
but we cannot let these commercial interests take precedence over the
destiny of our former allies who assisted us and are still loyal to our
cause. The retention of the Jackson-Vanik waiver can be a powerful sign
to show that we honor our commitments to human rights.
Obstacles continue to exist on the road to free emigration for
Vietnamese who want to come to the United States and other countries in
the free world. Ethnic groups that were allied with the Americans
during the war, namely the Montagnards, and former employees of the
U.S. government are still discriminated against by the Vietnamese
government when applying and processing through the Resettlement
Opportunities for Vietnam Returnees program (ROVR), the Orderly
Departure Program (ODP), and others.
What better way to show that we truly are committed to allowing
those Vietnamese who have remained faithful to the United States to
emigrate than by denying U.S. exporters to Vietnam access to U.S.
Government credits. This would be a powerful signal that we demand
increased progress and cooperation on the part of the Vietnamese
government.
The American Legion strongly urges you and sub-committee members to
not grant the Jackson-Vanik waiver for this year.
JOHN F. SOMMER, JR.
Executive Director
Statement of Boeing Company, Arlington, Virginia
The Boeing Company appreciates this opportunity to comment
on the U.S. trade relationship with Vietnam and commends the
Chairman for his leadership on this important issue. Boeing
strongly supports U.S.-Vietnam trade relations and applauds the
Congress and the Administration for their efforts to implement
the policies necessary to further expand trade with Vietnam.
The U.S.-Vietnam trade relationship is beneficial to both
nations. Open trade with Vietnam provides a market for U.S.
exports, creating high-paying jobs here at home, and gives the
Vietnamese people an opportunity to experience the benefits of
free enterprise. Commercial aviation is a key element of that
relationship, increasing trade, tourism, and other types of
commerce, promoting communication, and generating the foreign
currency necessary for continued economic growth and
development.
The Boeing Company supports renewal of Vietnam's waiver
under the Jackson-Vanik amendment to the Trade Act of 1974 and
recommends the establishment of both a general trade agreement
with Vietnam and an air transportation bilateral agreement to
accelerate Vietnam's progress toward a vital free market
economy.
Vietnam has met the requirements of the Jackson-Vanik
amendment that is designed to encourage a policy of free
emigration in countries with non-market economies. Since the
Administration normalized diplomatic relations with Hanoi in
1995, Vietnam has moved aggressively to comply with the
Resettlement Opportunity for Vietnamese Returneees agreement.
The waiver of Jackson-Vanik gives American companies
selling to Vietnam access to crucial US export promotion
programs offered by the US Export Import Bank (EXIM) and the
Overseas Private Investment Corporation (OPIC). These programs
are vital to meeting the challenges of doing business in
Vietnam's emerging market.
Since the President lifted the trade embargo on Vietnam in
1994, the country has made significant free market reforms and
has experienced substantial economic growth. Foreign companies
have joined forces with the Vietnamese to undertake a major
rebuilding of the economy in almost every sector. The aviation
sector is no exception.
Vietnam Airlines has been working hard to make those
changes necessary to compete in the increasingly competitive
commercial aviation industry. Until six years ago, it operated
a small fleet of older, Russian-made aircraft generally
considered unreliable and uncomfortable by today's standards.
Vietnam Airlines now has replaced much of this fleet with
modern equipment, allowing the airline to greatly improve its
level of service and better meet the demands of today's
sophisticated traveler. The results have been dramatic.
From 1992 to 1997, prior to the Asian financial crisis,
Vietnam Airlines experienced annual traffic growth averaging 30
percent per year. This compares to an average for the industry
worldwide of five percent per year, and for Asia as a whole, of
seven percent. The financial turmoil that engulfed Asia in late
1997 and in 1998 did not have the same negative impact on
Vietnam Airlines that it did on the airlines in neighboring
countries. Some of these airlines suffered from double-digit
percentage reductions in traffic, and significant erosion in
profits. While Vietnam Airlines did lose profits, the carrier
was able to hold on to a generally constant level of traffic
during the depths of the crisis.
As these statistics indicate, the potential market for
aircraft sales in Vietnam over the next 10 to 15 years is
significant. Boeing projects Vietnam Airlines could require
three to five billion dollars worth of modern aircraft during
this period. Such growth means that Vietnam Airlines could
develop an operation comparable to the size of Thai
International Airways, Cathay Pacific, or Singapore Airlines,
each with 60 to 80 aircraft.
Extension of the Jackson-Vanik waiver and a bilateral trade
agreement with Vietnam are essential to the ability of The
Boeing Company to compete for commercial aircraft sales in that
country.
In recent history, the U.S. trade embargo on Vietnam made
it impossible for Boeing to compete for direct aircraft sales
in Vietnam. As a result, our competitor was awarded a contract
to provide a fleet of Airbus A320 aircraft to Vietnam Airlines.
However, Vietnam Airlines operates three Boeing 767-300ER
widebody aircraft leased from GE Capital Aviation Services, and
Boeing is involved in a sales campaign for the 777 aircraft.
Boeing will have to compete aggressively for this business, but
cannot do so in the absence of a strong trade relationship with
Vietnam.
Boeing urges the Congress to support the waiver of Jackson-
Vanik for Vietnam and the development of a bilateral trade
agreement with Vietnam. Increased trade between our two nations
will create jobs and economic opportunity both in the United
States and Vietnam.
Statement of Caterpillar Inc.
Caterpillar Inc. is pleased the 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 both countries.
We are encouraged by the progress being made in
consultations with Vietnam on a Bilateral Trade Agreement.
Renewing the Jackson-Vanik waiver will further signal U.S.
confidence that our two countries can work together on areas of
mutual benefit towards conclusion of this Bilateral Trade
Agreement and beyond.
The Jackson-Vanik waiver promotes U.S. commercial interests
in Vietnam by allowing support from the Export-Import Bank of
the United States (Ex-Im) and The Overseas Private Investment
Corporation (OPIC) to U.S. businesses there. Without support of
US Export Credit Agencies, Caterpillar will be at a distinct
disadvantage with our foreign competition with ready access to
their own export credit agencies.
Caterpillar currently has applications pending with Ex-Im
and OPIC for projects that will improve the infrastructure of
Vietnam and the quality of life of its people. We are hopeful
that trade relations between the United States and Vietnam--
including export opportunities supporting US jobs--will grow
significantly over the coming years as relations between our
countries continue to improve.
Caterpillar strongly urges Congressional support for the
Jackson-Vanik waiver for Vietnam.
Caterpillar Inc., headquartered in Peoria, Illinois, is the
world's largest manufacturer of construction and mining
equipment, diesel and natural gas engines and industrial gas
turbines. Company sales and revenues set a record in 1998 of
nearly $21 billion.
Statement of Andre Sauvageot, General Electric Company, Hanoi, Vietnam
I am Andre Sauvageot, residing in Hanoi as the Chief
Representative for General Electric in Vietnam. I have held
this position for over 6 years. As I did for your hearing last
year on the initial waiver of the Jackson-Vanik Amendment, I am
again 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. I completed 8
years of Vietnam service with varied assignments including US
Liaison & Coordination Officer for the Military Assistance
Command (MACV) in the Prime Minister's Office. My last
assignment, ending in March 1973, was as the Interpreter for
the Chief of the American Delegation to the Four-Party Joint
Military Commission charged with implementing the Paris
Agreement on ending the war.
From 1976 to 1978 the Army assigned me to the US Department
of Health, Education & Welfare as an Assistant Director to the
Indochina Refugee Assistance 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 of these delegations was solely on the
MIA/POW issue, but later they 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 leadership
and the freedom to travel freely in Vietnam at my own
initiative throughout my mission.
My long involvement in Vietnam has given me a profound
respect for the Vietnamese. Their pragmatism, flexibility,
courage and intelligence makes it a country which is very
amenable to constructive engagement. I agree with Department of
Defense experts working the MIA/POW issue full time that the
Vietnamese have provided outstanding cooperation and that the
cooperation has increased as the U.S.-Vietnam relationship
expands. The same is true on a wide range of commercial and
other issues of interest to both countries. Progress on all
issues is positively correlated with improvements in the
overall relationship based on the principle of mutual benefit.
II. Doing business in Vietnam
Doing business in Vietnam is tough sledding. A country
which has long been ravaged by war in its struggle for
independence and national unity cannot be expected to move
quickly from feudalism through Soviet-style state socialism to
a market economy.
The problems with an underdeveloped banking system,
underdeveloped legal and physical infrastructure, lack of
transparency and widespread corruption are serious and combine
to make it 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.
In addition, the lack of domestic capital and severely
limited national budgets constrain the Vietnamese and their
foreign business partners to seek off-shore-funding. Financing
must often be in the form of government-to-government soft
loans, as Vietnam's lack of a successful track record may
preclude commercial financing. To be successful, companies must
be prepared to make a long term commitment and maintain an in-
country presence.
For the committed company with the right products or
services, correct corporate policies and open minds to learn
about Vietnam, the positives far outweigh the negatives.
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, and a literate,
intelligent, trainable workforce are durable, valuable and more
significant that the difficulties which so often frustrate
foreign companies doing business in Vietnam.
The Vietnamese have forged a society in which 78 million
people of some 54 different ethnic groups with a wide mix of
various religions and a large number of people who subscribe to
no religion all live peacefully together free of the religious
and ethnic strife with which so many other countries are
afflicted.
These strengths are the ingredients by which Vietnam will
effectively address its shortcomings. Vietnam will succeed by
integrating with the global economy. The question is which
companies from which countries will grow their businesses in
Vietnam, in short will grow with the country and by their
engagement help shape the kind of market economy that emerges
in Vietnam.
III. GE Businesses currently in Vietnam
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 on June 18, 1993.
Several of GE's 11 major businesses, each with its own
separate headquarters in the United States, have already
successfully entered Vietnam's market.
GE Medical Systems (GEMS)
Medical Systems, a global business, headquartered in
Milwaukee, Wisconsin was the first of GE's 11 major Businesses
to enter the Vietnam market, because medical equipment was
included among certain humanitarian items exempted from the
Trade Embargo by former President Bush in April 1992. Since
1993, GEMS has been selling ultrasound and x-ray equipment
against stiff foreign competition from long established
companies such as Siemens from Germany. GEMS has made a
respectable beginning, including the sale of high-end Magnetic
Resonance Imaging (MRI) equipment manufactured in Wisconsin.
GE Aircraft Engines (GEAE)
GE Aircraft Engines, headquartered in Cincinnati, Ohio
regards the Vietnam Airlines (VNA) as a strategic customer with
significant growth potential. VNA airline has selected GE or GE
joint venture engines with an aggregate value of some $162
million to power its entire small fleet of Boeing and Airbus
aircraft.
GE Capital Aviation Services (GECAS)
One of the 29 major branches of GE Capital Services,
headquartered in Stamford, Connecticut, GECAS has dry-leased 3
new Boeing 767-300ER aircraft to the Vietnam Airlines (VNA) for
a period of 5 years. Now, over 3 years into the lease, GECAS,
the worlds largest aircraft lessor, is favorably impressed with
the management and the integrity of VNA, a customer which has
always paid its lease obligations on time, even after the
currency crisis hit the Pacific nations.
GE Lighting (GEL)
GE Lighting, headquartered in Cleveland, Ohio has gained a
modest presence with annual sales running over $1 million.
GE Industrial Control Systems (GEIS)
GE Industrial Systems, a global Business, headquartered in
Salem, Virginia, is actively exploring a number of attractive
opportunities from supplying equipment for the modernization of
cement plants to crane control equipment for port facilities.
GE Transportation Systems (GETS)
Headquartered in Erie, Pennsylvania, GETS manufactures
locomotives as well as parts and components for its
locomotives. In Vietnam, GETS has won two international bids
(1996-97) to provide parts/components to the Vietnam Railways
(VR). GETS is working on opportunities to sell new locomotives
and to upgrade its old locomotives.
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, GEPS won the following contracts in
Vietnam:
--first ever gas compressors for the White Tiger field to
bring in gas from off-shore,
--2 generators for Ham Thuan 300MW hydro plant (contract
award February 1998), and
--2 steam turbines and 2 hydrogen cooled generators for Pha
Lai 2 600MW thermal, coal fired power plant.
IV. Importance of Jackson-Vanik Waiver
We deeply appreciate the initial support of your sub-
committee and ultimately of the entire Congress last year for
the first waiver of the Jackson-Vanik amendment. As a result
General Electric is better positioned than ever to win the
bidding opportunity which we presented last year, the Thac Ba
Hydro upgrade project. In addition, GE is in a more competitive
position to sell locomotives made in Pennsylvania and to bid on
additional hydro projects.
As we mentioned last year, Electricity of Vietnam (EVN) had
decided to upgrade a 30-year old hydro power plant named Thac
Ba. The project tender calls for ``supplier credit'' which
means the contractor must present a competitive financing
proposal. GE's competitors include ABB (Switzerland/Sweden) and
Siemens from Germany.
GE is extremely competitive from a technical standpoint
because of its high quality, large number of reference plants
and because GE, unlike ABB or Siemens, manufactures both the
turbine and the generators, as well as the turbine and
generator control equipment manufactured in Salem, Virginia.
GE is the first American company in Vietnam to have given
the U.S.-Eximbank a specific (Thac Ba hydro upgrade) project
request. Eximbank had already issued GE its letter of interest
at the time we submitted our testimony last year. However, at
that time, Vietnam had not yet decided which agency would
provide the sovereign guarantee or which organization would
sign a framework agreement with Eximbank, a precondition to
Exim's operations.
Vietnam has now resolved the issue of how to provide Exim a
sovereign guarantee for their loans and has designated the
State Bank of Vietnam to sign the Framework Agreement.
Meanwhile, EVN gave GE the green light to present our
feasibility study for the upgrade of Thac Ba.
Finally, Vietnam Railway is also exploring possible
Eximbank funding for a new locomotive purchase.
Renewal of the Jackson-Vanik waiver is critical to GE's
ability to pursue the Thac Ba upgrade, new locomotive
opportunities and other infrastructure projects.
Winning Thac Ba would help position GE for further wins in
Vietnam's growing hydro power market. It could be an important
stepping stone to Son la, a giant 3,600MW hydro power plant.
Failure to sustain the Jackson-Vanik waiver could also
greatly damage GE's chances against foreign competition on
projects for which ODA funding is available and for which
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 with ``untied'' aid,
should both the GE and the Japanese company's proposal be
roughly equivalent technically and economically, political
considerations could become a factor in determining how Vietnam
perceived its national interest. Stated differently, diminished
U.S. involvement results in less U.S. leverage.
V. Conclusion
Experience clearly indicates that as the U.S.-SRV
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 American workers which we have received
from Ambassador Peterson and his fine staff in Hanoi.
We will also continue our active involvement with such
organizations as the U.S.-Vietnam Trade Council and AMCHAAM.
I believe that the most rigorous analysis suggests that
there is no conflict in pursuit of US commercial objectives in
Vietnam and our other national interests. In fact, they are
positively correlated and mutually reinforcing.
Liberty Flame Foundation
Westminster, California 92684
June 11, 1999
Honorable Phillip M. Crane
Chairman, Subcommittee on Trade
Committee on Ways and Means
US House of Representatives
Longworth House Office Building
Washington DC, 20515
Ref.: Reasons to oppose Vietnam's unconditional Extension of Jackson-
Vanik Waiver and Normal Trade Relation
Dear Mr. Chairman and Distinguished Members of the Trade
Subcommittee:
I represent the interest of a group of Vietnamese American business
executives who have been conducting business and charity work in
Vietnam. Having lived and worked in Vietnam with extensive local
contacts, I can objectively testify to the following reasons for not
granting unconditional trade privileges to Vietnam's communist
government:
1. The Vietnamese Communist Party (VPC) has absolute power in
Vietnam and has become absolutely corrupt. Most of the benefits from
trade with the US will be looted by the VPC and its corrupt members for
their own selfish gains, and for oppression of the people of Vietnam to
perpetuate its rule. Specifically, international companies, investors
and applicants for exit visas have all been subjected to difficulties
and delays by many layers of VN government for political persecution
and for extortion. In fact, investment in Vietnam is very risky that
many investors have lost all their investments, some even lost their
freedom, due to Vietnam's corrupt government and its arbitrary and
inconsistent interpretation and enforcement of the laws. For American
companies to unconditionally provide the corrupt VPC with more economic
resources now, is to become a tool for oppression, and to betray the
budding wishes for more freedom and democracy by the people of Vietnam.
American companies will help lengthening, not shortening, Vietnam's
vicious cycle of oppression, hunger, ignorance and hopelessness.
2. With the implementation of 31/CP directive since 1998 that
allows imprisonment of any political suspect for up to 2 years without
charges, the VCP has become far more oppressive. The people of Vietnam
is one of the most oppressed people in terms of religious and political
freedom, as confirmed by UN' Special Religious Intolerance Envoy
Abdelfattah Amor in his visit to Vietnam in Oct 1998. The VCP is still
imprisoning 115 confirmed political prisoners, with hundreds more
recently arrested, after civil disobedience and demonstrations in Thai
Binh and Dong Nai .
3. It is not good business policies for American companies to
obviously abandon American democratic ideals and principles in pursuit
of short-term profit by aligning with the totalitarian communist
government in a highly oppressed and inequitable country like Vietnam.
The stock holders of these companies would most likely prefer that
their executives take their businesses to stable and less risky
countries with a good democratic traditions, rather than assisting an
incompetent, oppressive, corrupt and violent minority government to
perpetuate its rule.
4. American companies should not be duped by the ignorant
Vietnamese communists with the prospects of short-term profit, and
betray the sacrifices, pay for in sweat, blood and flesh by millions
American boys and girls, who valiantly defended the cause of freedom
and democracy in Vietnam.
The noble and secured ways for American companies to conduct
business in Vietnam is to leverage our business opportunities and
financial resources to educate and demand the Vietnam Communist Party
to commit to serious reforms in its political, economic and social
systems, to bring about long-term peace and stability, and to allow the
people of Vietnam to partake fairly and equitably in the benefits of
our trade,.
To achieve these goals, we suggest that the US government not to
extend the Jackson-Vanik waiver, and to deny the Normal Trade Relation
and any favorable trade concession to the government of Vietnam until
it meets the following conditions:
1. Vietnam must honor UN's International Covenants on Political and
Civil Rights, in which it is a party, and grant immediate and
unconditional release of all religious and political prisoners without
confinement, harassment and surveillance.
2. Vietnam must immediately grant all its citizens freedom of
religion, expression (speech, press, internet), congregation, movement
and political alliances.
3. Vietnam must amend its present constitution to allow all
individuals and organizations, besides the Communist Party, to compete
openly and fairly in all social, economic, political and professional
activities., with internationally-supervised elections.
Respectfully submitted,
Nguyen Pham Tran
Managing Associate
Statement of Hon. John McCain, a U.S. Senator from the State of Arizona
As the United States and Vietnam work to resolve the few
remaining obstacles to the conclusion of a bilateral trade
agreement, I am pleased to submit this statement in support of
extending the Jackson-Vanik waiver for Vietnam. I hope this
hearing serves the dual purpose of reviewing Vietnam's record
on freedom of emigration, as advanced by the Jackson-Vanik
waiver, and reminding Members of Congress of the broader
momentum in U.S.-Vietnam relations, including trade ties and
efforts to account for our missing servicemen.
Although the Jackson-Vanik waiver may appear to be a minor,
technical issue of little relevance to U.S.-Vietnam relations,
it serves as an important tool for the advancement of American
interests in Vietnam. Specifically, the President's decision to
waive the Jackson-Vanik amendment last year has encouraged
measurable Vietnamese cooperation in processing applications
for emigration under the Orderly Departure Program, or ODP, and
the Resettlement Opportunity for Vietnamese Returnees
agreement, or ROVR.
The Jackson-Vanik amendment exists to promote freedom of
emigration from non-democratic countries. The law calls for a
waiver if it would enhance opportunities to emigrate freely.
The numbers indicate that opportunities for emigration from
Vietnam have clearly increased since the President waived the
Jackson-Vanik amendment in 1998.
As of June 1, 1999, the Vietnamese Government had cleared
for interview 19,975 individuals, or 96 percent of ROVR
applicants. The Immigration and Naturalization Service has
approved 15,833 ROVR applicants for admission to the United
States as refugees. Last year, after the initial waiver was
granted, Vietnam eliminated the requirement for ODP applicants,
including Montagnards and former re-education camp detainees,
to obtain exit permits prior to being interviewed by American
officials.
Critically, on the day the President announced his decision
to extend the Jackson-Vanik waiver in 1998, the Vietnamese
government announced it would allow U.S. officials to interview
all Montagnard ODP cases. Previously, many of these individuals
had been off-limits to American interviewers, raising concern
among many of us that Vietnam was denying Montagnards
eligibility for emigration under the ODP. Clearly, the
Vietnamese understood that the Montagnard issue was important
to the United States, and they responded by meeting our demand
for access to this group of people. Since that decision, the
Vietnamese Government has cleared for interview 220
individuals, of which 118 have been approved by U.S. officials
for resettlement in the United States.
In short, Jackson-Vanik is working. Vietnamese cooperation
on outstanding emigration applications has increased. Vietnam
has made important progress on its commitments under the
January 1997 ROVR agreement with the United States. The vast
majority of remaining ROVR applicants have been cleared for
interview by U.S. officials. Pre-interview exit permits are no
longer required for ODP applicants. American officials are
actively interviewing Montagnards who wish to emigrate under
the terms of the ODP. The Administration expects to complete
almost all ODP refugee interviews within a few months, bringing
to an end a process that has allowed over half a million
Vietnamese to emigrate to the United States since the 1980s.
The Jackson-Vanik waiver has given momentum to this
process. Revoking the waiver would likely stall this momentum,
to the detriment of those who seek to emigrate.
We should also note the significant effect of the Jackson-
Vanik waiver on U.S. businesses operating in Vietnam. The
waiver has allowed the Overseas Private Investment Corporation
(OPIC), the Export-Import Bank (EXIM), and the Department of
Agriculture (USDA) to support American businesses in Hanoi, Ho
Chi Minh City, and elsewhere. Competitors from other
industrialized countries have long had the benefit of lending
and insurance guarantees provided by their own governments.
Without such governmental support, American businesses in
Vietnam suffered.
Withdrawing OPIC, EXIM, and USDA guarantees would hurt U.S.
business in Vietnam and halt the progress on economic
normalization that may soon lead to a bilateral trade agreement
and Vietnam's accession to the World Trade Organization. It
would reinforce the position of hard-liners in Hanoi who
believe Vietnam's opening to the West has proceeded too
rapidly. We should do all we can to encourage this opening by
supporting the U.S. companies that bring trade and investment
to Vietnam.
We should also be prepared to approve a U.S.-Vietnamese
bilateral trade agreement, which is in the final stages of
negotiation. Having visited Vietnam regularly throughout this
decade, I can attest to the changes in Vietnamese society that
have resulted from the limited economic reforms adopted by the
government. Such change in the direction of a mildly freer,
more prosperous society should accelerate with the
liberalization of external trade relations. Although it is a
long-term project, I take seriously the proposition that the
growth of the middle class and greater exposure to Americans as
a result of deepening economic ties between our countries will
render Vietnam more susceptible to the influence of our values.
A number of outstanding differences continue to stand in
the way of closer U.S.-Vietnamese relations. Human rights,
including the freedom to speak, assemble, and worship, remain
subject to the whims of political leaders in Hanoi. Political
and economic reforms lag far behind American expectations. Our
companies operating in Vietnam suffer from bureaucratic red
tape and corruption.
Ambassador Peterson and the embassy staff in Hanoi are
working diligently to address these legitimate concerns. At the
same time, the 33 Joint Field Activities conducted by the
Department of Defense in the past six years, and the consequent
repatriation of 266 sets of remains of American military
personnel during that period, attest to the ongoing cooperation
between Vietnamese and American officials on our efforts to
account for our missing servicemen. I am confident that such
progress will continue.
Just as the naysayers who insisted that Vietnamese
cooperation on POW/MIA issues would cease altogether when we
normalized relations with Vietnam were proven wrong, so have
those who insisted that Vietnam would cease cooperation on
emigration issues once we waived Jackson-Vanik been proven
wrong by the course of events since March 1998. Those of us
with long experience dealing with the Vietnamese, including
Senator Kerry, Ambassador Peterson, and U.S. military leaders
responsible for our POW/MIA accounting, recognize that
cooperation begets cooperation, and that the carrot is as
effective as the stick in furthering our cause with the
Vietnamese.
It is important to stress that the Jackson-Vanik amendment
relates narrowly to freedom of emigration. It does not relate
to the many other issues involved in our bilateral relationship
with Vietnam. The Jackson-Vanik waiver is a tool we can
selectively use to encourage free emigration. The waiver has
contributed to that objective. Using it as a blunt instrument
to castigate the Vietnamese government for every issue of
contention between our two countries will not advance America's
interest in free emigration from Vietnam.
Last year, I initiated a Dear Colleague letter to members
of the House of Representatives signed by every Vietnam veteran
in the Senate. There are those in Congress who remain opposed
to the extension of Vietnam's Jackson-Vanik waiver. But they do
not include any United States Senators who served in Vietnam
and who, as a consequence, might be understandably skeptical of
closer U.S.-Vietnamese relations. That unanimity of opinion
reminds us that, whatever one may think of the character of the
Vietnamese regime, such considerations should not obscure our
clear humanitarian interest in promoting freedom of emigration
from Vietnam. The Jackson-Vanik waiver serves that interest.
Congress should support it.
Statement of Richard Daly, Board Member, Minnesota League of POW/MIA
Families, White Bear Lake, Minnesota
The intelligence in possession of the U.S. government
clearly shows that the Vietnamese withhold vital information
regarding the fate of United States missing servicemen last
known alive. This is a fact.
It is also a fact that Ambassador Pete Peterson has refused
to confront the Vietnamese regarding the fate of the missing
men. Former Hanoi Bureau chief Bill Bell stated that even
before he was ambassador, Peterson refused to ask the
Vietnamese tough questions because it might ``embarrass'' the
Vietnamese government.
Clearly the Vietnamese reneged on their promise to provide
all POW/MIA information when the U.S normalized relations.
Promoting Vietnamese treachery is a disgrace, and the quick
dollar will soon be lost to Vietnamese corruption. State
Department documents show the Vietnamese admitted to Senator
John Kerry that they hold a number of American citizens that
they publicly deny all knowledge of. Perhaps Vietnam will
kidnap family members of wealthy American businessmen, and
perhaps when enough blackmail money is paid you will consider
holding Vietnam to its word.
Let us trade with Vietnam, open and honestly, but only
AFTER the Vietnamese keep their word. Anything else only
promotes dishonesty and corruption.
Richard Daly
Board Member
National League of Families of
American Prisoners and Missing in Southeast Asia
Washington, DC 20036-5504
June 16, 1999
The Honorable Phil Crane
Chairman, Subcommittee on Trade
Committee on Ways and Means
1100 Longworth House Office Building
Washington, DC 20515
Dear Mr. Chairman:
I deeply appreciate the Subcommittee's request to testify on the
subject of U.S.-Vietnam Trade Relations and regret that our 30th Annual
Meeting precludes my participation. From June 17-20th, the POW/MIA
families and concerned veterans and other guests have come from across
the country for official briefings on the status of efforts to account
for America's POW/MIAs still missing from the Vietnam War.
Having very recently returned from another trip to Vietnam, Laos
and Cambodia, I can attest to the fact that there is much more to be
done. The emphasis must continue to be placed on generating greater
unilateral action by the Vietnamese Government to locate and return
remains and provide relevant documents that could help account for
scores of Americans. Unilateral Vietnamese actions are also required to
help accounting for the 444 still missing in Laos and the 74 still
unaccounted for in Cambodia. The vast majority--nearly 85% in Laos and
90% in Cambodia--were lost in areas then under the control of
Vietnamese forces. The US Government has repeatedly asked Vietnam for
documents pertaining to losses in both countries, as have senior Lao
and Cambodian officials, thus far to no avail. The leadership of
Vietnam made many welcome commitments during our visit. If they decide
to honor their pledges, all of which are defined in our enclosed Trip
Report, then the League would have no objection to steps to improve
bilateral economic relations. If they break their commitments, as has
happened repeatedly over the years, then it would be impossible for the
League to support further improvements. It is up to the Vietnamese
leaders to keep their word, and the responsibility of the League and
the US Government, both Congress and the Executive Branch, to monitor
and measure the results.
Since 1970, the League has maintained realistic positions and have
no intention of looking backward at this point in our history. Although
we strongly disagreed with the President's stated basis for the many
steps taken to improve economic and political relations with Vietnam,
we accept the reality of decisions that have already been made.
However, in taking each step, the President asserted that accounting
results would improve and that the families were his primary reason for
advancing the normalization process.
The many pledges that President Clinton has made to the families
have repeatedly been broken, there is little leverage and few
incentives that remain. Despite the hard work by many career officials,
civilian and military, there is no question that in this
administration, and rhetoric to the contrary, the accounting for
missing Americans has not been a real priority. Responsiveness to the
business community far outweighed the principle of standing behind
those who serve. That is tragic, since it should not be a zero sum
game, but a realistic assessment.
Rather than focusing on the status of the Jackson-Vanik Amendment,
tied most directly to issues related to freedom of immigration, the
League would ask that careful scrutiny be applied to decisions upcoming
on extending Normal Trade Relations, once a bilateral trade agreement
is reached. US Ambassador to Vietnam Pete Peterson has publicly
estimated that this agreement would be reached by the end of the year.
Once that occurs, this administration will undoubtedly wish to move
quickly to if their historical record is any indication. At that time,
the League hopes that Congress will give serious consideration to the
status of this issue, not evident in previous Subcommittee votes. I
request that this letter and our Trip Report serve as the League's
testimony for your hearing, to be included in the Congressional Record
and distributed in accordance with Committee rules.
Respectfully,
Ann Mills Griffiths
Executive Director
Status of the POW/MIA Issue: June 7, 1999
2,061 Americans are still missing and unaccounted for from
the Vietnam War, though 468 were at sea/over water losses:
Vietnam--1,534 (North, 554; South, 980); Laos--444 Cambodia--
74; Peoples Republic of China territorial waters--8. The League
seeks the return of all US prisoners, the fullest possible
accounting for those still missing and repatriation of all
recoverable remains.
The League's highest priority is resolving the live
prisoner question. Official intelligence indicates that
Americans known to have been alive in captivity in Vietnam,
Laos and Cambodia were not returned at the end of the war. In
the absence of evidence to the contrary, it must be assumed
that these Americans may still be alive. As a matter of policy,
the US Government does not rule out the possibility that
American POWs could still be held.
Unilateral return of remains by the government of the
Socialist Republic of Vietnam (SRV) has been proven the most
effective means of obtaining accountability. Extensive field
activities have brought some progress through joint recovery or
turnover in the field of remains fragments. From that process,
155 Americans have thus far accounted for by the Clinton
Administration, all as a result of joint field operations.
Archival research in Vietnam has produced thousands of items,
documents and photos, but the vast majority pertain to
accounted-for Americans. A comprehensive wartime and post-war
process existed in Vietnam to collect and retain information
and remains. For this reason, unilateral SRV efforts to locate
and return remains and provide records offer the most
productive short term potential. The Defense Department's case-
by-case review and other evidence reveal that unilateral SRV
efforts could bring many answers.
Joint field activities in Laos are productive and,
increasingly, the Lao Government has permitted greater
flexibility while US teams are in-country. Agreements between
the US and the Indochina governments now permit Vietnamese
witnesses to participate in joint operations in Laos and
Cambodia when necessary. POW/MIA research and field activities
in Cambodia have received excellent support. Over 80% of US
losses in Laos and 90% of those in Cambodia occurred in areas
where Vietnamese forces operated during the war; however,
Vietnam has not yet responded to numerous US requests for case-
specific records on US loss incidents in these countries.
Records research and field operations are the most likely means
of increasing the accounting for Americans missing in Laos and
Cambodia.
Despite US intelligence assessments and other evidence that
hundreds of Americans can best be accounted for by unilateral
Vietnamese efforts to locate and return remains and provide
relevant documents and records, President Clinton lifted the
trade embargo, established a US Embassy in Hanoi, normalized
relations and posted a US Ambassador to Vietnam. He has
consistently certified to Congress, without supporting
evidence, that Vietnam is ``fully cooperating in good faith''
or similar such language to resolve this issue. The burden is
squarely on the current administration to obtain increased
accountability. The League supports steps by the US to respond
to concrete results, not advancing political and economic
concessions in the hope that Hanoi will respond.
POW/MIA Statistics
Statistics are provided by the Defense POW/MIA Office
Live Sightings: As of June 3, 1999, 1,902 first-hand live
sighting reports in Indochina have been received since 1975;
1,858 (97.69%) have been resolved. 1,300 (68.35%) were equated
to Americans now accounted for (i.e. returned POWs,
missionaries or civilians detained for violating Vietnamese
codes); 45 (2.37%) correlated to wartime sightings of military
personnel or pre-1975 sightings of civilians still unaccounted
for; 513 (26.97%) were determined to be fabrications. 448
(2.31%) unresolved first-hand reports are the focus of current
analytical and collection efforts: 36 (1.89%) are reports of
Americans sighted in a prisoner situation; 8 (.42%) are non-POW
sightings. The years in which these 44 first hand sightings
occurred is listed below:
----------------------------------------------------------------------------------------------------------------
Year Pre-76 76-80 81-85 86-90 91-92 93-94 95-96 97-99 Total
----------------------------------------------------------------------------------------------------------------
27 8 0 2 0 1 1 5 44
----------------------------------------------------------------------------------------------------------------
Note: Statistics are provided by the Defense POW/MIA Office
Accountability: At the end of the Vietnam War, there were
2,583 unaccounted for American prisoners, missing in action or
killed in action/body not recovered. As of June 17, 1999, 2,060
Americans are still missing and unaccounted for, over 90% of
whom were lost in Vietnam or in areas of Laos and Cambodia
where Vietnamese forces operated during the war. A breakdown of
the years during which the 523 Americans were accounted for
follows:
------------------------------------------------------------------------
------------------------------------------------------------------------
1974-1975.......................... Post war years:....... 28
1976-1978.......................... US/SRV normalization 47
negotiations:.
1979-1980.......................... US/SRV talks break 1
down:.
1981-1984.......................... 1st Reagan 23
Administration.
1985-1988.......................... 2nd Reagan 156
Administration.
1989-1992.......................... Bush Administration... 113
1993-1996.......................... 1st Clinton 146
Administration.
1997-.............................. 2nd Clinton 8
Administration.
------------------------------------------------------------------------
Unilateral Vietnamese government repatriations of remains
with scientific evidence of storage have accounted for 164 of
the 387 from Vietnam; all but 3 of the 127 Americans accounted
for in Laos have been the result of joint excavations. The
breakdown by country of the 523 Americans accounted for from
the Vietnam War: Vietnam 386*, Laos 127*, China 2, Cambodia 7.
*4 remains were recovered from indigenous personnel; 1 from
North Vietnam and 3 from Laos; in addition, one recently
identified was actually recovered in Vietnam before the end of
the war.
League Delegation to Southeast Asia
May 11-22, 1999
A delegation of the National League of POW/MIA Families
visited Thailand, Vietnam, Laos and Cambodia from May 11-22. In
Thailand, the Delegation met with US diplomatic officials,
Joint Task Force-Full Accounting (JTF-FA) and Defense
Intelligence Agency (DIA) Stony Beach personnel. The visit to
Vietnam, Laos and Cambodia reinforced to senior officials in
each country the families' views regarding the status of
efforts to achieve the fullest possible accounting for
America's POW/MIAs from the Vietnam War. Representing all of
the families were Chairman of the Board Jo Anne Shirley and
Executive Director Ann Mills Griffiths. Richard T. Childress,
National Security Council (NSC) Director of Asian Affairs from
1981-89, during both Reagan terms, and a Vietnam veteran,
agreed to the unanimous request of the League's Board of
Directors to serve as adviser on this mission.
In each country, the delegation was briefed by US Embassy,
Joint Task Force-Full Accounting (JTF-FA) and Defense
Intelligence Agency (DIA) personnel. Prior to departure, the
Defense POW/MIA Office (DPMO), JTF-FA and the Central
Identification Laboratory (CILHI) were very helpful in
preparing updates on material that was utilized during the
trip. The logistic support provided by all US Government
organizations/agencies was invaluable, ensuring that the League
Delegation's mission was carried out smoothly.
BACKGROUND
This was the fourth League Delegation since the end of the
Vietnam War in 1975. The first was in 1982, just after it was
apparent that priority would be raised in the Reagan
Administration. From 1983-1993, the League's Executive Director
represented the POW/MIA families on numerous US Government
delegations in which Childress also participated until 1989,
including those led by former Presidential Emissary/Chairman of
the Joint Chiefs of Staff General John Vessey, USA-Retired. A
League Delegation in 1994 was comprised of former Chairman of
the Board Sue Scott, Board member Colleen Shine and the
Executive Director, who also participated in 1994 and 1995
missions led by Presidential Emissary Hershel Gober, then, as
now, the Deputy Secretary of Veterans Affairs.
A League Delegation in May of 1997 included Board Chairman
Jo Anne Shirley, Board member/returned POW LTC David Gray, Jr.,
USAF-Retired, and the Executive Director. At that time, it was
the Board's view that the League should attempt to send a
delegation every two years to conduct an on-the-scene
assessment of efforts and to ensure that all governments
involved understand the families' views. In January of this
year, the Board made the final decision on the current mission,
and, fortunately, the timing coincided with Childress' travel
on business in the region. He graciously altered his schedule
to hold over in Bangkok awaiting the League delegates' arrival
before all embarked to Vietnam, Laos and Cambodia.
TIMING AND PURPOSE
The League has had both policy and operational concerns for
the past several years. Our concerns stem from the destruction
of POW/MIA criteria in the ``roadmap'' on normalization of
relations with Vietnam, the abolition of the POW/MIA
Interagency Group, the consistently glowing remarks on the
status of the issue from policy officials who are truly
unfamiliar with the issue, the lack of integration of the issue
into US foreign policy, the ``turf battles'' among US
Government agencies and organizations with POW/MIA
responsibilities, senior-level downgrading of accountability
expectations, and the lack of new initiatives to move this
issue toward resolution.
This state of affairs has generated perceptions by
Vietnamese and, to a lesser extent, Lao and Cambodian officials
that the US Government and, by extension, the American public
is satisfied that all that could possibly be done is either
underway or completed. While the families, informed veterans,
some in Congress, and many current and former officials know
this is not true, the perception hampers implementation of what
is stated as a highest priority.
Since President Clinton has repeatedly certified to
Congress that Vietnam is ``fully cooperating in good faith'' to
resolve the issue, or similar such language, it was considered
very important to convey to senior Vietnamese, Lao and
Cambodian leaders the families' views on what we consider full
cooperation, to reinforce the positive aspects of the
government-to-government efforts, and provide our frank
assessment of where improvements are needed. It was also timely
to conduct an assessment due to the Clinton Administration's
publication of a National Intelligence Estimate (NIE), the
declassified summary which seriously downgraded, even
dismissed, earlier intelligence assessments on which long-
standing accounting expectations have been based. The League
Delegation also sought firsthand knowledge from participants in
the joint accounting process, both US officials and those of
Vietnam, Laos and Cambodia.
The Clinton Administration is moving to reach a trade
agreement with Vietnam and grant Normal Trade Relations, or
NTR, (previously Most Favored Nation status) by the end of this
year. Therefore, the Delegation looked closely at the level of
Vietnamese cooperation, as well as that of Laos and Cambodia.
Other priorities included seeking improvements in the
accounting process--the US Government's approach to both joint
activities and unilateral efforts by the governments of
Vietnam, Laos and Cambodia--to ensure that all available assets
and resources, including DIA's POW/MIA team, Stony Beach, are
being fully utilized to expedite and increase accounting
results.
In the view of the League, veterans, former and current US
officials, and key Members of Congress, cooperation in ``full
faith'' requires renewed unilateral actions by Vietnam. The
Delegation reinforced this position, as well as the continuing
need for joint field operations, particularly in Laos. Joint
field activities alone cannot achieve the fullest possible
accounting; increased unilateral effort by Vietnam is required,
including effort to locate and return identifiable remains.
Without such effort, ``full faith'' cooperation by that
government is not a sustainable conclusion.
We believe we made progress on all of these issues, but
ultimate success will be dependent upon effective follow-up by
the US Government and a sincere effort by the governments of
Vietnam, Laos and Cambodia to carry out the welcome commitments
made to us, as outlined in this report. We found some very
dedicated, hard-working military and civilian personnel in JTF-
FA, Stony Beach and on the US Embassy staffs who care deeply
about their mission.
We also found evidence of ``turf wars'' that are hampering
the most effective pursuit of the issue and attitudes among
some that simply reflect the current administration's policy of
pursuing the issue without interfacing with other priorities.
These problems are of concern, and the League is providing
specific recommendations to our government. We believe the
executive branch can solve them and that is our expectation.
Such problems are unnecessary obstacles to a truly effective
effort and waste some of the considerable resources dedicated
to obtaining the fullest possible accounting.
While this and other trips cost the League significant
resources, we believe they are worthwhile, an attitude
expressed to us by officials of all governments. By providing
continuity of objective expectations and a critique by the
families on a regular basis, we can bring new ideas and,
hopefully, revitalization of government-to-government efforts
which we support as the only possible means to receive answers.
THAILAND
In Bangkok, final preparations were made for discussions in
Hanoi, Vientiane and Phnom Penh. The Delegation met with the US
Ambassador to Thailand, Richard Hechlinger, DIA's Stony Beach
Chief COL K.C. Marshment, USA, and LTC Jeff Smith, USAF, JTF-FA
Detachment 1 Commander. The support and assistance provided by
JTF-FA and Stony Beach immediately prior to departure for Hanoi
are deeply appreciated and were most helpful. Another
significant contribution during the time in Bangkok was the
gracious hospitality of Ambassador Hechlinger in making his
official Guest House available for the League's use, saving the
League funds otherwise necessary for the trip.
VIETNAM
The first meeting was at the US Embassy with US Ambassador
to Vietnam Douglas ``Pete'' Peterson, during which the
Ambassador provided his views on bilateral interests in general
as well as where he feels things currently stand on the issue.
The League Delegation conveyed to the Ambassador the purpose
and approach to be pursued while in Hanoi. This was followed by
a lengthy, very interesting session at JTF-FA Detachment 2,
commanded by LTC Matt Martin, USA. The level of knowledge and
the depth of the briefing on current JTF operations was
helpful, as was the direct interchange between all
participants. The support of MSgt Ron Ward, a skilled
Vietnamese linguist, was greatly appreciated, including an
added requirement to make adjustments to an already full
schedule.
The Delegation would have gained useful insights from a
proposed visit to the site of an ongoing underwater excavation,
but time requirements precluded accepting the invitation. The
need to first meet with appropriate senior officials and lay
out the concerns and initiatives, then discuss in greater
detail and provide suggestions for implementation to
representatives of the Vietnam Office for Seeking Missing
Persons (VNOSMP), allow time for policy-level Vietnamese
consideration, and then a wrap-up meeting with VNOSMP, at which
the League Delegation would hear the consensus response of the
Vietnamese Government, precluded spending an entire day
traveling to and observing a joint field operation.
Meetings were held with three senior Vietnamese officials--
Vice Minister of Foreign Affairs Nguyen Dinh Bin, Vice Minister
of National Defense LTG Tran Hanh, and Vice Minister of Public
Security Services (prior Ministry of Interior) Nguyen Khanh
Toan. Each discussion focused on the need to find solutions to
problems that are impeding efforts to achieve the fullest
possible accounting. The Delegation defined that objective,
shared by all involved, as the man returned alive, or his
identifiable remains or convincing evidence as to why neither
is possible. It was clearly noted that archival records, while
of intense interest to many in the US and elsewhere, become
critical to the families only in the absence of the man alive,
his identifiable remains or if such records provide leads that
can determine fate or recover remains.
The League noted that since the trade embargo was ended in
1994 and bilateral relations were normalized in 1995, the
expected increase in accounting results had not occurred. The
League urged further expansion of unilateral efforts to locate
remains, archives and sources of information, including on
cases of Americans missing in Laos and Cambodia. (According to
US officials, unilateral investigative efforts in Laos are
bringing increasingly useful information.)
Five specific areas were raised as warranting attention.
These included the need for renewed unilateral efforts,
provision of archives regarding incidents in Laos and Cambodia,
expanded research to locate additional records on cases in
Vietnam, improved use of assets and resources, and the need to
expedite the step-by-step investigative process to facilitate
more rapid results. Each Vice Minister was asked to support
later, more detailed talks with VNOSMP members.
The Delegation noted a growing sense of impatience and
urgency on the part of family members and American veterans due
to the passage of time and advancing ages of both family
members and sources. The League expressed concern that
opportunities are being missed, since despite increased
military-to-military contacts between the two countries,
dedicated Stony Beach assets have not been fully utilized on
POW/MIA matters. Noting that US Government sensitivity and
reluctance could stem from lack of knowledge regarding history
and the origin of defining the issue as humanitarian, the
League clarified that all US officials with POW/MIA
responsibilities, including Stony Beach personnel, have only
one agenda--the accounting for missing Americans--and expressed
the hope that Vietnam would welcome use of all qualified
personnel, including DIA's Stony Beach, who could help focus
the effort to bring increased results.
Finally, the Delegation expressed appreciation for some
improvements in joint operations since the first excavation in
1985, but noted concerns that the step-by-step approach on case
resolution may be a reflection of process overtaking results.
Following a well-received explanation of historical
negotiations and initiatives by the League's adviser--what
worked and what didn't work--there was clear understanding and
acknowledgment by senior Vietnamese that more can and should be
done. The League expressed confidence that Vietnam could
unilaterally take significant steps to expedite answers.
All of the Ministers stated their government's commitment
to continue cooperating fully with the United States on a
humanitarian basis, separate from other issues, and offered
assurances that Vietnam is doing its best to provide support
and assistance. They rejected any suggestion to the contrary,
but noted that they could and would work harder and encouraged
further dialogue with VNOSMP to discuss initiatives that could
move the process forward.
The Ministers also stated their understanding of the need
to expedite results in view of the advancing years of both
family members and potential sources. They added, however, the
notion that the work is becoming harder since the ``easiest
cases'' had been resolved, leaving both governments with the
``most difficult cases'' still requiring attention. This was a
recurring theme that the League is not yet convinced is
supportable without greater unilateral Vietnamese initiative.
Vice Foreign Minister Bin was very familiar with the status
of the issue. He indicated that all visiting delegations--
congressional and veteran--have commended Vietnam's cooperation
and assistance. He noted that although the Vietnamese people
had suffered tremendous losses, they help with the accounting
effort out of a spirit of cooperation and humanitarian concern.
As anticipated, and reflecting some US Government public
statements, Minister Bin noted that only 43 Last Known Alive
(LKA) cases remain under investigation. However, as the League
indicated in its updated material, relatively few have been
accounted for through return of identifiable remains and only
10 remains now at CILHI are believed to relate to Americans
previously listed as LKA cases. Further, fate determinations,
important as they are, do not resolve the accounting issue.
Vice Minister Hanh (MND) was equally well versed and voiced
many of the same points, as did Vice Minister Toan. Both
characterized the decrease in remains repatriated as
``realistic'' since the easy cases had long ago been solved, a
consistent theme. Minister Hanh noted that there are increasing
problems as the VNOSMP seeks cooperation of local citizens,
citing the extent of effort made to investigate the Phou Pha
Thi (Lima Site 85) incident and that a primary witness to that
incident, now 75 years old, is unwilling to participate
further. Despite these realities, Vice Minister Hanh welcomed
the list of problem areas that the League believes should be
central and pledged to work with the US to address them.
The initial working session with the VNOSMP, chaired by Mr.
Nguyen Ba Hung, Deputy Director of North American Affairs,
focused in greater detail on the key areas raised to the Vice
Ministers. After first explaining that the League's primary
purpose was to seek solutions, not cast aspersions or place
blame, greater detail was provided regarding the areas that
need attention, and League suggestions on specific initiatives
to be discussed.
In exploring the area of archival research, the League
pointed out examples: Politburo records, service level
intelligence documents, and documents such as the Group 559
Summary of incidents along the Ho Chi Minh Trail, that raise
logical questions, rather than bring answers. Indicating our
view that the archival effort is incomplete and requires
further effort, the League suggested various approaches for
consideration. It was apparent from the reaction of long-
standing VNOSMP members that official US explanations to the
League and the public since 1992 have been inadequate in
describing efforts that took place in the early 1990s; the US
Government needs to ensure that the families are fully
informed.
The VNOSMP Chairman indicated that archival research was
allowed precisely because the SRV understands that documents
are crucial when remains are not available. A senior VNOSMP
official provided details about the nature of efforts by the
joint Archival Research Team (ART) from 1992-95, a thorough
description that was helpful, informative and appreciated. Many
of the details provided by the Vietnamese were unknown to the
League Delegation, thus the families. The League has requested
a full rundown on the ART effort from 1992-95. (Poor
communication by the US Government can be directly attributed
to the Clinton Administration's decision to terminate the POW/
MIA Interagency Group in which the League Executive Director
participated as a full member from its formation in 1980 until
terminated in 1993.)
The League raised a serious concern that films turned over
to German television producers for commercial purposes had not
been fully reviewed by the US. The Vietnamese acknowledged the
potential problem and said that these and all other films will
now be jointly screened before release.
On the subject of further efforts on archival research to
help resolve incidents that occurred in areas of Laos and
Cambodia where Vietnamese forces operated during the war, the
League proposed consideration of four-party discussions between
officials of Laos, Cambodia, Vietnam and the United States.
Noting first that any such multilateral conference would
require structure and an agenda agreed upon by all parties on
an equal basis, the League suggested that the initial topic
should be archival research and noted our intention to raise
the concept during upcoming discussions in Laos and Cambodia.
VNOSMP's reaction was positive, but their apparent first
priority was to focus on resolving difficulties that arise in
dealing with the border cases.
The first session with VNOSMP ended by their noting that
although a great deal of work had been done, as evidenced by
the lengthy description of actions by the ART, Vietnam has
continued archival research and turned over additional
documents since the ART's work had ended. The VNOSMP Chairman
pledged to continue the effort, both unilaterally and jointly,
and to revitalize the previous ART effort, offering to
coordinate a specific plan with JTF Detachment 2.
VNOSMP also appealed for more US continuity by extending
the tour of the JTF Detachment Commander from one to two years.
Further, they stated that the current pace of Joint Field
Activities (JFAs) interferes with unilateral efforts that they
wish to accomplish, noting that the previous schedule of 30-day
breaks between JFAs no longer applies. The VNOSMP suggested
efforts need to be made to decrease unnecessary field work to
allow more time for periods devoted exclusively to unilateral
work. They specifically stated that they want to do more
unilaterally and asked that this message to be brought back.
At the wrap-up meeting the following day, the official
Vietnamese Government position on the five points raised by the
League was provided, initially in an oral presentation and
formalized in writing, dated Hanoi, 14 May 1999, in a document
entitled ``REGARDING THE 5 AREAS OF CONCERN AND PROPOSALS OF
THE NATIONAL LEAGUE OF US MIA FAMILIES.''
In addressing the five specific areas raised by the League,
VNOSMP expressed appreciation for the suggestions that they
view as a ``reflection of the concern and great responsibility
of the League's leadership.'' VNOSMP went on to state that the
suggestions would ``enable the VNOSMP and the US agency seeking
missing Americans, our direct contact of which is the MIA
office in Hanoi, to seriously research and examine the
process'' of efforts to account for Americans still missing
from the war. League areas of concern are provided below in
bold type, followed by the official Vietnamese response and
League comments.
Unilateral repatriation of remains essentially halted in
1990. The League wishes to explore ways to reenergize these
efforts and has developed some ideas. We look forward to
discussing them, to include the repatriation of remains and
remains fragments, and soliciting Vietnamese ideas as well.
While joint operations have improved in very positive ways
since the first excavation in 1985, the League has concerns
that the incremental, step by step approach in research is a
reflection of process overtaking results. We are convinced that
Vietnam can take significant steps unilaterally to identify
site locations for more immediate excavation, bypassing some of
the ponderous incremental investigative steps now being
conducted bilaterally.
SRV On Unilateral Vietnamese Efforts: ``VNOSMP completely
agrees with the League's proposal that in the unilateral
process, Vietnam's specialists will be proactive in developing
investigation requirements provided by the US, with the
objective of attaining the best results.'' The VNOSMP also
pledged to ``increase unilateral activities such as
investigations, recovery of remains which citizens voluntarily
provide, site surveys, archival documents relating to US
personnel missing from the war, searching for witnesses, etc.
In this process, VNOSMP will consider as a priority the task of
finding the fullest possible answers to discrepancy and last
known alive cases; paying attention to the cases that the
League is concerned about in the 'Blue Book Document' handed
over to the VNOSMP in 1994, updated in the 'Black Book
Document' handed over to the VNOSMP during the League
Chairman's and Executive Director's visit to Vietnam from 12 to
14 May 1999.''
Comment: The League has long maintained that renewed and
increased unilateral efforts by Vietnam are needed. A
``proactive'' Vietnamese effort, if seriously implemented,
would expedite concrete accounting results and bring greater
efficiency to the joint field operations; however, as can be
noted, there is still too much emphasis on leads provided by
the US.
SRV on Recovering and Repatriation of Remains--``The VNOSMP
will continue to increase encouraging Vietnamese citizens to
turn over missing American service member's remains, through
veterans organizations and other societal organizations at the
local area throughout the nation in order to collect
information and remains associated with individual American
service members missing from the war.''
Comment: In the oral presentation, the Vietnamese
acknowledged previous remains recovery and storage in various
locations that were the most accessible and turned over
unilaterally. Hopefully, this new commitment will bring forward
those remains not yet repatriated. Since 1986, the Government
of Vietnam has made occasional public announcements urging
citizens to cooperate in searching for American remains and has
published official directives through People's Army of Vietnam
and Communist Party channels. This current commitment, in
response to the League's suggestions, extends to a broader
audience and provides a logical vehicle for expanded unilateral
efforts that can bring forward increased accounting results.
The Vietnamese also noted their efforts to block remains
trading which they try to balance with encouraging the
voluntary turnover of remains by citizens.
89-90% of losses in Laos and Cambodia were in areas under
PAVN control. The League has made requests to Vietnamese
officials on numerous occasions to provide such records.
Officials from Laos and Cambodia, as well as US officials, have
made similar requests for many years with no response. The
League has developed ideas concerning this problem which we
look forward to discussing, and we are also eager to solicit
Vietnam's solutions.
On Trilateral Cooperation/Four-Party Conference--``The
VNOSMP pledges to continue active cooperation with Laos and
Cambodia in resolving the cases along the Vietnam-Laos border
as well as the Vietnamese-Cambodian border; agree with the
League's idea that holding a trilateral technical meeting
between Vietnam, Laos and Cambodia with the participation of a
US government representative is crucial to raising
effectiveness and cooperation, since these cases remaining are
the most difficult.''
Comment: Whether ``technical'' or policy level, or a
combination, a Four Party Conference to address specific
concerns will, of necessity, require policy level endorsement
by each government. (The concept for such a conference is
discussed later in this report.) The first ``trilateral''
conference, hosted by Vietnam in 1995, did not include
Cambodia. While some of the border cases are difficult, they
are made more so by Vietnam's failure to date to provide
relevant documents, despite requests from the US, Lao and
Cambodian governments. Vietnamese concerns on border
coordination do not address the archival gap raised by the
League in the context of a Four Party Conference. Vietnam has
identified some sources and made them available for interview,
but not to the extent necessary to increase results that
greater effort could produce.
The archival research effort is incomplete and raises more
questions than answers. The League has developed discussion
topics and ideas that we look forward to exploring with
Vietnamese officials.
SRV on Archival Research: ``The VNOSMP will continue
efforts to find files and documents associated with American
personnel missing from the war, and if found will turn them
over to the US government.''
Comment: Recognizing that there are cases where remains
will not be recoverable, the quality of cooperation on this
important aspect of the accounting effort is crucial and needs
improvement. Lao and Cambodian officials recognize that success
in the accounting effort in their two countries depends in
large measure upon obtaining relevant files and access to
firsthand sources of information who served in the areas where
incidents occurred. While some progress has been made in this
area, the vast majority of files and documents thus far
received pertain to returned POWs, not Americans still missing.
Diplomatic relations has been restored and military to
military contacts are developing. These are positive steps, but
exchanges in the contact of resolving the POW/MIA issue have
not been fully utilized. Much of the reluctance on the US side,
mistakenly in the League's opinion, relates to misunderstanding
the origin of defining this issue as humanitarian and not being
aware of past history. The League has some ideas on this
subject that we wish to discuss, and solicit Vietnamese ideas
on this as well.
SRV on Full Utilization of Resources: ``The component of US
MIA teams operating in Vietnam which the US sends to Vietnam
must have the aim and objective of searching for missing
American service members only, absolutely no other work, and
must follow every rule and law of Vietnam.''
Comment: In their oral presentation, the Vietnamese stated
that the integration of teams was no problem as long as team
members only do ``MIA work,'' a welcome statement. This subject
was raised due to some US Government reluctance to allow
trained collectors in Stony Beach to participate on teams
conducting in-country investigations. Since 1992, the members
of DIA's Stony Beach team have rarely participated, thus
squandering the experience, language and training to maximize
time spent and the quality of field investigations and surveys.
Vietnam's agreement (and later agreement by the Lao
Government) to permit personnel sent by the US Government, so
long as their mission is limited strictly to POW/MIA matters,
clears the way for renewed Stony Beach involvement. The
Cambodian Government has allowed the US to use whatever
resources it deems appropriate to pursue answers on America's
POW/MIAs and has cooperated closely with DIA's Stony Beach
team. Hopefully, there will be no further excuses from the US
Government for not using all available assets to achieve the
fullest possible accounting.
Assessment: Vietnam's specific commitments are welcome, as
was the frank, open dialogue. Implementation and results will
be the key to gauging their seriousness since countless
promises have been made and broken in the past. Implementation
of these pledges should be closely monitored by the US
Government and Congress and will be closely watched by the
League. Results must be reported accurately by all involved to
the families and the American people. The League hopes to
report later that the commitments are being carried out and
greater results are forthcoming.
The Four-Party Conference offers an opportunity to expand
the accounting process into new areas of cooperation. To
succeed, all parties must give careful consideration to
structuring sessions so that they will be productive for the
issue and useful in moving the accounting effort in a positive
direction. This League initiative is intended to break the
endless passing of papers which the Vietnamese also indicated
has little utility. Properly structured, this initiative can
result in real exchanges on potential solutions and information
that increases accounting--the key measure of success for us.
LAOS
The League Delegation first met with US Ambassador to Laos
Wendy Chamberlin to get an update on her views regarding the
broader spectrum of US-Lao relations; she assessed the level of
POW/MIA cooperation as increasingly responsive, helpful and
productive. In preparation for subsequent discussions with
senior Lao officials, the Delegation also met with and was
briefed by LTC Bob Gahagin, USA, Commander of JTF-FA Detachment
3, and other members of the JTF and US Embassy staff. These
sessions, including extended time with JTF-FA Detachment 3
personnel, were most helpful and appreciated, as was the
hospitality of Ambassador Chamberlin in accommodating the
League Delegation at her official residence, as she did in
1997. The Ambassador also hosted a dinner in the League
Delegation's honor, inviting Lao guests.
The most senior meeting with the Lao Government was held
with Deputy Prime Minister and Foreign Minister Somsavad
Lengsavad. The League Delegation met with this key official for
cordial and very constructive discussions. Ambassador
Chamberlin, LTC Gahagin and JTF linguist/specialist Bill
Gadoury accompanied the League representatives. Informal
discussions were also held with H.E. Soubanh Srithirath,
Minister to the President's Office (former Vice Minister of
Foreign Affairs), who hosted a private luncheon.
The same general points were raised in each official
meeting, and the Delegation appreciated discussions with LTG Ai
Soulignaseng, Vice Minister of National Defense (MND) and COL
Sisophon Bangonesengdet (known to the League since 1982), MND
Director of the Foreign Relations Department. Detailed talks
were held with Mr. Amphone Phiphacphommachanh, Acting Director
General, Department of European and American Affairs, Ministry
of Foreign Affairs (MFA) and the Lao ADHOC (POW/MIA) Committee.
Mr. Amphone also graciously hosted a dinner for the League
Delegation.
The League expressed appreciation to Deputy Prime Minister
Somsavad for the significant progress achieved through
bilateral cooperation over the years since the first post-war
League delegation in 1982. Improvements in the joint field
operations, initiated in 1985, were recognized, as was the
increased flexibility and positive attitude now evident on the
part of Lao officials. Noting the continuing need for the
process to be studied and improved, the League suggested that
the Lao Government should also continue seeking ways to
expedite results.
Several specific areas were then addressed, including the
increase in Lao unilateral investigations, cited as a very
positive step on which many future efforts depend. Noting that
such efforts are key to identifying relevant archival
materials, obtaining information from current and former Lao
officials with personal knowledge of U.S. losses, and
conducting advance preparation for joint field operations, the
League requested an increase of 2-3 people to the Lao team. Now
numbering only 10 Lao officials, the League suggested that it
is extremely difficult for so few to handle all unilateral Lao
efforts and expressed the hope that the request would receive
serious consideration.
Noting that since the Delegation's arrival in Vientiane a
Lao citizen had brought remains to the US Embassy and turned
them in, the Delegation expressed appreciation for the Lao
Government's assistance in encouraging such humanitarian
actions. A request was made for further announcements to be
made on a regular basis, using channels of communication at
every level.
Another area of concern raised by the League is the need
for Lao language specialists that are often difficult for the
US Government to identify and hire. Recognizing that there had
been sensitivity in the past to using such personnel, the
League expressed the view that due to the passage of years and
long-standing US Government support of continued improvements
in bilateral relations, such sensitivities should no longer
pose any obstacle. The League urged understanding of this
problem by the Lao Government and requested acceptance of
ethnic Lao-Americans to ensure that positions can be filled
with the most qualified personnel. It was pointed out that
assistance by such linguists is critical not only to accomplish
successful joint investigations and excavations, but also to
facilitate the medical treatment of Lao citizens that is
conducted during each joint field activity.
Raising the need to maximize effectiveness during joint
field operations, the League also requested utilization of all
resources, including those with language and collection
qualifications, and consideration of expanding the total number
of US officials from 40 to 50 during the months when conditions
are best. In this context, and recognizing the limited
resources of the Lao Government, the expansion in number was
encouraged due to the backlog of excavations now pending, with
the passage of time decreasing the likelihood of answers.
Noting that the League Delegation had just come from
meetings with senior officials in Hanoi, the key Vietnamese
commitments that relate to Laos were explained, including
Vietnam's agreement to the proposed Four Party Conference to
deal with specific concerns, such as resolution of the border
cases. Also noted was the fact that the League's only interest
is in documents that relate to the POW/MIA issue, both policy
concerning handling of POWs and remains, and information that
could help resolve individual cases. Lao views on the concept
of the Four Party Conference were also requested. LTG Ay
indicated that the Ministry of Defense had held meetings and
seminars to explore ways to help in the accounting effort and
that this is a continuous process. He noted that the terrain in
Vietnam is easier to deal with than in Laos. On documents, LTG
Ay said they need them from Vietnam and hope to obtain more.
Deputy Prime Minister Somsavat provided assurance of the
Lao Government's continuing commitment to do its best to
resolve the issue, noting that such cooperation is not linked
to any other issues. The Minister seemed pleased that the Lao
unilateral team was viewed as productive by the League and the
US Government, a view with which he agreed, and pledged to
intensify such efforts. (In a later working session, the Lao
indicated that they have begun oral history interviews at the
local level, described as a ``bottom-up'' approach.) Somsavad
agreed to consider additional personnel, but added that there
is a limit to the number of Foreign Ministry personnel and that
existing requirements were already heavy, with too few people
to handle them. In response, the League suggested assigning
additional military personnel for this purpose, a suggestion
Minister Somsavad agreed to consider.
The Minister was pleased to see progress from official
efforts to encourage Lao citizens to cooperate by providing
information and remains, and agreed to make further such
announcements on a regular basis, using established channels
throughout the country. He discussed the concept of a meeting
of officials from various levels that he would convene and
allow US Government representatives to lay out their concerns
and ideas--a welcome initiative which needs follow-up by the US
Government.
Minister Somsavad qualified his acceptance of skilled
language specialists by stating that such officials should
focus solely on POW/MIA and adhere to Lao law and customs, but
agreed that the Lao Government was willing to determine
suitability with the US. The request to expand the US team
beyond the 40 per joint field operation was rejected, noting
that the joint field teams have now increased efficiency, even
completing operations ahead of schedule, thus there appeared to
be no need for any expansion at this time.
The Minister endorsed the concept of the Four Party
Conference, noting the Lao Government's previous offer to serve
as host. Concerning archival research and documents, the
Minister acknowledged that Lao records are incomplete, but
indicated that the Lao ADHOC (POW/MIA) Committee could focus on
further archival research in phase two of its efforts, once its
reviews of wartime film at national and provincial levels have
concluded. Minister Somsavad also stated that Vietnamese
records should be relevant and useful, indicating that prior
Lao Government requests had gone unanswered, but would be
renewed.
Assessment: The strategy for discussions with the Lao
Government posed entirely different challenges from those faced
in Vietnam. The decision-making process in Laos on POW/MIA
matters is now focused on His Excellency Somsavad Lengsavad,
Deputy Prime Minister and Minister of Foreign Affairs, thus
discussions with him came as the final, wrap-up meeting. The
exchanges at every level were cordial, straightforward and
sensitive to the need of the families for answers as rapidly as
possible. Minister Somsavad was open to League proposals and
had the authority to respond, with no requirement for further
consultations.
The League Delegation was pleased with the initiative to
host a Lao officials meeting and with positive responses on the
concept for the Four Party Conference, expanding the Lao
unilateral team, and willingness to accept ethnic Lao American
team members so long as they focus solely on POW/MIA matters
and are sensitive to their surroundings. US Government follow-
up is needed to get additional personnel assigned to Lao
unilateral efforts, to operationalize the Lao officials
meeting, and to structure the Four Party Conference. In view of
existing requirements and anticipated increases, the Lao need
to be more flexible on the number of US personnel allowed in-
country for joint field operations. As is always the case, the
League will be closely monitoring Lao and US Government
implementation.
CAMBODIA
Though there are only 74 Americans still missing and
unaccounted for in Cambodia, this devastated country, by all
known assessments, including the League's, ``fully cooperates
in good faith'' with the US on efforts to account for missing
Americans. Since inception of the cooperative process in 1992,
Cambodian officials have consistently provided outstanding
cooperation, conducting unilateral actions to assist and
support joint field operations in every way requested by the
United States.
Background: Prime Minister Hun Sen, then serving as the
Cambodian Foreign Minister, agreed to the League's 1984 request
to accept the case files of all Americans then missing and
unaccounted for in Cambodia, pledging to do what he could on a
humanitarian basis. (This occurred long before there was
recognition of Cambodia, then still occupied by Vietnam, much
less government-to-government cooperation in the field.) Since
that time, JTF-FA and CILHI have conducted site excavations
whenever and wherever a location was confirmed, often under
very difficult circumstances.
There has also been close cooperation with DIA's Stony
Beach Team in conducting investigations and archival research,
unless interrupted by US Government sensitivity. The tragic
plight of the Cambodian people under the Khmer Rouge regime
from 1975-78, as well as political turbulence since that time,
has complicated efforts to account for Americans still missing
in that country, as has the fact that 90% of the losses in
Cambodia occurred in Vietnamese-controlled areas. Despite these
obstacles, the Cambodian Government has made available senior
historians and other officials, including a very active POW/MIA
Committee, to pursue whatever leads and avenues have been
suggested by the US.
The League appreciates the hospitality afforded by US
Charge d'Affaires Carol Rodley in hosting a reception for the
League Delegation at the Ambassador's Residence (Ambassador Ken
Quinn was out of the country), as well as the support and
information provided by US Defense Attache COL Bill McMillan,
USA, COL K.C. Marshment, USA, Stony Beach Team Chief, and LTC
Jeff Smith, USAF, JTF-FA, and other members of the US Embassy
staff in Phnom Penh. The brief visit to Cambodia was filled
with important and useful meetings, resulting in positive
responses and firm commitments.
Immediately after arrival at the airport in Phnom Penh, the
League Delegation went directly to meet with Prime Minister Hun
Sen at his residence, accompanied by Charge d'Affaires Carol
Rodley and other US officials. The League Delegation first
expressed sincere appreciation for the outstanding support and
cooperation since inception of bilateral cooperation, despite
the multiple tragedies and loss of loved ones that the
Cambodian people have suffered.
The League recognized some of the difficulties found in
working to account for Americans missing in Cambodia,
especially the fact that 90% of the US losses occurred in areas
then under Vietnamese control. Noting the importance of
trilateral cooperation on these border cases, the Prime
Minister was again urged to raise the need for archival
documents and witnesses during future contacts with his
counterpart, Vietnamese Prime Minister Pham Van Khai.
In the context of pursuing information and leads on
individual cases, the League presented a partial list of
Vietnamese officials who had served in Cambodia and would
likely be known to current and former Cambodian officials,
requesting that unilateral Cambodian efforts be made to locate
them for interviews. (The list was a duplicate of that provided
to senior Vietnamese officials in the hope that the two
governments would cooperate in locating these individuals.)
Referring to the Prime Minister's previous letter in answer
to the League's January request, the Delegation expressed
appreciation for his pledge to seek information from former
Khmer Rouge officials. Noting that unilateral Cambodian
interviews are more likely to succeed in screening such
individuals for relevant information, the League suggested that
follow-up interviews by the US could then occur, as needed. A
request was made that these efforts proceed as quickly as
possible in view of the advancing age of sources and family
members who long for answers.
Recognizing the need for trilateral and multilateral
cooperation, particularly with archival research, the League
proposed the concept of the Four Party Conference and requested
the Prime Minister's views, noting that the subject had also
been raised in Hanoi and Vientiane.
Finally, the League expressed regret over the lack of a
more active US Government POW/MIA effort in Cambodia over the
last two years, noting the rationale for decreased activity as
being a reflection of political and safety concerns by some,
not decreased interest. The League expressed optimism that an
active program would now resume and gratitude that H.E. Chey
Saphon was still eager to participate, noting his long-standing
relationships with Vietnamese and Lao historians as especially
helpful.
Prime Minister Hun Sen first briefed some present (who did
not know) on the history of cooperation between the League and
Cambodia, stating his commitment to continue doing whatever is
needed to assist and that he considers cooperation on this
issue as a responsibility. He noted that the Cambodian people
have suffered and lost so many family members that they
understand and want to help on a humanitarian basis. He also
expressed sensitivity to the hardship of uncertainty,
mentioning that he had written a song about the subject of
missing loved ones.
On the subject of trilateral cooperation, the Prime
Minister stated that after 1970, the border areas were mostly
under Vietnamese control. He stated that Vietnam also would
have information on cases in Laos, thus the importance of
trilateral cooperation, adding that during that time forces
were traveling back and forth along the border. He noted that
within the week, he would be meeting with the Vietnamese Prime
Minister and would use that opportunity, as he had before, to
personally raise the need for Vietnam's assistance on archival
records and ask him to urge the Vietnamese people to cooperate.
In that same context, Prime Minister Hun Sen stated his
strong support for the Four Party Conference, indicating that
Cambodia would host the first such meeting, after consulting
with Vietnam and Laos. He noted that trilateral meetings had
been held in the past, but not yet the four parties all
together. The Prime Minister stated his intention to assign his
son (1999 graduate of West Point Military Academy) to the
Cambodian POW/MIA Committee. He expressed his hope that his son
might be able to participate in organizing the Four Party
Conference during the summer months before returning to New
York to continue his education, pursuing a graduate degree in
economics.
The Prime Minister agreed with the need for getting access
to former Khmer Rouge officials, noting that some may have
information and pledged to take advantage of opportunities to
obtain answers. He indicated that in the case of highly visible
Khmer Rouge, such as Duch and Ta Mok, their attorneys would
need to be present for interviews, but expressed hope that the
humanitarian mission would allow them to be questioned about US
MIAs. He pledged that they would make every effort to locate
sources of information and expressed appreciation for the list
that the League had provided.
The Prime Minister also stated that LTG Pol Saroeun, head
of the POW/MIA Committee, having persuaded KR defections from
Pailin, has responsibility for the mission and the ability to
get information from the Khmer Rouge immediately as Deputy
Commander in Chief of the Armed Forces and Chairman of the
Joint Staff. He added LTG Saroeun also is tasked with reforming
the Cambodian military forces, can write orders for them, and
is publicly well known and admired by the Cambodian people.
Comment: The Prime Minister was cordial, expansive and
responded positively to all suggestions and requests. The
importance of gaining Vietnam's cooperation was a theme that
Prime Minister Hun Sen reinforced in several instances. The
League responded that he and other Cambodian officials likely
have unique influence with the Vietnamese leadership that
neither the League nor the US Government possesses. In dealing
with Vietnam and Laos, implementation of the commitments of all
governments involved, including the US, must be closely watched
to ensure follow-through and to measure results. In Cambodia,
commitments are honored and implemented unless the US
Government does not follow through, as has been the case during
the long delay. Hopefully, that situation is now resolved,
implementation can and will occur without further impediment,
and progress will result.
The same key points were raised with HRH Prince Norodom
Ranariddh, President of the National Assembly, who also has a
well-established history of support for the League's efforts.
In addition to expressing appreciation for his personal support
and that of the Cambodian government, the League suggested
introduction of a Joint Resolution of the National Assembly and
the Senate offering full bipartisan support for obtaining the
fullest possible accounting for missing US personnel.
Prince Ranariddh immediately agreed to introduce the
resolution and was confident that there would be no problem
with passage in either the National Assembly or the Senate,
stating his intention to call His Excellency (H.E.) Chea Sim,
President of the Senate. He stated his plan to visit Hanoi the
next week for meetings with the entire leadership, during which
he would raise the need for their full cooperation on the cases
of Americans still unaccounted for in Cambodia.
Comment: As in the past, His Highness was most cordial and
responsive. The discussions made clear that Cambodia's
cooperation on POW/MIAs spans the breadth of all parties in the
newly formed coalition government, assurance that was welcome
to the League Delegation, though anticipated.
H.E. Chea Sim, President of the Senate, was attentive to
the League's concerns, as in prior meetings. He expressed
appreciation for the League's recognition of Cambodia's efforts
to assist and agreed to work with Prince Ranariddh to ensure
that a Joint Resolution is passed in the Senate. He stated his
full confidence in LTG Pol Saroeun and Chey Saphon, historian,
to implement the Four Party Conference, for which he also
stated full support. (Since returning from the trip, H.E. Chea
Sim has already sent a letter to the League stating his strong
support for our ``noble mission'' and readiness of the Royal
Cambodian Government to cooperate closely, plus ``undertake
further steps to address the concerns of POW/MIA families.''
Their Excellencies Sar Kheng and You Hockry, Co-Ministers
of Interior, were gracious in time and attention during the
League Delegation's presentation that covered the same key
points. (The two ministers had met with League Delegations in
the past.) Minister Sar Kheng stated that Cambodia would
continue to cooperate fully, that there were no internal
obstacles since the issue is viewed as humanitarian, and that
implementation has enabled the two countries to build trust.
Since the Ministers indicated that they also plan an imminent
trip to Hanoi, the League Delegation asked them to raise the
need for Vietnam's cooperation with their counterpart,
Vietnamese Minister of Public Security Le Minh Huong, a request
which was met with a positive response.
The League hosted a working lunch with LTG Pol Saroeun,
H.E. Sieng Lapresse, Major General Phoung Siphan, BG Kim Chan
Nee and other members of the Cambodian POW/MIA Committee.
Senior members of the POW/MIA Committee were present at most of
the meetings with the Cambodian Ministers; therefore, informal
discussions over lunch were most helpful. (Since the League
Delegation returned, LTG Saroeun has already initiated contact
to propose hosting the first session of the Four Party
Conference.)
The final meeting in Cambodia was with H.E. Chey Saphon,
the designated historian of the Royal Cambodian Government who
has worked closely with DIA's Stony Beach over the last few
years. The League Delegation expressed appreciation for his
personal dedication to obtaining answers for the families and
for his hospitality in welcoming us to his personal residence.
The Delegation indicated to Chey Saphon full confidence that
his assistance is a key element of trilateral and four-party
cooperation and expressed gratitude for his willingness to
exert efforts on the difficult task of locating relevant
archives and sources of information.
Noting with sadness the loss of his colleague, Lao
historian Sisana Sisane, the League indicated that such
longstanding relationships with officials in Vietnam and Laos
are potentially very useful, but time is short since all are
aging.
Mr. Chey Saphon indicated he is eager to continue his work
with US officials and that he has already begun a renewed
effort. He stated that he had worked closely with counterpart
historians in Laos and Vietnam and was impressed with the scope
of Vietnamese Government archives. He recognized the problem
with passage of time and the need to move as quickly as
possible. Referring to the aging of sources, League Adviser
Richard Childress remarked to Chey Saphon, ``Each time an old
man dies, a library burns,'' a sentiment with which Chey Saphon
agreed.
Assessment: The seriousness of the Royal Cambodian
Government and its POW/MIA Committee, including H.E. Chey
Saphon, stands as an example of full cooperation, yet there is
much more that can be done and, in the League Delegation's
view, will be pursued by responsible Cambodian officials. Undue
caution on the US side was equally evident, especially in light
of the humanitarian nature of the issue as recognized by
Congress and others. The Delegation believes, however, that
adjustments are being made to better utilize all assets and
resources, following establishment of the new Royal Cambodian
Government. These are welcome changes that will continue to be
closely watched by the League, and further delays for less than
valid reasons will be strongly opposed. Now that the political
situation has stabilized, there should be no further excuses
for failing to permit qualified US personnel to visit Cambodia
whenever the need arises.
Sacramento, CA 95831
June 17, 1999
Honorable Phillip Crane, Chairman
Committee on Ways and Means
Subcommittee on Trade
United States House of Representatives
1104 Longworth House Office Bldg.
Washington, DC 20515
Dear Honorable Crane,
As a Vietnamese-American, I am writing this letter to urge you to
support the waiving of the Jackson Vanik (J-V) requirement for Vietnam,
and to encourage better U.S.-Vietnam trade relation for the following
economic and political reasons.
Economically, free trade would benefit all the countries involved.
Specifically I believe strongly that waiving the J-V requirement for
Vietnam would:
(1) Encourage free trade between the U.S. and Vietnam,
(2) Nurture a free market system in Vietnam, and
(3) Improve economic conditions and standards of living of the
people of U.S. and Vietnam.
Politically, waiving the J-V requirement would:
(1) Reinforce the image of the U.S. as a champion of free trade and
free market system.
(2) Provide free flow of information to Vietnam, and
(3) Encourage needed political changes, democracy, and human rights
improvement in Vietnam.
I believe that many Vietnamese-Americans also share my view. In a
recent Los Angeles Times survey of 861 Vietnamese Americans living in
Southern California*, 69% of the respondents believed that lifting the
trade embargo against Vietnam would have a positive effect on economic
conditions for most of the people living in Vietnam. Only 6% believed
that it would have negative effect. In addition, 49% believed that
lifting the embargo would encourage democracy and human rights in
Vietnam. Only 13% believed that it would discourage human rights.
Waiving the J-V requirement for Vietnam would be in the best
interest of the people of the U.S. and Vietnam, and would be in
compliance with the spirit of the J-V requirement. I urge you to
support this waiving.
Respectfully,
Dan Nguyen
*``Southland Vietnamese Support Renewed Ties,'' D. Carvajal, T. Le, and
L. Dizon, Los Angeles Times, June 12, 1994.
Statement of Bruce R. Harder, Director, National Security and Foreign
Affairs, 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 a written statement for the
record.
This statement is the written testimony of Bruce R. Harder,
Director, National Security and Foreign Affairs 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'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
leadership'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 as a result of the Vietnam War.
The POW/MIA issue has been, and remains a priority issue
with the Veterans of Foreign Wars of the United States. VFW
Resolution Number 431, ``Americans Who Are Prisoners of War or
Missing in Action,'' provides the VFW's policy on the POW/MIA
issue. Our policy is broken down into two simple goals. The
VFW's first goal is to reach the fullest possible accounting of
Americans missing from all our nation's past wars. Our second
goal is to urge the President of the United States of America
and every member of the Congress to speak out on every occasion
to expedite the return of those U.S. servicemen who are still
unaccounted for from all our nation's past wars. To the VFW,
full accounting means the return of either a live American
serviceman or his identified remains to this country and his
family for proper military burial with full honors.
With 2,060 (1,534 in Vietnam) Americans still missing from
the Vietnam War, we still have a long way to go before the
accounting process is complete. The VFW supports the fullest
possible accounting effort for those Americans who did not
return home from the war.
The VFW believes that it plays an important role in staying
engaged with the U.S. government and other organizations on the
POW/MIA issue. We closely review the government's program,
policy, and activities for accounting for Americans who remain
``unaccounted-for'' from all of our nation's past wars. As one
of the largest and most respected veteran's organizations, we
believe it is our responsibility to closely monitor activities
and developments in the POW/MIA area and to take an active role
when it is appropriate.
I am responsible for keeping our National POW/MIA
Committee, our Department POW/MIA Chairmen, and our national
leaders informed on the POW/MIA issue. We accomplish our goals
by staying in frequent contact with the Defense Prisoner of
War/Missing Personnel Office (DPMO), and other veteran and
family organizations on the issue. In addition, I closely
monitor the news media and stay in regular contact with State
Department representatives on issues related to POW/MIA
accounting.
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. Last year, VFW representatives visited
Vietnam on three separate occasions and Laos on two occasions.
Our mission on every trip to Southeast Asia has been the same.
We urge both U.S. Government and foreign government officials
and their veteran's 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. Our goal is to
bring home every missing American warrior.
Most recently, in December 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 the Joint Task Force-Full Accounting Detachment
Headquarters in Hanoi, Vietnam and Vientiane, Laos to receive
update briefings, collect information, meet key personnel, and
discuss progress on POW/MIA accounting directly with them. As
in the past, we found the Americans deployed under the command
and control of Joint Task Force-Full Accounting to be highly
motivated, dedicated, and focused on the mission.
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
between the United States and Vietnam, we have not seen any
decrease in the effort to account for our missing men on the
part of either the U.S. or Vietnam. On two visits to both
Vietnam and Laos last year, we saw no evidence that current
U.S. government policies on trade were having a negative effect
on the MIA accounting process.
We believe that current U.S. trade policies towards Vietnam
have resulted in both gradual improvements in U.S.-Vietnamese
relations in general and proportional improvements in
Vietnamese cooperation in efforts to account for missing
Americans from the war. A few examples of better overall U.S.-
Vietnamese cooperation are taken from the VFW Commander-in-
Chief's report of our most recent visit to Southeast Asia in
December 1998.
The following conclusions from Mr. Pouliot's trip report
are offered as a result our discussions, meetings, and
observations during the subject visit:
``In Vietnam, On the issue of unaccounted for Americans
from the War in Southeast Asia, my conclusion is that the
Vietnamese government appears to be cooperating 'in good faith'
with the U.S. government in working to resolve the issue.
Evidence that this is in fact happening is as follows:
a. The Vietnamese government assists U.S. MIA activities
with their own unilateral programs such as POW/MIA information
distribution and unilateral investigations.
b. The Vietnamese have made significant improvement in
terms of both quantity and quality of their Unilateral
Investigations over past years. U.S. analysts are now reviewing
reports of the 14 unilateral investigations that were delivered
to JTF-FA at Dalat in November 1998.
c. The Vietnamese Office for Seeking Missing Personnel
(VNOSMP) regularly receives information from Vietnamese
citizens about missing Americans and passes it on to JTF-FA
Detachment 2.
d. VNOSMP is cooperating and working closely with DPMO to
provide information to help complete the DPMO ``Remains
Study.'' In November 1998, Mr. Bob Jones, DASD DPMO, requested
VNOSMP assistance in answering additional questions that cut
across several SRV government ministries. This includes
requests for lists of American remains and documents that
tasked civil and military authorities to inspect and confirm
the location of American graves. Also, he has asked for a copy
of a central government directive that dealt searching for,
verifying and recovering the graves and personal effects of
American pilots. Copies of documentary photos taken by SRV
technicians of recovered remains were also requested. The SRV
officials have said they remain committed to assisting DPMO in
the completion of this study.
e. VNOSMP obtains access for JTF-FA research teams.
f. The Vietnamese have established an MIA office in Ho Chi
Minh City and have established a joint document center in
Hanoi.
g. SRV Officials have agreed to focus their efforts on the
43 last known alive cases. Early in 1999, U.S. and Vietnamese
officials have agreed to participate in working level meetings
on LKA cases.
h. According to DPMO, Trilateral Operations (U.S./Vietnam/
Laos) have been successful. Vietnamese documents and witnesses
are one of the best potential sources for resolving many cases
of missing Americans in Laos and Cambodia. The Vietnamese have
agreed to continue cooperative Tri-lateral efforts, especially
with Laos.
i. The Oral History Program and document turnover have been
relevant for case investigation and resolution. In November
1998, the Vietnamese turnover two new documents related to U.S.
aircraft losses to U.S. analysts at Dalat. According to Mr.
Jones, the Vietnamese officials promised continued cooperation
in the search for additional documents, and the Vietnamese said
they have issued a directive asking the Vietnamese people to
bring forward any information they have on U.S. MIAs.
Also, in Vietnam (SRV), leads and excavation sites will
probably begin to thin out in 2002. Given the current number of
planned investigations and excavations, JTF-FA operations in
SRV will continue on a steady pace until at least FY2001. Cases
remaining unresolved at that point will be extremely difficult
to resolve because of the lack of information, terrain, and
other factors. Their resolution may have to wait until new
leads are uncovered in the future.''
Some additional examples of progress on the POW/MIA issue
is listed below according to the four criteria used by the
Administration to measure Vietnamese cooperation.
The first criteria are the efforts by Vietnam to recover
and repatriate American remains. Since 1973, 523 Americans have
been accounted for in Southeast Asia. Of that total, 387 were
accounted--for from Vietnam. Also, since 1988, 54 Joint Field
Activities (JFAs) have been conducted in the SRV (33 since
1993). Five JFAs were conducted in SRV last year (1998).
Typically, each JFA in SRV involves about 100 U.S. personnel
working with Vietnamese counterparts doing investigations and
excavation operations. Between December 1, 1998 and April 30,
1999, Joint task Force-Full Accounting (JTF-FA) conducted 3
Joint Field Activities (JFAs) in Vietnam. The past three JFAs
resulted in the repatriation of 6 sets of remains. Over this
period the Central Identification Lab Hawaii (CILHI) has
identified 9 individuals representing 8 different cases. Since
1993, 266 sets of remains have been repatriated. Since 1993,
117 identifications in SRV.
In addition, the SRV has been responsive to U.S. requests
to conduct case-specific unilateral investigations. These
investigations include witness interviews and archival
research. Each year the SRV reserves two periods during which
Vietnamese unilateral teams conduct investigations and then
report their findings to U.S. officials. Vietnamese unilateral
investigation teams have provided reports on 38 different
cases. The total number of unilateral reports since 1993 is
162. Vietnam's unilateral efforts have supported the U.S.
``Remains Study'' that evaluates the SRV's official efforts to
recover American remains. The SRV responses provided to U.S.
questions reflect extensive research and investigative
activity. In one instance, the SRV's investigative results lead
directly to the identification of U.S. remains.
The VNOSMP pledged to continue cooperation with the U.S.
government to execute joint and unilateral operations designed
to resolve the cases of missing Americans from the war to the
fullest extent possible.
In November 1998, Mr. Robert L. Jones, DASD DPMO, requested
an SRV Foreign Ministry review of the ``deferred'' and ``no
further pursuit'' category of unaccounted-for cases. The idea
was to determine if the Vietnamese possessed additional
information pertaining to these cases. Vietnamese Vice Foreign
Minister Bin promised a formal response to Mr. Jones by the end
of March 1999, and the response was delivered to DPMO on time.
Analysts at JTF-FA and DPMO are now reviewing and analyzing the
Vietnamese response.
The second criteria are the continued resolution of ``last
known alive'' (LKA) priority discrepancy cases. Of the 196
persons associated with ``last known alive'' cases (individuals
who survived their loss incidents, but did not return alive and
remain unaccounted-for) in Vietnam. Fate has been determined
for all but 43 of these individuals. Determination of the fate
for individuals on this list last occurred in May 1998 when the
fate of five individuals was determined.
Of the 153 ``last known alive'' cases whose fate has been
determined, DoD has resolved the cases or identified the
remains of 37 formerly unaccounted-for Americans who were
originally on the LKA list. Fourteen of these identifications
were completed in the last five years. These are the most
difficult cases to solve.
The special remains list is a representative sampling of
cases for which the U.S. government has evidence that the SRV
government, at one time, possessed remains of American
servicemen that were still unaccounted for in 1993 when the was
prepared and given to the SRV. The U.S. government has resolved
special remains cases involving 19 individuals. This reduces
the original list of 98 individuals on this list to the present
list of 79 individuals.
The third criteria are Vietnamese assistance in
implementing the trilateral investigations with Laos. Since
1994 when the agreement for these investigations was signed, a
total of 31 Vietnamese witnesses have participated in
operations in Laos. In March 1999, a Laotian witness
participated in an investigation in Cambodia. As of April 1999,
Vietnam identified more than 40 witnesses for participation in
future operations in Laos. Eight witnesses were identified
since December 1, 1998.
The fourth criteria are accelerated Vietnamese efforts to
provide all POW/MIA related documents. Since 1994, when
Vietnamese unilateral search teams were created, the Vietnamese
Office for Seeking Missing Personnel (VNOSMP) has provided 14
separate turnovers totaling more than 300 documents that
consist of 500-600 untranslated pages. Recently, VNOSMP
provided 12 documents in two separate turnovers. These were
related to the U.S. study of Vietnam's collection and
repatriation of U.S. remains or `` Remains Study.'' In
addition, over 260 oral histories have been conducted not
including the hundreds completed during JFA operations.
Finally, over 28,000 archival items were reviewed and
photographed since January 1993 by joint research teams.
Since we did not observe a decrease in the POW/MIA
accounting and cooperation effort with the Vietnamese after the
lifting of the trade embargo, establishment of diplomatic
relations, and past waiver of the Jackson-Vanik Amendment, it
suggests that this year's waiver of the Jackson-Vanik Amendment
restrictions will not result in any decrease in cooperation
between our countries on the POW/MIA issue. The Vietnamese know
that the POW/MIA accounting is the single most important issue
governing the relationship between our two countries. Based
upon our observations and conversations with JTF-Full
Accounting personnel and other U.S. government officials during
our visit to Vietnam in December 1998, it is my opinion that
current trade relations with Vietnam may have helped rather
than hindered the accounting process for missing Americans.
Also, if improving U.S.-Vietnamese trade relations and
normalizing our relationship with Vietnam helps us reach our
goal of the ``fullest possible accounting'' of missing
Americans, then it makes sense to do so.
Finally, I'd like to point out that the VFW has had a POW/
MIA initiative for the last several years. Briefly, we
encourage our members to come forward with information and
documentation about Vietnamese casualties from the war. Keeping
the information anonymous, we then present the information to
the Vietnamese veterans' organization when we visit Vietnam. We
have presented information about their losses to their veterans
on four different occasions. We believe this initiative has
helped improve relations with the Vietnamese people, and shows
American sincerity in attempting to resolve this issue.
Feedback from Joint Task Force-Full Accounting personnel
permanently stationed in Hanoi, indicates that this initiative
others like it, have resulted in improved cooperation between
U.S. personnel and Vietnamese counterparts. Also, we have asked
the Vietnamese veterans for help in resolving some of the most
difficult cases of our missing in action.
In conclusion, the VFW believes that progress has been made
on POW/MIA accounting in Vietnam, Laos, and Cambodia since the
establishment of Joint Task Force-Full Accounting in January
1992. Over the past decade years, we have developed an
effective and cooperative relationship with Vietnam on the POW/
MIA issue. Since 1992, this partnership with Vietnam has
produced reasonable results in the accounting process, but more
work still remains. Twenty years ago the relationship between
our countries was not very good and as a result, the POW/MIA
accounting process was slow and less productive. Our visits to
Southeast Asia, our meetings and discussions with both the
Department of Defense and Department of State officials here in
Washington, and our constant review of monthly POW/MIA
progress, lead us to the conclusion that we should continue the
policy of engagement with Vietnam. We believe that current
relationship between the U.S. and Vietnam is helping the POW/
MIA accounting process.
Finally, our primary 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. We think the normalization of
trade relations between the United States and Vietnam helps to
accomplish this goal. Our view is that the current effort with
Vietnam, Laos and Cambodia is producing positive results.
Certainly, we are not satisfied that it has taken so long to
reach this point. The current effort should have begun the
moment the guns feel silent. We will continue to remain
vigilant and press our government and those foreign governments
to reach the fullest possible accounting as soon as possible.
But, no matter how long it takes, the VFW will continue to
strive to reach our goal--the fullest accounting for every
missing American warrior.
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.
Statement of Tanette Nguyen McCarty, Vietnamese-American Voters'
Coalition, Long Beach, California
Mr. Chairman:
My name is Tanette Nguyen McCarty. I am an econometrician
with the New York State Division of the Budget. My father,
Professor Nguyen Ngoc Huy, was a professor of law and political
science in South Vietnam, the leader of a prominent political
party, the Tan Dai Viet, and a member of the South Vietnamese
delegation to the Paris Peace Talks. He and his friends shared
a common goal: to bring freedom and democracy to Vietnam. His
work is being continued in the United States by the Vietnamese-
American Voters Coalition. I am here to speak for the Coalition
and to oppose a second waiver of the Jackson-Vanik amendment
for Vietnam.
Last year at this time, the Vietnamese-American Voters
Coalition expressed its opposition to the waiver of the
Jackson-Vanik amendment for Vietnam. Our opposition was based
on the view that the waiver would hurt the cause of freedom in
Vietnam.
Despite our opposition, the waiver was approved. But now, a
year later, events appear to bear out our original concerns.
Despite the granting of the waiver, the human rights situation
is no better than it was. On the contrary, it has gotten worse.
The communist regime is still imprisoning hundreds of
religious and political dissidents, such as Professor Nguyen
Dinh Huy, journalist Nguyen Ngoc Tan; the Catholic priests,
Rev. Mai Duc Chuong and Rev. Pham Minh Tri; the United Buddhist
Church of Vietnam monks, (Venerable) Thich Thien Minh and
(Venerable) Thich Hue Quang, and the Hoa Hao Buddhist leader,
Le Van Son.
The regime has also intensified the atmosphere of
repression in Vietnamese society. Dr. Nguyen Thanh Giang, a
geologist and well known political dissident in Hanoi, was
arrested and only released last month because of intense
international pressure on the Vietnamese government. In the
meantime, direct threats have been made against other Hanoi
dissidents, including Hoang Minh Chinh, Hoang Tien, Vu Nuy
Cuong, Nguyen Kien Giang and Hoang Huu Nhan.
The decree on administrative detention (31/CP) that
authorizes village level Peoples' Committees and public
security officials to detain individuals without trial for from
six months to two years remains in force and it inspires fear
throughout the country because it is applied to those persons
deemed to have violated laws on national security but whose
offense ``is not serious enough to be prosecuted criminally.''
The continuing repression in Vietnam exacts a heavy toll on
the Vietnamese people. Revenue from foreign trade and even
humanitarian aid, such as relief for the victims of Typhoon
Linda provided by the International Red Cross, have been stolen
by corrupt officials and corruption is the underlying reason
why despite several years of bumper rice crops in the Mekong
Delta, the standard of living of the people living there has
not changed.
The U.S. State Department, in its report on human rights in
Vietnam in 1998 said that the government's human rights record
remained poor and that the regime continued to repress basic
political and religious freedoms.
In the debate over the waiver of the Jackson-Vanik
amendment for Vietnam last year, one of the most substantial
arguments in favor of the waiver was that Vietnam no longer
required exit permits as a pre-condition for access to
interviews under the U.S. Resettlement Opportunity for
Vietnamese Returnees Program (ROVR.) In fact, Vietnam did not
eliminate the necessity of an exit permit but only delayed it
until after the interview. The reality, as viewed from inside
Vietnam, is that the emigration situation has not improved.
In light of these conditions, we urge that the proposed
waiver of the Jackson-Vanik amendment for Vietnam be denied,
until the Vietnamese government satisfies at least three
important conditions. The Vietnamese government should:
1. Immediately and unconditionally release all religious
and political prisoners and allow them to assume an active role
in the life of the country without discrimination, harrassment
or surveillance;
2. Immediately grant freedom of religion, expression,
assembly, movement; and
3. Amend the constitution to allow all individuals and
political parties to compete equally in all popular elections.
Freedom and respect for human rights constitute the core of
our nation. As the most powerful democracy in the world, we
must do our best to encourage the same principle in other
nations that we live by ourselves. My father, who left Vietnam,
the day before the communists took over, escaped the fate of
many who spent years wasting away in so called ``reeducation
camps.'' But he never forgot those who were left behind. We
must not forget them either.
There are many persons who argue that the waiver of the
Jackson-Vanik amendment and the eventual extension of most
favored nation status to Vietnam will promote the
liberalization of Vietnamese society. The experience of the
last year--as well as all our knowledge of the nature of
communist societies--suggests that exactly the opposite is the
case. It is only the insistence on the fulfillment of strict
conditions in return for concessions that is able to promote
change.
I therefore urge you to reject an extension of the waiver
of the Jackson-Vanik amendment for Vietnam. I make this request
in the names of the many brave American soldiers who died in
Vietnam, in my father's name, and in the name of all the
political prisoners in Vietnam who cannot speak for themselves.
Thank you.
Vietnamese Nationalist Community of Austin and Vicinity
Austin, TX 78708-1574
June 11, 1999
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
1104 Longworth House Office Building
Washington DC 20515
Dear Mr. Chairman:
We represent the Vietnamese community of Austin, Texas and its
neighboring areas. In lieu of a personal appearance before the House
Ways and Means Subcommittee on Trade regarding this year's Jackson-
Vanik waiver for the R'S Vietnam granting Normal Trade Relations,
formerly known as the Most Favoured Nation Status, we are writing you
to express our opinions as well as the opinions of those living within
our communities.
Based on our own recent personal experiences and information from
members of our communities, in which we represent, we would like to
express the following thoughts and facts:
1. 17th June in Vietnamese history marks the day in which a
National Vietnamese Hero Nguyen Thai Hoc and many other Vietnamese
nationals were executed for their belief and adherence to the ideals of
an independent nation governed by its citizens, a nation of the people
and for the people.
2. The Vietnamese Communist Party (VCP) has relaxed its grips
somewhat but still maintains firm and total control of all aspects of
life in Vietnam. Its government process is closed to all, and
accountable to no one, except a few members of the party's top
politburo. This absolute power has allowed the VCP to corrupt Vietnam
absolutely. The VCP has always made international businesses support
and contribute to its absolute power. Do we allow any members of our
political system to get away with such corruption and abuse of power?
3. The Vietnamese Communist Party and its members at all levels
have been systematically abusing their authority and power to extort
and exploit the people of Vietnam and all business entities to
illicitly profit its members, and to ultimately perpetuate its rule.
Specifically, international companies, investors and applicants for
exit visas, have all been subjected to difficulties and unnecessary
delays by VN government officials for political persecution and for
extracting large bribes. ``In October 1997, journalist Nguyen Hoang
Linh, the editor of a business newspaper, was arrested, charged and
convicted for publishing articles detailing alleged corruption among
customs officials'' (US Department of State, Vietnam Country Report on
Human Rights Practices for 1998). Many international business
executives have lost all their investments in Vietnam, and even their
freedom, due to Vietnam's corrupt government and judicial systems and
arbitrary interpretation and enforcement of the laws. Reuters has
reported that 120 companies and 19 banks have sold their assets and
left Vietnam in the first two months of 1999 due to lack of profits.
4. The Vietnamese Ambassador Le Van Bang was presented with
questions at a Symposium of ASEAN Ambassadors held on 9 April, 1999 at
the University of Texas at Austin. Present at this Symposium were
several Vietnamese groups representing the community. Although the
official government position states that the economy is booming, the
GDP per capita is approximately $300 (this is less than a roundtrip
airplane ticket from Austin, Texas to San Jose, California). One must
ask the question, who benefits from the booming economy? The average
citizen or specific members of the government? Furthermore, Ambassador
Bang stated that the economy grew at a rate of 6% last year. This
official growth rate conflicts with reports from sources well regarded
as the IMF, Reuters and the Wall Street Journal. The Wall Street
Journal indicates that the actual growth rate for Vietnam is 3%, a
clear difference of 3%. If this were a poll where a 2% or
3% didn't really make a difference, this discrepancy would be
tolerated. However, this is not a poll that allows for a margin of
error. This is actual figures by which one ascertains the true value of
any business enterprise. Clearly, Mr. Alan Greenspan cannot get away
with such an erroneous statement of fact, why should the Vietnamese
government represented by its Ambassador be allowed to make such a
false statement? As other member nations of ASEAN continue to reform
their political systems to be more open and democratic, to remove as
many barriers and economic regulations in response to the economic
crisis that occurred last year, Vietnam is tightening it's political
system and increasing regulations in its economic policy. Do we truly
want a trade partner that creates an environment where it economically
benefits one party, and it is not the US?
5. The government of Vietnam has been blatantly denied its people
their basic human rights and freedom of religion, expression and
politics. They have been imprisoning and torturing hundreds of
religious and political leaders who peacefully demanded their basic
rights. Vietnam's severe oppression of religious freedom was clearly
confirmed by the United Nation's Special Rapporteur on Religious
Intolerance Abdelfattah Amor's report on his visit to Vietnam in
October 1999, published in February 1999. Even the UN's envoy was
prevented from visiting senior representatives of the non-government
sanctioned Unified Buddhist Church of Vietnam. Lack of accomodation and
disrespect to a request made by an envoy of the international
community, who is also representing the US, should be a concern,
particularly in a matter that is not as explosive as the concealing of
the development of biological weapons or is Vietnam truly concealing
something? We would like to suggest that Vietnam is concealing its
continued dehumanization of the human person by not respecting the
basic fundamental rights of all human beings, the rights of expression,
the right of self-determination.
6. Since 1998, the political oppression by the VN government has
become worse. The VN government has implemented its 31/CP directives
that allows imprisonment of any critics, dissidents or suspects for up
to 2 years in inhumane detention centers without legal charges.
7. Since the Communist Party has unlimited and unaccountable power,
revenue and profit from foreign trades, and even humanitarian aids,
have been widely known to be liberally skimmed off by the Communist
Party and many layers of its members for their personal gains. Trade
with the US will benefit only the Communist Party and its members, who
will use the proceeds to further control, manipulate, oppress and
impoverish the people of Vietnam, in effect lengthening the cycle of
injustice, oppression, poverty and hopelessness. US trading privileges
for Vietnam will therefore further deepen the inequity, injustice,
oppression and impoverishment of the people of Vietnam.
To encourage the Vietnamese Communist government to increase the
speed and intensify its political and economic reforms toward a more
just, fair, and equitable system for the people of Vietnam, we urge the
US government not to grant special trading privileges to the government
of Vietnam until it meets the following conditions:
1. Vietnam must honor the United Nation's International Covenants
on Political and Civil Rights, in which it is a party and signatory,
and grant immediate and unconditional release of all religious and
political prisoners without confinement, harassment and surveillance.
2. Vietnam must immediately grant all its citizens freedom of
religion, expression (speech, press, Internet), congregation, movement
and political alliances.
3. Vietnam must amend its constitution to allow all individuals and
political parties, besides the Communist Party members, to compete
openly and fairly in all social, economic, political and professional
activities, with internationally supervised elections.
We are not advocating that ties to Vietnam be ceased nor censured.
However, we are advocating a measure of constraint. Although exports to
Vietnam is not as great as that to other nations and thus, we can
easily waive this issue aside and state that it's only a little bit of
money that we are concerning ourselves with, we, as a country, still
have to stand up for the principle. The principle here is the right of
human beings to determine their own destiny in a democratic society.
Why do we continue to broadcast Radio Free Asia when the broadcast is
being jammed by the Communist government of Vietnam? If it were not for
the ideals of democracy, freedom of religion, freedom of expression,
everything the United States of America is founded upon, then there is
no purpose. We have broadcasts continuing for years in the direction of
Cuba. Why? Because we believe that our ideals of a free, democratic
nation is worth it. Should it not also be worth it to us as a nation to
continue to encourage these ideals in other nations? We send our men
and women to be peace keepers in Kosovo as part of an international
peace keeping force. Why do we do this? Again, it is because we believe
in the respect and dignity of the human person to strive towards
freedom of expression, freedom of determination in a democratic
society. Should we not be consistent with our national agenda and make
a difference in this matter of the RS Vietnam? We urge the members of
this most esteemed and honoured group to not grant Vietnam Normal Trade
Relations nor any other special trading privileges.
We thank the distinguished members of the House Ways and Means
Subcommittee on Trade for considering our perspective and position.
Mr. Khanh K. Chau
President
Mr. Hung Quoc Nguyen
Public Relations Director