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