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 You are in: Under Secretary for Political Affairs > Bureau of East Asian and Pacific Affairs > Releases > Remarks > 2002 East Asian and Pacific Affairs Remarks, Testimony, and Speeches

Request to Waive Application of the Jackson-Vanik Amendment to Vietnam

Christopher LaFleur, Acting Assistant Secretary of State for East Asian and Pacific Affairs
Testimony before the House Ways & Means Subcommittee on Trade
Washington, DC
July 18, 2002

Chairman Crane, Mr. Levin, I would like to thank you for inviting me to consult with you about the President's decision to waive Jackson-Vanik again this year. Since the waiver was first granted in March 1998, it has been an essential component of our policy of engagement with Vietnam. I am confident this extension of the waiver will continue to advance U.S. national interests in Vietnam.

The last seven years have seen substantial progress in our relationship with Vietnam, and much of the credit must be given to the vigorous and productive executive/legislative cooperation that has been developed relative to Vietnam policy. I would like to take this opportunity to thank the members of this subcommittee and the members of the House for their continuing contributions to the development of U.S.-Vietnam relations. Your visits to Vietnam, meetings with Vietnamese leaders visiting Washington, and other congressional interventions on a wide range of issues have reinforced our policy of engagement. The House and its members have made clear, both privately and publicly, to Vietnamís leaders and its people that the United States remains committed to enhanced U.S.-Vietnam relations. Progress on some bilateral issues would not have occurred without direct assistance rendered by members of Congress. In that regard, I would like specifically to thank Chairman Crane and the members of this committee for your direct support and counsel.

One common theme runs through the development of every facet of our relationship with Vietnam -- engagement works. We have made progress on every issue in which we have been able to demonstrate mutual interests and in which both sides have been convinced of each otherís commitment to build a relationship. Each side has made gestures over the years to advance this process -- the United States lifted its trade embargo and Vietnam agreed to assume long-term debt and settle property claims. Vietnam, by joining the ASEAN Regional Forum and the Asia Pacific Economic Cooperation forum, signaled its desire to play a constructive role on regional security, trade issues, and economic development. In the past two years we have signed agreements with Vietnam to expand cooperation in labor and in the science and technology fields. Both sides worked together for many years to bring into force finally last year a bilateral trade agreement.

Bilaterally, engagement at all levels is building a spirit of cooperation between our two peoples and producing results in those areas that are most important to us -- POW/MIAs, emigration, human rights, and economic reform. Vietnamís cooperation on emigration policy, the test issue for the Jackson-Vanik waiver, is continuing. We have completed nearly all immigration processing under the former Orderly Departure Program (ODP), the Resettlement Opportunity for Vietnamese Returnees (ROVR) sub-program, the Former Re-education Camp Detainees ("HO") program, and the Montagnard programs. Less than 100 applicants remain to be interviewed under all of our various refugee programs.

We still hope to finish processing of eligible applicants under the former ODP and ROVR programs by the end of this calendar year. We recently completed interviewing applicants under the U-11 program for former U.S. Government employees. I want to emphasize that we will not consider our refugee programs to be completed until the last eligible applicant has had the opportunity to be interviewed, or we have an acceptable accounting of each case. Vietnamese officials have continued cooperation over this past year and we will continue to build on this strong foundation to interview all those who wish to be interviewed for resettlement in the United States under all refugee and related programs. We hope this cooperation will extend to accepting the deportations of Vietnamese imprisoned in the U.S.

Our relations with Vietnam were tested last year when over one thousand Montagnards fled to Cambodia following large-scale Montagnard protests in the Central Highlands in February 2001. The Vietnamese Government initially objected to third-country resettlement of the Montagnards in Cambodia, and unsuccessfully attempted to repatriate the Montagnards directly from the refugee camps. After intensive discussions between the U.S., Vietnam, Cambodia, and UNHCR, Vietnam tacitly acquiesced and accepted arrangements to resettle these Montagnards from Cambodia to the United States. Hundreds have already arrived and nearly all should be in the U.S. by the end of this summer. We would like to work with Vietnam to help develop the Central Highlands and encourage greater respect for human rights so that this kind of exodus is not necessary.

We have established an impressive spirit of cooperation with the Vietnamese in the search for our servicemen and women still missing in action from the Vietnam War. Slowly, we are making progress in building the people-to-people relationships that are replacing suspicion with trust and understanding. This is vitally important at this juncture because we have finished the easy work; the tasks ahead are becoming progressively more arduous. We are now searching in some of the most difficult and dangerous terrain possible and our recovery teams face greater dangers. In April last year, seven Americans and nine Vietnamese lost their lives in a helicopter crash on a mission to recover the remains of missing Americans. Nonetheless, our operations continue unabated and young volunteer American servicemen and women and their Vietnamese counterparts continue to brave these severe and highly dangerous conditions to locate the remains of our MIAs.

Since 1988 when joint recovery operations began with the Vietnamese, we have conducted 68 joint field activities in Vietnam, five of those since the previous Jackson-Vanik waiver was extended last year. Since 1973, the remains of 481 individuals have been identified and repatriated. This would not have been possible without bilateral cooperation between the U.S. and Vietnam. Of the 196 Americans that were on the Last Known Alive list, the fate of all but 39 men has been determined. Many of the American losses occurred in Laos and Cambodia. To date, Vietnam has provided 44 witnesses for investigation of possible loss sites along the border and within Laos and Cambodia. The Vietnamese continue to provide documents and films to investigation teams. About 28,000 items have been reviewed for possible information that would lead to an accounting for our fallen comrades. We are still encouraging Vietnam to provide additional documentation and to conduct more unilateral activities. As presented here, Vietnam is fully cooperating in our efforts to account for missing Americans from the Vietnam War; without such cooperation, closure for the many families of our missing warriors would not occur. Let me assure you, the quest for fullest possible accounting of POW/MIAs remains one of our top foreign policy priorities with Vietnam.

Since we reestablished relations with Vietnam, we have seen some human rights improvements there. It is far from a perfect situation and we see a long road ahead in encouraging Vietnam to make further improvements in this critical area. We share with the Congress and the people of the United States a deep concern for the human rights situation in Vietnam. We have established what we hope is a serious dialogue with the Vietnamese on human rights issues, and, this fall we will hold the ninth annual high-level human rights discussions. Secretary Powell raised human rights issues with Vietnamese senior leadership during his visit last summer. In addition, our staff in the Embassy in Hanoi constantly work with Vietnamese officials to keep this issue a key issue of the bilateral relationship.

Progress in past years notwithstanding, there were some troubling setbacks on human rights and religious freedom this year, and not much good news. Two recent amnesties did not include any political or religious prisoners that we knew of. Father Nguyen Van Ly, a high-profile case for us, was sentenced to 15 years imprisonment for activities that the authorities deemed anti-government. Two Buddhist monks, Thich Quang Do and Thich Huyen Quang remain under house arrest for their work with the United Buddhist Church of Vietnam. Two other dissidents, Pham Hong Son and Lam Chi Quang were arrested for circulating documents on the internet promoting democracy in one case and criticizing a border agreement with China in another.

However, the picture on religious freedom brightened a bit for officially recognized religious organizations. Those not recognized continue to face difficulties, as the imprisonment of religious leaders highlights. The Vatican and Vietnam have regular dialogue. We are also encouraging Vietnam to recognize more than one group of Hoa Hao adherents. Ambassador at Large for International Religious Freedom John Hanford plans to visit Vietnam next month to continue discussions with the Vietnamese. Much remains to be done, but there has been progress and we want to encourage further progress.

Conditions for workers have also improved. The U.S. Department of Labor has developed technical assistance projects with Vietnam in the areas of employment services, social insurance and safety nets, employment of people with disabilities, industrial relations, and prevention of child labor. A sixth project on HIV/AIDS education and prevention is in the works. And the first Labor Dialogue between the U.S. and Vietnam took place in March this year.

You should also know that there were 72 private and public strikes during the year, many against foreign-owned or joint venture companies, but others that involved state-owned and private firms. The government tolerated these strikes, even though most were spontaneous and supported by organized labor after the fact. In some cases, the government disciplined employers for illegal practices that led to strikes.

The brightest spot in our engagement with Vietnam has been on the economic side. Last December saw the capstone on long years of negotiation when the U.S.-Vietnam Bilateral Trade Agreement (BTA) finally entered into force. The BTA is comprehensive, binding Vietnam to an unprecedented array of reform commitments, including tariff reductions for key U.S. exports, elimination of non-tariff barriers on most products, adoption of WTO-consistent protection for intellectual property rights (IPR), market access for American service industries, and protections for American investors. Many of these reforms were due on entry into force; others will be phased in over the next one to nine years.

The results of the BTA are already there to see. In the first four months of this year, U.S. exports to Vietnam increased by over 25% compared with the same period last year. This increase came even as our exports to most other countries in Asia were falling. As Vietnam phases in further reforms over the coming years the trade and investment picture for U.S. business should steadily improve. Extension of the Jackson-Vanik waiver is required to keep the BTA in effect and vital to keeping our momentum on trade.

In the seven months since the BTA entered into force, Vietnam has made substantial progress in assessing and planning for legal reforms that are necessary to meet its BTA commitments. Their government is progressively drafting and enacting new laws and reforming its regulatory structure. A new ordinance that opened up opportunities for foreign business in advertising came into force this year, and legal amendments that will expand operations for foreign law firms are expected soon. The National Assembly is to discuss additional laws on business bankruptcy and commercial law this month; new laws on MFN and national treatment are under draft. This has been no simple task. The work to change this large number of laws, regulations, and rules would swamp the law-drafting capacity of most countries.

That said, Vietnam's current trade and investment regime still falls significantly short of its commitments in the BTA, including many that were due on entry into force. We recognized early on that Vietnam would need technical assistance to meet its BTA commitments, and USAID has funded assistance in this area.

One of our most vexing long-term problems is the protection of intellectual property rights. Vietnam is again on the Special 301 Watch List for IPR, as IPR enforcement generally remains weak and violations are rampant. Piracy rates are extraordinarily high on some types of products such as computer software, music and video CDs, VCDs, and DVDs. On the positive side, the BTA contains important commitments in the IPR arena, and Vietnam is making progress in strengthening its legal regime. Vietnam has recently extended legal protection to new areas not previously covered such as trade secrets and new plant varieties. This year, Vietnam issued guidelines on resolving copyright disputes and is drafting a new Civil Procedure law. Vietnamese officials are well aware of the enforcement difficulties and are prepared in principle to address them, but IPR enforcement responsibilities are divided among a number of agencies, often with coordination and resources lacking.

As certain as these ongoing reforms will help the U.S. to expand exports to and investment in Vietnam, they will surely also bring change for the better in Vietnam. The Vietnamese economy appears today to be in recovery, thanks to relatively low inflation, a favorable trade balance, and the prospect of increased exports and investment from the BTA. Many of the same commitments that are opening up markets and improving the business climate for U.S. business in Vietnam should be opening the way for Vietnamese business at home as well. Vietnam's commitments to make its process for drafting and enacting laws more transparent will give Vietnamese and international business a chance to comment on laws before they are passed, improving the process for all. Tariff reductions are opening up new markets on both sides of the Pacific; indeed, Vietnamese exports to the U.S. have grown this year as well.

Vietnam's outlook toward private enterprise has taken a radical departure. The economy today bears little resemblance to the days of communal farms and ration cards in the 70s and 80s. With approximately 1.3 million annual entrants into the job market, Vietnam needs a vibrant private sector to keep growth at high rates and provide the necessary jobs. The Enterprise Law in effect for the last two years made it substantially easier to begin a new business and is given credit for the registration of 35,000 new businesses since that time. The Communist Party even changed its rules this year to allow members to own private businesses.

The Jackson-Vanik waiver remains a prime example of executive/legislative cooperation on foreign policy and an essential element of our engagement with Vietnam. It has promoted greater Vietnamese cooperation on the total range of bilateral issues and its successes are visible and plentiful. Congressional approval of the waiver sends a vital message to Vietnamís leadership and people that the United States wants a cooperative, constructive relationship with Vietnam. The policy tools the Jackson-Vanik waiver makes available build the people-to-people relationships that will strengthen trust between our societies. I am confident that this extension of Jackson-Vanik will further advance the national interests of the United States in Vietnam. I urge members of the Committee to support the Presidentís waiver.

Released on July 18, 2002

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