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Perspective

Following is the text of Peterson's speech, as prepared for delivery:

Speech to the Asia Society
U.S.-Vietnam Relations

Ambassador Douglas B. "Pete" Peterson

March 9, 2001
St. Regis Hotel
Washington, DC

U.S.-Vietnam Relations
The BTA and Normalization's End

Fifteen years ago we took the first small steps in what became a bipartisan effort to normalize relations with Vietnam. Coincidentally, or not, in 1986, Vietnam's economy was deteriorating; its people were even having trouble feeding themselves. To reverse the situation, Vietnam introduced the reform policies called doi moi, which started by giving farmers the right to grow what they liked and sell as they wished. The policies, and economic growth, really didn't take hold, though, until the early '90s, when things had become so bad that you saw hungry people on the streets of Hanoi. Real liberalization measures were introduced, and Vietnam soon went from an importer of rice to the second largest rice exporter in the world.

Concurrently, 1986 saw the first U.S. steps since the late 1970s to engage the Vietnamese on issues of U.S. concern, principally POW/MIA identification and resolution of a regional refugee crisis. At former President Reagan's request, General John Vessey began visiting Vietnam trying to convince the Vietnamese to cooperate in the effort to recover and identify America's missing in action, still today our number one foreign policy priority with Vietnam. Five years later, the U.S. and Vietnam agreed to a blueprint for normalization of relations. Between 1994 and 2000, the U.S. ended its trade embargo of Vietnam, normalized diplomatic relations, and issued Jackson-Vanik waivers. Vietnam settled outstanding financial claims, assumed some debts of the former South Vietnam and steadily increased its cooperation on POW/MIA accounting and freedom of emigration.

The July signing of the BTA was a milestone, the penultimate step toward full normalization of relations. It took five long years to bring to signature the most comprehensive Jackson-Vanik bilateral trade agreement yet completed. But that fact needs to be put in its proper perspective. The first Jackson-Vanik bilateral trade agreement, signed with Romania in 1975, is 18 pages long. The Vietnam BTA and its annexes are 146 pages long. In it, Vietnam receives Normal Trade Relations, subject to annual congressional review through the Jackson-Vanik waiver, and Vietnam commits to a wide range of extensive market-opening commitments for goods and services. WTO-level protection for Intellectual Property Rights, and other important economic reforms. I think we learned a few things in 20 years.

However, as advanced as the BTA is within its category, it by no means approaches in sophistication the latest generation of free trade agreements and WTO accession agreements under negotiation. As an example, one senior trade negotiator commented during the final round of negotiations that, if the BTA were a WTO accession agreement, it would be three times as long. I understand that free trade agreements, like NAFTA and Jordan, along with new FTAs under negotiation with Singapore and Chile, go well beyond WTO commitments on trade and investment.

If signing the agreement was the penultimate step towards full normalization of relations, congressional approval of the agreement and ratification by Vietnam are the final acts in this 15-year long bipartisan process. The new U.S. Trade Representative, Ambassador Robert Zoellick endorsed the agreement during his Senate confirmation hearings, and he is working with his cabinet colleagues to develop the administration's trade legislation strategy. The trade agenda is quite large -- the Vietnam BTA, Jordan FTA, Trade Promotion Authority, and the Free Trade Area of the Americas, and timing each piece of the puzzle is complicated.

Hopefully, our little trade agreement with Vietnam doesn't get lost in the shuffle, because the BTA advances our foreign policy and trade interests. The BTA equalizes Vietnam's trade status in the U.S. market with Vietnam's neighbors, and it draws Vietnam further into the global economy and regional economic associations like APEC. This will be vital for Vietnam, a country with a per capita GDP of $400, and a region that is struggling economically. Approval of the BTA will send a strong pro-trade message to our friends in Asia, and, by expanding regional prosperity, it will also promote regional stability.

And lots of anxious American and Vietnamese business people are banking on the BTA's entry into force. The BTA will open the American market to Vietnam on the basis of normal trade relations (NTR). It will lower the duties on Vietnamese exports from, in some cases, 40 percent, to an average of about three percent. Despite facing Smoot-Hawley level tariffs now, Vietnam already exports some products to the U.S. -- seafood, coffee, footwear, and a few other things. The value of their exports is expected to grow quickly after ratification, to maybe double the present level of $600 million per year.

From our perspective, U.S. businesses will gain a great deal from the BTA. Highly protected Vietnamese markets for goods and services will open to our companies. In some cases the opening will be gradual over several years to allow Vietnam time to prepare. But in such fields as information technology, machine tools, insurance, and others, U.S. businesses will be able to compete very effectively. The BTA will make Vietnam a much more attractive place for investors, bringing greater transparency and consistency to an investment environment whose arbitrariness and bureaucracy have recently been driving investors away rather than drawing them in. The agreement is also structured to point Vietnam toward compliance with the requirements it must meet to join the World Trade Organization.

Implementing the BTA will not be easy for the Vietnamese. They will have to make a lot of changes in their laws, regulations, procedures, and institutions. They are already moving to implement some provisions before the agreement has entered into force. We are providing technical assistance to help them work through some of these complex changes.

As for passing the Congress, of course there will by a lively debate on the BTA as there always is on such matters, and it may get noisy at times. That's the way our system works, and it's fine. People will air their views concerning Vietnam's record on human rights, religious rights, labor, the environment, and so on. We'll also get a chance to explain to the members the benefits of the BTA for both countries. In the end, I believe that broad bipartisan support for normalization of relations with Vietnam will prevail and the agreement will be approved.

Human Rights -- We Never Give Up

That is not to say that all is rosy in Vietnam or in our relations. We have plenty of disagreements, and we discuss them candidly with the Vietnamese. In late February, the State Department released its annual human rights reports, and the shortcomings of Vietnam in that area were reported objectively and in detail. Without question the situation in Vietnam is far from what we would like to see. You can read all about it at www.state.gov. There are no independent media. There is arbitrary detention without trial. Religious organizations not officially recognized are branded as illegal and their leaders and practitioners are subject to a variety of pressures and harassment, including imprisonment.

But the report also acknowledges that some human rights trends in Vietnam have been positive in recent years. Critical public expression that would have gotten people arrested a few years ago is now increasingly tolerated by the authorities. Some Protestant churches in the south, which long operated on the precarious fringe, recently met to form an officially recognized organization. We have seen groups of rural people camped on sidewalks across the street from government buildings for weeks at a time, displaying hand-lettered signs that tell of their complaints about unfair treatment in land disputes. Some individuals well known for dissident views say that they have experienced an easing of the pressure on them.

Importantly, Vietnam has also made strides in the area of worker rights, which we know will be interest to some members of Congress as we discuss the BTA. Vietnam is taking seriously its commitments under the 1998 ILO General Declaration on Labor Standards, ratifying three of the eight core ILO Labor Conventions and working steadily towards ratification of the remaining five. The ILO has opened an office in Hanoi, and is working closely with Vietnam's labor ministry to facilitate Vietnam's meeting its international obligations. I strongly believe that the MOU on labor cooperation signed last November reinforces these efforts, and I am confident the MOU will facilitate further progress in Vietnam towards meeting international labor standards and towards insuring Vietnamese enjoy the full range of workers' rights.

The Vietnamese government reacts sternly when our annual human rights and international religious freedom reports are released, calling them interference in Vietnam's internal affairs. But they have participated in an official human rights dialogue with us, where all the matters included in those reports are fair game for discussion. We do see some results from our efforts, but we don't always think it best to publicize them.

A few weeks ago, the Commission on International Religious Freedom, an independent body established by the Congress, held hearings on Vietnam and heard from a number of those in the West who are most critical of the Vietnamese on religious matters. Again, the Vietnamese government was quick to denounce the hearings as unwarranted interference. But there was a fairly well balanced mix of speakers, including those who would hold up the BTA unless Vietnam meets their standards of freedom, and others who believe that one effect of the BTA will be to help expand the space for freedom in Vietnam. I lean toward the latter view.

A Political Turning Point?

This is a crucial moment in Vietnam. It is preparing to hold a congress of the Communist Party, something that happens once every five years. At this congress, party leaders and representatives will set the policy direction for the next five years and decide on the new leadership line-up. Everyone is watching for the outcome, but it's a bit slow in coming. They keep holding plenary sessions of the Central Committee, where the major decisions are all supposed to be prepared in advance of the congress. But the number of sessions is already beyond what is usual, indicating some difficulty reaching agreement.

In the midst of these political developments, disturbances erupted a few weeks ago in the Central Highlands. These are areas inhabited by many ethnic minorities, indigenous peoples who have grown increasingly resentful as majority ethnic Vietnamese have settled in large numbers and put forests into coffee cultivation. There have been many complaints, often publicly aired in the press, about poor response by local administrative officials to grievances over land. On top of that, many of the people in this region have turned to Protestant faiths, worshipping in so-called "house churches," outside the control of the umbrella organization that sanctions officially recognized religious groups. Many pastors and adherents have been subjected to arrest or harassment for belonging to these so-called illegal organizations.

Thousands of members of ethnic minority groups staged protests in two Central Highlands provinces after the arrest of two minority group house church leaders. The situation reportedly calmed down after several days, but we have almost no information on the extent of the protests, or government reaction, as neither we, nor the foreign media, have been allowed into the area. We are still trying to get into the area and will keep doing so.

Vietnam is not a monolithic dictatorship. There is only one legal party, but there are significant differences of view contending within it. The National Assembly, a body that could have been characterized some years ago as a rubber stamp, has shown increasing signs of life. Its members are elected from all regions and ethnic groups. Most, but not all, are Communist Party members. One is a former South Vietnamese military officer. Lately, Assembly members have taken to addressing rather sharp questions to government officials about government performance.

Looking Ahead

The normalization process, based on a blueprint developed by the first Bush Administration, has provided a necessary framework for the development of U.S.-Vietnam relations. Ten years after agreement on the blueprint and fifteen years after engagement resumed, the growth of bilateral relations is impressive. As we move beyond the normalization framework, annual two-way trade is nearing a billion dollars a year and American investment in Vietnam is approaching $2 billion. Two thousand Vietnamese students are earning university degrees in the U.S., and that number will rise dramatically thanks to Senator Kerry, Senator McCain, Rep. George Miller, Rep. Lane Evans, and others who proposed and mid-wifed the Vietnam Education Foundation Act of 2000. The law establishes a $5 million per year scholarship fund financed from Vietnam's repayment of some of the debt of the former South Vietnamese government.

In November, we signed an agreement on scientific and technological cooperation. Under its terms, we hope to expand robust Centers for Disease Control and National Institutes of Health collaborative scientific research programs looking at emerging infectious diseases like tuberculosis, dengue fever, typhoid, malaria, and HIV/AIDS. AID and CDC plan to expand their HIV/AIDS activities in Vietnam and neighboring countries to try and contain the spread of this terrible disease. We are also talking to the Vietnamese about starting a joint research effort on the health and environmental effects of Agent Orange in Vietnam, but we still haven't reached agreement on how to proceed.

And in the multilateral arena, we are looking for ways to engage Vietnam, which has been a member of Asia-Pacific Economic Cooperation (APEC) for four years, including a region-wide effort this year on the New Economy and on emerging infectious diseases.

Safety in Vietnam has been my personal concern. Whether it's working with our AID projects helping victims of landmines and unexploded ordinance, or bringing our two countries to conclude a humanitarian demining agreement last June, I have made safety a priority. Unexploded ordinance-related accidents kill and maim hundreds, if not thousands of Vietnamese every year. I've also been very proud of raising the profile of accident prevention in Vietnam, where thousands of people ride motorbikes without helmets, and hundreds are severely injured in accidents every year.

U.S.-Vietnam relations have potential. Vietnam is a country of nearly 80 million people, twelfth largest in the world. It is a young country, over half the population was born after 1975. Although among the poorest now, its natural resources are vast, and its human resources are limited only by the nearsightedness of its government. I hope we will continue to be a part of the process that assists the Vietnamese people to correct that vision impairment and bring Vietnam's potential to reality.

You can help too. I hope that many of you will visit Vietnam, an increasingly popular destination for tourists. There is plenty to see in that beautiful country, but while you are admiring the ancient temples and the imperial citadel of Hue and the beaches and the gorgeous green countryside and the variety of colorful ethnic dress in the mountain villages, I hope you will talk to the Vietnamese you meet and ask them about their lives and their aspirations. You will find that almost everyone is pleased to meet Americans. More and more Vietnamese, especially young people, speak English.

Anyone who visits Hanoi and Ho Chi Minh City will see a beehive of economic activity, lots of it in small businesses. This is true in other cities too, though the countryside is still very poor. The state-owned enterprises are still inefficient sinkholes, protected by their political patrons. But seeing the explosion in commercial activity in the last few years, it's unmistakable that lots of people have more money to spend than ever before.

You might find that you want to get more directly involved in building the relationship. There are many ways to do so, from academic exchanges to volunteer organizations to business opportunities. All of them contribute to creating a broader and deeper sense of mutual trust that will help prevent repetition of some of the mistakes of the past.

If this is your inclination, I suggest that you visit our embassy in Hanoi or our consulate general in Ho Chi Minh City. The dedicated people working there can assist you in many ways, from adding blank pages to your passport to advising exporters on market opportunities, and they have insights to share that can help deepen your perspective on U.S.-Vietnam relations.

A reporter interviewed in November an old Vietnamese war veteran who was among the crowd waiting to see the American president. He asked the old man why he was so eager to see an American president after his experience fighting against the Americans. The man replied with a proverb: "A thousand friends are not enough. One enemy is too many." A lot of people there and here would agree.

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