IB9803306-17-05Congressional Research Service
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The Library of Congress
The Vietnam-U.S. Normalization Process
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UMMARY
U.S.-Vietnam diplomatic and economicrelations remained essentially frozen for morethan a decade after the 1975 communist vic-tory in South Vietnam. Relations took majorsteps forward in the mid-1990s, particularly in1995, when the two sides opened embassies ineach other’s capitals. Since then, the normal-ization process has accelerated and bilateralties have expanded. Congress has played asignificant role in the normalization process.The most important step toward normal-ization since 1995 was the signing of a sweep-ing bilateral trade agreement (BTA), whichwas approved by Congress and signed byPresident Bush in 2001. Under the BTA, theU.S. extended conditional normal trade rela-tions (NTR) to Vietnam. In return, Hanoiagreed to a range of trade liberalization mea-sures and market-oriented reforms. Trade —primarily imports from Vietnam — has surgedsince the BTA was signed. The United Statesis now Vietnam’s largest trading partner.Until recently, each step in improvingbilateral ties has brought controversy, albeit atdiminishing levels. U.S. opponents in Con-gress and elsewhere have argued that Vietnammaintains a poor record on human, religious,and labor rights. Opposition has also comefrom groups arguing that Vietnam has notdone enough to account for U.S. Prisoners of War/Missing in Action (POW/MIAs) from theVietnam War, though this argument has di-minished markedly in recent years.Forces favoring normalization haveincluded those in Congress and elsewherereflecting a strong U.S. business interest inVietnam’s reforming economy and Americanstrategic interests in working with U.S. friendsand allies to promote stability and develop-ment by integrating Vietnam more fully intothe existing East Asian order. The next, andfinal, step toward full normalization would begranting permanent normal trade relationsstatus to Vietnam. This step, which wouldrequire congressional approval, almost cer-tainly will be considered in the context of negotiating Vietnam’s accession to the WorldTrade Organization (WTO). Vietnam hopesto join the WTO in 2005, though some ana-lysts believe this is an overly optimistic timeframe.Recently, clashes over Vietnam’s humanrights record and trade friction over shrimp,catfish, and textiles have soured relationssomewhat since the heady days after the BTAwas signed. At the same time, some U.S.analysts have suggested that the Bush Admin-istration seek to expand the as yet embryonicsecurity relations between Hanoi and Wash-ington, arguing that Vietnam and the UnitedStates share suspicions of China’s expandinginfluence in Southeast Asia. Other observers,however, have argued there is little evidencethat Hanoi seeks to balance Beijing’s risingpower. Regardless of motivation, since 2003the two sides slowly have expanded military-to-military ties, albeit primarily in symbolicrather than substantive ways.Vietnamese officials have expressed theireagerness for their Prime Minister to visit theUnited States in the summer of 2005. Theyhope the visit not only will accelerate thebilateral World Trade Organization accessionnegotiations but also will smooth the way forPresident Bush’s expected trip to Hanoi in2006, when Vietnam hosts the Asia-PacificEconomic Cooperation (APEC) forum sum-mit. The two sides have not had a bilateralsummit since 2000, when President Clintonvisited Vietnam.
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