IB98033 11-28-03Congressional 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 economicrelationsremainedessentiallyfrozenformorethan a decade after the 1975 communist vic-toryin South Vietnam. Over the past decade,Washington and Hanoi have normalizedrelations incrementally. Congress has playedasignificantroleinthenormalizationprocess.Bilateral relations took a major stepforward in February 1994, when PresidentClintonorderedanendtothe19-yearoldU.S.trade embargo on Vietnam. The followingyear, the United States and Vietnam settleddiplomatic and private property claims andopened liaison offices in Washington andHanoi. InApril1997,aU.S.AmbassadorwasapprovedbytheSenateandtookuphispostinHanoi. In March 1998, President Clintongranted a waiver from the Jackson-Vanik amendment that smoothed the way for Over-seas Private Investment Corporation (OPIC)and Export-Import Bank support for U.S.business in Vietnam.On July 13, 2000, the U.S. and Vietnamcontinued their normalization by signing asweeping bilateral trade agreement (BTA),which was approved by Congress and signedby President Bush in 2001. Vietnam ratifiedthe agreement shortly thereafter. Under theBTA, the U.S. extended conditional normaltrade relations to Vietnam. In return, Hanoiagreed to a range of trade liberalization mea-sures and market-oriented reforms. ImportsfromVietnamhavesurgedsincetheBTAwassigned, leading to friction over sensitiveproducts,suchascatfishandtextiles. InApril2003, the U.S. and Vietnam signed a bilateraltextile agreement imposing quotas on Viet-nam’s textile exports. In 2003, the two coun-tries took hesitant steps toward exploring anew, as yet undefined, security relationship.Until recently, each step in improvingbilateraltieshasbroughtcontroversy,albeitatdiminishing levels. U.S. opponents in Con-gressandelsewherehavearguedthatVietnammaintains 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/MissinginAction(POW/MIAs)fromtheVietnam 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 economyand AmericanstrategicinterestsinworkingwithU.S.friendsand allies to promote stability and develop-ment by integrating Vietnam more fully intothe existing East Asian order.The next, and perhaps final, step towardfull normalization would be granting perma-nent normal trade relations status to Vietnam.This step, which would require congressionalapproval, is likely to be considered in thecontext ofnegotiatingVietnam’saccession tothe World Trade Organization (WTO). Viet-nam hopes to join the WTO in 2005, thoughsome analysts believe this is an overly opti-mistictimeframe. Recently,tradefrictionandclashes over Vietnam’s human rights recordhave soured relations somewhat since theheady days after the BTA was signed.
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