U.S. GOVERNMENT PRINTING OFFICE

71–553 DTP WASHINGTON : 2001

UNITED STATES-VIETNAM TRADE RELATIONS

HEARING

BEFORE THE

SUBCOMMITTEE ON TRADE

OF THE

COMMITTEE ON WAYS AND MEANS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

JUNE 15, 2000

Serial 106–106

Printed for the use of the Committee on Ways and Means

(

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ii

COMMITTEE ON WAYS AND MEANS

BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois

BILL THOMAS, California

E. CLAY SHAW, JR., Florida

NANCY L. JOHNSON, Connecticut

AMO HOUGHTON, New York

WALLY HERGER, California

JIM MCCRERY, Louisiana

DAVE CAMP, Michigan

JIM RAMSTAD, Minnesota

JIM NUSSLE, Iowa

SAM JOHNSON, Texas

JENNIFER DUNN, Washington

MAC COLLINS, Georgia

ROB PORTMAN, Ohio

PHILIP S. ENGLISH, Pennsylvania

WES WATKINS, Oklahoma

J.D. HAYWORTH, Arizona

JERRY WELLER, Illinois

KENNY HULSHOF, Missouri

SCOTT MCINNIS, Colorado

RON LEWIS, Kentucky

MARK FOLEY, Florida

CHARLES B. RANGEL, New York

FORTNEY PETE STARK, California

ROBERT T. MATSUI, California

WILLIAM J. COYNE, Pennsylvania

SANDER M. LEVIN, Michigan

BENJAMIN L. CARDIN, Maryland

JIM MCDERMOTT, Washington

GERALD D. KLECZKA, Wisconsin

JOHN LEWIS, Georgia

RICHARD E. NEAL, Massachusetts

MICHAEL R. MCNULTY, New York

WILLIAM J. JEFFERSON, Louisiana

JOHN S. TANNER, Tennessee

XAVIER BECERRA, California

KAREN L. THURMAN, Florida

LLOYD DOGGETT, Texas

A.L. SINGLETON, Chief of Staff

JANICE MAYS, Minority Chief Counsel

SUBCOMMITTEE ON TRADE

PHILIP M. CRANE, Illinois, Chairman

BILL THOMAS, California

E. CLAY SHAW, JR., Florida

AMO HOUGHTON, New York

DAVE CAMP, Michigan

JIM RAMSTAD, Minnesota

JENNIFER DUNN, Washington

WALLY HERGER, California

JIM NUSSLE, Iowa

SANDER M. LEVIN, Michigan

CHARLES B. RANGEL, New York

RICHARD E. NEAL, Massachusetts

MICHAEL R. MCNULTY, New York

WILLIAM J. JEFFERSON, Louisiana

XAVIER BECERRA, California

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records

of the Committee on Ways and Means are also published in electronic form. The printed

hearing record remains the official version. Because electronic submissions are used to

prepare both printed and electronic versions of the hearing record, the process of converting

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process

is further refined.

iii

C O N T E N T S

Page

Advisory of May 30, 2000, announcing the hearing ............................................. 2

WITNESSES

Montagnard Advocacy, Y Hin Nie .......................................................................... 39

Pacific Ventures, Inc., Barry L. Clark ................................................................... 54

Peterson, Hon. Douglas ‘‘Pete’’, U.S. Ambassador to Vietnam ............................ 16

Rohrabacher, Hon. Dana, a Representative in Congress from the State of

California .............................................................................................................. 6

U.S.-ASEAN Business Council, and Cargill, Incorporated, Juels Carlson ......... 45

U.S.-Vietnam Trade Council, Virginia B. Foote .................................................... 32

Vietnamese-American Public Affairs Committee, Falls Church, Virginia, Dan

Duy-Tu Hoang ...................................................................................................... 50

SUBMISSIONS FOR THE RECORD

American Legion, John F. Sommer, Jr., letter ...................................................... 57

Anheuser-Busch, St. Louis, MO, statement and attachment ............................... 58

Boat People S.O.S., Merrifield, VA, Nguyen Dinh Thang, statement ................. 60

General Electric Company, Andre Sauvageot, statement .................................... 61

Khmer Kampuchea Krom Federation, Lakewood, CA, statement ....................... 64

McCain, Hon. John, a United States Senator from the State of Arizona,

statement .............................................................................................................. 68

Montagnard Human Rights Organization, Greensboro, NC, Rong Nay, statement ...................................................................................................................... 70

National Alliance of Families, Bellevue, WA, Dolores Apodaca Alfond, statement and attachments ......................................................................................... 71

New York Life Insurance, Inc., Sandra J. Kristoff, statement ............................ 72

Veterans of Foreign Wars of the United States, Bruce R. Harder, statement ... 74

(1)

UNITED STATES-VIETNAM TRADE RELATIONS

THURSDAY, JUNE 15, 2000

COMMITTEE ON WAYS AND MEANS,

HOUSE OF REPRESENTATIVES,

Washington, DC.

The subcommittee met, pursuant to notice, at 10:15 a.m., in room

1100, Longworth House Office Building, Hon. Philip M. Crane

(Chairman of the Committee) presiding.

[The advisory announcing the hearing follows:]

2

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON TRADE

FOR IMMEDIATE RELEASE Contact: (202) 225–1721

May 30, 2000

No. TR–21

Crane Announces Hearing on

United States-Vietnam Trade Relations

Congressman Philip M. Crane (R–IL), Chairman, Subcommittee on Trade of the

Committee on Ways and Means, today announced that the Subcommittee will hold

a hearing on United States-Vietnam Trade Relations, including the renewal of Vietnam’s waiver under the Jackson-Vanik amendment to the Trade Act of 1974 (Trade

Act). The hearing will take place on Thursday, June 15 , 2000, in the main

Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m.

Oral testimony at this hearing will be from both invited and public witnesses. Invited witnesses will include the Honorable Douglas ‘‘Pete’’ Peterson, U.S. Ambassador to Vietnam . Also, any individual or organization not scheduled for an oral

appearance may submit a written statement for consideration by the Committee or

for inclusion in the printed record of the hearing.

BACKGROUND:

Vietnam’s trade status is subject to the Jackson-Vanik amendment to Title IV of

the Trade Act of 1974. This provision of law governs the extension of normal trade

relations (NTR), including normal tariff treatment, as well as access to U.S. Government credits, or credit or investment guarantees, to nonmarket economy countries

ineligible for NTR treatment as of the enactment of the Trade Act. A country subject

to the provision may gain NTR treatment and coverage by U.S. trade financing programs only by complying with the freedom of emigration provisions under the Trade

Act. The extension of NTR tariff treatment also requires the conclusion and approval by Congress of a bilateral commercial agreement with the United States providing for reciprocal nondiscriminatory treatment. The Trade Act authorizes the

President to waive the requirements for full compliance with respect to a particular

country if he determines that a waiver will substantially promote the freedom of

emigration provisions, and if he has received assurances that the emigration practices of the country will lead substantially to the achievement of those objectives.

Since the early 1990s, the United States has taken gradual steps to improve relations with Vietnam. In February 1994, President Clinton lifted the trade embargo

on Vietnam in recognition of the progress made in POW/MIA accounting. The

United States opened a Liaison Office in Hanoi later that year. On July 11, 1995,

President Clinton announced the establishment of diplomatic relations, which was

followed by the appointment of former Congressman Douglas ‘‘Pete’’ Peterson as

U.S. Ambassador to Vietnam. In 1997, the Office of the United States Trade Representative began negotiations toward the conclusion of a bilateral commercial

agreement with Vietnam. An agreement in principle was reached with Vietnam on

July 25, 1999. The trade agreement, while not yet signed, consists of four parts:

market access, trade in services, intellectual property rights protection, and investment.

Because the bilateral trade agreement with Vietnam has not yet entered into

force, Vietnam is ineligible to receive NTR tariff treatment. However, if the PresiVerDate 20-JUL-2000 14:16 May 02, 2001 Jkt 060010 PO 00000 Frm 00006 Fmt 6633 Sfmt 6621 K:\HEARINGS\71553.TXT WAYS3 PsN: WAYS3
3

dent determines that a Jackson-Vanik waiver would substantially promote the freedom of emigration objectives under the Trade Act, U.S. exporters doing business in

Vietnam are given access to U.S. Government credits, or credit or investment guarantees, such as those available from the Overseas Private Investment Corporation,

the Export-Import Bank, and the U.S. Department of Agriculture, provided that

Vietnam meets the relevant program criteria.

On March 9, 1998, the President first determined that a Jackson-Vanik waiver

for Vietnam would substantially promote the freedom of emigration objectives under

the Trade Act. On April 7, 1998, the President issued Executive Order 13079, under

which the waiver entered into force. The renewal procedure under the Trade Act

requires the President to submit to Congress a recommendation for a 12-month extension no later than 30 days prior to the waiver’s expiration. On June 3, 1998, the

President renewed Vietnam’s waiver for the next 12-month period. On June 3, 1999,

the President issued another 12-month waiver. The President is expected to issue

a waiver for the next 12-month period by June 3, 2000. Once renewed, the new

waiver authority will continue in effect unless disapproved by Congress within 60

calendar days after the expiration of the existing waiver. Disapproval, should it

occur, would take the form of a joint resolution disapproving of the President’s waiver determination. In the first session of the 106th Congress, a resolution of disapproval, H.J. Res. 58 , was considered and failed by a vote of 130 to 297.

In 1999, two-way trade between the United States and Vietnam was valued at

$900 million. U.S. exports to Vietnam last year totaled $291 million, and U.S. imports from Vietnam equaled $609 million. Top U.S. exports included machinery and

transportation equipment, and chemicals and related products. Top U.S. imports

from Vietnam in 1999 included food and live animals, and miscellaneous manufactured articles.

In announcing the hearing, Chairman Crane stated: ‘‘This hearing will provide

the Subcommittee with an opportunity to review Vietnam’s Jackson-Vanik waiver

and emigration policies. It is also an occasion to assess the progress that has been

made on accounting for our soldiers missing in action.

In addition, I look forward to this chance to review the status of the pending bilateral trade agreement, which must be signed and approved by Congress before NTR

can be extended to Vietnam.’’

FOCUS OF THE HEARING:

The focus of the hearing will be to evaluate U.S. trade relations with Vietnam and

to consider the renewal of Vietnam’s waiver under the Jackson-Vanik amendment

to the Trade Act. The Subcommittee is interested in receiving testimony about Vietnam’s emigration policies and practices and on the potential impact on Vietnam and

the United States of a termination of Vietnam’s waiver. Witnesses are also encouraged to address the nature and extent of U.S. trade and investment ties with Vietnam, as well as issues related to the pending bilateral trade agreement with Vietnam.

DETAILS FOR SUBMISSIONS OF REQUESTS TO BE HEARD:

Requests to be heard at the hearing must be made by telephone to Traci Altman

or Pete Davila at (202) 225–1721 no later than the close of business, Thursday, June

8, 2000. The telephone request should be followed by a formal written request to

A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. The

staff of the Subcommittee on Trade will notify by telephone those scheduled to appear as soon as possible after the filing deadline. Any questions concerning a scheduled appearance should be directed to the Subcommittee on Trade staff at (202)

225–6649.

In view of the limited time available to hear witnesses, the Subcommittee

may not be able to accommodate all requests to be heard. Those persons and

organizations not scheduled for an oral appearance are encouraged to submit written statements for the record of the hearing. All persons requesting to be heard,

4

whether they are scheduled for oral testimony or not, will be notified as soon as possible after the filing deadline.

Witnesses scheduled to present oral testimony are required to summarize briefly

their written statements in no more than five minutes. THE FIVE-MINUTE

RULE WILL BE STRICTLY ENFORCED. The full written statement of each

witness will be included in the printed record, in accordance with House

Rules.

In order to assure the most productive use of the limited amount of time available

to question witnesses, all witnesses scheduled to appear before the Subcommittee

are required to submit 200 copies, along with an IBM compatible 3.5-inch diskette

in WordPerfect or MS Word format, of their prepared statement for review by Members prior to the hearing. Testimony should arrive at the Subcommittee on

Trade office, room 1104 Longworth House Office Building, no later than

Tuesday, June 13, 2000. Failure to do so may result in the witness being denied

the opportunity to testify in person.

WRITTEN STATEMENTS IN LIEU OF PERSONAL APPEARANCE:

Any person or organization wishing to submit a written statement for the printed

record of the hearing should submit six (6) single-spaced copies of their statement,

along with an IBM compatible 3.5-inch diskette in WordPerfect or MS Word format,

with their name, address, and hearing date noted on a label, by the close of business, Friday, June 23, 2000 to A.L. Singleton, Chief of Staff, Committee on Ways

and Means, U.S. House of Representatives, 1102 Longworth House Office Building,

Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Subcommittee on Trade office,

room 1104 Longworth House Office Building, by close of business the day before the

hearing.

FORMATTING REQUIREMENTS:

Each statement presented for printing to the Committee by a witness, any written statement

or exhibit submitted for the printed record or any written comments in response to a request

for written comments must conform to the guidelines listed below. Any statement or exhibit not

in compliance with these guidelines will not be printed, but will be maintained in the Committee

files for review and use by the Committee.

1. All statements and any accompanying exhibits for printing must be submitted on an IBM

compatible 3.5-inch diskette in WordPerfect 5.1 format, typed in single space and may not exceed a total of 10 pages including attachments. Witnesses are advised that the Committee

will rely on electronic submissions for printing the official hearing record.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing.

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material

not meeting these specifications will be maintained in the Committee files for review and use

by the Committee.

3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments

by the Committee, must include on his statement or submission a list of all clients, persons,

or organizations on whose behalf the witness appears.

4. A supplemental sheet must accompany each statement listing the name, company, address,

telephone and fax numbers where the witness or the designated representative may be reached.

This supplemental sheet will not be included in the printed record.

The above restrictions and limitations apply only to material being submitted for printing.

Statements and exhibits or supplementary material submitted solely for distribution to the

Members, the press, and the public during the course of a public hearing may be submitted in

other forms.

Note: All Committee advisories and news releases are available on the World

Wide Web at ‘‘http://waysandmeans.house.gov’’.

The Committee seeks to make its facilities accessible to persons with disabilities.

If you are in need of special accommodations, please call 202–225–1721 or 202–226–

5

3411 TTD/TTY in advance of the event (four business days notice is requested).

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

Chairman C

Mr. Rohrabacher, we will reserve our opening statements until

RANE. The hearing will come to order.

f later so that we can take your testimony and then go vote.

With that, Dana, I ask you to try to keep it confined, your oral

testimony, to about 5 minutes; and any written testimony will be

a part of the permanent record.

[The opening statements of Chairman Crane and Mr. Ramstad

follow:]

Statement of Hon. Philip M. Crane, a Representative in Congress from the

State of Illinois

Good Morning. Welcome to this hearing of the Trade Subcommittee on U.S.-Vietnam trade relations. Today we meet to examine the 2000 Jackson-Vanik waiver for

Vietnam and pending legislation by Rep. Rohrabacher—H.J. Res. 99—to disapprove

this waiver.

Since the early 1990’s, the United States has taken gradual steps to normalize

our relationship with Vietnam. However, this process has been contingent upon

Vietnam’s total cooperation with the United States in making the fullest possible

accounting for our missing servicemen and women.

In 1998, the President issued the first waiver for Vietnam from the freedom of

emigration criteria in the Jackson-Vanik amendment to the Trade Act of 1974. As

many of you know, the Jackson-Vanik amendment governs U.S. trade relations with

nonmarket economy countries, including the extension of normal trade relations

(NTR). Earlier this month, the President issued the annual waiver for the next 12

months because he has determined that such a waiver will substantially promote

freedom of emigration in Vietnam.

Vietnam is not yet eligible for NTR trade status because Vietnam and the United

States have not yet signed a bilateral trade agreement, which would also have to

be approved by Congress. Thus, the practical effect of the Jackson-Vanik waiver has

been to enable U.S. government agencies such as the Overseas Private Investment

Corporation, the Export-Import Bank, and the U.S. Department of Agriculture to

provide financing to Americans interested in doing business in Vietnam—provided

that Vietnam meet the relevant program criteria. This is a necessary first step on

the way to full normal trade relations with Vietnam.

With respect to the bilateral trade agreement between the United States and Vietnam, the United States Trade Representative announced in July 1999 that it had

reached an ‘‘agreement in principle’’ with Vietnam. The agreement is reportedly

comprehensive in scope and generally covers market access, trade in services, intellectual property and investment. I look forward to the formal signing of the agreement and hope that it can be submitted to Congress for consideration in the near

future.

I believe this agreement would provide U.S. firms and workers with access to the

Vietnamese market, which is the 12th most populous in the world. Such market access also would give the United States the opportunity to be a positive force for

change in a country in transition and where over half of the population is under

the age of 25. If the agreement is signed and approved by Congress, Vietnam would

be eligible for NTR treatment.

I look forward to our witnesses’ testimony today on a broad range of bilateral

issues and policy objectives in U.S. relations with Vietnam. I now recognize Mr.

Levin, the Ranking Member of the Subcommittee, for his opening statement. [statement]

We have a full schedule today and in the interest of time, I ask our witnesses

to limit their oral testimony to five minutes each. We will include your longer written statements in the hearing record. Our first witness is our colleague, Congressman Dana Rohrabacher of California.

f6

Statement of Hon. Jim Ramstad, a Reprensentative in Congress from the

State of Minnesota

Mr. Chairman, thank you for calling today’s hearing to discuss U.S.-Vietnam

Trade Relations.

I am pleased that we are once again reviewing the progress being made in Vietnam on reform of the country’s economy as it moves toward a more market-oriented

approach. These policies of political and economic reintegration in the world must

be encouraged.

Hopefully, as the Vietnamese Communist Party continues to relinquish some of

its control over the economy to spur its growth, they will also see the benefits of

political freedoms for the citizens. While there are signs of personal freedoms and

considerable power at the local levels, there is significant need for greater democracy in Vietnam.

Two-way trade between the U.S. and Vietnam has greatly increased since 1994,

reaching $900 million in 1999. I am very pleased that Amb. Peterson, our former

colleague and a true American hero as a former POW, is here today to update us

on the status of our bilateral trade negotiations and the general economic and political situation in Vietnam today.

Knowing the crucial value of an engaged relationship between the US and Vietnam, I want to thank you again, Mr. Chairman, for calling this hearing. I look forward to hearing from all of today’s witnesses about the importance and implication

of U.S.-Vietnam trade relations.

STATEMENT OF HON. DANA ROHRABACHER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

f Mr. ROHRABACHER. Mr. Chairman, it has been 2 years since

President Clinton issued the first Jackson-Vanik waiver for Vietnam, allowing for taxpayer-funded subsidies and insurance for investment in that dictatorship. Each year we have been assured by

the administration and by our ambassador to Hanoi that this action would lead to greater political openness and prosperity for the

Vietnamese people and a better economic climate for American investors. Unfortunately, the exact opposite has happened.

As the Washington Post stated on May 3rd, ‘‘Vietnam remains a

one-party state. Rampant corruption retards foreign investment,

and the Communist party fears more openness to the outside world

could bring in more political heterodoxy for which the party shows

zero tolerance..’’

Human Rights Watch recently linked the ongoing persecution of

dissidents and religious believers in Vietnam to pervasive economic

and political corruption. There is no free press; all information is

controlled by the state. Radio Free Asia broadcasts are routinely

jammed.

A recent poll of international businessmen by Political and Economic Risk Consultancy Group, which is a respected Hong Kongbased research firm, rated Vietnam among the three worst legal

systems in Asia; and that is saying a lot when you consider that

includes Burma, China, Communist China, North Korea, and so

forth. Official Vietnamese data shows that foreign investment has

dropped by 75 percent during the past year, and the country’s annual growth rate of around 4 percent has fallen to half of what it

was when President Clinton normalized political and economic relations with Hanoi.

7

I fully agree with the Wall Street Journal’s assessment that, ‘‘The biggest barrier to growth in Vietnam is, as it always has

been, the Communist party itself. Until the party sees its way to

limiting its own power, Vietnam will be saddled with widespread

corruption and slow economic growth.’’ . Another troubling development, based on numerous reports by

western diplomats, is that Hanoi has sent large numbers of troops

into Laos to defend the corrupt and repressive Pathet Lao regime

from its internal opponents. Thus, we continue to subsidize investment in this dictatorship while they are engaged in military action

in their neighbor’s country. This military intervention to prop up

a neighboring Communist regime will further deplete Vietnam’s

economy. But, also, it should say to the world, we should not be

guaranteeing American investments in that country with taxpayers’ dollars.

The repeated promises by Hanoi of economic reform have been

no more credible than any past pledges. There is still not even the

slightest hint of free and fair elections, and that repressive government is basically still looking to the United States and foreign investment through businesses to bail them out, and that is what we

do when we grant this status. When we give them a Jackson-Vanik

waiver, we permit American businessmen to go in with American

dollars backed up by the U.S. taxpayers—to make investments in

this dictatorship and bail them out of their bad policies.

As this panel is aware, the Jackson-Vanik provision primarily

addresses the issue of freedom of emigration for people who have

fear of prosecution and persecution in Vietnam. The Vietnamese

Exit Permit system for immigration, including for long-time reeducation camp survivors, Amer-Asians, Montagnards and other people of interest to America, remains rife with corruption. Many Vietnamese on the U.S. migration list have not been able to come to

the United States because they could not afford to pay the bribes

that are necessary to get those papers, that paperwork done.

My joint resolution, disapproving the President’s waiver for the

corrupt Vietnamese dictatorship, does not intend to isolate Vietnam

nor to stop U.S. companies from doing business there. It simply

prevents Communist Vietnamese from enjoying a trade status that

enables American businessmen to make increasingly risky investments with loan guarantees subsidized by the American taxpayer.

If private banks or insurance companies will not back up or ensure private business ventures in Vietnam, why should the American taxpayers be asked to guarantee those loans? Rampant corruption, mismanagement, as well as abuses in the emigration program, the lack of free trade unions, the suppression of free expression, and the persecution of dissidents and religious believers are

valid reasons to oppose the Jackson-Vanik waiver for Vietnam.

Mr. Chairman, we do no favors to the Vietnamese people nor to

American investors by once again reflexively supporting the President’s unjust Jackson-Vanik waiver. I propose that we give the

Communist dictators of Vietnam a strong message from the U.S.

Congress that their corruption, mismanagement and repression

will no longer be, at the very least, subsidized by the American taxpayers. By supporting my legislation, we can put the Vietnamese

leaders on probation for a period of 1 year.

8

If they then enact reforms, which they have promised to do, and

begin developing a truly credible judicial system, and they begin

ending their corruption in the migration program and take their

jack-boots, or you might say Ho Chi Minh sandals, off the face of

the Vietnamese people, I personally will reconsider my support for

this waiver next year. I am not holding my breath on that one.

The Vietnamese Communists have manipulated American generosity to further impoverish and repress their people. There is no

reason in the world for us to provide taxpayer guarantees for the

people who are investing in this increasingly risky venture, when

there are democracies like the Philippines who would love to have

those investments of those American companies go to their country

instead of this dictatorship.

Thank you very much, Mr. Chairman. I would ask, for the

record, to submit several of the articles that I have quoted about

the situation in Vietnam.

Chairman CRANE. Without objection, so ordered. Thank you for

your testimony.

[The prepared statement and an attachment follow:]

Statement of Hon. Dana Rohrabacher, a Representative in Congress from

the State of California

Mr. Chairman:

It has been two years since President Clinton issued the first Jackson-Vanik waiver for Vietnam, allowing for taxpayer-funded subsidies and insurance for investments there. Each year we have been assured by the Administration and by our ambassador to Hanoi that this action would lead to greater political openness and prosperity for the Vietnamese people, and a better economic climate for American investors. Unfortunately, the exact opposite has happened.

As the Washington Post stated on May 3, ‘‘Vietnam remains a one party state...

rampant corruption retards foreign investment and... the Communist Party fears

more openness to the outside world could bring in more political heterodoxy—for

which the party shows ZERO tolerance.’’ And Human Rights Watch recently linked

the ongoing persecution of dissidents and religious believers in Vietnam to pervasive

economic and political corruption. There is no free press—all information is controlled by the state. Radio Free Asia broadcasts are routinely jammed.

A recent poll of international businessmen by Political and Economic Risk

Consultancy Group, a respected Hong Kong-based research firm, rated Vietnam

among the three worst legal systems in Asia. Official Vietnamese data shows that

foreign investment dropped by 75% during the past year and the country’s annual

growth rate of around 4 percent has fallen to half of what is was when President

Clinton normalized political and economic relations with Hanoi. I fully agree with

the Wall Street Journal’s assessment that, ‘‘The biggest barrier to growth in Vietnam is—as it always has been—the Communist Party itself. Until the party sees

its way to limiting its own power, Vietnam will be saddled with widespread corruption and slow economic growth.’’

Another troubling development, based on numerous reports by Western diplomats,

is that Hanoi has sent large numbers of troops into Laos to defend the corrupt and

oppressive Pathet Lao regime from its internal opponents. This military intervention to prop up a neighboring communist regime will further deplete Vietnam’s

economy.

The repeated promises by Hanoi of economic reform, have been no more credible

than any past pledges. There is still not even the slightest hint that free and fair

elections will be conducted in Vietnam. In that repressive environment, it is hardly

surprising that foreign investors and businesses are bailing out.

As this panel is aware, the Jackson-Vanik provision primarily addresses the issue

of freedom of emigration for people who fear or have experienced persecution. The

Vietnamese Exit Permit system for immigration—including for long time reeducation camp survivors, Amer-Asians, montagnards and other people of interest to

America—remains rife with corruption. Many Vietnamese on the U.S. emigration

list have not been able to come to the United States because they could not afford

to pay the bribe price.

9

My joint resolution, disapproving the President’s waiver for the corrupt Vietnamese dictatorship, does not intend to isolate Vietnam nor to stop U.S. companies

from doing business there. It simply prevents Communist Vietnam from enjoying a

trade status that enables American businessmen to make increasingly risky investments with loan guarantees and subsidies provided by U.S. taxpayers.

If private banks or insurance companies will not back-up or insure private business ventures in Vietnam, the American taxpayers should not be asked to do so.

Rampant corruption, mismanagement, as well as abuses in the emigration program,

the lack of free trade unions, the suppression of free expression and the persecution

of dissidents and religious believers, are valid reasons to oppose the Jackson-Vanik

waiver for Vietnam.

Mr. Chairman, we do no favors to the Vietnamese people or American investors

by once again reflexively supporting the President’s unjustified Jackson-Vanik waiver. I propose that we give the Communist dictators of Vietnam a strong message

from the U.S. Congress that corruption, mismanagement and repression will no

longer be, at the very least, subsidized by American taxpayers. By supporting my

legislation, we can put the Vietnamese leaders on probation for the period of one

year.

If they enact the reforms that they have promised, and begin developing a truly

credible judicial system, end the corruption in the migration program and take their

jack-boots—or Ho Chi Minh sandals—off of the faces of the Vietnamese people, I

will then consider support for the waiver next year. But I won’t hold my breath.

The Vietnamese Communists have manipulated American generosity to further

impoverish and repress their people. I ask my colleagues to support my resolution.

f10

[Additional attachments are being retained in the Committee

files.]

fluence the pace and direction of economic and political reforms in

Chairman CRANE. How can the United States most effectively inf Vietnam?

Mr. ROHRABACHER. We should, number one, as Ronald Reagan

did with the Soviet Union, the number one goal should be not to

help them grow economically. Because Ronald Reagan said about

the Soviet Union, every week he would say, what have we done to

undermine the Soviet Union economy, which eventually led to freedom in Russia.

11

What we must do instead is what Reagan did, support those people in Vietnam and in that region who seek democracy and support

communications with the people of Vietnam themselves who are for

a more free and open democratic society. We have lots of avenues

open to us. We should have major efforts through our national Endowment for Democracy and bolstering Radio Free Asia, and so

forth. That is the way to bring a better, more peaceful and freer

Vietnam.

Chairman CRANE. And will that contribute in a positive way to

the fullest possible accounting of POW-MIA cases and progress on

remaining emigration cases?

Mr. ROHRABACHER. I think the most important thing that could

bring an accounting for MIA-POWs is the elimination of the Communist dictatorship in Vietnam, instead of continuing support for

the Communist dictatorship of Vietnam. They have not given us a

full accounting, and I know that there are some people who have

testified to that before this Committee.

Again, let me state for the record, this Congressman has asked

over and over again for the Vietnamese government to simply provide the records of all the prisons in which Americans were held

during the Vietnam War. They have steadfastly refused to do that.

If we had those records, we could find out exactly how many men

they were holding. They claim to me and to others who were at the

negotiations that all of those records were destroyed during the

war. They have not given us a full accounting, not by a long shot.

The way to get a full accounting of our men is to try to put pressure on them, rather than trying to curry favors with these dictators in Vietnam.

Chairman CRANE. Thank you.

Mr. Levin.

Mr. LEVIN. I think there is much shared concern about the government of Vietnam. I am not sure there is anything close to total

disagreement. I think it is closer to total agreement about the problems there. The issue becomes how you begin to impact conditions

within Vietnam.

We have an ambassador there, a former colleague, and I am not

saying ambassadors are always right, but I think our present ambassador has some special credibility and also a relationship with

us that I think underlines his credibility. I just urge that you take

a look at his testimony—I think you were here last year perhaps

when he testified—and to see his perspective on how we try to

bring about change with Vietnam, within Vietnam. Because, as you

know, his perspective is very different in terms of how we respond

to the problems there, whether it is the POW-MIA issue that you

just commented on or whether it is emigration issues or whether

it is commercial and related issues. So I just urge that we try to

have a serious dialog on that.

When you talk about taxpayer subsidization, I just hope that

that does not become kind of the rallying cry. I am not sure how

much it really costs, if anything. As I understand it, there is one

OPIC project now under way, just begun with Caterpillar, and ExIm has just signed an agreement, I think it may be the initial one,

where there hasn’t been any funding. So I don’t want taxpayers to

think that the ambassador or anybody is suggesting that we proVerDate 20-JUL-2000 14:16 May 02, 2001 Jkt 060010 PO 00000 Frm 00015 Fmt 6633 Sfmt 6602 K:\HEARINGS\71553.TXT WAYS3 PsN: WAYS3
12

vide taxpayer moneys to prop up the government of Vietnam. It is

really, in a sense, the opposite. It is how to impact change within

that country.

Mr. ROHRABACHER. Well, number one, I have the utmost respect

for Pete Peterson. I consider him a friend, and he is a former colleague, but I have some disagreements with him, obviously. But,

again, I hold him in high esteem, and I think of him as a personal

friend as well.

With that said, let me say that I do disagree with him. I think

that you could only judge someone’s opinion as how right it is by

how it plays out in reality, and we have had this Jackson-Vanik

waiver now for several years and has Vietnam become more democratic? No.

There is a definition of insanity, and that is doing the same thing

over and over again but expecting to have different results. Things

are not getting better in Vietnam. I have quoted many sources here

from the Wall Street Journal and other economic analyses, as well

as politically. It shows that things are not getting better. I hope

when Pete comes to testify here today that he will be asked again

whether or not the Vietnamese—here is a very easy thing the Vietnamese can do to show good faith on an accounting of MIA/POWs

come up with the records for all of the prisons that Americans were

held in during the war. Please ask him, why, after that has been

requested, have not the Vietnamese complied with that. If they are

dealing with us in good faith, they could do that with a snap of

their fingers.

Mr. LEVIN. We will ask him about that and your other comments.

I would simply urge, a few years is not a true test of where a country is going.

Mr. ROHRABACHER. I agree, but we have been doing this with

China for 10 years, and it is becoming more repressive. We have

the same pattern.

One last thought in terms of the subsidy that you are talking

about. That is the essence of the argument. If you take away the

portion of what we are dealing with here and we say you could

have everything else but you are not going to get any more taxpayer guarantees through the Export-Import Bank and any other

internationally financed, subsidized—taxpayer-subsidized financial

institution, saying we are just going to eliminate that from the mix

here, you will find that that is what this debate is really all about.

That is why the business community is pushing this. They want

a subsidy so that they can close up here and open up in this dictatorship where they have no unions, they can pay dirt wages, and

they think they are going to have this tremendous profit by doing

it that way.

Mr. LEVIN. My time is up, but I think Caterpillar might say to

you that the purpose of their project is not to close up here, it is

to help to shape relationships so that what is produced here by

Caterpillar can be sold and used in Vietnam.

My time is up. Thank you.

Chairman CRANE. Thank you.

Thank you, Dana, for your testimony. We have no further questions.

We will now stand in recess subject to the call of the Chair.

13

[Recess.]

Chairman CRANE. The Committee will come to order.

I want to welcome you all to the Subcommittee hearing on U.S.-

Vietnam trade relations. Today we meet to examine the 2000 Jackson-Vanik waiver for Vietnam and pending legislation by Representative Rohrabacher, H.J.Res. 99, to disapprove this waiver.

Since is early nineties, the United States has taken gradual stops

to normalize our relationship with Vietnam. However, this process

has been contingent upon Vietnam’s total cooperation with the

United States in making the fullest possible accounting for our

missing servicemen and women.

In 1998, the President issued the first waiver for Vietnam from

the freedom of emigration criteria in the Jackson-Vanik amendment to the Trade Act of 1974. As many of you know, the JacksonVanik amendment governs U.S. trade relations with nonmarket

economy countries, including the extension of normal trade relations, or NTR. Earlier this month, the President issued the annual

waiver for the next 12 months because he has determined that

such a waiver will substantially promote freedom of emigration in

Vietnam.

Vietnam is not yet eligible for NTR trade status because Vietnam

and the United States have not yet signed a bilateral trade agreement, which would also have to be approved by Congress. Thus,

the practical effect of the Jackson-Vanik waiver has been to enable

U.S. Government agencies such as the Overseas Private Investment Corp., the Export-Import Bank, and the U.S. Department of

Agriculture to provide financing to Americans interested in doing

business in Vietnam, provided that Vietnam meet the relevant program criteria. This is a necessary first step on the way to full normal trade relations with Vietnam.

With respect to the bilateral trade agreement between the

United States and Vietnam, the U.S. Trade Representative announced in July, 1999, that it had reached an agreement in principle with Vietnam. The agreement is reportedly comprehensive in

scope and generally covers market access, trade in services, intellectual property and investment. I look forward to the formal signing of the agreement and hope that it can be submitted to Congress

for consideration in the near future.

I believe this agreement would provide U.S. firms and workers

with access to the Vietnamese market, which is the twelfth most

populous in the world. Such market access also would give the

United States the opportunity to be a positive force for change in

a country in transition and where over half of the population is

under the age of 25. If the agreement is signed and approved by

Congress, Vietnam would be eligible for NTR treatment.

I look forward to our witness’ testimony today on a broad range

of bilateral issues and policy objectives in U.S. relations with Vietnam.

I now recognize Mr. Levin, the Ranking Member of the Subcommittee, for his opening statement.

Mr. LEVIN. Thank you, Mr. Chairman. Welcome to everybody

who is here for this hearing, and thank you for calling this hearing.

As you indicate, the immediate question before the Subcommittee

and then before the Congress as a whole is whether to approve or

14

disapprove of the President’s recent decision to waive the JacksonVanik prohibitions with respect to Vietnam for an additional year.

I support that decision. It should be a small, but hopefully, significant step in stimulating forward momentum in our relationship

with Vietnam and reforms within Vietnam. It will not confer normal trade relations status nor GSP status for Vietnam. It will enable U.S. producers exporting to and investing in Vietnam to continue to receive the benefits of trade financing provided by the Department of Agriculture, Ex-Im, OPEC and other Federal agencies.

Gradually, this should help to strengthen U.S.-Vietnam commercial

relations.

In addition to the immediate question of a Jackson-Vanik waiver

for Vietnam, we must begin to focus more sharply on longer term

questions relating to the future of U.S.-Vietnam relationships.

Last July, our trade negotiators concluded an agreement in principle with the government of Vietnam. This agreement reportedly

would be far-reaching in its scope. Vietnam has made significant

market access commitments, agreeing to extend MFN and national

treatment to U.S. goods. It also would agree to cut tariffs on key

U.S. exports and to eliminate quotas on most imports.

In the area of intellectual property rights protection, Vietnam

would agree to bring its laws into compliance with standards that,

in some cases, go beyond the obligation of the WTO Agreement,

TRIPS.

In the services sectors, Vietnam has agreed to phase in over relatively short periods of time the right for foreign firms to establish

businesses in areas including law, accountancy, information technology, banking and insurance. While the commitments that Vietnam would make in its agreement in principle with the U.S., while

those commitments are significant, much work, in my judgment,

remains to be done. There are areas of concern that must be addressed as we consider taking further steps toward normalization

of trade and economic relations with Vietnam.

First, we must insist on improved compliance with internationally recognized labor standards in Vietnam, and we must find ways

to implement that compliance. The Human Rights Report of the

State Department issued earlier this year states that ‘‘Vietnam’s

record in this area is poor.’’ in particular, the State Department observes that, and I quote, ‘‘There were reports that thousands of

children work in exploitative child labor.’’ this must change.

A second area of concern is the pace of economic reform in Vietnam. Our approval of a bilateral trade agreement would require reassurance that Vietnam is taking steps to reform its economy, including steps to root out corruption, enforce intellectual property

rights, and improve the reliability of government-published data.

I am looking forward to hearing what our witnesses today have

to say on these and other issues, because there are, indeed, problems in our relationship. In particular, I am pleased that our ambassador to Vietnam and former colleague, Pete Peterson, is once

again appearing before this Subcommittee. His perspectives on

Vietnam have been valuable to us in the past, as I am sure they

will be today.

In conclusion, Mr. Chairman, our work is cut out for us. We may

be on the threshold of taking important new steps in our trade and

15

economic relationship with Vietnam. In the short term, it is important that we not take steps backward. For that reason, I support

renewal of the waiver for Vietnam. In the longer term, it is critical

that we address these many issues—these many outstanding issues

affecting our trade and economic relationship with Vietnam.

Thank you, Mr. Chairman.

Chairman CRANE. Thank you.

Now I would like to yield 1 minute to our distinguished colleague

from the State of Washington, Ms. Dunn.

Ms. DUNN. Thank you very much, Mr. Chairman.

I would like to thank the Chairman for his willingness to hold

hearings on this issue, and I support the policy of engagement with

Vietnam that began earlier this decade. I have long thought that

Vietnam should be doing more to help answer the many questions

that families of American POWs and MIAs have had to endure for

well over two decades. This issue continues to trouble me deeply.

At this time, however, I continue to believe that it is in the best

interests of the United States to move forward with our relationship with Vietnam. My conversation with many experts on our Nation’s policy toward Vietnam, including Ambassador Peterson who

traveled a great distance to be at our hearing today, have led me

to this conclusion. If we are to work with the Vietnamese to win

further concessions on the POW-MIA issue and help them move toward a market-based economy, continuing our engagement with

them will only increase our leverage in the future.

The United States has entered into bilateral trade negotiations

with Vietnam, and it is well on the way to finalizing a historic

agreement. At the same time, I will insist that we use every tool

at our disposal to extract further concessions on the issue of POW/

MIAs, and I look forward to hearing from Ambassador Peterson on

this issue today.

If Vietnam wants to enjoy the benefits of open trade with the

United States, it must live up to its obligations to provide access

to all POW/MIA records and to make substantial progress in reforming its economic structure and ensure human rights and religious freedom.

Mr. Chairman, thank you once again for bringing attention to

this very important matter, and I look forward to working with you

in the future as we continue a new era in our relations with Vietnam.

Chairman CRANE. Thank you, Ms. Dunn.

We have a full schedule today, and in the interest of time I ask

our witnesses to limit their oral testimony to 5 minutes, and we

will include any longer written statements in the hearing record.

Chairman CRANE. Our next witness is Ambassador Pete Peterson, our U.S. ambassador to Vietnam, former colleague of ours here

in the Congress, resident of the Hanoi Hilton for 6-1/2 years, is

that not correct, Pete?

Mr. PETERSON. That is correct.

Chairman CRANE. And a man who has, I think, special insights

on our relations with Vietnam and who has inconvenienced himself

to make that long trip to get over here to participate in our hearings.

16

We welcome you, Pete; and we are glad to have you here today

to testify.

STATEMENT OF HON. DOUGLAS ‘‘PETE’’ PETERSON, U.S.

AMBASSADOR TO VIETNAM (FORMER MEMBER OF CONGRESS)

Ambassador PETERSON. Thank you very much, Mr. Chairman. It

is an honor to be back with you and your colleagues.

I see on the dais three of my classmates, which would suggest

some success here with the elevation of the Ways and Means Committee. I also see high-tech coming up with the new timing devices,

which I am impressed with, instead of the old bulbs, which is rather significant.

This morning, I would like to consult with you once again on the

President’s decision to waive Jackson-Vanik for this year. Since the

waiver was first granted in March 1998, it has been an essential

component of our policy of engagement with Vietnam, and I am

confident that this extension of the waiver will continue to advance

U.S. national interest as we deal with Vietnam.

The one common point here that I think that you will hear

throughout my testimony is that engagement works. We are now

at our fifth anniversary of our recognition of normalization of our

diplomatic relations with Vietnam; and, of course, another anniversary that we have all just witnessed was the 25th anniversary of

the fall of Saigon. That is the past, and now we are looking to the

future. Getting to where we are, relations between our two countries have been difficult over the last 25 years, but we are now

stepping out into a new millennium with great aspiration and anticipation.

The engagement progress since 1995 has been much smoother,

quicker, and more sustainable. An example of that is just the very

fact that 500,000 Vietnamese have resettled permanently in the

United States since we have engaged in that program.

It is also significant that we continue to look at the executive and

legislative cooperative process in the establishment of Vietnamese

policy, and this Committee and other Committees here have been

very helpful, and I want to give you my personal thanks for that.

I want to also thank you for your outstanding support staff. They

have been just remarkable in helping me out and my staff out in

establishing our positions here.

But we are now building a spirit of cooperation between our two

peoples, and we are producing results in the areas of POW-MIAs,

which Ms. Dunn has talked about, emigration, human rights, and

economic reform. On the emigration issue, the cooperation between

the United States and Vietnam has been excellent. We have completed nearly all of our emigration processing under the Orderly

Departure Program, resettlement opportunities of the returnees,

the ROVR program, the subprograms of the former reeducation

camps, the HO program, and the Montagnard program.

Since I last spoke to you a year ago, 3,786 persons have departed

Vietnam and resettled in the United States. That is an example of

what is happening in the emigration policy and the levels of cooperation to be measured between the United States and Vietnam.

I am confident that renewal of the Jackson-Vanik waiver this year

17

will continue to sustain the excellent cooperation that we have had

with the Vietnamese.

Now, on MIA and POW. This is a very, very significant program.

It remains the number one foreign policy issue with our engagement with Vietnam, and I am only here to tell you that we are

making significant progress. The fact is that we have gone into the

field, we have discovered remains, and the Vietnamese, because of

their unilateral actions, have enhanced significantly the works that

we are doing in Vietnam. Because of time, I cannot give you all the

details, but in my testimony you will find where we have been and

where we are going.

The human rights area is another area of major concern between

our two countries, and in the last 3 years, the times that I have

been posted to Vietnam, I have seen myself significant improvements in the human rights process in Vietnam. No, it is not a perfect situation, and it will not be for a long time. Much work needs

to be done. But I share with Congress and the American people the

deep concern for the human rights situation in Vietnam, and we

continue to keep it as the cornerstone of our dialog.

In fact, just last week we held our human rights dialog, our annual dialog with Vietnam with significant results, and I am confident that that will continue.

The labor issue comes up often. The International Labor Organization, ILO, is involved in Vietnam. We are hooking up, hopefully,

the AFL-CIO with them for training and to help move the Vietnamese along in that area as well.

Now, very quickly, trade and economic reform. It has slowed

down, and clearly the reform has stagnated because of a lot of reasons, but it looks like there is light at the end of the tunnel. I have

been told informally that the Vietnamese would like to come to the

United States to finalize the clarification of the BTA, the Bilateral

Trade Agreement, and it is likely that we should see them back to

the United States within the next month. Should that occur, it is

conceivable that that agreement could be signed and, therefore,

then submitted to your Committee for consideration later this year.

In conclusion, I would remind you that this is a 1-year extension.

This is not something that you do not get another look at in the

next year. In fact, if you will, it is significant in the sense that it

is a probationary process, and you will have the opportunity to look

at Vietnam’s conduct in all of these areas of which I have touched.

Congressional approval of this waiver sends a vital message to

the Vietnamese that we are committed to the rule of our policy of

engagement and that we do want to have a constructive, cooperative relationship with Vietnam and that we want to stimulate U.S.

exports to Vietnam, thereby increasing the job potentials here in

the United States. I am confident that the extension of the Jackson-Vanik waiver this year once again will further our sense of engagement and further our national interests as we deal with the

Vietnamese in the next year.

Thank you, Mr. Chairman.

Chairman CRANE. Thank you, Mr. Ambassador.

[The prepared statement follows:]

18

Statement of the Hon. Douglas ‘‘Pete’’ Peterson, U.S. Ambassador to

Vietnam (former Member of Congress)

Mr. Chairman, I would like to thank you for once again 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.

Before opening our discussion of the current state of U.S.-Vietnam relations, I

thought I might take a brief retrospective look at the history of our relationship.

In three weeks we will celebrate the fifth anniversary of the normalization of United

States—Vietnam diplomatic relations. This year also marks the twenty-fifth anniversary of the fall of Saigon. Anniversaries provide a useful opportunity to put relationships into some perspective.

The years between 1975 and 1995 were difficult, as we faced both differences over

history and our commitments to resolve POW/MIA questions and to deal with the

tens of thousands of refugees flowing out of Vietnam. Progress since 1995 has been

much smoother, quicker, and more sustainable. As an example, our successful and

cooperative emigration programs have paved the way for nearly 500,000 Vietnamese

citizens to resettle permanently in the United States.

Much of what has been accomplished over these five years can be directly attributed 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 interest in 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 Vietnam’s 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 Archer, Chairman Crane and the members of this committee for

your direct support and counsel.

Looking back at the last five years, there is one common theme to everything involved in the development of the relationship; one factor that should be evident from

our experience in Vietnam—engagement works. On every issue in which we have

been able to demonstrate mutual interests and in which both sides have been convinced of each other’s commitment to build a relationship, we have made progress.

Each side has made gestures 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. Vietnam will take over chairmanship of the ASEAN Standing Committee (ASC) and the ASEAN Regional Forum

(ARF) after the July ASEAN Ministerial Meeting. This change marks the first opportunity for Hanoi to assume leadership positions within ASEAN.

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. Vietnam’s cooperation on emigration policy, the test issue for the Jackson-Vanik waiver, is exemplary.

In the past five years, we have completed nearly all immigration processing under

the Orderly Departure Program, Resettlement Opportunities for Vietnamese Returnees (ROVR) sub-program, the Former Re-education Camp Detainees (‘‘;HO’’)

program, and the Montagnard programs. Since I last spoke to you, a total of 3786

persons have departed Vietnam and resettled in the United States under all of our

various refugee programs.

This year we relocated refugee and resettlement processing from our Embassy in

Bangkok to our full-service Consulate General in Ho Chi Minh City. This move has

enhanced our ability to provide essential services. While this move was accomplished relatively smoothly, there have been some start-up pains. We still hope to

finish processing of eligible applicants under the ODP and ROVR programs by the

end of this calendar year. 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 their excellent cooperation over this past year and we will

continue to build on this strong foundation to gain authorization to interview all

those who wish to be interviewed for resettlement in the United States under all

refugee and related programs. I am confident that the renewal of the Jackson-Vanik

19

waiver this year will further enhance the excellent cooperation and coordination we

now receive from Vietnamese officials.

Like emigration, 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 war. In March Secretary Cohen’s visit provided an enormous boost to our

progress in building the people-to-people relationships that are slowly 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 difficult. We are now searching in some of the most difficult and dangerous

terrain in the world—in thick primeval jungle and on top of rugged mountain peaks.

We face unpredictable weather conditions from torrential rains and high winds,

along with increasingly treacherous situations involving the clearing of unexploded

ordinance. Nonetheless, 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. I am never more proud than when I meet

these young people, most of whom were born well after any of the loss incidents

they are investigating.

Vietnam continues to support the President’s Four Measures of Cooperation on

the POW/MIA issue. Since 1993, thirty-nine (39) joint field activities have been conducted in Vietnam, 288 possible American remains have been repatriated, and the

remains of 135 formerly unaccounted for American servicemen have been identified,

including 26 since January 1999. 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, fate has been determined for all but 41 men. Many

of the American losses occurred in Laos and Cambodia. To date, Vietnam has provided 39 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. Since 1993, approximately 28,000 items have been reviewed

for possible information that would lead to an accounting for our fallen comrades.

As presented here, Vietnam’s cooperation in our efforts to account for missing Americans from the Vietnam War remains excellent and in good faith; 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

our number one foreign policy priority with Vietnam.

Since my posting to Hanoi, I have seen significant human rights improvements

in Vietnam. It is not a perfect situation and we have additional work to do in encouraging Vietnam to make further improvements in this critical area. I share with

the Congress and the people of the United States a deep concern for the human

rights situation in Vietnam. We have established a serious dialogue with the Vietnamese on human rights issues, and, just last week, we held annual high-level

human rights discussions with Vietnam’s representatives here in Washington. Secretary Albright raised human rights issues with Vietnamese senior leadership during her visit last year. In addition, my staff and I constantly work with Vietnamese

officials to keep this issue a cornerstone of the bilateral relationship. I am pleased

to report that our policy of engagement and dialogue has produced encouraging results.

This year, Vietnam liberalized its policy toward tolerating public dissent, and the

Vietnamese Communist Party continued its efforts to reform procedures on internal

debate and to allow a mechanism for citizens to petition the Government with complaints. We have seen evidence of this in various publications, but one of the clearest demonstrations can be seen on the streets outside the National Assembly Hall,

where delegates are currently in session. Ordinary Vietnamese citizens are carrying

placards demanding change on political and economic issues. Some placards I personally witnessed complained about corrupt local officials in their home districts.

Additionally, the Vietnamese released nearly 20 religious or political prisoners

and thousands of others from jail this year. Among those released were 12 Hmong

Protestants and three Catholic priests. Participation in religious activities throughout the country continued to grow significantly. Churches are generally full on days

of worship and on special days of remembrance large numbers of followers celebrate.

An estimated 500,000 Hoa Hao gathered in An Giang province for a religious festival and an estimated 200,000 Roman Catholics attended the annual La Vang pilgrimage. The Vatican and Vietnam have regular dialogue. We are also encouraging

Vietnam to recognize more than one group of Hoa Hao adherents. Ambassador for

Religious Freedom Robert Seiple visited Vietnam last year and witnessed many of

the improvements and issues first hand. Still, much remains to be done, but there

has been progress and we want to encourage further progress in the future.

Conditions for workers have also improved. The International Labor Organization

has opened an office in Hanoi and has moved quickly to assist Vietnam to impleVerDate 20-JUL-2000 14:16 May 02, 2001 Jkt 060010 PO 00000 Frm 00023 Fmt 6633 Sfmt 6602 K:\HEARINGS\71553.TXT WAYS3 PsN: WAYS3
20

ment its new labor law. The ILO is also providing technical assistance to help establish a workers’ compensation and social security program, to improve occupational

health and safety standards and inspectors, to train union members for negotiation

of collective bargaining agreements, and to review overtime procedures. The ILO

also conducted a two-day seminar in Vietnam to educate Vietnamese officials on the

importance of ILO Conventions 138 and 182 on Child Labor. We anticipate that the

AFL–CIO, working with the ILO, will bring to Vietnam in the near future its tremendous experience and dedication to the cause of Workers’ rights.

You should also know that there were numerous (approximately 60) private and

public strikes during the year, primarily against foreign-owned or joint venture companies, but a number also 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. In October 1999 the Government reduced the

length of the workweek for government employees and employees of companies in

the state sector from 48 hours to 40 hours.

Organizing this year’s annual Human Rights Dialogue was the easiest I have yet

experienced, and for the first time Vietnam’s delegation met with U.S.-based human

rights NGOs. In last week’s human rights dialogue, Assistant Secretary for Democracy, Human Rights, and Labor Harold Koh raised freedom of speech, association

and religion, Vietnam’s administrative detention decree, prison conditions, labor

rights, information on former prisoners of conscience, as well as specific detention

cases of concern to us. Vietnam’s delegation also met with the Council on International Religious Freedom. The tone of the meetings was the best ever. I believe

that we have finally established in-depth mutual understanding on this issue that

will encourage a spirit of cooperation on human rights.

Expanding economic linkages between the U.S. and Vietnam has been another

challenging mission. Although we have made excellent progress over the past five

years in expanding U.S. exports to and investment in Vietnam, this past year has

been particularly frustrating. Perhaps the relationship is just experiencing growing

pains. When I spoke with you last year, we were in the middle of the 8th round

of trade negotiations with Vietnam. One month later in July, we reached agreement

in principle on the bilateral trade agreement. Following technical discussions in August, we had high hopes of signing the Bilateral Trade Agreement during the APEC

Summit in September, but Vietnam balked at the last minute. I know all of us were

disappointed by this outcome, because concluding the BTA will bring real benefits

to both sides. Not only would the BTA open markets to American companies, but

implementation of its terms would mean that, over time, Vietnamese citizens would

gain significant freedom to determine their own economic destinies.

Nonetheless, I still hope we can complete the agreement before the end of this

administration. We are currently awaiting Vietnam’s answer to the United States

Trade Representative’s May 17 invitation to Vietnam’s Trade Minister for discussions in the U.S. to finalize the BTA. Ambassador Barshefsky’s invitation responded

to Vietnam’s March letter indicating issues on which Vietnam desired further clarification. Without access to the U.S. market on competitive terms, Vietnam cannot

attract the foreign direct investment and expertise to be able to compete in international markets with its neighbors in ASEAN and China.

Over the last six months, selected macroeconomic indicators have given the leadership of Vietnam a sense of comfort that has led to a slowdown in economic reform.

Although foreign direct investment flows have plummeted as economic reform has

stalled, higher oil revenues, improving exports to recovering regional trading partners, increasing remittances from overseas Vietnamese, and rising levels of official

development assistance have stimulated Vietnam’s economy. Growth has risen from

less than 4% one year ago to an estimated 5.6% in the first quarter of this year,

seemingly validating arguments for slowing the pace of change.

We have seen some progress on economic reform, nevertheless. Vietnam’s State

Bank issued important new prudential regulations and took the first steps in restructuring Joint Stock Banks and State Owned Commercial Banks. The National

Assembly approved an important new foreign investment law and the new Enterprise law, which streamlined domestic business formation. The government moved

to simplify equitization, divestiture, transfer, sale, or lease of small State Owned

Enterprises (SOEs) and allowed foreigners to own equity in SOEs. Minor steps were

also taken toward trade reform; the government reduced tariffs, liberalized import/

export rights, removed some import licensing requirements, and improved foreign

exchange regulations. The National Assembly has also extended, on a temporary

basis, normal trading relations status to United States goods pending completion of

the Bilateral Trade Agreement.

21

The reform agenda remains long and the next steps—expanding competition in

the financial sector, removing further protections for SOEs, and opening to the global economy—can free Vietnam’s people to stimulate more rapid economic growth.

With approximately 1.3 million annual entrants into the job market, Vietnam’s annual growth rate needs to approach 10% to absorb new job seekers and to keep pace

with its neighbors.

This past year, Ex-Im, OPIC, TDA, and USDA programs made available by the

Jackson-Vanik waiver began to have the positive impact on U.S.-Vietnam commercial relations we all expected. USDA’s Cooperator Program is improving dietary sensitivities that can lead to greater demand for U.S. agricultural products. A 25,000

MT wheat donation authorized under Section 416(b) of the Agriculture Act of 1949,

generated considerable positive publicity and good will among the Vietnamese people. The grain’s timely arrival in Vietnam’s Central Provinces just before major

flooding augmented a considerable United States humanitarian effort to provide relief to thousands left homeless. Local currency earned from the commercial sale of

the wheat will be applied to disaster mitigation and rural development projects in

Vietnam. These projects build Vietnamese goodwill for the U.S. More specifically,

OPIC lent Caterpillar’s local distributor $2.3 million for an expansion of the company’s facilities and OPIC has approved an $8 million loan for a new pharmaceutical factory. A few more project finance applications are in the pipeline. The

Trade and Development Agency continued to support U.S. businesses through funding of feasibility studies and technical training. Finally, Ex-Im Bank signed two

agreements making its insurance and loan programs available for the first time to

U.S. exporters.

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. Congressional approval of the waiver sends a vital message to Vietnam’s

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 House

to support the President

agreement has not been signed?

Chairman CRANE

’s waiver.

. Could you elaborate any further on why the

f Ambassador PETERSON. Yes. I think, by and large, the Vietnamese became very, very frightened at the complexity of this

trade agreement. The trade agreement is patterned and created

under the auspices and principles of the WTO. When we first

began speaking to the Vietnamese about these principles, frankly,

they did not understand them at all. And even if we do not get the

agreement signed, the very fact that we have educated the Vietnamese on these very complex issues will be a benefit to future relationships on trade. But they became very frightened. I think

there was an internal debate that took place within the halls of the

Politburo and the National Assembly and others, and they just

came to the point where they said, you know, we are not ready.

It has been nearly a year since we initialled the Principle Agreement. I think now that there is much greater understanding in the

country as to the benefits associated with this, and now I think,

too, that the concern that they had of losing control of the economic

situation in Vietnam is becoming a lesser matter, and that has

been, I think, stimulated again by the very fact of the passage of

permanent NTR for China here in this hall just last month. I think

all of those factors have given the Vietnam a comfort factor in moving ahead to the future.

22

Chairman CRANE. Could you describe a little bit the scope of the

agreement in principle that was reached last year in the bilateral

commercial agreement?

Ambassador PETERSON. I can’t tell or relate all of the details because they are not—I am not a trade expert, for one, and I don’t

understand some of these complex issues. Nevertheless, I can assure you that they do take the Vietnamese to the next step.

The agreement is largely designed with the evaluation of the Vietnamese market and the potentials for implementation, but it addresses very concretely the intellectual property issues that are

very important to any kind of commercial engagement. It has the

opening up of sectors of the market that we are concerned about.

It addresses tariff issues that are always of concern; and, just in

general, it has a small chapter on investment that is critical to any

kind of engagement we might have.

Chairman CRANE. Our previous witness talked about government

subsidies of businesses going over there and implied they are just

losing taxpayer dollars. Those businesses that have had assistance

to do business in Vietnam through such things as the Ex-Im Bank

loans or OPIC or the Department of Agriculture providing assistance, have there been significant American businesses going in

there that have failed?

Ambassador PETERSON. No, I don’t think any would come out

and just say they have failed, but there have been businesses that

lost patience with the process, and that is clear. Because some of

the reforms that were necessary for some to be successful in various sectors, the energy sector is a case in point, that just did not

materialize as was expected, and so some of those companies obviously saw opportunities in other countries, so they pulled their investments out and went to another country. That is how business

works.

But the programs of OPIC and the Ex-Im are infant, and only

a very few have been used. Because we just haven’t had that much

interest on the American side to invest in these last couple of years

because of the downturn of the FDI interest in Vietnam in general.

But I don’t think that you are looking at—certainly you are not

looking at a subsidy program, if you will, with the enticement of

American companies to come to Vietnam.

Chairman CRANE. Finally, what impact would denying the Jackson-Vanik waiver have on our relationship with Vietnam and any

future progress on the POW-MIA accounting and immigration

issues?

Ambassador PETERSON. I think failure of the renewal of the

Jackson-Vanik waiver between the two countries would be very,

very damaging to our overall relationship. While it wasn’t meant

to be, it has become the symbol of American commitment of engagement and of cooperation into the future. I don’t think that the

Vietnamese would negatively in any way impact—allow a negative

impact to our MIA search efforts. They have long stated that as a

humanitarian issue; and, in fact, we have now established, I believe, a partnership in that regard in that we are helping them locate the lost persons from the war, which number 300,000, by the

way.

23

So we are working this back and forth in a very humanitarian

way. So I don’t think there is any threat there of withdrawal

should this not pass. Nevertheless, there is a whole host of other

things that we are working with the Vietnamese on, be it counternarcotics, be it health programs, be it environmental programs and

things like that that would likely suffer greatly if we were not able

to pursue.

Now, again, I don’t think it would have a negative impact, a severe negative impact on the emigration policy, because the Vietnamese have indeed moved forward to embrace international

standards of emigration policy, which, of course, is the basis for the

Jackson-Vanik waiver.

Chairman CRANE. Thank you, Mr. Ambassador.

Mr. Levin.

Mr. LEVIN. Thank you. Welcome.

Ambassador PETERSON. Thank you.

Mr. LEVIN. Nice to see you again, Pete.

Would you like to comment—and it is not necessary, perhaps,

but you heard Mr. Rohrabacher’s comments about POW-MIA

issues. Would you like to say a word about that?

Ambassador PETERSON. I only would cite the fact that I have personally seen, if you will, the master list of POWs held in Vietnam.

We have had that in our possession since at least 1992, which was

a very ragged, very wide—on very bad paper, I might add—list of

everybody that the Vietnamese claim to have.

Now, it wasn’t by prison. It was just the master list. It was almost like checking in at a hotel, the registrar’s listing. And we

have that in our possession, and my name is on it, a number of

other names that you would be familiar with are on it. I have forgotten the exact number of names on that, but even some that did

not come out of prison on—who lost their lives there after having

been captured are on that list.

And so, I don’t know that there is a prison-by-prison list, and I

doubt it seriously. There were at least 11 prisons in Vietnam, and

we moved around in those prisons frequently. So at any 1 day, you

would get a snapshot list but you would not get a list, if you will

a definitive list, of persons who had been in that one prison for the

entire time that we were incarcerated.

Mr. LEVIN. Thank you. In your testimony, and you referred to it

briefly in our oral presentation, you mentioned in terms of conditions for workers, we anticipate that the AFL-CIO, working with

the ILO, will bring to Vietnam in the near future its tremendous

experience and dedication to the cause of workers’ rights. And

maybe this is too preliminary for further comment, but is there

anything further that you could tell us about that?

Ambassador PETERSON. Well, for the last 3 years we have had

a dialog with AFL-CIO and they have had at least three delegations visit Vietnam to evaluate the possibility of engaging in, perhaps through the good offices of the ILO, a dialog with the Vietnamese on the establishment of labor law and the implementation

of the labor law. The labor law in Vietnam actually is pretty good.

Mr. LEVIN. On paper.

Ambassador PETERSON. On paper. The problem of course is implementation. And in a general sense, the ILO is working with the

24

Vietnamese very diligently to pursue greater implementation nationwide on that document and to further expand that into the

areas that it does not quite meet the test.

And the AFL-CIO have, without commitment yet, but have signaled an interest in coming in and marrying up with the ILO to

conduct technical assistance.

Mr. LEVIN. And that is being pursued by the embassy? By your

staff?

Ambassador PETERSON. Yes, I personally have been involved

with this myself since actually before I ever even was posted to

Hanoi.

Mr. LEVIN. By the way, and I perhaps should know this, it indicates why we should have a better idea of the real dynamics within

Vietnam, the state-owned enterprises, are they still the majority of

the economy within Vietnam?

Ambassador PETERSON. Yes.

Mr. LEVIN. They are?

Ambassador PETERSON. Yes, and there is a move, of course, for

the equitization—that is their word for privatization—of the SOEs,

the state-owned enterprises. They are moving not as fast as we

would like to see them move, but there is enormous problems with

valuation in those SOEs. Those are ancient companies whose inventories and accounting practices have been pretty bad, and so

they are having the difficulty of establishing valuation.

They have gone so far, however, to say in the process of

equitization that foreign entities can, in fact, purchase up to I believe 30 percent of the SOEs in that process. And that is a breakthrough, and a further breakthrough is that on July 1st, the Vietnamese will open its very first stock market in Ho Chi Minh City,

and that will open up the opportunity for a greater SOE

equitization, so that they can build capital from the stock market.

Mr. LEVIN. Thank you.

Chairman CRANE. Mr. Ramstad.

Mr. RAMSTAD. Thank you, Mr. Chairman. And Ambassador Peterson, it is good to see you again. As one of your three classmates

on the panel, I just want to say that you made all of us very, very

proud and I certainly appreciate all the hard work that you have

done to improve relations with Vietnam and the work you have

done with the Vietnamese government to improve economic conditions there and your work on economic reforms as well.

I certainly agree with you, Pete, that opening Vietnam’s economy

and markets will make Vietnam stronger and improve the lives of

the Vietnamese people, and of course it is music to my ears whenever we have an opportunity for more export markets. My farmers

appreciate it. Our businesspeople appreciate it and need it, and so

it is obviously good for our economy as well.

While I firmly believe that trade and economic development are

vital to the development of democracy in Vietnam, I am concerned

about the benefits of trade and economic development reaching

down to the oppressed ethnic minorities. I have read the accompanying statement from the State Department accompanying the

waiver request. I am concerned about what the government of Vietnam is doing, if anything, Mr. Ambassador, to promote economic

25

development among minority groups, especially our former allies,

the Hmong, the Khmer Rouge and the Montagnards.

Two questions: What is the government of Vietnam doing to promote economic development among these minority groups, particularly the three I referenced? And second, what is your country team

doing to encourage and monitor the situation?

Ambassador PETERSON. The Vietnamese, it is really quite a

mixed process as to the minority groups. There are 54 minority

groups in Vietnam. In some provinces, it is totally merging and you

really cannot see any differentiation between one to the other. But

once you get out into the very, very serious rural areas, mountainous areas where the Hmong and some of the Thai and others

locate, it is very, very distinguished that there is a separation. And

some of it is self-imposed. It is not necessarily something that the

government can do much about.

Those are extremely poor areas which we are talking about, and

the Vietnamese have, and through the good offices the World Bank,

ADB and through the donor programs that other nations have,

have worked very hard to move the investment out into those rural

areas because they see that that is a major need. In fact, they have

identified 1,600 communes that have special needs for the alleviation of poverty and hunger.

Now, you can say how do you fix that? Clearly, it is not by just

going into that commune and dropping off bags of rice. What you

have to do is create sustainable jobs. And so those programs are

focused on that. And to a very minor, minor extent, the American

programs that we have are assisting in that regard. We have very

little USAID money, as you know, and so we are not so much involved with economic development in that program but more humanitarian and in a sense some of those hunger and poverty issues

become humanitarian.

But the overall is positive, and our country team watches very

closely. I have traveled to—personally, to well over 50 of the 61

provinces and my staff is out in those areas virtually weekly. And

we report that rather frequently back to the U.S. through the State

Department and I am sure those reports would be made available

to you if you would like.

Mr. RAMSTAD. And I appreciate that. And that certainly corroborated what my friends from Cargill tell me. You have traveled

throughout the country to the hinterlands and you have helped

American companies as well in the process. Let me just conclude,

if your team could get to me, because of my concern before this

goes to the floor, if possible, the economic condition of each of the

three groups I pointed out, and then any planned actions either by

the government or NGOs to help ensure that the benefits of U.S.

trade do reach the minorities.

Ambassador PETERSON. OK. We will work on that. I would ask—

the term ‘‘Montagnards’’ is a very generic term and it means all of

those groups essentially and I would need, if you would, to just jot

down now we are talking two groups, and I will get that back to

you.

[The following was subsequently received:]

What are the economic conditions of the Hmong, Khmer, and ‘‘Montagnard’’ minority groups and what are actions planned by the Vietnamese government and

26

non-governmental organizations to help ensure that the benefits of U.S. trade do

reach the minorities?

The ‘‘Montagnard’’ people, some 6.5 percent of the total population of 78 million,

comprise more than 30 ethnic groups in the Central Highlands. The Hmong number

approximately one percent of the population and live in the highland regions of the

northwest border provinces. Both groups have a lower standard of living than the

majority Vietnamese population and many of their communities suffer from severe

poverty. This is due to a variety of factors, including high population growth, environmental degradation, isolation, and social and cultural marginalization. The

Khmer constitute one and a quarter percent of the total population with the majority residing in the eastern coastal provinces of the southern Mekong River delta

where they engage in wet rice cultivation and are relatively prosperous. On the

other hand, the Khmer of the western Mekong delta near Cambodia live in relatively isolated pockets and their overall standard of living is much lower than their

eastern brethren.

In general, increased economic development and expanded trade and tourism have

helped ethnic minority communities in Vietnam, though progress in developing

these communities has been uneven. Many of these groups have long been isolated,

and expanding trade and increasing investment clearly help to improve living standards and economic and educational opportunities for members of ethnic minority

groups, especially those in areas located near larger cities and in the delta. Over

the past ten years, Vietnamese government and NGO programs have made gains

in increasing educational opportunities and health conditions for persons in ethnic

minority communities.

Mr. RAMSTAD. I will break that down and be more specific. Great

to see you. Thanks for the wonderful job you are doing and God

bless.

And I yield back.

Chairman CRANE. Ms. Dunn.

Ms. DUNN. Thank you very much, Mr. Chairman. Ambassador,

it is great to welcome you here. We were disappointed last December, when Congressman Crane was going to lead a delegation to

Vietnam, that we were not able to secure the airplane we needed

and so we couldn’t visit you. I would like to see firsthand how

things are doing there. But just for the benefit of somebody like

me, who comes from a state that is very reliant on trade, one out

of four, almost one out of three jobs almost are now related to

trade, I am curious for your feel about what is going on in Vietnam

with regard to the level of activity by American firms in Vietnam.

How does it compare to other countries that are doing business?

Are you in a position to help out our American firms?

Boeing is an example. Microsoft. What do you see as the future

of trade from the United States with Vietnam?

Ambassador PETERSON. I think the opportunities and the potential are enormous. But, in fact, the economy has stagnated because

the government has, in fact, stagnated their reform process. And

as a result, with the increase, if you will, of the recovery of the

Asian financial crisis, the neighbors of Vietnam become more attractive as to attracting that investment that would otherwise come

to Vietnam. So we are not seeing a lot of new companies come to

Vietnam but those who are already there—and Boeing is there.

Vietnam Air flies three 767s right now, and they are looking at the

potential purchase of additional Boeing aircraft in the next year or

two.

But the others, like Microsoft certainly is there in a very big

way. We just had a dinner celebrating the—what is it—the new

program that Microsoft has just come out with, the 2000 program,

and that was a big hit in Vietnam and virtually everyone knows

those two companies there.

27

Some companies though, I have to tell you, are not doing so well.

Some companies are doing very well. And it has a lot to do with

sector opportunity, and it also has to do with management of those

companies because some companies have not really patterned their

opportunities or actions against what the realities are yet in country.

But the potential is there for American export. We have your apples in Vietnam. We have a whole host of Washington-based companies that are involving themselves there, and I see nothing but

a bright future for the export market into Vietnam as it adheres

to greater reforms.

Ms. DUNN. Thank you, Mr. Chairman.

Chairman CRANE. Mr. Nussle—Mr. Camp.

Mr. CAMP. Thank you, Mr. Chairman. Welcome, Ambassador. It

is good to see you. Your testimony always has great weight before

this Committee and partly because we all know you and have great

respect for the job that you did as a Member of Congress and the

job that you are doing now as Ambassador to Vietnam and also

your experiences. Thank you for being here and for your testimony.

My question, I just wanted to go into a little more detail, if you

could, about some of the concrete steps the Vietnamese have taken

to help us resolve the remaining POW/MIA cases and what you see

as the greatest obstacle to resolving those cases that remain.

Ambassador PETERSON. You know, Dave, I think the biggest obstacle is just the logistics now. We have, from the Vietnamese side,

had enormous unilateral efforts on their part to help us discover

locations, establish identities of witnesses that will give us information concerning the cases that remain unresolved. All the things

that give us access to their archives, all of those things are there.

But just the pure logistics is enormous. I wish I could take you

out and show you, and you might have seen, in fact, when Secretary of Defense Cohen visited. He visited one of the most difficult

sites that we had had for some time, and people are working in

water up to their chest and mud up to their knees at least or beyond in effecting the kinds of search efforts. And now we are going

into circumstances where the sites are so remote that people are

having to walk for hours into the jungle to get to those sites and

then camp out in some of the most dangerous places in the world

and on mountain tops and on sides of mountains as well.

So the logistics are becoming our major obstacle for making faster progress, because now when we get out to one of those sites

what might have taken you 3 weeks to do is now taking 6 or 8

weeks when we have to go back. And then there is another factor

and that is the danger. We put so many of our cases sort of back

off to the side because the site itself was too dangerous because of

unexploded ordnance that was associated with the crash site. And

now we are having to go into those places, and I am very concerned

about that because I don’t want to lose any life or have anyone injured associated with that.

But I think the bottom line is the biggest problem is the

logistical issue, access is not a problem. Unilateral action is not a

problem, and cooperation is not a problem.

Mr. CAMP. Thank you very much for that summary. On some

economic issues, obviously some of the trade statistics are not as

28

good in recent years as they were beginning to be in sort of the

mid-nineties, and the foreign direct investment figure has begun

slipping, and I understand some new commitments are expected.

To what extent do you believe that the lack of implementing structural reforms to revitalize the economy has affected foreign investment?

Ambassador PETERSON. It has had a devastating impact on attracting foreign direct investment. Their lack of moving forward

with the kind of reforms they needed to do in the financial sector

and the re-equitization of the state-owned enterprises and the

trade issues has severely restricted the importation of foreign direct investment.

They could turn that around virtually overnight by signing the

bilateral trade agreement, because that has in all of it a reform

package essentially that they would buy in. And it also in a sense

allows time, because there are time lines associated with it, for

them to build the infrastructure, the institution infrastructure that

has to be in place for them to implement. And it is a good agreement in that respect.

But the fact that the Vietnamese stalled on their reform efforts

has directly impacted negatively their opportunities to attract investment. But I would say that there is an encouraging sign on the

American side. In the last quarter, American exports to Vietnam

were $110 million. That is quite a step above last year and might

be an indicator for the future.

Mr. CAMP. Thank you very much for your insight and your comments, and it is great to see you, Pete, and congratulations on all

of your successes. Thank you. I yield back.

Chairman CRANE. Mr. Neal.

Mr. NEAL. Thanks, Mr. Chairman. Great to see you, Pete. I read

where the Chinese often describe their new approach to economics

as being a mixture of socialism and capitalism. How would you describe the Vietnamese framework for their economic system?

Ambassador PETERSON. It is very close. Very close to that. Their

idea is they still are saying that they want the state-owned enterprises to have a majority piece of the economic well-being of the

country, which means that they want to maintain a significant portion of control.

On the other hand, it becomes unrealistic because of the stateowned enterprises. They are so badly managed, many of them are

in serious debt, and over 50 percent of them are not profitable. And

so they might make a statement like that but it is not sustainable.

But in a general sense, they would probably say and describe their

new marketplace as that same combination as the Chinese.

Mr. NEAL. As we recently concluded the debate on permanent

normal trading relations with China, much of the discontent that

surrounded that debate dealt with the issue of human rights. Could

you just quickly give us your sense of whether or not American values introduced into a free market advance our interests or whether

or not a tight economic system precludes that?

Ambassador PETERSON. I am convinced that through engagement, through dialog and through the creation of a strong economic

engine, that we are at our apex of having the greatest amount of

influence on the improvement of human rights in any country.

29

In the process of building the economic engine, you empower people, and through that empowerment they then determine their own

destinies. And you can see it happening, in the urban areas particularly, in Vietnam right now. You will see even greater adherence to that once the economic engine kicks in and the economic

engine reaches even somewhere close to the potentials that exist in

Vietnam. Those citizens will be enriched. The government will be

more comfortable because there will not be so many pressures, financial pressures, and they then in the process will have a new

role for individuals.

In the process the quality of life for everyone, in this case 80 million people, improves, and I think that in itself is a human rights

issue. If you have that many people having a greater lifestyle and

more comfortable life, a healthier life and one in which individual

potential is realized, I think that is a significant improvement.

Mr. NEAL. Do you have a time line? Do you have any sense of

where we are in history and where we are going with that?

Ambassador PETERSON. Well, I think it is really hinged on the

Vietnamese courage in signing the BTA, because the BTA is the

one thing that is going to really kick the economy in Vietnam.

Now, it is not all American. The bilateral trade agreement will

be a very significant psychological lift to not only American investors but investors all over the world, because if in the process of

implementation of that agreement the Vietnamese reform their financial sector, and of course reform their state-owned enterprise

sector and reform their trade sector, the entire world trade organizations will benefit and you are going to see probably, if this trade

agreement was to be signed and implemented, that the first major

influx of foreign direct investment is likely to be not American but

is likely to be in some of those industries that are already there,

like from Korea or Taiwan or Singapore. But then Americans are

sitting there at the doorstep to take advantage of that as well.

Mr. NEAL. You are always most welcomed here and great to see

you, Pete.

Ambassador PETERSON. Thank you.

Chairman CRANE. Mr. Watkins.

Mr. WATKINS. Thank you, Mr. Chairman. Mr. Ambassador, welcome again. Always delighted to see you here, and appreciate the

job and the professionalism that you go about doing that job in

Vietnam.

I am proud of Oklahoma. We were the first state to step forward

to put in a trade office in Vietnam. As you well know, States have

limited dollars and it is one of those decisions that was made to

try to be there early and to try to be of assistance. There is always

a little debate on where that money should go. And especially without the bilateral trade agreement, there is a lot of people who say

we should not have been there. Some of us think it is always good

to be a leader in areas.

I know that debate will continue as we try to position ourselves

in trying to help our business and industries and others in the

area.

The question is, you know, do you have other States there fulltime now? Or is Oklahoma still basically the only one?

30

Ambassador PETERSON. It turns out that Oklahoma has the

record for staying power.

Mr. WATKINS. We have always been a hardy bunch.

Ambassador PETERSON. And I think it has been very beneficial

to you. Florida had an office there and it actually was withdrawn

because of funding issues in January, I believe is when that office

closed.

But Oklahoma has for not so much cost actually been there over

these years and has established a very strong relationship with

their counterparts in Vietnam, which is going to serve Oklahoma

issues or interests a great deal once the opportunity breaks

through for the BTA. For instance, if the BTA was to be signed this

year and implemented next year early or something like that, your

office would be in first place to reap the benefits from that, particularly as it might apply to the energy sector or the agricultural sector, of which you have great interest.

So I think it is a good investment, and I think that to stay there

now would be wise and to carry this out, and I think it is really

minimal costs.

Mr. WATKINS. How close do you think we are, Pete, in getting to

that agreement? I mean, do you see any—what is the problem, do

you think? What can we do to help break the ice and get that?

Ambassador PETERSON. Well, we really have been working on

this very hard. USTR—and Joe Devane is with me, our chief negotiator—have done yeoman’s work in pursuing this, as has our State

Department and my mission in Vietnam, to encourage the Vietnamese to move forward with the signing of this agreement. It is

very key to their economic recovery and their road toward WTO.

As I said earlier, I have been told unofficially that the Vietnamese

intend to come back to the United States to work out the final details on this trade agreement as early as the end of this month and

perhaps into July. But if that were to occur, then I think we are

very, very close to signing that agreement.

Mr. WATKINS. Pete, let me ask you along this line, and I am kind

of just thinking out loud with the chairman, as you know, Congresswoman Dunn indicated that—I forgot when it was, Mr. Chairman, but I know you invited me to go along, we were looking at

going to Vietnam. Do you think it is timely? I mean, maybe this

is a timely—would that possibly help focus a little bit if a congressional delegation came?

Ambassador PETERSON. It is always helpful for a congressional

delegation to visit Vietnam. Every delegation has been received

very warmly. I encourage strongly as I can for you all to come. I

know Chairman Crane attempted to come out last December and

for reasons beyond his control was not able to with a good delegation. I hope that we can renew that. But a delegation right now

would be a useful issue, I think.

Mr. WATKINS. We have a contest coming November that may

have to take precedence. But let me say, Mr. Ambassador, again,

I appreciate what you are doing there. In Oklahoma, I have tried

to lift the vision of a lot of our people about the importance of international trade and it is a constant battle to try to convince a lot

of people that investments have to be made. At my alma mater at

Oklahoma state we have established an international trade area.

31

Also, I have the honor of a lectureship that is in my name and I

would like to visit with you sometimes about coming maybe to

Oklahoma and those hardy people there that have got that stickto-it-ness and maybe share and lift the vision of our people concerning Vietnam and the potential and all there. We have been

making investments in that country, time, energy, and money, and

I know Mr. Clark is going to be on the next panel, but I think I

could always use some great help in trying to be more positive

about what we are trying to do in that area of the world. So I

would like to visit with you afterward.

Ambassador PETERSON. I would be happy to help in any way that

I can. I have to tell you that your trade missions—trade delegations from Oklahoma have been probably the most successful of

any that we have had visit Vietnam, very professional, very focused, and have really given a boost to the process.

Mr. WATKINS. Well, as a daddy, I am just trying to catch up. My

son has already been there, and when the opening—so I hate for

him to always say, daddy, I have already been there. So I need to

catch up, Mr. Chairman.

Thank you, Mr. Ambassador, for what you are doing.

Chairman CRANE. I did not realize, Wes, that your son served in

Vietnam.

Mr. WATKINS. No, he is a world traveler. He majored in international trade. He did not serve in Vietnam. He got his degree in

international trade, and I think he figured out a way to travel

around the world, Mr. Chairman, and he has been there.

Chairman CRANE. I want to thank you very much, Pete. It is a

delight always to have the opportunity to share time with you and

to get your insights, especially from the perspective that you bring

to this debate, and we look forward to ongoing contacts with you

and hopefully we can get our Trade Subcommittee on a trip over

there. We will continue working on that and look forward to visiting with you over there, too. And in the interim any way we can

be of assistance you let us know.

Ambassador PETERSON. Thank you very much, Mr. Chairman.

Chairman CRANE. Thank you.

Now our next panel: Virginia Foote, President of the U.S. Vietnam Trade Council; Y Hin Nie, President, Montagnard Dega Association, Inc.; Juels Carlson, Associate, Cargill, on behalf of the

U.S.-ASEAN Business Council; Dan Hoang, Vice President, Public

Relations, Vietnamese-American Public Affairs Committee; and

Barry Clark, the Director, Oklahoma Vietnam Office, Oklahoma

Department of Commerce, and President and Director, Pacific Ventures, Inc., in Tulsa, Oklahoma.

And if our witnesses will please all take their seats. I would remind you again we will have your presentations in the order that

I presented you. If you can keep your oral testimony to 5 minutes,

let me assure you that any printed testimony will be made a part

of the permanent record.

With that, we shall proceed first with Virginia Foote.

32

STATEMENT OF VIRGINIA B. FOOTE, PRESIDENT, U.S.-

VIETNAM TRADE COUNCIL

Ms. FOOTE. Thank you, Chairman Crane and members of the

subcommittee. I am pleased to be here today representing the U.S.-

Vietnam Trade Council to testify in strong support of the JacksonVanik waiver renewal for Vietnam. As you suggested, I will submit

my full statement into the record and we have fact sheets on Jackson-Vanik and NTR plus a chronology of the normalization process

which I would like to submit into the record as well.

The Vietnam Trade Council was founded in 1989 as a trade association. We have strong membership within the American business

community. We have offices in Washington and Hanoi, and have

worked through our educational affiliate, the U.S.-Vietnam Forum,

to help improve relations between the United States and Vietnam

with educational exchange programs, annual conferences, congressional delegations, and programs designed to provide assistance on

international trade norms and standards.

Today I would like to address why the renewal of the JacksonVanik waiver for Vietnam is so important for both the United

States and Vietnam. As we discussed earlier, beginning in the late

eighties Vietnam’s government committed to end its isolation and

began working to normalize relations worldwide. The Reagan, Bush

and Clinton administrations recognized Vietnam’s goal of ending

its international isolation and responded with a policy of normalizing relations with Vietnam through a step-by-step process pegged

to cooperation on the U.S.’s principal goal of seeking the fullest

possible accounting for our missing in action from the Vietnam

War.

Since the normalization process betweem the U.S. and Vietnam

has moved far more slowly than other nations did, American business involvement in Vietnam has lagged behind other nations and

still operates with severe handicaps. Without NTR status, a trade

agreement and initially without trade support programs, American

companies nonetheless began traveling, investing, and trading with

Vietnam. Today the United States is the ninth largest investor,

with slightly over $1 billion committed to foreign investment

projects and a billion in two-way trade. Two-way trade is up 30

percent the first quarter of the year 2000.

But Vietnam’s impressive foreign direct investment growth

peaked in 1996. It has dropped substantially since then. For Vietnam the easy parts of economic reform have been accomplished.

Harder issues loom large and important steps toward reform have

been postponed or avoided. But important economic reform continues to be made in Vietnam, albeit slowly.

One of the most significant recent reforms for the domestic private sector in Vietnam is the enterprise law, which came into effect

in January this year. Since that time, 5,000 new private enterprises have been started in Vietnam. The number of enterprises

founded since the law went into effect in January equals the numbers founded in the previous 9 years put together.

Vietnamese businesses and foreign investors will not be successful until additional reforms are made, and Vietnam knows this. Toward this end, additional commercial reform is under way in the

banking-insurance sector, customs law, and competition policy;

33

they are working to eliminate the burdensome registration and licensing procedures; intellectual property rights are being protected

and administrative procedures are being streamlined.

The international community is involved in these reforms. Specifically through AID projects, the U.S.-Vietnam Trade Council is

working on the bilateral trade agreement and legal reform in general. It is in this complex and changing economic environment that

the U.S. and Vietnam are hoping to finalize a bilateral trade agreement, and once again Congress is discussing the annual waiver of

Jackson-Vanik.

On the merits of the progress in the ROVR program alone, Jackson-Vanik ought to be renewed. In assessing orderly departure programs, Jackson-Vanik ought to be renewed. But on the economic

front the renewal of Jackson-Vanik is equally important for achieving U.S. Goals. American involvement in the economic integration

process is welcomed in Vietnam and is extremely important to our

mutual development and relations there overall.

Americans set a high standard for trade investment, labor and

business practices. The Jackson-Vanik waiver plus a bilateral trade

agreement pave the way for normal trade relations, which is the

crucial goal for both sides. While Vietnam has extended NTR status to goods entering the United States, the U.S. has not done the

same for Vietnam, making it one of only six countries that do not

have NTR status.

Yes, Vietnam has a corruption problem. Yes, Vietnam is bogged

down in its bureaucracy and constituency driven decisionmaking

process. But are these problems unique to Vietnam? They are not.

The Jackson-Vanik waiver is a crucial building block of bilateral

trade relations, allowing Ex-Im and OPIC programs to continue for

American companies in Vietnam.

Vietnam’s strategic and economic role in the region will be greatly affected by U.S. policy, and this bilateral policy of a step-by-step

process of normalizing relations with Vietnam, while slow, has produced positive results for American interests. The Jackson-Vanik

waiver has produced important results since the initial waiver was

issued by the President in 1998, and on behalf of my membership

I urge to you renew the waiver again this year.

Thank you.

[The prepared statement follows:]

Statement of Virginia B. Foote, President, U.S.-Vietnam Trade Council

Chairman Crane, members of the Committee, I am pleased to be here today representing as the U.S.-Vietnam Trade Council to testify in strong support of the

Jackson-Vanik waiver renewal for Vietnam. If there are no objections, I would like

to submit for the record two fact sheets we have put together on the importance

of this waiver and NTR status, and a chronology of the overall normalization process between the United States and Vietnam, which began in the Reagan Administration.

The U.S.-Vietnam Trade Council, founded in 1989, is a trade association with

strong membership from the American business community. With offices in Washington D.C. and Hanoi we have worked along with our educational affiliate, the

U.S.-Vietnam Forum, to help improve relations between the United States and Vietnam with educational exchange programs, annual conferences, Congressional delegations and programs designed to provide assistance on international trade norms

and standards.

Today I would like to address why the renewal of the Jackson-Vanik waiver for

Vietnam is so important to both the United States and to Vietnam. Beginning in

the late 1980’s Vietnam embarked on a bold economic reform program, which

34

showed impressive results almost immediately. Vietnam went from near famine to

become the third largest rice exporter behind Thailand and the United States in a

matter of a few years. Growth rates climbed to 8 and 9%. Foreign investors flocked

to Vietnam. From 1988 ¥1999 over $36.6 billion in foreign investment was com- mitted. Vietnam had a very low per capita income of approximately $250 per year

in the early 1990s and the international donor community began generous overseas

development assistance programs, reaching pledges of $2.8 billion for 1999. Total

ODA committed since 1993, when Vietnam became eligible, to the end of 1999

equals $16 billion. (UNDP Hanoi).

Also beginning in the late 1980’s, the Vietnamese government committed to end

its isolation and began working to normalize relations worldwide. In this area, Vietnam has had tremendous success in establishing relations in Europe, within Asia

and with the United States. Vietnam joined ASEAN in 1995, APEC in 1998, and

now belongs to over a dozen international organizations. Vietnam has observer status in the WTO and is committed to joining.

The Reagan, Bush and Clinton administrations recognized Vietnam’s goal of ending its international isolation and responded with a policy of normalizing relations

with Vietnam through a step-by-step process pegged to cooperation on the U.S.’s principal goal of seeking the fullest possible accounting for our missing in action

from the Vietnam War.

As the attached timeline shows, this process has proceeded slowly through three

administrations but has led to the lifting of the trade embargo, the establishment

of diplomatic relations and the beginnings of economic normalization including the

initial waiving of the Jackson-Vanik amendment in 1998. On its part, Vietnam has

greatly enhanced its efforts on issues of high priority to the U.S. including the MIA

efforts, immigration goals, and now economic integration. Just the latest in a long

line of normalization steps, in March of this year Secretary of Defense William

Cohen became the first US Defense Secretary to visit Vietnam since the end of the

War.

Since the U.S. normalized relations far more slowly than other nations did, American business involvement in Vietnam has lagged behind other nations and still operates with severe handicaps. Without NTR status*, a trade agreement, and initially without trade support programs, American companies and individuals nonetheless began traveling, investing and trading with Vietnam. Today the U.S. is

ninth largest investor with slightly over $1.0 billion commitment to foreign investment projects, and $899 million in two-way trade. And two-way trade is up 30% in

the first quarter of 2000.

And Americans are traveling to Vietnam in great numbers. In 1997 Vietnam

issued 98,000 visas for Americans wishing to travel to Vietnam, over 66,000 for Vietnamese Americans wanting to visit their homeland. In 1998, Vietnam issue

180,000 for all Americans. In 1999 the Embassy of Vietnam in DC alone issued

64,386 visas to Americans traveling to Vietnam, 46,113 of those were to Vietnamese

Americans.

By 1996, Vietnam’s impressive FDI growth had peaked at $8.6 billion. Foreign investment dropped by 40% in 1997 to $4.6 billion and has continued to decline since.

In 1998, FDI commitments totaled approximately $3.8 billion and in 1999 dropped

to $1.5 billion. Official GDP growth rates were calculated at around 5% in 1998 and

4.7% in 1999, a ten-year low. Independent observer estimates are even lower. The

IMF estimates that growth rates may have actually been as low as 3–3.5 percent

in 1999. In 1999 unemployment climbed to 7.4 percent from a low of 5.9 percent

in 1996. And although Vietnam was in a sense one step removed from the Asian

financial crisis with a non-convertible currency and plans for a stock market still

in the works, 70% of its foreign investment nearly and 70% of its international trade

had been coming from Asian countries, and therefore saw a dramatic decrease.

For Vietnam, the easy parts of economic reform have been accomplished. Harder

issues loom large and important steps towards reform are often postponed or avoided. But important economic reforms continue to be made in Vietnam, albeit slowly.

One of the most significant recent reforms for a domestic private sector is the Enterprise Law, which came into effect this January 2000. Since that time the 5,000 new

enterprises have been founded in Vietnam with a total registered capital of

US$285.7 million. These figures are very significant given the small size of Vietnam’s fledging private sector. The number of enterprises founded since the law went

into effect in January equals the number founded in the previous nine years. This

figure does not include the 2,647 enterprises in Ho Chi Minh City alone who have

switched to new business fields or expanded their operations, investing a combined

$67.7 million.

But Vietnamese businesses and indeed foreign investors will not be successful unless additional reforms are made. Towards this end, additional commercial law reVerDate 20-JUL-2000 14:16 May 02, 2001 Jkt 060010 PO 00000 Frm 00038 Fmt 6633 Sfmt 6602 K:\HEARINGS\71553.TXT WAYS3 PsN: WAYS3
35

form is underway in the banking and insurance sector, customs law, competition

policy, the elimination of burdensome registration and licensing procedures, intellectual property protection, and administrative procedures. With the support of

USAID, the Trade Council’s educational affiliate is actively involved in supporting

these efforts with expert technical assistance. The United States should do more in

this area—and could do more in this area.

How? As a step towards fully normalized relations, the U.S. required the current

government of Vietnam in Hanoi to repay the $145 million debt the former South

Vietnamese government owed to the U.S. While it was an extremely bitter pill for

Vietnam to assume this debt, since 1997, Vietnam has been making multi-million

dollar payments to the U.S. Treasury. This year Vietnam will make payments totaling around $8.0 million and payments range from $6–12 million annually until the

year 2019. This debt money could be put to tremendous use through a fund focused

on educational programs, technical assistance work, and business and legal training.

During the cold war period, it is estimated nearly two hundred thousand Vietnamese students spent their college, post-graduate, and additional training years in

universities and institutes in the former Soviet Union and Eastern Europe. In this

post-cold war period when an educated and trained population is key to a country’s

success, a comparatively small tens of hundreds students are coming to the U.S.

each year, due to the lack of funds. This year some 1800 Vietnamese students are

studying in the U.S. The Vietnamese government just recently has committed to

funding 400 students abroad annually. Would it not serve both Vietnamese and

American interest to see these numbers grow dramatically? A debt settlement fund

could be used to help address this problem as well.

It is in this complex and changing economic environment that the U.S. and Vietnam are hoping to finalize a bi-lateral trade agreement and once again the Congress

is discussing the annual waiver of the Jackson-Vanik amendment.

Initially U.S. policy pegged the Jackson-Vanik waiver to progress on the ROVR

program specifically and immigration in general. While difficult to reach agreement

on, the implementation of the program has been fairly smooth and rapid. The State

Department reports that the government of Vietnam has cleared over 96% of the

ROVR cases. On the merits of progress on the ROVR alone, Jackson-Vanik ought

to be renewed again this year. And in assessing the Orderly Departure immigration

program overall, Jackson-Vanik ought to be renewed. Approximately half a million

Vietnamese have come to the United States under ODP. Only a small number of

ODP cases remain to be processed. Since the initial waiver of Jackson-Vanik, the

Vietnamese have allowed all remaining ODP cases—including the Montagnard cases

which are of particular concern to the U.S.-to be processed under the new and far

quicker system developed by the Vietnamese initially just for ROVR cases.

The ODP office in Bangkok has been closed and responsibility for handling the

few remaining cases successfully transferred to the Refugee Resettlement Section

(RRS) at the Consulate General of Ho Chi Minh City, which opened in August 1999.

Interviews of remaining ODP and ROVR applicants, of which a few hundred remain, are expected to be completed by the end of 2000.

On the economic front, the renewal of a Jackson-Vanik waiver is equally important for achieving U.S. goals. American involvement in the economic integration

process is welcome in Vietnam and could be extremely important to overall development in the long run. American companies and government negotiators set a high

standard for trade, investment, labor and business practices. American management

and technology is greatly admired in Vietnam. American companies are actively involved in training programs through the Trade Council and individually. American

products are popular. With a population of 77 million with over half under the age

of 25 and well educated, Vietnam has great potential as a significant trading partner.

The Jackson-Vanik waiver, plus a bi-lateral trade agreement will lead the way for

normal trade relations, a crucial goal for both sides. While Vietnam has extended

NTR status to goods entering from the United States, the U.S. has not done the

same for Vietnam and it remains one of only 6 countries that do not have NTR status from the U.S, including Afghanistan, Cuba, Laos, North Korea, Serbia, and Vietnam.

Vietnam has signed an agreement in principle with the U.S. on a bilateral trade

agreement in July last year and finally appears now to be in the final stages of its

internal decision making process on the signing a final document. The issues in the

agreement, such as liberalizing the trade and investment regimes and the strengthening of intellectual property rights, are of great importance to anyone doing business in Vietnam, now or in the future, or anyone hoping to see Vietnam’s standard

of living increase.

36

The United States should stay involved in this process. It is in our interest to see

an economically healthy Vietnam in the Southeast Asian region. The Economist Intelligence Unit estimates that although GDP growth will continue to fall in 2000

to 4.2% but the completion of a bilateral trade agreement with the US this year

could boost Vietnam’s GDP growth to 5.9 % in 2001. With fully normalized economic

relations, the United States could well join the top ranks of investors in Vietnam.

Yes, Vietnam has a corruption problem. Yes, Vietnam is bogged down by its bureaucracy and conscientious driven decision making process. Yes, the vested interests are fighting reform. Yes, there is fear of massive unemployment if their companies can’t compete. Yes, they worry about what lessons are to be learned from the

economic crisis in the region and the role of foreign interests. But are these problems unique to Vietnam? They are not.

Vietnam was slow to set out on an economic reform path that other countries in

the region began years earlier. And it has been a slower process in Vietnam than

many hoped and therefore it has not been easy for our companies to operate there.

But the Jackson-Vanik waiver is a crucial building block of bi-lateral trade relations

allowing Ex-Im Bank and OPIC to open programs for American companies doing

business in Vietnam. In 1999 the framework agreements, which allow Exim to begin

operations in Vietnam were completed, and OPIC made its first loan to an American

company operating in Vietnam. Operations of both Exim and OPIC programs are

dependent on a renewal of the Jackson-Vanik waiver.

Vietnam’s strategic and economic role in the region will be greatly affected by

U.S. policy overall and by the course of bilateral relations in the short run. The bipartisan policy of a step-by-step process of normalizing relations with Vietnam,

while very slow, has produced positive results for American interests. The JacksonVanik waiver has produced important results since the initial waiver by President

Clinton in March of 1998 year and it is crucial that the waiver be renewed again

this year at this important time in our relationship. On behalf of our membership,

I urge your favorable consideration.

Thank you.

VIETNAM NTR STATUS AND THE BILATERAL TRADE AGREEMENT

• Why does the U.S. need a bilateral trade agreement with Vietnam?

A bilateral trade agreement with Vietnam is important to the U.S. because, together with the Jackson-Vanik waiver, it allows for Normal Trade Relations (NTR)

status to be extended to U.S. goods entering Vietnam, and reciprocally to Vietnamese goods entering the U.S. The bilateral trade agreement, which addresses

issues relating to trade in goods, trade in services, intellectual property rights and

foreign investment, not only guarantees NTR but creates more open market access,

and greater transparency for U.S. exporters and investors in Vietnam. Through this

trade agreement and provision of NTR status, the U.S. will receive the same status

that Vietnam affords its other trading partners such as the EU, Australia and Canada.

• How does Vietnam receive NTR status under U.S. Law?

In order to receive NTR status from the U.S., the following criteria must first be

met under Title IV of the Trade Act of 1974, as amended: 1) A waiver of the Jackson-Vanik Amendment must be renewed annually by the President; and 2) the U.S.

and Vietnam must conclude a bilateral trade agreement. Once the two governments

sign a bilateral trade agreement, it will be submitted to Congress with a request

for the granting of NTR for Vietnam. Non-discriminatory treatment can only be extended through a joint ‘‘approval resolution’’ passed by both the House and the Senate. NTR status for Vietnam would then be subject to annual renewal each summer

through the continuation of the Jackson-Vanik waiver. Currently, countries that do

not have NTR status are Afghanistan, Cuba, Laos, North Korea, Serbia & Montenegro, and Vietnam.

• What are the Congressional procedures?

Pursuant to Section 152 (b) of the Trade Act of 1974, as amended, an approval

resolution for NTR status is first introduced (by request) to the House and the Senate and then is referred to the House Ways and Means Committee and the Senate

Finance Committee. Both the House and the Senate must vote in favor of NTR for

it to be granted. Because Vietnam is a Jackson-Vanik country, the NTR request has

built-in procedures for Congressional consideration—the agreement cannot be

amended and the request must be voted on by the House and the Senate within

60 session days from when the President’s request is submitted to Congress, with

a maximum of 45 legislative days in committee and 15 days on the floor within

which time a vote must be taken. Debate on the floor is limited to 20 hours each

for both Houses. Upon Congressional approval and a Presidential signature, diploVerDate 20-JUL-2000 14:16 May 02, 2001 Jkt 060010 PO 00000 Frm 00040 Fmt 6633 Sfmt 6602 K:\HEARINGS\71553.TXT WAYS3 PsN: WAYS3
37

matic notes are exchanged between the two sides, formally extending reciprocal

NTR status.

THE JACKSON-VANIK AMENDMENT FOR VIETNAM

• What is the Jackson-Vanik Amendment?

It is an amendment to the U.S. Trade Act of 1974, that precludes the participation

of 30 some non-market economy countries in any U.S. Government program that extends credits or credit and investment guarantees if the country restricts emigration. Before the waiver was issued, American projects in Vietnam were not eligible

for assistance from the Export-Import Bank (Ex-Im) or the Overseas Private Investment Corporation (OPIC). To remove this restriction on a country such as Vietnam,

the President must either certify that the country permits free emigration, or the

President can waive the emigration requirement on the grounds that the waiver will

promote U.S. emigration objectives.

On March 11, 1998, President Clinton issued a Jackson-Vanik waiver for Vietnam

based on improvements of emigration procedures, particularly its cooperation on the

Resettlement Opportunity for Vietnamese Returnees (ROVR). The waiver must be

renewed annually. On July 30, 1998, the U.S. House of Representatives voted 260–

163 in favor of extending the waiver for Vietnam. When the waiver was first issued

in March 1998, American projects in Vietnam became potentially eligible for trade

and investment support programs such as the Export-Import Bank of the U.S. (ExIm) and the Overseas Private Investment Corporation (OPIC). In June, 1999 President Clinton extended the waiver to Vietnam again, and on August 3, 1999 the

House of Representatives renewed the waiver by a vote of 297 in favor and 130 opposed. The President has requested a renewal for the year 2000.

• Why the Jackson-Vanik waiver is important?

The availability of export promotion programs is a critical factor in a number of

major procurement decisions being made now in Vietnam. The Jackson-Vanik waiver also allows the U.S. Department of Agriculture and the U.S. Maritime Administration to make their trade support programs available for projects in Vietnam. The

ability of U.S. companies to utilize these programs now places them on a more level

playing field with their foreign competitors who have enjoyed a high level of government support for their projects in Vietnam. Though the U.S. currently is the ninth

largest investor in Vietnam, the investment and trade opportunities for U.S. companies could expand significantly with continued availability of Ex-Im and OPIC financing.

• What role does Congress play now?

On an annual basis, the President must submit to Congress by June 3rd a request

to renew his authority to issue waivers of the Jackson-Vanik amendment in principle, and a decision to continue waivers for individual countries where he determines this will substantially promote freedom of immigration from that country.

Congress then has the opportunity to reject the overall authority, or to withhold it

for an individual country through a joint resolution of disapproval, which must pass

both the House and Senate before September 1st. If Congress does not act the authority is automatically renewed.

• What the 2000 Jackson-Vanik waiver for Vietnam does not do:

The waiver does not grant Normal Trading Relations (NTR, formerly MFN) status

to Vietnam as the Jackson-Vanik waiver is only one step in the NTR process. A bilateral trade agreement must first be negotiated and signed and then Congress

must vote whether or not to approve the granting of NTR status to Vietnam. Vietnam and the U.S. signed an agreement in principle on July 25, 1999 on a trade

agreement. It is hoped that the agreement will be concluded in the year 2000.

Chronology of U.S.-Vietnam Relations

April 30, 1975—North Vietnamese forces take over the southern part of Vietnam,

ended the war and unified the country. Washington extends embargo to all of Vietnam and breaks diplomatic relations.

1978—Secret talks between Hanoi and Washington on normalizing relations

break down

1988—Under the Reagan Administration, Vietnam begins cooperation with United

States to resolve fate of American servicemen missing in action (MIA)

September 1989—Vietnam completes Cambodia withdrawal.

April 1991—Under the Bush Administration, Washington presents Hanoi with

‘‘roadmap’’ plan for phased normalization of ties. The two sides agree to open U.S.

government office in Hanoi to help settle MIA issues.

April 1991—U.S. begins humanitarian aid projects for war victims to be administered by U.S. Agency for International Development (USAID).

38

October 1991—Vietnam supports U.N. peace plan for Cambodia. Secretary of

State James Baker announces Washington is ready to take steps toward normalizing relations with Hanoi.

December 1991—Washington lifts ban on organized U.S. travel to Vietnam.

1991—U.S. Congress authorizes the United States Information Agency (USIA) to

begin exchange programs with Vietnam.

April 1992—Washington eases trade embargo by allowing commercial sales to

Vietnam for basic human needs, lifts curbs on projects by U.S. non-governmental

and non-profit groups and allows establishment of telecommunications links with

Vietnam.

July 2, 1993—President Clinton clears way for resumption of international lending to Vietnam.

September 13, 1993—Clinton eases economic sanctions to let U.S firms join in development projects.

January 27, 1994—Senate in favor of a resolution urging the Administration to

lift embargo, saying this would help get a full account of MIAs.

February 3, 1994—President Clinton lifts trade embargo.

January 28, 1995—United States and Vietnam sign agreements settling old property claims and establishing liaison offices in each other’s capitals.

May 15, 1995—Vietnam gives U.S. presidential delegation batch of documents on

missing Americans, later hailed by Pentagon as most detailed and informative of

their kind.

June 1995—Veterans of Foreign Wars announces support of U.S. normalization

of diplomatic relations with Vietnam.

July 11, 1995—President Clinton announces ‘‘normalization of relations’’ with

Vietnam.

August 6, 1995—Secretary of State Warren Christopher visits Hanoi and officially

opens U.S. embassy.

May 1996—U.S. presents Vietnam with trade agreement blueprint.

July 12, 1996—U.S. National Security Adviser Anthony Lake visits Hanoi to mark

first anniversary of normalization and press forward on slow-moving economic and

strategic ties, stressing that MIA issue tops Washington’s agenda.

April 7, 1997—U.S. Treasury Secretary Robert Rubin and Finance Minister

Nguyen Sinh Hung sign accord in Hanoi for Vietnam to repay debts of approximately $145 million, which Vietnam assumed from former government of South

Vietnam.

April 10, 1997—Senate confirms Douglas ‘‘Pete’’ Peterson, Vietnam War veteran

and former prisoner of war, as Ambassador.

April 16, 1997—United States and Vietnam reach agreement on providing legal

protection for copyright owners.

May 9, 1997—Peterson takes up post as U.S. Ambassador in Hanoi.

May 9, 1997—Vietnam’s Ambassador to the United States, Le Van Bang, arrives

to take up post in Washington, DC June 1997—Secretary of State Madeleine

Albright attends ceremony to lay cornerstone for U.S. consulate in Ho Chi Minh

City.

August 1997—U.S. government under the U.S. Agency for International Development (USAID) begins a commercial law program.

October 1997—Vietnam institutes new processing procedure in ROVR program

significantly improving progress.

November 1997—Vietnam opens consulate in San Francisco, CA

March 1998—U.S. opens talks on a Civil Aviation Agreement held.

March 10, 1998—President Clinton issues waiver of Jackson-Vanik Amendment

for Vietnam, paving the way for OPIC, EXIM, USDA and MARAD operations.

March 19, 1998—OPIC and the Government of Vietnam signed a new Investment

Incentive Agreement, allowing OPIC to offers services in Vietnam.

March 26, 1998—Minister of Planning & Investment Tran Xuan Gia and Ambassador Pete Peterson finalize signing of the OPIC bilateral for Vietnam.

July 23,1998—The U.S. Senate votes 66–34 to continue funding for the U.S. Embassy in Vietnam based on ongoing cooperation on the POW/MIA issue.

July 30, 1998—The U.S. House of Representatives passes the Jackson-Vanik

waiver for Vietnam by a 260 to 163-vote margin.

October 1998—Deputy Prime Minister and Foreign Minister Nguyen Manh Cam

make Vietnam’s highest—level visit to Washington since normalization.

October 1998—Deputy Prime Minister Hanh visits U.S. for planning meeting on

military-to-military activities.

October 1998—U.S. and Vietnam agree to negotiate a Science & Technology

Agreement.

December 28, 1998—Bilateral Copyright Agreement enters into force.

39

January 1999—EXIM team visits Vietnam to negotiate an EXIM bilateral agreement.

January 29, 1999—The U.S. receives a proposal from the Vietnamese indicating

substantial progress on the U.S.-Vietnam bilateral trade negotiations.

March 1999—The most recent round of trade talks are held in Hanoi.

June 1999—Trade talks held in Washington, DC—Ambassador Barshefsky cites

progress, noting that the number of remaining issues had been significantly narrowed in this negotiation.

June 30, 1999—President Clinton re-extends the Jackson-Vanik waiver for Viet- namJuly 25, 1999—Negotiators from the U.S. and Vietnam agree to a bilateral trade

agreement in principle in Hanoi, Vietnam

August 3, 1999—The Jackson—Vanik waiver passes the House by a vote of 297

to 130.

August 16, 1999—The U.S. opens a consulate in Ho Chi Minh City

September 1999—President Clinton and Prime Minister Phan Van Khai speak informally at the APEC summit in New Zealand.

September 5–7—Secretary Albright visits Vietnam

November 30, 1999—The first OPIC investment in Vietnam is announced-a $2.3

million loan to Caterpillar Inc.’s authorized dealership in Vietnam.

December 9, 1999—Ex-Im and the State Bank of Vietnam complete the framework agreements, which allow Ex-Im to begin operations in Vietnam.

March 13, 2000—Secretary of Defense William Cohen became the first US Defense secretary to visit Vietnam since the end of the War.

Chairman C

Mr. Nie.

RANE. Thank you.

f STATEMENT OF Y HIN NIE, PRESIDENT, MONTAGNARD

ADVOCACY, INC., GREENSBORO, NORTH CAROLINA

Mr. NIE. Honorable Philip Crane, ladies and gentlemen, my

name is Y Hin Nie. On behalf of the Montagnard community, I

want to thank Congressman Crane for his help bringing this hearing together. Further, I want to thank the Members of the Subcommittee for holding the hearing on U.S.-Vietnam trade relations,

and we place our trust in today’s hearing.

Today, I want to emphasize that there is not free immigration for

Montagnards in Vietnam. The waiver of the Jackson-Vanik amendment has not promoted free immigration for Montagnards. There

are many obstacles for Montagnard family members to reunite with

their loved ones in Vietnam.

I would like to remind this legislative body that the Montagnards

have been punished today because Montagnard soldiers were allies

of the U.S. Army during the Vietnam War. There is extreme prejudice to our people for this reason, and other reasons.

Almost all the people are Christians. They are not allowed under

Hanoi to worship freely. The Christian church under Hanoi authority is not permitted to practice their religious beliefs. Many

Montagnards became Christians through the effort of American

missionaries in Vietnam. Most Members of this Committee are

probably not aware that the Vietnamese government does not permit any Protestant church to exist throughout the entire central

highlands. This basic human right is denied to our people. Also,

this same basic human right that allows families to be together is

restricted from our people.

The Jackson-Vanik waiver should not be renewed because in the

last year, the Montagnard people still have terrible obstacles to

40

travel freely and to unite with their loved ones. Even when we

communicate by letter, local security tears letter and sends less

than one piece of four pieces to the children in Vietnam.

Many of you not may know that we, as American citizens, when

we return to Vietnam are harassed by local police. The local security demand that we answer questions about other Montagnards

living in our community. We are treated as enemy in our home.

Americans citizens should not be treated that way in Vietnam. And

we are Montagnard-American citizens when we return to visit our

families.

Vietnam may be a police state, but we refuse to become a tool

of the Hanoi government simply because we love our family and we

miss them. This situation happened every single time when we return to family in Vietnam.

Montagnard families still have to pay huge bribe money or land

to get emigration documents that U.S. and Hanoi requires. The Vietnamese government still investigates Montagnards as terrorists.

I would like to emphasize to our U.S. Department of state that

in Vietnam the Montagnards have right to remain eligible under

refugee status. We have been persecuted people in Vietnam and

that situation has not changed.

With respect to the aforementioned issue, on behalf of the

Montagnard people I would like to strongly encourage this Subcommittee to support Jackson-Vanik of 1974 in hopes that issues

concerning human rights in Vietnam and emigration practices of

Hanoi authority may be overcome. The Clinton administration

should not renew Jackson-Vanik waiver until Montagnard and

other ethnic minority groups in Vietnam are allowed freely to emigrate, practice their religion, and allow them to travel free in the

central highland of Vietnam and allow them free movement for

NGO assistance with humanitarian aid.

Please, this is the only honorable and just course of the U.S. in

its relationship in Vietnam. The Jackson-Vanik waiver should not

be renewed at this time.

May God bless you and the United States of America. Thank you,

Mr. Chairman.

[The prepared statement follows:]

Statement of Y Hin Hie, Montagnard Advocacy, Greenesboro, North

Carolina

Ladies and Gentleman

My name is Y Hin Nie. On behalf of the Montagnard Community, I want to thank

Congressman Crane for his help in bringing this hearing together. Further, I want

to thank the members of the Subcommittee for holding this hearing on U.S.-Vietnam trade relations, and the President decision to possibly renew the Vietnam trade

waiver under Jackson/Vanik amendment to the act of 1974. We also appreciate their

interest and assistance in the matter of emigration policies and practices in Vietnam, particularly, in Montagnard Reunification family’s cases. I would like to state

again, the Montagnard people believe in the trustworthiness of the United States

of America as a leader in democratic freedom. We place our trust in today hearing.

Today, I want to emphasize that there is not free emigration for Montagnards in

Vietnam. The waiver of Jackson/Vanik Amendment has not promoted free emigration for Montagnards. There are many obstacles for Montagnard family members to

be reunited with their loved-ones in Vietnam. I would like to remind this legislative

body that the Montagnards have been punished today because the Montagnard soldiers were allies of the U.S. Army during Vietnam War. There is extreme prejudice

towards our people for this reason and other reasons.

41

Almost all of our people are Christian and we are not allowed under the Hanoi

authority to worship freely. The Christian Church under Hanoi authority does not

yet permit the practice our religious beliefs. Many Montagnards became Christian

through the efforts of American Missionaries in Vietnam. Most members of this

committee are probably not aware that the Vietnamese Government does not permit

any Protestant church to exist throughout the entire Central High lands. This basic

human right is denied to our people. This same basic right to allow families to be

together is restricted from our people. The Jackson/Vanik waiver should not be renewed because in the last year, our Montagnard people still have terrible obstacles

to travel freely and be reunited with the loved ones. Even when we communicated

by letter local Security in Vietnam pears letter and send last that 1 of 4 pieces to

their children in the U.S.

Many of you may not know that we, as Americans citizens when we return to

Vietnam, are harassed by the local police. The local security demands that we answer questions about other Montagnards living in our community. We are treated

like enemies in our own homes. Americans should be not treated this way in Vietnam and we are Montagnard American citizens when we return to visit our families. Vietnam may be a police state, but we refuse to become tools of the Hanoi government simply because we love our families and we miss them. This situation happens every single time when we return to visit our families in Vietnam.

Montagnard families still have to pay huge bribes, money or land to get emigration documents that the U.S. and Hanoi require. The Vietnamese government still

investigates our Montagnard people as terrorists.

I would like to emphasize to our U.S. Department of State that Montagnards have

right to remain eligible under refugees’ status. We have been a persecuted people

in Vietnam and that situation has not changed.

May I make very clear today, the war is over and families should be together.

The Montagnard community is peaceful and honorable. We respect the laws of Vietnam, but we Hanoi must modify its views today. The relationship between the

United States and Hanoi government must also change. The Montagnard people are

no longer the enemy of Hanoi Government. We all deserve to be free human beings

in a humanitarian world!

With respect to the afore mentioned issues, and on behalf of the Montagnard people; I would like to strongly encourage this subcommittee to support the Jackson/

Vanik Amendment of 1974 in the hope that issues concerning human Rights in Vietnam and emigration practices of Hanoi authority may be over-come. The Clinton

Administration should renew the Jackson/Vanik waiver until Montagnards and

other minority groups in Vietnam are allowed to freely emigrate, practice the religion of their choosing, travel freely in the Central Highlands of Vietnam, and allow

free movement for NGO assistance with humanitarian aid. Please, this is the only

honorable and just course for the United States in its relationship with Vietnam.

The Jackson/Vanik waiver should not be renewed at this time. May God bless you

and the United States of America. Thank you.

42

43

When the Americans left Vietnam in 1975, certain elements of the Montagnard

Dega people of the Central Highlands mounted a guerrilla movement within their

ancestral lands, at the behest of the departing Americans, to whom they had been

loyal throughout the years of the American presence. The Americans, on whom the

guerrilla depended for support, provided none. Even so the Montagnard Dega guerrillas fought on for more than ten years, and elements of the resistance persist of

this day.

44

In retaliation the Vietnamese government has pursued a policy of repression of

all Montagnard Dega people, whether affiliated with the guerrilla movement or not.

The Montagnard Dega people have been forbidden their lifestyle, their languages,

their religion, their freedom. Christian marriage between Montagnards is forbidden.

Cross cultural marriage with ethnic Vietnamese is government policy. This is an attempt to eradicate the Montagnard Dega culture in one generation.

The overseas Montagnard community is now launching an effort for reconciliation

between the Vietnamese Government and all the Montagnard people. Continued

loss of life and continued loss of the several thousand year old Montagnard culture

must now stop.

The Montagnard Dega People of the world wish to bring to an end the hostilities

that have plagued our people for decades. We wish to come to an agreement with

the Vietnamese people and their government concerning the future of the Dega. We

are tired of and frightened by the terrible suffering our people have endured. We

are aware that we do not stand guiltless in the affairs concerning hostilities with

the Vietnamese. We feel if the Vietnamese choose to come to terms with the rest

of the free world then we should be able to reach an agreement concerning the

world of the Dega. We, though, neither accept all blame for the hostilities with the

present government of Vietnam nor do we place all blame upon them. Many of our

present problems started during the French-Indochina War and were compounded

greatly during the Second Indochina War between the United States, the North Vietnamese and their counter-parts in the South. The world realizes what a terrible

position the Montagnard Dega were put in and that we were forced to make decisions that may not have been in the best interest of the Montagnard Dega society

as a whole. We were forced to come of age quickly and made choices that were appropriate at the time. We are guilty of being naive concerning the ways of the world

and its politics. We were citizens of South Vietnam and supported our country the

best we could under Vietnam and supported our country the best we could under

the circumstances. We have no ill feelings towards any participant of either war and

are absolved of any circumstances that we are still being persecuted for. We wish

for the Montagnard Dega people to be able to pursue a life from from the horrors

of a life of war and rebellion. We feel the United States and the Socialist Republic

of Vietnam have a moral obligation to help end all hostilities. Now is the time of

healing between all nations involved in the conflicts that have plagued all of Southeast Asia for the last fifty years. As many countries and their citizens throughout

the world now resolve their differences, we, the Montagnard Dega, have earned the

right to resolve honorably our difference with the government of Vietnam and to be

functional part of the world of Southeast Asia. We have many attributes to offer;

we wish to be treated with the same dignity and respect as other persons of the

free world. Following are the terms we place before the Socialist Republic of Vietnam. We are interested in making our country a beacon of light that will shine

brightly through all of Southeast Asia and the world. No matter what our past differences, we are all citizens of Vietnam. It is time for all Vietnamese to reunify

under a common goal, and we believe that by working together with the United

States, the United Nations and other free world countries these reasonable goals are

attainable.

The above points are hereby presented to all interested and legitimate parties. It

is our wish to bring to an end the hostilities between the ethnic people of Vietnam

and the Central Government of Vietnam. It is our wish that all people of Vietnam

be able to live in peace and harmony, extending goodwill not only to one another

but also the rest of the world. It is time for the people of the Socialist Republic of

Vietnam to come together for the good of our country. If the government of the Social Republic of Vietnam desires an end to the hostilities that have plagued our

country for many years, they will sit down with legitimate parties concerned and

work out a fair and binding solution. We offer ourselves in good faith to be government of the Socialist Republic of Vietnam to act as a mediator between rival factions

of the ethnic, indigenous groups and the government. We Montagnard Dega hope

and pray that the Socialist Republic of Vietnam needs our call and acts appropriately.

During 1994 a detailed team study was undertaken within the North Carolina

Dega community to better understand the depth of retribution by the Socialist

Democratic Government of Vietnam perpetrated against the Montagnard people of

the Central Highlands of (South) Vietnam. This study was concluded in late 1994.

New information, when learned and verified, is added to that study. The research

respondents were voluntary and no records exists of who contributed to the research. The research fell into several categories, including:

A. imprisoned/Tortured, B. Missing, C. Murdered/Death.

45

As information developed, a pattern of annihilation of the Montagnard people in

Vietnam surfaced beyond expectations—the following documented deaths are in part

the cause of the ‘‘Declaration’’ and are added as partial evidence of the evidence of

reconciliation...and not retribution. If there is to be a Montagnard people in Vietnam’s future, then the door to peaceful coexistence must be opened today.

This study was funded by the Montagnard-Dega Association.

Chairman C

Mr. Carlson.

RANE. Thank you, Mr. Nie.

f STATEMENT OF JUELS CARLSON, ASSOCIATE, CARGILL, INCORPORATED, ON BEHALF OF THE U.S.-ASEAN BUSINESS

COUNCIL

Mr. CARLSON. Mr. Chairman and Members of the Subcommittee,

I am appearing before you today on behalf of both the U.S-ASEAN

Business Council and Cargill, Incorporated. Cargill has just assumed chairmanship of the Council’s Food and Agricultural Committee, and Vietnam is one of the 59 different countries in which

Cargill has operations. The U.S. ASEAN Business Council, its over

400 member companies, and Cargill individually strongly support

extension of the waiver of the Jackson-Vanik amendment for Vietnam.

The Export-Import Bank and the Overseas Private Investment

Corp. programs, which waiver of the Jackson-Vanik amendment

authorizes, are vital to Business Council members who rely on the

support from these government agencies to level the competitive

playingfield against firms from other countries that receive substantial support from their governments.

Moreover, the United States has completed negotiating a

groundbreaking bilateral trade agreement with Vietnam. Since the

agreement was initialed last fall, however, there has been no further action. The Vietnamese have insisted on a long internal review process that only recently shows some sign of coming to an

end.

U.S. negotiators fought hard for this agreement, which is viewed

by many as a stalking horse for Vietnam’s eventual entry into the

World Trade Organization. The agreement is of course a prerequisite for Vietnam to receive the same reduced tariffs that all

but a handful of countries receive under normal trade relations status, but all reports indicate that most of the benefits of the agreement will actually flow to U.S. individuals and companies seeking

to do business with and in Vietnam, including U.S. farmers, as

Vietnam opens its agricultural markets to increased imports.

This perhaps helps explain why the Vietnamese government has

been spending so much time reviewing and debating the terms of

the agreement since it was first initialed.

I am now working as an independent consultant to Cargill and

other clients in Vietnam, Russia and the Ukraine. But in 1994, I

opened a one-person office in Saigon for Cargill. Now Cargill employs over 300 people in Vietnam and has become a leading commodity trading company there. Cargill supplies fertilizer to Vietnamese farmers and corn and soybean meal to the Vietnamese feed

46

industry and is looking to provide U.S. commodities such as wheat,

soybeans and cotton to the Vietnamese market.

In addition to the two representative offices in Hanoi and Saigon,

Cargill runs two new animal feed manufacturing plants in Dong

Nai and Hanoi and is building a third in Can Tho in the Mekong

Delta, and it has a poultry breeding farm and hatchery. Most recently, Cargill learned it has received approval to purchase a 12

percent interest in a deep water port in Vung Tau province.

As I have outlined in my written statement, it has not been an

easy road, but our business is profitable and we are not the only

investor pleased with Vietnam.

Vietnam is making progress, but there is a lot more that Vietnam can do to increase foreign and domestic investments that will

create jobs. In my written statement I list some of the steps Vietnam should take to improve its economy. These include things like

privatizing state-owned entities and improving its banking system.

However, perhaps the most important is that the bilateral trade

agreement should be signed and implemented as soon as possible.

Their exporters will have new access to the world’s biggest market,

but the reforms that Vietnam has agreed to undertake will do even

more for that country’s long-term economic welfare as well as for

U.S. companies seeking to do business and invest there. National

treatment, transparency, improved market access, and other

changes are long-awaited reforms for the Vietnamese system.

The United States can do its part by extending the JacksonVanik waiver and working with Vietnam to successfully implement

the terms of the bilateral trade agreement. The U.S.-ASEAN Business Council and Cargill both have found over the years that engagement, both commercially and politically, builds the best

bridges to peace and mutual prosperity. In fact, U.S. companies export more than just products when they invest overseas. They export U.S. values and good business practices.

For example, all of our employees in Vietnam have been trained

to work under world class quality and safety standards, and we

give them better wages and benefit packages, including retirement

and medical insurance. For our communities we have actively participated in building relations. For example, Cargill replaced a rickety footbridge that kept washing out near our Dong Nai feed mill

with a modern cement and steel bridge. We have also built schoolrooms and provided supplies for neighborhood schools and provided

scholarships for poor students, and the company has developed a

partnership with a training center for the handicapped in Saigon,

where we have donated playground equipment and a variety of

other supplies on a regular basis.

But Vietnam must do its part, too, by becoming more outward

thinking and responsible in today’s world. Otherwise, the capital,

the management resources and investors that Vietnam knows it

needs to attract simply will go elsewhere.

Thank you for the opportunity to testify here today.

[The prepared statement follows:]

Statement of Juels Carlson, Associate, Cargill, Incorporated, on behalf of

the U.S.-ASEAN Business Council

Mr. Chairman and members of the subcommittee, Iam appearing before you today

on behalf of both the US–ASEAN BusinessCouncil, and Cargill, Incorporated. The

47

council is a private, non-profit organization that works to expand trade and investment between the United States and the member countries of the Association of

Southeast Asian Nations. ASEAN members include Brunei Darussalam, Cambodia,

Indonesia, Laos, Malaysia, Myanmar (Burma), the Philippines, Singapore, Thailand

and Vietnam. Cargill hasjust assumed the chairmanship of the council’s Food and

AgricultureCommittee.

Vietnam is one of the 59 different countries inwhich Cargill has operations on the

ground. Globally, Cargill is an international marketer, processor and distributor of

agricultural, food, financial and industrial products. The company employs some

82,000 people and is headquartered in Minneapolis, Minnesota.

The US–ASEAN Business Council, its over 400 member companies, and Cargill

individually strongly support extensionof the waiver of the Jackson-Vanik Amendment for Vietnam. Although in Vietnam Cargill does not utilize programs such as

the Export-Import Bank or the Overseas Private Investment Corporation, which

waiver of the Jackson-Vanik Amendment authorizes, many business council members do. Many.S. companies rely on the support of these government agencies to

level the competitive playing field against firms from other countries that receive

substantial support from their governments.

The Bilateral Trade Agreement

But, there is a much more important reason for extending the Jackson-Vanik

waiver. It is the first real step toward full normalization of economic relations with

Vietnam. Renewing the waiver demonstrates to the Vietnamese government and to

consumers there that the United States is serious in its desire to become a full partner with Vietnam in its trade and its development.

Moreover, since President Clinton first proposed a waiver of the Jackson-Vanik

Amendment a little over a year ago, the United States has completed negotiating

a groundbreaking bilateral trade agreement with Vietnam. This agreement is of

course a prerequisite for Vietnam to receive the same, reduced tariffs that all but

a handful of countries receive under normal trade relations status. Since Vietnamese and U.S. negotiators initialed a final pactlast fall, however, there has been

no further action. The Vietnamese have insisted on a long, arduous internal review

process that only recently shows some signs of coming to an end.

This agreement was hard-fought and contains substantial concessions for U.S.

traders and investors. In fact, it is viewed by many as a stalking horse for Vietnam’s eventual entry into the World Trade Organization. Unfortunately, the exact terms

of the agreement are not yet published. However, all reports indicate that most of

the benefits of the agreement will actually flow to U.S. individuals and companies

seeking to do business with and in Vietnam. U.S. farmers also stand to realize gains

as Vietnam opens its heavily protected agricultural market to increased imports.

This helps explain, for example, why the Vietnamese government has been spending so much time reviewing and debating the terms of the agreement since it was

first initialed. The waiver that you are considering today will help demonstrate the

U.S. government’s continued commitment to the bilateral trade agreement and help

pave the way for the United States to receive the many market-opening benefits and

reforms that the agreement incorporates.

Cargill’s Experience in Vietnam

Until December 1998, I served for almost five years as Country Manager starting

up operations for Cargill, Incorporated, in Vietnam. I am now working as an independent consultant to Cargill and other clients in Vietnam, Russia and Ukraine, focusing on agricultural and food products and issues.

I am not a scholar on Vietnam and in fact had never visited the country prior

to August 1994. Prior to that I opened the first Cargill office in the USSR and developed investments in Russia, Uzbekistan and Ukraine in 1990–91, so that I had a

good deal of experience in doing business in centrally planned economies. This experience with state owned enterprises and with thefeudal nature of multiple ministries and multiple levels of governmentkept me out of lots of trouble in Vietnam.

In 1994 I opened a one-person office there. Since then, Cargill’s businesses have

grown rapidly, despite start-up delays that were mostly caused by the Ministry of

Trade, Customs, and local district officials who could block land leases on plants located outside of industrial zones. Cargill now employs some 300 Vietnamese workers

in a wide range of jobs in businesses fromHanoi in the north to Can Tho in the

south. Cargill now has representative offices in Hanoi and Ho Chi Minh City. The

company has built and is operating two new animal feed manufacturing plants in

Dong Nai and Hanoi that produce feed for poultry, cattle, swine and fish. Cargill

also operates a poultry breeding farm and hatchery, which produces about half the

day-old chickens in southern Vietnam. Although Cargill is in the process of selling

48

its global coffee and rubber businesses, Cargill has operated a warehouse facility for

both those commodities, also in Dong Nai province.

Most recently, Cargill has just learned that it has received approval to purchase

a 12 percent interest in the former French port at Phu My on the Thi Vai river in

Vung Tau province. This infusion of capital will allow the port to make important

improvements to allow the port to stop losing money and make full use of its deep

water location. This will lead to reduced transportation costs for imported fertilizer

and feed products from the United States and other sources. Once again, this was

not an easy process, but Cargill persevered and has won this approval, just as the

United States must persevere and see the bilateral trade agreement through to

adoption.

Cargill has also become a leading commodity trading company in Vietnam. Cargill

has been one of the largest buyers of the country’s agricultural products, including

coffee, rice and rubber. Cargill also supplies fertilizer to Vietnamese farmers and

corn and soybean meal to the Vietnamese feed industry and is looking to provide

U.S. commodities, such as wheat, soybeans and cotton, to the Vietnamese market.

As in any market where Cargill invests, the company is committed to a long-term

relationship with its suppliers andcustomers in Vietnam.

In all, in terms of capital Cargill has invested over 25 million U.S. dollars and

has approval to double this amount when market conditions are appropriate. Our

business is profitable, and we’re not the only investor pleased with Vietnam. Companies that export clothing, footwear and furniture are doing well, as are many of

the consumer product companies, all of which see sales increases to Vietnamese consumers year after year.

Positives and Negatives

Cargill has had its share of challenges in establishing itself in Vietnam. First,

however, I’d like to focus on the positives, and people certainly top the list. I can’t

say enough about Cargill’s 300 Vietnamese employees. They are the fastest learning, most loyal, hardest working and most competent people Cargill employs anywhere in the world. They are proud of what they do, and Cargill is proud of them.

As a sign of our confidence in the work force there, Cargill has reduced the number

of its foreign employees in Vietnam down to two.

Vietnam’s strong agricultural base is another positive for a business like Cargill.

Productive private farms produce a food surplus, which frees up limited surplus capital for other uses. Vietnam also has the advantage of not bearing the burden of

an inefficient industrial base that plagues other centrally planned countries like

Russia.

Vietnam’s new industrial and export zones give foreign investors some protection

from the army of officials who police and limit business activity. In some cases,

these zones also provide infrastructure.

Vietnam is making progress. The government has been speeding up approvals,

and some costs like land leases have been lowered, but these tend to be small and

incremental steps and do not represent major changes.

I would especially like to single out the Ministry of Agriculture and Rural Development for praise. It’s not perfect, but it is one of the most honest and enlightened

Ministries in Hanoi. Its officials understand that food security is more tied to economic well-being than to the country’s ability to produce all that it needs. They realize the critical need to build a competitive food industry, with the help of foreign

investment, zero import duties and, sometimes, zero import quotas.

Studies after studies have shown that hunger persists around the world largely

because poverty persists. For countries like Vietnam, where 70 percent of the labor

force work in agriculture and forestry, increasing agricultural productivity can help

boost the livelihood of a vast group of people.

A vital agricultural and food sector can then provide consumers with affordable

and safe food. What they save on food they will spend on other products and services—all of which help to create more business activities and jobs.

Agriculture officials certainly recognize this, since agricultural growth has been

robust. Industrial crops like coffee and rubber have experienced the fastest growth,

while the rice yield has doubled since 1987. Vietnam is now the world’s second largest rice exporter, and Cargill participates in that business.

Let me turn to some of the negatives for foreign businesses in Vietnam. Aside

from Vietnam’s small market, which cannot support large industrial projects, such

as car manufacturing, many of the country’s weaknesses lie with the government.

Not all the ministries work as cooperatively as the Ministry of Agriculture and

Rural Development. In its zeal to raise revenues, the Ministry of Finance has imposed relatively high tariffs on food and feed imports, so that Vietnamese consumers

and farmers end up paying more for basic needs.

49

To many business people, the Ministry of Trade seems to see its mission not as

promoting trade, but as controlling and discouraging trade. In its concern over the

need to maintain control over rice exports, the Ministry of Trade denies the Vietnamese rice farmer access to the higher prices that a free market in rice would provide.

Actions by Customs officials continue to cost investors in time and money.

Overall, government polices discourage wealth creation by Vietnamese citizens

and small and medium-sized private businesses. Multiple levels of government

agencies control business activities, and it seems at times there are more people involved in controlling business than in doing business. The most obvious barrier is

the 80 to 90 percent income tax on all monthly income of Vietnamese citizens above

500 to 600 U.S. dollars. Most foreign investors in Vietnam see this tax as a manifestation of the government’s fear that it will lose control if the citizens become

wealthy and economically independent. In the same light, government officials keep

a tight lid on businesses by imposing licenses and a repressive tax structure, which

in effect prevent people and companies from doing business. As a result, small and

medium-sized businesses that could provide new jobs simply aren’t being formed.

Foreign investors in Vietnam can also face challenges at the provincial level, as

provincial leaders sometimes maintain their own fiefdoms. Getting land leases outside of industrial zones continues to be very time consuming and difficult because

of the ability of provincial or lower level officials to slow down or block investments.

However, there are exceptions. For example, I do want to highlight the wonderful

provincial leaders of Dong Nai province. Their honesty and help have netted the

province many profitable investments and created many jobs for their people.

There are a number of things that Vietnam can do to increase foreign and domestic investment that will create jobs. With new investment down last year and even

lower this year, creating jobs for a nation of 80 million people with an average age

of about 22 years should become a national goal.

The government can tackle this on many fronts. First, the government should discourage joint ventures with state-owned enterprises. The government should stop

putting more bank credits into SOEs. They tend only to be profitable when they

have a monopoly, and monopolies are always costly for consumers, who must subsidize them. In reality, SOEs should be privatized, so that the market can work

more efficiently.

Second, Vietnam should encourage investments in industrial zones that have the

support of provincial and local officials. Investing for political reasons is finished.

Competitors for foreign capital now are Thailand, South America, Eastern Europe

and a host of other countries around the world. Vietnam needs competitive industries. The country does not need more plants in politically acceptable locations or

in politically desirable industries such as capital intensive oil refineries that are located far from markets and raw materials.

Third, Vietnam must improve its banking system. Banks can’t lend to private borrowers if they can’t judge credit risks, and foreign banks can’t innovate if they are

not permitted to introduce new products.

Fourth, Vietnam should encourage investments in small and medium-sized businesses that can make quick decisions to grow as they gain experience. International

funding should also focus on small and medium-sized businesses, so that they can

start up quickly, use local materials and serve domestic and export markets. These

businesses can create more jobs and develop local management skills faster than the

big, capital intensive projects, whose technology sometimes becomes outdated before

they are completed.

Lastly, the bilateral trade agreement should be signed and implemented as soon

as possible. There is no question about the benefits of the agreement to Vietnam,

as value-added exporters will have new access to the world’s biggest market. But,

the reforms that Vietnam has agreed to undertake will do even more for that country’s long term economic welfare, as well as for U.S. companies seeking to do business and invest there. National treatment, transparency, improved market access,

and the other changes—though we understand there are a number of carve-outs and

exceptions—are long-awaited reforms for the Vietnam system.

Having laid out both the strengths and weaknesses of Vietnam, I am optimistic

about its future. The country is well-positioned to grow: It has the people and natural resources. Thousands of overseas Vietnamese are eager to pool their talents

and skills. Many corporations want to take part.

The United States can do its part by extending the Jackson-Vanik waiver and

working with Vietnam to successfully implement the terms of the bilateral trade

agreement. The U.S.-ASEAN Business Council and Cargill both have found over the

years that engagement, both commercially and politically, builds the best bridges to

peace and mutual prosperity.

50

In fact, U.S. companies export more than just products when they invest overseas.

They export U.S. values and good business practices. For our employees, who are

used to wearing flip-flops on construction sites, we require steel-toed shoes and

hard-hats and safety rails. We give them better than average wages and benefits

packages.

For our communities, we actively participate in building relations. Cargill, for example, replaced a rickety footbridge that kept washing out near our Dong Nai feed

mill with a solid stone bridge that will last for years and be far safer for the citizenry. We used the leftover money from that project, which was raised by our employees, to build additional schoolrooms for a neighborhood school. And, the company has developed a partnership with a training center for the handicapped in Ho

Chi Minh City, where we have donated playground equipment.

But Vietnam must do its part, too, by becoming more outward-thinking and responsible in today’s world market. Otherwise, the capital, management resources

and investors that Vietnam knows it needs to attract simply will go elsewhere.

Chairman C

Mr. Hoang.

RANE. Thank you, Mr. Carlson.

f STATEMENT OF DAN DUY-TU HOANG, VICE PRESIDENT, PUBLIC RELATIONS, VIETNAMESE-AMERICAN PUBLIC AFFAIRS

COMMITTEE, FALLS CHURCH, VIRGINIA

Mr. HOANG. Mr. Chairman, and Members of the Committee, I

appreciate the opportunity to testify before you today. The Vietnamese-American Public Affairs Committee, a national grass-roots

organization of Vietnamese American voters, strongly opposes

waiving the Jackson-Vanik amendment for Vietnam for two main

reasons.

First, the Vietnamese government continues to deny its citizens

basic human rights. The essence of the Jackson-Vanik amendment

is to promote human rights in communist world countries by conditioning the granting of U.S. investment and credits.

Second, by providing Vietnam with access to cheap U.S. Credits

and investments while the Hanoi government stalls at economic

and political reform is a waste of U.S. taxpayer money. Moreover,

it is a signal to the Vietnamese government to continue dragging

its feet on reform in all areas.

We believe that maintaining the Jackson-Vanik amendment in

the case of Vietnam will help pressure the Vietnamese government

for more concrete reforms. Let me elaborate on the reasons why we

oppose extending the waiver.

At this moment, Dr. Nguyen Xuan Tu, a biologist and writer

whose pen name is Ha Si Phu, is under strict house arrest in Dalat

City in Vietnam. In the least year, authorities have raided his residence on at least two occasions, each time removing his personal

computer and working papers. According to two credible sources,

Human Rights Watch and the Free Vietnam Alliance, on MIA 12,

2000, the public security again entered Ha Si Phu’s home and presented him with a written order threatening to bring charges of

treason, which carries a maximum penalty of death. Ha Si Phu’s

only activity has been to write a series of essays critiquing MarxistLeninist doctrine and advocating political pluralism.

In Hanoi, geophysicist Nguyen Thanh Giang remains under

heavy police surveillance and harassment. He was jailed for 2

months in 1999 for pro-democracy writings. Since MIA of last year,

51

Nguyen Thanh Giang has been under virtual house arrest with his

phone disconnected, mail stolen and home ransacked by security officials.

In Saigon, a medical doctor named Nguyen Dan Que also faces

house arrest. While Dr. Nguyen Dan Que has not been charged

with any crime, security police surround his home 24 hours a day,

a point that was underscored on April 12th when a reporter from

the French newspaper L’Express tried to pay a visit. Not only was

Sylvaine Pasquier turned away by the public security, she was herself detained for intense questioning.

The situations of Ha Si Phu, Nguyen Thanh Giang, and Nguyen

Dan Que highlight the government’s repression of peaceful dissent.

Ha Si Phu has been under house arrest for the last 3 years without

ever being brought to trial. Professor Nhuyen Thanh Giang has

been persecuted without ever being formally charged with any

crime. Dr. Nguyen Dan Que was released from jail in October,

1998, in a much-publicized amnesty of prominent political prisoners and then confined quickly to his home. All three men, along

with many others in Vietnam, are the victims of the government’s

administrative detainment policy, which effectively legalizes arbitrary arrest and detainment. Under the infamous Directive 31/CP,

signed into law in April 1997, security officials can detain any individual without charge for up to 2 years. The purpose of that administrative detainment policy is to repress political dissent while

avoiding the official trials and lengthy prison sentences which attract international attention.

Arbitrary arrest in Vietnam also extends to religious figures.

During his January visit to Vietnam, Congressman Ed Royce met

with several prominent religious leaders and heard firsthand the

government’s restrictions on religious worship and persecution of

clergymen. Venerable Thich Quang Do, the second highest leader

of the Unified Buddhist Church of Vietnam and a nominee for the

2000 Nobel Peace Prize by 29 Members of Congress, told Mr.

Royce, ‘‘If I walk out the gate of this Pagoda, I know an accident

will conveniently happen to me.’’ .

Now, this travesty was brought to light thanks to Mr. Royce’s insistence on hearing a variety of voices in Vietnam, and I hope that

Members of the Subcommittee, in future trips to Vietnam, will seek

to visit dissidents to get a balanced view of the country as Representatives Ed Royce, Tom Campbell, Chris Smith and Loretta

Sanchez have done on their recent trips.

It is not unreasonable that American corporations and the Vietnamese government should lobby for a waiver of the Jackson-Vanik

amendment. Who would want to do business in a corrupt, red-tape,

and nontransparent economy without subsidized Export-Import

loans and OPIC risk insurance? What is unreasonable, however, is

that U.S. taxpayers should have to fund programs which permit investments not economically viable on their own merits and which

allow the Vietnamese government to put off economic and political

reforms.

Dear members, in conclusion, it is in the interest of the United

States to encourage Vietnam’s transition to a market economy.

Such a transition can only be achieved through sustained economic

and political reform. Since the President’s decision to waive the

52

Jackson-Vanik amendment in March, 1998, and to extend the annual waiver since, the Vietnamese government has backtracked on

reform. Extending the waiver for another year gives Hanoi more

excuse to put off essential reforms. At the same time, it creates a

moral hazard as American companies effectively gamble on a

flawed economic system by investing when and where they otherwise would not without the benefit of taxpayer subsidies.

Waiving the Jackson-Vanik amendment now, and then hoping

and praying that the Vietnamese government will reform, just does

not work. The first requirement for free enterprise is free people.

As long as the Vietnamese government continues to run a police

state, arbitrarily arresting and detaining the country’s best minds,

don’t expect it to respect the laws and conditions good for business

either. Thank you.

Chairman CRANE. Thank you, Mr. Hoang.

[The prepared statement follows:]

Statement of Dan Duy-Tu Hoang, Vice-President, Public Relations,

Vietnamese-American Public Affairs Committee, Falls Church, Virginia

Dear. Mr. Chairman and Members of the Committee,

I appreciate the opportunity to testify before you today. The Vietnamese-American

Public Affairs Committee (VPAC), a national grassroots organization of Vietnamese

American voters, strongly opposes waiving the Jackson-Vanik amendment for Vietnam for two main reasons:

(1) The Vietnamese government continues to deny it citizens fundamental

human rights The essence of the Jackson-Vanik amendment is to promote human

rights in communist-ruled countries by conditioning the granting of U.S. government credits and investment.

(2) Providing Vietnam with access to cheap U.S. credits and investment,

while the Hanoi government stalls on economic and political reform, is a

waste of U.S. taxpayer money. Moreover, it is a signal to the Vietnamese government to continue dragging its feet on much needed reform in all areas.

Maintaining the Jackson-Vanik amendment in the case of Vietnam will help pressure the Vietnamese government for more concrete reforms. Let me elaborate on the

reasons why we oppose extending the waiver.

Repression of Political and Religious Views

At this moment, Dr. Nguyen Xuan Tu, a biologist and writer whose pen name is

Ha Si Phu, is under strict house arrest in Dalat city, Vietnam. In the last year, authorities have raided his residence on at least two occasions, each time removing

his personal computer and working papers. According to two credible sources,

Human Rights Watch and the Free Vietnam Alliance, on May 12, 2000, the public

security again entered Ha Si Phu’s home and presented him with a written order

threatening to bring charges of treason, which carries a maximum penalty of death.

Ha Si Phu’s only activity has been to write a series of essays critiquing MarxistLeninist doctrine and advocating political pluralism.

The unjust treatment of Ha Si Phu is of great concern to the Vietnamese American community. Our moral outrage is shared by many others. As I understand,

there is an effort underway in the House of Representatives led by the Congressional Dialogue on Vietnam to demand the Vietnamese government to immediately

release Ha Si Phu. This parallels the protests of the broader international community, including human rights organizations and scientific groups, against the Vietnamese government’s persecution of Ha Si Phu. His case, though, is not unique.

In Hanoi, geophysicist Nguyen Thanh Giang remains under heavy police surveillance and harassment. He was jailed for two months in 1999 for pro-democracy

writings. Since May last year, Prof. Nguyen Thanh Giang has been under virtual

house arrest with his phone disconnected, mail stolen, and home ransacked by security officials.

In Saigon, a medical doctor named Nguyen Dan Que also faces house arrest.

While Dr. Nguyen Dan Que has not been charged with any crime, security police

surround his home 24 hours a day, a point that was underscored on April 12, 2000

when a reporter from the French newspaper L’Express tried to pay a visit. Not only

was Sylvaine Pasquier turned away by the public security, she was herself detained

for intense questioning.

53

The situations of Ha Si Phu, Nguyen Thanh Giang, and Nguyen Dan Que highlight the government’s repression of peaceful dissent. Ha Si Phu has been under

house arrest for the last three years without ever being brought to trial. Prof.

Nguyen Thanh Giang has been persecuted without ever being formally charged with

any crime. Dr. Nguyen Dan Que was released from jail in October 1998 in a much

publicized amnesty of prominent political prisoners and then quickly confined to his

home. All three men, along with many others in Vietnam, are the victims of the

government’s administrative detainment policy, which effectively legalizes arbitrary

arrest and detainment. Under the infamous Directive 31/CP, signed into law in

April 1997, security officials can detain any individual without charge for up to two

years. The purpose of the administrative detainment policy is to repress political

dissent while avoiding the official trials and lengthy prison sentences which attract

international attention.

Arbitrary arrest in Vietnam also extends to religious figures. During his January

visit to Vietnam, Congressman Ed Royce met with several prominent religious leaders and heard first hand the government’s restrictions on religious worship and persecution of clergymen. Venerable Thich Quang Do, the second highest leader of the

Unified Buddhist Church of Vietnam and a nominee for the 2000 Nobel Peace Prize

by 29 U.S. Members of Congress, told Mr. Royce: ‘‘If I walk out the gate of this Pagoda, I know an accident will conveniently happen to me.’’ (This travesty was

brought to light thanks to Mr. Royce’s insistence on hearing a variety of voices in

Vietnam. We earnestly hope that members of the Committee in future trips to Vietnam will seek to visit dissidents to get a balanced view of the country as Representatives Ed Royce, Tom Campbell, Chris Smith and Loretta Sanchez have done in

their recent trips.)

Perhaps the most worrisome part of the government’s record on religion is its ongoing crackdown against the Hoa Hao faith. In May 1999, the government created

a state-sanctioned Hoa Hao Representative Board consisting entirely of senior communist party cadres to oversee the affairs of the Hoa Hao Buddhist community. To

curtail an independent Hoa Hao organization, authorities have repeatedly tried to

stop gatherings by Hoa Hao Buddhists on their most solemn religious occasions and

detained large numbers of worshippers. This climate of repression has created the

potential for major social unrest in the southern provinces of Vietnam where five

million Hoa Hao Buddhists live.

Waste of U.S. Taxpayer Money

It is not unreasonable that American corporations and the Vietnamese government should lobby for a waiver of the Jackson-Vanik amendment. Who would want

to do business in a corrupt, red-tape, and non-transparent economy without subsidized Export-Import loans and OPIC risk insurance? What is unreasonable, however, is that U.S. taxpayers should have to fund programs which permit investments

not economically viable on their own merits and which allow the Vietnamese government to put off economic and political reforms.

Everyone talks about the corruption problem in Vietnam, especially the government. But according to a Reuters article (‘‘;Despite campaign, graft hobbles Vietnam,’’ 5/17/2000), Hanoi has nothing to show one year into a major anti-graft campaign. Not a single senior government or party official has been publicly accused,

let alone punished, for corruption. The most senior official rebuked for ‘‘mismanagement,’’ Ngo Xuan Loc, was dismissed as deputy prime minister only to quickly return as senior advisor to the premier. The root of the problem is that the communist

regime is accountable only to itself.

Red tape is another legendary problem. Consider this account from the Rushford

Report (‘‘;Vietnam, twenty-five years later,’’ 4/5/2000): ‘‘Every small business operator one sees has a piece of paper in his or her pocket giving permission to do business, the same kind of noodle shop down the street might have a different set of

papers. It is a criminal offense not to have that permission slip.’’ The bureaucratic

mess gets worse for larger ventures, especially when they involve foreigners.

Finally, there is the problem of non-transparency in Vietnam. This stems from the

lack of reliable information, which follows from the government’s monopoly on the

media and the ‘‘firewalls’’ it uses to block many Internet sites. The stifling of free

information not only discourages foreign investors, but also denies Vietnamese the

knowledge they need to do business and take part in their national affairs.

Conclusion

It is in the interest of the United States to encourage Vietnam’s transition to a

market economy. Such a transition can only be achieved through sustained economic

and political reform. Since the president’s decision to waive the Jackson-Vanik

amendment in March 1998 and to extend the annual waiver since, the Vietnamese

54

government has backtracked on reform. Extending the waiver for another year gives

Hanoi more excuse to put off essential reforms. At the same time, it creates a moral

hazard as American companies effectively gamble on a flawed economic system by

investing when/where they otherwise would not without the benefit of taxpayer subsidies.

Vietnamese Americans in general and VPAC in particular would dearly like to see

material improvements in the lives of people in Vietnam. But sustainable development and economic progress that benefits all—not a disproportionate few in power— can only be achieved on a framework of human rights, rule of law, and democracy.

Waiving the Jackson-Vanik amendment now, and then hoping and praying that

the Vietnamese government will reform just does not work. The first requirement

for free enterprise is free people. As long as the Vietnamese government continues

to run a police state, arbitrarily arresting and detaining the country’s best minds,

don

the State of Oklahoma introduce our next distinguished guest.

Chairman C

’t expect it to respect the laws and conditions good for business either.

RANE. Now I would like to have our colleague from

f Mr. WATKINS. Thank you, Mr. Chairman and Members of the

Committee. I am honored that my friend, Barry Clark, who represents Oklahoma in Vietnam in this real pioneering effort, who I

think has got some great words to share with us, but I am glad

he is here.

Barry, I know that you are doing a great job there working at

it and trying to lift the vision not only for Oklahoma but for Vietnam of what the real world of freedom is all about.

So, Mr. Chairman, I appreciate you allowing Mr. Clark to be

here as one of the panel members.

Chairman CRANE. Well, we are happy to have Mr. Clark.

Now, proceed, Mr. Clark.

STATEMENT OF BARRY L. CLARK, PRESIDENT AND DIRECTOR,

PACIFIC VENTURES, INCORPORATED, TULSA, OKLAHOMA

Mr. CLARK. Thank you, Mr. Chairman and Subcommittee members, for the opportunity to be here today to testify before you.

My name is Barry Clark; and I am President of Pacific Ventures,

which is an Oklahoma-based consulting and private equity company. Our offices are in Tulsa, Oklahoma, as well as in Hanoi and

Ho Chi Minh City, Vietnam. The focus of our consulting business

is to assist American companies entering the Vietnamese market.

We have been in Vietnam since 1995, 1 year after President Clinton lifted the trade embargo.

From my first visit to Vietnam in 1993 to moving there for 3

years in 1995, I have witnessed firsthand the changes as Vietnam

took the first uncertain steps toward a market economy. These

changes are providing new economic and civic hopes for many of

the Vietnamese people and new business opportunities for American companies. Similar to most people doing business in Vietnam,

our challenges have been frequent, costly and time-consuming.

Nevertheless, we are confident that the opportunities are real and

significant, and we remain determined to see them through.

In addition to private enterprise, Pacific Ventures also represents

the State of Oklahoma. In September 1996, the State of Oklahoma

became the first State of any Nation to open a trade office in Vietnam. Since the Vietnamese government was not accustomed to

dealing with individual States, the State of Oklahoma’s DepartVerDate 20-JUL-2000 14:16 May 02, 2001 Jkt 060010 PO 00000 Frm 00058 Fmt 6633 Sfmt 6602 K:\HEARINGS\71553.TXT WAYS3 PsN: WAYS3
55

ment of Commerce asked Pacific Ventures to represent their clients

in this newly emerging market. Through our company infrastructure, Oklahoma now has offices in Hanoi and Ho Chi Minh City

with a staff of 12 Vietnamese and two Americans. Oklahoma is still

the only American state to have a full-time presence in Vietnam.

The reason the State of Oklahoma opened this trade office was

due to several of Oklahoma’s major industries matching those of

Vietnam’s. These industries are of vital importance to both of our

economies. They are oil and gas, agriculture, education and infrastructure development.

For the businesses we represent directly and through our ties to

the State of Oklahoma, we manage the daily challenges of arranging meetings, securing licenses, conducting market research, identifying potential partners, and navigating the labyrinth of red tape.

Our preliminary business, as we participated in the opening of

Vietnam’s consumer markets, was to establish one of the first softserve ice cream companies. We represent life and health insurance

companies looking to enter the Vietnamese market and are also a

licensee for the Disney Book Co.

Through our contract with the State of Oklahoma, Pacific Ventures has led nine delegations of Oklahoma business and institutions to Vietnam to sell Oklahoma-made goods and services, as well

as six delegations from Vietnam who have come to Oklahoma to

purchase equipment. The Oklahoma goods and services sold to

Vietnam have included oil-field drilling equipment, which you

might expect from Oklahoma, but also bio-tech products, such as

sewage treatment enzymes, assistance in building environmentally

sound landfills, beef cattle genetics, and infrastructure building

equipment.

But the export for which the State of Oklahoma has great pride

is education. Oklahoma has more than 9,000 foreign students

studying in its colleges and universities. Oklahoma is third in the

Nation in the number of Vietnamese students in higher education

in our state. A good example is Petro-Vietnam, the Vietnamese national oil company, which has 57 students—young people which the

company sees as its future leaders—as full-tuition paying undergraduate and graduate students at the world-famous Sarkeys Energy Center at the University of Oklahoma in Norman. These students will go back to Vietnam not only with a world-class education

in petroleum science and engineering but also with a better understanding of the American way of life. It wouldn’t be complete if I

didn’t add that we also hope that they return home with knowledge

of, and an appreciation for, the products and services of American,

as well as Oklahoma companies.

The Jackson-Vanik waiver has brought about dramatic changes

that are indeed part of the rising tide that is floating more hopes

and dreams for Vietnamese entrepreneurs and small business owners. Vietnam has great potential as a friend and trading partner

of the United States. I think Ambassador Peterson has stated it

best: ‘‘With the continued opening of the economy, the middle class

will grow, the population will become more educated and exposed

to more ideas, and Vietnam will continue to evolve to become a

more open society. But changes come in increments. By extending

the Jackson-Vanik waiver and taking other steps along the path of

56

normalization, including extension of normal trade relations, the

U.S. will advance our interest in encouraging Vietnam’s ongoing

transition.’’ . In conclusion, I want to express the appreciation of Oklahoma

government and business leaders for Ambassador Peterson’s passionate leadership and to his staff at the U.S. Embassy for all of

their assistance and support. They have made our work in Vietnam

much more productive than we could have ever been otherwise.

Again, thank you for this opportunity, sir.

Chairman CRANE. Thank you, Mr. Clark.

[The prepared statement follows:]

Statement of Barry L. Clark, President and Director, Pacific Ventures,

Incorporated, Tulsa, Oklahoma

Thank you, Mr. Chairman, members of the subcommittee, for the opportunity to

testify before you today. My name is Barry Clark and I am President of Pacific Ventures, which is an Oklahoma-based consulting and private equity company. Our offices are in Tulsa, Oklahoma as well as Hanoi and Ho Chi Minh City, Vietnam. The

focus of our consulting business is to assist American companies entering the Vietnamese market to sell their products and services. We have been in Vietnam since

1995, one year after President Clinton lifted the trade embargo. From my first visit

to Vietnam in 1993, to moving there in 1995 for three years, I have witnessed firsthand many of the changes as Vietnam took the first uncertain steps towards a market economy. These changes have provided new economic and civic hopes for many

Vietnamese people—and new business opportunities for American companies. Similar to most people doing business in Vietnam, our challenges have been frequent,

costly and time-consuming, but never the less we are confident that the opportunities are real and significant and we remain determined to see them through.

In addition to private enterprise, Pacific Ventures represents the State of Oklahoma. In September 1996 the State of Oklahoma became the first state of any nation to open a trade office in Vietnam. Since the Vietnamese government was not

accustomed to dealing with individual states, the State of Oklahoma’s Department

of Commerce ask Pacific Ventures to represent their clients in this newly emerging

market. Through our company infrastructure Oklahoma now has offices in Hanoi

and Ho Chi Minh City with a staff of twelve Vietnamese and two Americans. Oklahoma is still the only American state to have a full-time presence in Vietnam. The

reason the State of Oklahoma opened this trade office was due to several of Oklahoma’s major industries matching those of Vietnam’s. These industries are of vital

importance to both economies: They are oil and gas, agriculture, education, and infrastructure development. For the businesses we represent directly and through our

ties to the State of Oklahoma, we manage the daily challenges of arranging meetings, securing licenses, conducting market research, identifying potential partners

and navigating the labyrinth of red tape. Pacific Ventures also supports companies

or joint-venture projects until they are capable of operating on their own. Our preliminary business as we participated in the opening of Vietnam’s consumer markets

was to establish one of the first soft-serve ice cream companies. We represent life

and health insurance companies looking to enter the Vietnamese market, and are

also a licensee for Disney books in Vietnam.

Through our contract with the State of Oklahoma, Pacific Ventures has led nine

delegations of Oklahoma businesses and institutions to Vietnam to sell Oklahomamade goods and services as well as six delegations from Vietnam, that have come

to Oklahoma to purchase equipment. The Oklahoma goods and services sold to Vietnam have included oil-field drilling equipment, which you might expect from Oklahoma, but also bio-tech products such as sewage treatment enzymes, assistance in

building environmentally sound landfills, beef cattle genetics, and infrastructure

building equipment.

But the export, for which the State of Oklahoma has great pride, is education.

Oklahoma has more than 9,000 foreign students studying in its colleges and universities. Oklahoma is third in the nation in the number of Vietnamese students in

higher education. A good example is Petro—Vietnam, the Vietnamese national oil

company, which has 57 students (young people which the company sees as its future

leaders) as full-tuition paying undergraduate and graduate students at the worldfamous Sarkeys Energy Center of the University of Oklahoma. These students will

go back to Vietnam not only with a world-class education in petroleum science and

engineering, but also with a better understanding of the American way of life. It

57

wouldn’t be complete if I didn’t add that we also hope that they take back knowledge of and an appreciation for the products and services of American as well as

Oklahoma companies. The Jackson-Vanik wavier has brought about dramatic

changes that are indeed part of the rising tide that is floating more hopes and

dreams for Vietnamese entrepreneurs and small business owners. Vietnam has

great potential as a friend and trading partner of the United States. I think Ambassador Peterson has stated it best: ‘‘With the continued opening of the economy, the

middle class will grow, the population will become more educated and exposed to

more ideas, and Vietnam will continue to evolve to become a more open society. But

changes come in increments. By extending the Jackson-Vanik waiver and taking

other steps along the path of normalization, including extension of normal trade relations, the U.S. will advance our interest in encouraging Vietnam’s on-going transition.’’ In concluding, I want to express the appreciation of Oklahoma government and

business leaders for Ambassador Peterson’s passionate leadership and to his staff

at the U.S. Embassy for all their assistance and support. They have made our work

in Vietnam much more productive than we could have been otherwise. Again, thank

you for giving me the opportunity to speak today.

Chairman C

I would now like to yield very briefly to our Ranking Member,

RANE. I thank all of you for your testimony.

f Mr. Levin.

Mr. LEVIN. Thank you, Mr. Chairman.

The timing is maybe imperfect, although I was going to say perfect. You have completed your testimony, and we have votes on the

floor.

I just wanted to say to all of you that we take your testimony

seriously, and we will be sure that it is widely circulated. I want

to say to the two of you who have come here to oppose the waiver

that I want to send your testimony over to the State Department

for their comments. We will do that, and I am sure we will receive

a reply from them.

So thank you, all of you, for coming. Also, to those who submitted

written testimony for the record, it will, Mr. Chairman, as you

know, be submitted in the record and will be considered seriously

by us before this matter comes to the floor. Thank you.

Chairman CRANE. Thank you, Mr. Levin.

Again, thank you all for your participation in the hearing this

morning.

With that, the subcommittee stands adjourned.

[Whereupon, at 12:10 p.m., the hearing was adjourned.]

[Submissions for the record follow:]

AMERICAN LEGION

WASHINGTON, DC 20006

June 13, 2000

Honorable Philip M. Crane, Chairman

Subcommittee on Trade

House Committee on Ways and Means

1102 Longworth House Office Building

Washington, DC 20313

Dear Mr. CHAIRMAN.

The American Legion is opposed to the renewal of the Jackson-Vanik waiver for

trade with Vietnam. This position is based on the continued failure of the Vietnamese government to fully cooperate with efforts to account for the over 2,000

Americans that remain missing from the war in Southeast Asia.

The American Legion does not accept the conclusions of the Clinton administration that the Vietnamese government has fully cooperated with accounting efforts.

Granted, the Vietnamese have provided assistance in the area of remains recovery

58

(e.g. locating and helping exhume aircraft crash sites). However, the United States

government is paying handsomely for that cooperation. The Vietnamese government

holds in their archives voluminous data that we believe would be helpful in solving

many of the 2,000-plus unresolved cases. Thus far the Vietnamese have been unwilling to share this information.

What is needed is unilateral cooperation on the part of the Vietnamese government and Communist Party in providing information relating to stored remains, and

to records on a significant number of unresolved cases designated as ‘‘last known

alive,’’ or ‘‘died in captivity.’’

As was the case with our recent opposition to Permanent Normal Trade Relations

with the People’s Republic of China, The American Legion is troubled that economic

and trade concerns continue to take precedence over issues of national security. The

highest national priority is accounting for our missing servicemembers. Vietnam is

capable of providing significantly more cooperation with our efforts to bring about

the fullest possible accounting. The American Legion urges the Committee to take

these factors into account and oppose the Jackson-Vanik waiver for trade with Vietnam.

Sincerely,

f John F. Sommer, Jr.

Statement of Anheuser-Busch, St. Louis, MO

In its press release (No. TR–21) of May 30, 2000 the Ways and Means Subcommittee on Trade requested public comment on the ‘‘nature and extend of U.S.

trade and investment ties’’ with Vietnam as well as issues related to pending bilateral trade agreement with Vietnam. Anheuser-Busch strongly supports the process

of developing closer economic ties with Vietnam. In our view, the further integration

of Vietnam into the world economy will enhance its economic development, increase

its standard of living and strengthen demand for consumer products. Given its size,

location and culture, it has tremendous market potential for companies in the brewing industry.

Anheuser-Busch has a longstanding interest in Vietnan. Currently, however,

there are no authorized sales of our flagship brand, Budweiser, in Vietnam. For

more than a decade, we have sought without success to register our world famous

Budweiser trademark in Vietnam. The details of the history of this effort are set

forth in the attached document (Exhibit I).

As we have expressed directly to the Vietnamese authorities, we strongly believe

that the relevant departments have has ample time to consider our application to

register our Budweiser trademark and make a decision with respect thereto. Adequate protection of intellectual property rights is an integral part of the U.S./Vietnam bilateral trade agreements as well as Vietnam’s standing with the world investment community. Adequate protection and equitable treatment include a fair

and timely decision process with respect to intellectual property issues.

We urge the Committee and the Administration to impress upon the Vietnamese

the importance of a timely decision with respect to this matter as the two countries

move forward in the development of their overall economic relationship.

Exhibit 1

Summary of Main Arguments in Support of the Request of

Anheuser Busch Company’s Request for Registration of

the Trademarks:

‘‘BUDWEISER’’ and ‘‘Budweiser’’ in the Socialist Republic of

Vietnam

1. Background

Anheuser Busch Company (‘‘A–B’’) is one of the largest companies in the world.

Since 1957, A–B has been the largest producer of beer in the world.

59

2. Trademark Dispute

For most of this century, A–B has been involved in a dispute with Budejovicky

Budvar Narodni (‘‘BB’’) over the right to use the trademark BUDWEISER in a number of countries throughout the world. Notwithstanding the parties’ competing

claims over the right to use the BUDWEISER trademark, one fact remains undeniable: A–B began using the BUDWEISER trademark in 1876, nearly 20years before

BB was founded in 1895.

After having sold large volumes of BUDWEISER beer in the southern part of

Vietnam before 1975, A–B applies to register its BUDWEISER trademark in Vietnam in 1989. In 1993, A–B applied to register the trademark BUD in Vietnam as

well. However, four previously registered trademarks of BB consisting of the trademark BUDWEISER blocked these applications of A–B. In 1997, A–B successfully

cancelled these four prior registrations of BB on the basis of non-use.

The cancellation of BB’s four trademark registrations should have cleared the way

for registration of A–B’s BUD and BUDWEISER trademarks. However, only the

BUD trademark proceeded to registration. The formal reason for the delay in allowing A–B’s application for BUDWEISER to proceed to registration was that BB has

two other trademark registrations (BUDWEISER BUDVAR and BUDWEISER

BUDBRAU) blocking A–B’s application for BUDWEISER. Notwithstanding the prior

applications of A–B for BUDWEISER and the pendency of A–B’s cancellation action

against BB’s first four BUDWEISER trademark registrations for non-use, BB as

permitted to register BUDWEISER BUDVAR and BUDWEISER BUDBRAU (which

are essentially the same marks as the ones that were being cancelled).

2.1 Priority of A–B’s Application over BB’s Subsequent Registration of

BUDWEISER BUDVAR and BUDWEISER BUDBRAU

According to the ‘‘first to file’’ and other relevant legal principles. A–B’s applications should have been given priority over these subsequent registrations of BB.

Therefore, once BB’s first four BUDWEISER trademark registrations were officially

cancelled, A–B’s application for BUDWEISER should have proceeded to registration,

as A–B’s application for BUD (which has also been blocked by these first four registrations (was allowed to do. Similarly, BB’s subsequent two registrations for

BUDWEISER BUDVAR and BUDWEISER BUDBRAU, having a later priority date

than A–B’s application for BUDWEISER, should have been cancelled.

In addition, it should be noted that permitting BB to register BUDWEISER

BUDVAR and BUDWEISER BUDBRAU during A–B’s pending cancellation action

against the same marks undermines fundamental tenet of Vietnamese trademark

law which states that a trademark is subject to cancellation if it is not used for the

specified period of time.

2.2 The Worldwide Fame of A–B’s BUDWEISER Trademark

Apart from the priority of A–B’s applications, another legal basis for allowing the

registration of A–B’s BUDWEISER trademark in Vietnam relates to the wellknown, indeed famous status of A–B’s BUDWEISER mark internationally. Overwhelming evidence supporting this claim, including registrations in over 125 countries worldwide and sales volumes almost 100 times greater than BB, was contained

in documents that were submitted to the NOIP on May 5, 1999.

As a well-known trademark, A–B’s BUDWEISER is entitled to special protection

under Article 6bis of the Paris Convention (to which Vietnam is a party), and Circular No. 437/SC. As such, the NOIP should allow immediate registration of A–B’s

BUDWEISER in order to give this well-known trademark the protection it deserves,

and at the same time cancel BB’s remaining registrations for BUDWEISER

BUDVAR and BUDWEISER BUDBRAU, neither of which can reasonably called

well-known.

3. Investment

To efficiently supply the demand for A–B’s BUDWEISER worldwide, A–B has invested in local brewing plants or has licensed its famous BUDWEISER mark to

local manufacturers, including in China, the Philippines, Japan, South Korea, Canada and others. In addition, A–B has invested in facilities in foreign countries for

the manufacture of aluminum beer cans, containers and other packaging using the

most modern manufacturing methods, including a commitment to recycling previously used products and materials. This latter commitment is particularly important to countries in Asia which are experiencing growing pollution problems.

A–B perceives Vietnam as an exciting new market. If AB were to engage in commercial activities in Vietnam, this would contribute significantly to the promotion

of commercial relations between the U.S. and Vietnam. However, the ability of A–

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B to consider engaging in such activities in Vietnam depends on it having the right

to use its most important trademark: BUDWEISER. Accordingly, A–B is keen to be

given the right to use the BUDWEISER trademark in Vietnam (through formal registration of the same) at the earliest possible date.

For the foregoing reasons, A–B is hopeful that the relevant authorities in Vietnam

will issue A–B a Certificate of Registration for the BUDWEISER trademark as soon

as possible.

Mr. Chairman and members of the Subcommittee,

Statement of Dr. Nguyen Dinh Thang, Executive Director, Boat People

S.O.S., Merrifield, VA

f Time has come again for Congress to review the President’s decision to renew the

waiver to the Jackson-Vanik Amendment for Vietnam. By granting this waiver to

Vietnam, the President promised that it would substantially promote free and open

emigration.

While there are many factors influencing U.S.-Vietnam relationship, the JacksonVanik Amendment focuses solely on the question of free and open emigration. The

justification, validity and effects of the waiver should therefore be evaluated solely

on the basis of whether it has promoted free and open emigration.

By statutory definition, free and open emigration means more than just the

issuance of exit permits to citizens who want to emigrate. It also means that no citizen should be made to pay more than a nominal fee on emigration or on the visas

or other documents required for emigration.

The Vietnamese people has been burdened by an outrageously corrupt system.

Vietnam’s corruption ranks among the worst in Asia, according to a report released

this month by the Hong Kong-based Political and Economic Risk Consultancy

(PERC). Even Vietnam has to admit that corruption permeates all government functions. A police report released earlier this month indicated that corruption is on the

rise—the level of detected embezzlement has increased some 10,000 times over the

past five months.

Emigration is not immune to graft. Practically every single person who wants to

emigrate must pay three to four times the annual salary of an average Vietnamese

citizen. That is certainly more than a nominal fee. Since few Vietnamese citizens

can afford such bribes, their U.S. relatives are often the ones to bear the burden.

Corruption seriously affects U.S. refugee programs in Vietnam. Our State Department has cited statistics showing that tens of thousands of refugees have been resettled since the U.S. first granted Vietnam the waiver to the Jackson-Vanik

Amendment two years ago. These refugees too had to pay their way out. The State

Department’s statistics are not an indicator of free and open emigration. On the contrary, they constitute thousands upon thousands of violations of the principle of free

and open emigration called for in the Jackson-Vanik Amendment.

Of course there are many Vietnamese citizens who are eligible for emigration but

who cannot afford the bribes; they continue to be denied clearance for interview

under U.S. refugee programs. At the last hearing I presented a number of specific

examples. None of them has been cleared for interview a year later.

Mr. Chairman and members of the Subcommittee,

There are those who argue that granting the waiver to Vietnam would strengthen

the hands of the reformist faction within the Vietnamese leadership. Developments

over the past 12 months do not support this speculation. There has been no serious

reform, be it institutional, social or political, to point to. The Vietnamese leadership

recoils when it realizes that the bilateral trade agreement with the U.S. entails

major reforms.

The Jackson-Vanik waiver has failed to improve the human rights conditions in

Vietnam. Two years ago, Vietnam released a handful of political and religious prisoners. All of these former prisoners of conscience continue to be held under house

arrest. Vietnam has since sent to jail a larger number of political dissidents and religious leaders than it had released.

The Jackson-Vanik waiver for Vietnam has not made emigration more free and

open, has not produced any reform, has not ameliorated the business environment

for U.S. investors, and has failed to improve human rights conditions in Vietnam.

Vietnam’s corrupt system continues to affect many U.S. citizens and their loved ones

in Vietnam, and to subvert U.S. refugee programs.

I recommend that this Subcommittee establishes benchmarks to track progresses

or the lack thereof in each of the above areas. Specifically, I recommend that the

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Subcommittee requests the General Accounting Office to survey immigrants and refugees from Vietnam about how much they must pay for emigration and to track the

number of U.S. businesses that are still in business and actually make a profit in

Vietnam.

I also recommend that this Congress delays the renewal of the waiver until Vietnam meets a number of conditions. Namely, Vietnam must clear all cases submitted

by the U.S. for interview, stop its corrupt practices in emigration, and institute reforms to guarantee transparency in all areas of the government.

the General Electric Company in Vietnam. I have held this position for over 7 years.

Thank you Mr. Chairman and members of the Subcommittee.

I am André Sauvageot, residing in Hanoi as the Chief Representative for

Statement of Andre Sauvageot, General Electric Company

f As I did for your hearing on the initial waiver and also last year for the renewal

of the Jackson-Vanik Amendment, I am submitting the following updated information to assist the Committee in its decision regarding the renewal of the JacksonVanik waiver for Vietnam.

I. Vietnam Experience Prior to Joining General Electric

My involvement in Vietnam began in 1964 as a U.S. Army Captain assigned as

a District Advisor in South Vietnam. This entailed participating in combat operations with small South Vietnamese units and afforded opportunities to learn about

life and civil administration at the village level. I completed 8 years of Vietnam

service with varied assignments including US Liaison & Coordination Officer for the

Military Assistance Command (MACV) in the Prime Minister’s Office. My last assignment, ending in March 1973, was as the Interpreter for the Chief of the American Delegation to the Four-Party Joint Military Commission charged with implementing the Paris Agreement on ending the war.

From 1976 to 1978 the Army assigned me to the US Department of Health, Education & Welfare as an Assistant Director to the Indochina Refugee Assistance Program to help with the resettlement of Vietnamese refugees in the United States. In

1984, I retired as a Colonel from the Army after 27 years service.

From 1982 to as recently as 1993, I served as the interpreter for the highest level

American delegations visiting Hanoi. The initial focus was solely on the MIA/POW

issue, but later broadened to include some of Vietnam’s humanitarian concerns.

Until December 1992, I was employed by the U.S. Embassy in Bangkok as the Regional Advisor for the Comprehensive Plan of Action designed to encourage voluntary repatriation of Vietnamese ‘‘boat people’’ back to Vietnam. This involved constant visits to the camps in Hong Kong and Southeast Asia with follow-up visits to

returnees in Vietnam. I enjoyed steadfast support from Vietnam’s leadership and

the freedom to travel freely in Vietnam at my own initiative throughout my mission.

My long involvement in Vietnam has given me a profound respect for the Vietnamese. Their pragmatism, flexibility, courage and intelligence make it a country

that is very amenable to constructive engagement. The recent House vote to grant

PNTR to China is an encouraging recognition of the merits of constructive engagement. I agree with Department of Defense experts working the MIA/POW issue full

time that the Vietnamese have provided outstanding cooperation and that the cooperation has increased as the U.S.-Vietnam relationship expands. The same is true

on a wide range of commercial and other issues of interest to both countries.

Progress on all issues is positively correlated with improvements in the overall relationship based on the principle of mutual benefit.

II. Doing business in Vietnam

Doing business in Vietnamese remains tough sledding. It is not surprising that

a country long ravaged by war in a long struggle for independence and national

unity would take time to move from feudalism through Soviet-style state socialism

to a market economy. The problems with an underdeveloped banking system, underdeveloped legal and physical infrastructure, a lack of transparency and widespread

corruption are serious and combine to make it difficult to do business. American

companies have the additional handicap of arriving behind foreign competitors,

which were not constrained by the U.S. Trade embargo against Vietnam.

In addition, the lack of domestic capital and a severely limited national budget

encourage the Vietnamese and their foreign business partners to seek off-shore

funding. Financing must often be in the form of Government-to-Government soft

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loans, as budget constraints may preclude commercial financing. To be successful,

companies must be prepared to make a long-term commitment and maintain an incountry presence.

For the committed company with the right products or services, proper corporate

policies and minds open to Vietnam, the positives far outweigh the negatives.

The Vietnamese leadership’s commitment to economic reform, its commitment to

diversification of Vietnam’s international relationships, the national unity behind

the leadership on both of these major policies, the strong work ethic, and a literate,

intelligent, trainable workforce are durable, valuable and more significant thoughts

than the difficulties which so often frustrate foreign companies doing business in

Vietnam.

The Vietnamese have forged a society in which 78 million people of some 54 different ethnic groups, with a wide mix of various religions and a large number of

people who subscribe to no religion at all, live peacefully together free of the religious and ethnic strife with which so many other countries are afflicted.

These strengths are the ingredients by which Vietnam will effectively address its

shortcomings. Vietnam will succeed in integrating with the global economy. The

question is which companies from which countries will grow their businesses in

Vietnam; in short, will grow with the country and by their engagement help shape

the kind of market economy that emerges in Vietnam.

III. GE Businesses currently in Vietnam

After former President Bush permitted American companies to establish representative offices in Vietnam, GE was among the first ten American companies to

seize the opportunity, having obtained a license on June 18, 1993.

Several of GE’s major businesses, each with its own separate headquarters in the

United States, have already successfully entered Vietnam’s market.

GE Medical Systems (GEMS)

GE Medical Systems, a global business, headquartered in Milwaukee, Wisconsin

was the first of GE’s eleven major businesses to enter the Vietnam market, because

medical equipment was included among certain humanitarian items exempted from

the Trade Embargo by former President Bush in April 1992. Since 1993, GEMS has

been selling ultrasound and x-ray equipment against stiff foreign competition from

long established companies such as Siemens from Germany. GEMS has made a respectable beginning, including the sale of high-end Magnetic Resonance Imaging

(MRI) equipment manufactured in Wisconsin. This year GEMS won a $1.3 million

(USD) contract to provide ultrasound systems, financed by the World Bank.

GE Aircraft Engines (GEAE)

GE Aircraft Engines, headquartered in Cincinnati, Ohio regards the Vietnam Airlines (VNA) as a strategic customer with significant growth potential. VNA airline

has selected GE or GE joint venture engines with an aggregate value of some $162

million, to power its entire small fleet of Boeing and Airbus aircraft. GEAE is currently participating in an international bidding competition to secure a 2-year maintenance contract for the CFM56–5B4 engines on VNA’s fleet of 10 A320 aircraft.

GE Capital Aviation Services (GECAS)

One of the 29 major branches of GE Capital Services and headquartered in Stamford, Connecticut, GECAS has dry-leased 3 new Boeing 767–300ER aircraft to Vietnam Airlines (VNA) for a period of 5 years. Now, over 4 years into the lease,

GECAS, the worlds largest aircraft lessor, is favorably impressed with the management and the integrity of VNA, a customer that has always paid its lease obligations on time, even after the currency crisis hit the Pacific nations. Although the

current lease expires January 2001, GECAS will bid to renew its lease with this priority customer in the near future.

GE Lighting (GEL)

GE Lighting, headquartered in Cleveland, Ohio has gained a modest presence

with annual sales in Vietnam running over $1 million.

GE Appliances (GEA)

GE Appliances, headquartered in Louisville, Kentucky successfully concluded a

contract over the past year with a private company that is already aggressively selling American manufactured appliances (refrigerators, air-conditioners, washing machines...) in the Vietnamese market.

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GE Transportation Systems (GETS)

Headquartered in Erie, Pennsylvania GETS manufactures locomotives and locomotive components. In Vietnam, GETS has won two international bids (1996–97) to

provide parts/components to the Vietnam Railways (VR). GETS is working on opportunities to sell new locomotives and to upgrade VR’s older locomotives. Our technical proposal for a new locomotive customized to meet VR’s requirements was so

well received that the railway asked us to proceed with a financing proposal that

combines attractive interest rates, full financing and relatively long payment terms.

GE Capital Marketing Services is currently working with the U.S. Export Import

Bank and an American Bank to enable us to pursue this opportunity with its significant downstream potential.

GE Power Systems (GEPS)

GE Power Systems, headquartered in Schenectady, New York, manufactures

steam turbines and generators in New York and gas turbines in Greenville, South

Carolina; and turbine and generator control equipment in Salem, Virginia. GETPS

has won the following contracts in Vietnam:

• first ever gas compressors for the White Tiger field to bring in gas from offshore,

• 2 generators for Ham Thuan 300MW hydro plant (contract award February

1998) and

• 2 steam turbines and 2 hydrogen cooled generators for Pha Lai 2 600MW thermal, coal fired power plant.

• 2 turbines in the Song Hinh hydro plant.

IV. Importance of Jackson-Vanik Waiver—Framework Agreement signed

last year

We deeply appreciate the initial support of your sub-committee and ultimately of

the entire Congress for last year’s decisive majority renewing waiver of the JacksonVanik amendment.

Since the U.S. Export Import Bank and the State Bank of Vietnam signed the

Frame Agreement last year after your renewal of the Jackson-Vanik Amendment,

General Electric is better positioned to meet foreign competition and thereby create

opportunities for our American workers to produce equipment for sale into Vietnam’s growing market.

The Framework Agreement permits the U.S. Export Import Bank to rapidly enhance our ability to compete with direct funding proposals to our customers. This

includes the bidding opportunity that we presented last year, the Thac Ba Hydro

upgrade project. This project has been delayed, partly as the result of uncertainty

concerning funding.

However, since your renewal of the waiver last year and the signing of the Framework Agreement, interest has been rekindled and we have presented additional

technical analysis of our proposed turbine and turbine control equipment at the request of our customer, Electricity of Vietnam (EVN). In addition, GE is in a more

competitive position to sell locomotives made in Pennsylvania and to bid on additional hydro projects.

As we mentioned last year, EVN’s decision to upgrade the 30-year old Thac Ba

hydro power plant calls for ‘‘supplier credit’’ which means the contractor must

present a competitive financing proposal. GE’s competitors include ABB (Switzerland/Sweden) and Siemens from Germany.

GE is extremely competitive from a technical standpoint because of its numerous,

high quality reference plants and because GE, unlike ABB or Siemens, manufactures both the turbine and the generators, as well as the turbine and generator control equipment.

Renewal of the Jackson-Vanik waiver will greatly enhance GE’s ability to pursue

the Thac Ba upgrade, new locomotive opportunities and other infrastructure

projects. Winning Thac Ba would help position GE for further wins in Vietnam’s

growing hydro power market. Failure to sustain the Jackson-Vanik waiver could

greatly damage GE’s chances against foreign competition on projects for which ODA

funding is available and for which U.S. Export Import Bank financing is neither

available or desired.

For example, assume that Vietnam’s largest donor country, Japan, were to fund

a large project wherein GE was bidding against a Japanese company for the contract. Even with ‘‘untied’’ aid, were both the GE and the Japanese company’s proposals roughly equivalent, political considerations could become a factor in awarding

the contract. Stated differently, diminished U.S. involvement results in less U.S. leverage.

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V. Conclusion

Experience clearly indicates that as the U.S.-S.R.V. relationship continues to improve on the basis of mutual respect and mutual benefit, progress will continue on

all fronts. We will continue to work closely with the U.S. Government and we appreciate the active support for American business and American workers that we have

received from Ambassador Peterson and his fine staff in Hanoi. We will also continue our active involvement with such organizations as the U.S.-Vietnam Trade

Council and AMCHAM.

I believe that the most rigorous analysis suggests that there is no conflict in pursuit of US commercial objectives in Vietnam and our other national interests. In

fact, they are positively correlated and mutually reinforcing.

Statement of Khmer Kampuchea Krom Federation, from the State of

Lakewood, California

f Thank you for the opportunity to present testimony concerning the direct experience of the Khmer Krom People in Vietnam within the context of the Jackson-Vanik

Amendment waiver review. While we recognize that immigration and human rights

can best be fostered in a climate of economic and trade development, we firmly believe that diplomatic pressure is essential to effect political reform.

Thus, we respectfully submit information opposing the Jackson-Vanik Amendment waiver based on the Vietnamese record to date on immigration and Human

Rights. When the Government of Vietnam (GOVN) makes significant progress in

these critical areas, we would happily support the waiver since it would signal true

progress toward bettering the lot of our people.

Immigration

Under the immigration policy announced and supported by President Clinton,

three criteria are to be met: (1) no one in Vietnam should be denied opportunity

to emigrate, and (2) no one in Vietnam should be made to pay more than a nominal

fee for emigration or documentation required for emigration, and (3) no one should

be discriminated against because of ethnic, or religious beliefs, or due to their service to the US Armed Forces during the Vietnam War.

There are many cases of Khmer Krom People being denied emigration because of

their background. There are multiple bureaucratic roadblocks, bribery, and pervasive corruption at all levels of government in Vietnam creating additional obstacles

to free emigration. In many instances, applicants to U.S. resettlement programs are

required to pay huge amounts of money. The bribes range from several hundred dollars to several thousand dollars.

According to State Department reports, ethnic minorities suffer the most from corruption. There are reasons to believe that many victims of racial persecution in

Vietnam are among ethnic minorities, especially the Khmer Krom People in the

Mekong Delta. The very disclosure of their qualifications to immigrate to the US—

under various programs such as ODP or HO—are tantamount to an admission of

guilt for cooperation with Vietnam’s enemies. A significant number of Khmer Krom

are currently under house arrest or in hiding.

Since the beginning of the HO and OPD programs there has been little progress

in immigration for the ethnic Khmer Krom. Of the thousands of Khmer Krom of

interest to the U.S., only a handful of cases have been identified and granted exit

visas. Since the first waiver was granted in 1998, the Federation has noted no increase in immigration as measured by Federation Membership.

Human Rights

The first sentence of section 402(a) of the Trade Act of 1974 said that the amendment is ‘‘to assure the continued dedication of the United States to fundamental

human rights...’’ With that in mind, Vietnam’s human rights record does not warrant the waiver of the Jackson-Vanik amendment. Vietnam continues to violate the

human rights of the ethnic minorities, particularly, the Khmer Krom People.

On April 19, 1999, the Vietnamese government issued Administrative Decree 26,

entitled Decree of the Government Concerning Religious Activities. In this 29-articles long decree, the Vietnamese government laid out some serious restrictions on

religious freedom.

Article 20 dictates that ‘‘the consecration of those who carry the title of Abbot in

the Buddhist religion, of cardinals, bishops, administrators in the Catholic Church,

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and of dignitaries of equivalent function of other religions, must receive the approval of the Prime Minister.’’ Article 21 reads that ‘‘the nomination and transfer of clergy, religious and specialists in religious activities must obtain the approval of the Peoples Committee whose

administrative management covers the territory of their activities.’’ Article 24 requires that ‘‘religious organizations and officials, in order to invite to

Vietnam religious organizations and officials from abroad, must obtain the authorization of the Bureau of Religious Affairs.’’ Article 25 dictates that ‘‘in order to organize a particular gathering within a place

of worship, it is necessary to obtain authorization from the President of the Peoples’ provincial committee.’’ It is important to note that human rights violations in Vietnam are not limited

to religious freedom. Three years ago, on April 14, 1997, the Vietnamese government issued Administrative Decree 31, entitled Government Administrative Detainment Policy, which gives the police the power to detain anyone suspicious of ‘‘infringing on the national security’’ for 6 months up to 2 years without trial.

Over one year ago, Reuters reported on 5/20/99 that the government ‘‘has amended its strict press law to tighten state control over official media and set rules that

all reporting must be of benefit to the country.’’ Not only did the government clamp

down on free speech for every citizen, but the Vietnamese Communist Party restricted their own party members’ free speech. On 6/7/99, the Associated Press reported that the Politburo decided to ban party members from ‘‘distributing documents that question party policies and decisions, and may not write anonymous letters or make accusations against people they disagree with.’’

Rather than improving on Human Rights, the GOVN appears to be backsliding

since the first waiver was granted in 1998.

Vietnam Violates Human Rights of Khmer Krom

The Khmer Krom People are the indigenous people of the Mekong Delta of southern Vietnam. They have lived in the Mekong since the first century. They are descendants of the highly advanced Khmer Empire—builders of Angkor Watt. Ethnically distinct, the Khmer have a different language as well.

In 1857 the French, under Napoleon III, placed Cochin China (as they called the

Mekong Delta) under a protectorate. On June 4, 1949, the French ceded Cochin

China to the last Emperor of Vietnam, Bao Dai, without a plebiscite or agreement

of the Khmer Representatives.

The Khmer Krom now number between 8–10 million. During the Vietnam war,

they were loyal allies and fought with great distinction with the US Special Forces

in a dangerous, experimental unit—the Mobile Guerilla Force. Khmer Krom were

not just soldiers—they were elite fighters. Under US Special Forces commanders,

who trained them to fight outnumbered, and outgunned, the Khmer Krom penetrated deep into enemy territory. Without artillery support, or hope of reinforcements, they turned suicide missions into successes. In tribute to their service, General Williams C. Westmoreland cited their discipline, courage, and sacrifice in recovering the black box of the U2 plane that crashed deep in the enemy territory in

1966. The mission was so important to the United States that President Johnson

was immediately notified of its recovery.

There are books and many eye-witness accounts of former US Green Berets providing testimonies for these exceptional soldiers. Now, Vietnam is punishing the

Khmer Krom for their service to the US. The Vietnamese should make peace with

their own people, if they want the fruits of a full relationship with America.

Mr. Chairman,

While hoping to win normal trade relations with the United States, the Vietnamese government continues to violate the US and international Human Rights

laws by destroying the sacred religious sites of ethnic Khmer Krom in Ho Chi Minh

City and many other provinces. I would like to bring to your attention such violations and ask for your help to save the Khmer Krom People from extinction under

the Vietnamese communists.

Culturally, the Khmer Krom culture is under a constant pressure by the ‘‘assimilation’’ policies of the Vietnam government. The Khmer Krom culture, deeply rooted

in Hinayanna Buddhism, is now crumbling. Originally, there were about 700 Khmer

Buddhist temples all over South Vietnam, the former French Cochin-China. However, under the Vietnam government’s hostile policies of assimilation, many temples

have been destroyed. As a result, the Khmer Krom People in those areas have been

uprooted, eliminated or forced to assimilate. The number of Khmer Buddhist temples have been greatly reduced and there are only 560 remaining. Agents of VietVerDate 20-JUL-2000 14:16 May 02, 2001 Jkt 060010 PO 00000 Frm 00069 Fmt 6633 Sfmt 6602 K:\HEARINGS\71553.TXT WAYS3 PsN: WAYS3
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nam Fatherland Front, a branch of the Vietnam communist government, constantly

scrutinize the Khmer Krom temples. They are to dictating the religious practices as

well as changing the built-in characteristics of the Khmer to assimilate the Vietnamese culture.

Evidently, a new building has been funded by Vietnam government to represent

Khmer traditions in the province of Travinh. It has been artistically skewed to deviate from the true Khmer cultural characteristics to impose the Vietnamese culture

upon the Khmer, and mislead the local and international tourists on the Khmer traditions. In many of the Khmer cultural festivities, the Vietnam government has subtly introduced many Vietnamese cultural characteristics, and the Khmer population

are forced to accept them to be part of Khmer traditions.

Recently, the government of Vietnam ordered and had destroyed the centuries old

and sacred religious site of the Khmer Krom People in Ho Chi Minh City. Namely,

it destroyed the sacred Pali School building, and spiritually disturbed the Bodhi

Tree where the remains of Khmer Krom ancestors have been kept for centuries and

paid tribute to every year. The remains of thousands of Khmer Krom fighters,

whose lives were dedicated along with the US Armed Forces during Vietnam War,

also lie under the same Bodhi Tree. The sacred site is at:

Most recently in January this year, in the province of Travinh, the government

of Vietnam ordered all 141 abbots of the province’s Khmer Krom Buddhist temples

to a concentration site in the province. In other provinces of the Mekong Delta, the

Khmer Krom abbots are suffering from similar government tactics. These religious

leaders have been intimidated, humiliated and mentally tortured. Any of the abbots

who dared to even to dream of welcoming the Millennium celebration were threatened with imprisonment. When U.S. Buddhist monks of Khmer Krom ethnic origin

came to visit their former temples and hometown, the Security Department from

Hanoi sent their secret police agents to intimidate and mentally torture them.

The Khmer Krom People in the province of Soctrang are now forced to celebrate

Kathinatean (giving clothing to Buddhist Monks) on the same day. This act has violated of Buddhist principles and practices, which is to celebrate this festival on any

day during the month of November. The UN Human Rights delegation was made

aware of this during their visit in Vietnam in October 1998.

At the millennium celebration January 1, 2000, the Khmer Krom People in Cambodia were blessed with permission from the government of the Kingdom to celebrate the Millennium events. Unfortunately, the Hanoi regime dispatched their secret police agents to intimidate and create psychological nightmares within the

Khmer Krom communities in Cambodia.

During the WWII and after 1975, Human Rights of this minority have been brutally abused by the Vietminh and the government of the Socialist Republic of Vietnam respectively. Their sufferings are parallel to the recent sufferings of the ethnic

Albanians in Kosovo and the East Timor people in Indonesia. As an example, a recent newspaper report on March 16, 1999 about the religious right and freedom in

Vietnam reads as the follows:

GENEVA, March 16 (Reuters)—The United Nations special investigator on religion on Tuesday accused Vietnam of continuing to deny people freedom of worship

and called for reforms.

Abdelfattah Amor, in his report on the situation in Vietnam, said all of the religious communities there were prevented from conducting activities freely....

‘‘Religion appears as an instrument of policy rather than a component of society,

free to develop as it wishes, something which is ultimately contrary to freedom of religion or belief as governed by international law,’’ said Amor, a former dean of the

University of Tunis law faculty who visited Vietnam in October.

Clearly, the Khmer Krom People’s ability to exercise their religious freedom has

been hindered by the Vietnam government.

Economically, the Khmer Krom are indigenous and land is the main source of

their viability. Since their land has been encroached on and occupied by the Vietnamese in the past, such activities continue. Thus, their only economic resource is

shrinking. Their economic status has been reduced from landowners to physical laborers earning less than the equivalent of $1.00 U.S. dollar per working day. They

are living ten-fold below the poverty level, but the government of Vietnam constantly prevents any international organizations from observing these facts or to

help these people. The Khmer Krom People, whose farmland is the only vital source

for their sustenance, have been deprived and deceived by land policies of the Vietnam government and, as a result, over 95% of Khmer Krom are living in harsh conditions below the poverty level, without stable jobs and without sufficient food and

medicine.

According to a recent Associated Press reported from Hanoi on Wednesday, December 09, 1998: the Khmer Krom people have only about 309 pounds of foods for conVerDate 20-JUL-2000 14:16 May 02, 2001 Jkt 060010 PO 00000 Frm 00070 Fmt 6633 Sfmt 6602 K:\HEARINGS\71553.TXT WAYS3 PsN: WAYS3
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sumption per year per person which is only 50% of the average availability of food

to a Vietnamese. According to a Vietnamese weekly paper, the Trong Dong (Silver

Drum) reported in Southern California on Friday, November 27, 1998: to alleviate

starvation, the Khmer Krom of Travinh province (of Vietnam) have to sell their

blood... There seems to be no genuine effort of the Vietnam government to develop Khmer

Krom People economically. Therefore, education for the Khmer Krom children is

poor both in the percentage of students attending grades schools and higher education. According to our records, no Khmer Krom students have been allowed to

study abroad. According to Deutsche Presse-Agentur, reported from Hanoi on Friday,

November 13, 1998: only 20 students of Vietnam’s millions of ethnic minorities have

been selected to attend higher education. This demonstrates that the Khmer Krom

and other minorities are not allowed to have opportunities to live their lives in the

modern society. Their future is now at stake.

A newspaper published inside Vietnam, Tien Phong (The Pioneer) dated 5/9/

1999 has identified some of the wide-spread and typical abuses of Vietnamese officials toward the Khmer Krom farmers by robbing their land, their crops or their

house:

1) On January 25,1999 Mr. Nguyen Viet Khoi, a Vietnamese police captain in the

city of Soctrang, robbed the farmland from a Khmer Krom family (Mr. Ly, Senh),

then imprisoned Mr. Ly for 3 years, his wife and his 4 adult children at lighter terms

in prison.

2) A Khmer Krom farmer, Phuong Thi Lan Anh of Thanh Quoi, My Xuyen,

Soctrang, her house was robbed by a Vietnamese official and she became homeless.

3) Mr. My Dinh of Nham Lang, Soctrang, a Khmer Krom farmer, his land was

robbed by a Vietnamese official after he left his hut to attend a Buddhist religious

service at the temple.

4) On August 10, 1999 Mr. Tran Van Thach, a Vietnamese police major in

Soctrang, robbed Mrs. Phen, a Khmer Krom farmer, of all her 10 tons of grains she

had harvested to feed her family for the entire year.

The Vietnamese communist government in 1976, and again recently, have murdered, imprisoned and persecuted the Khmer Krom people, including political and

religious leaders and the general public in order to expedite its assimilation policies

of minorities. Additional examples of blatant violations on the basic human dignity

and freedom of the people of Khmer Krom are as follows:

The Khmer Krom People’s civic and religious leaders who have been murdered by

Vietnam Communist government included: Dr. Son Ngoc Thanh, Senator Son Thai

Nguyen, Mr. Son Thuong, Ven. Kim Sang, Ven. Lam Em, Ven. Thach Phok, Ven.

Thach Ret, Ven. Yim Rong, Ven.Thach Ngos, Ven. Kim Toc Chuong, and countless

numbers of others.

The Khmer Krom People’s children have been discriminated against in education

and since the Vietnam government provides them with no real venue for advancement, a minimum number of them are being able to get access to higher education

in Vietnam, and none of them are being sent to study abroad, where sources of modern technology have originated and developed.

Conclusion:

The Khmer Krom People who are now poor farmers, do not live in the city or the

urban areas where UN officials, foreign diplomats, news-agencies, or international

organizations frequently visit or are stationed. They bravely served in the U.S.

armed forces during the Vietnam war, and because of their ethnic and religious

background the government of Vietnam has severely abused their human rights,

and their sufferings have never been heard of by the international community.

On behalf of the Khmer Krom People, the Khmer Krom Federation recommends

that the waiver be extended only after Vietnam agrees to:

1) Comply with U.S. laws, Charter of the United Nations, the Universal Declaration of Human Rights and Minorities Rights, and respect the rights of Khmer Krom

People and others in Vietnam;

2) End forced assimilation of the Khmer Krom People and other ethnic minorities,

stop planting communist agents as religious leaders in the Khmer Krom Buddhist

temples and let the Khmer Krom Buddhist monks elect their own leaders without

interference from GOVN;

3) Stop persecuting the Khmer Krom veterans who formerly fought side by side

with the U.S. Armed forces during the Vietnam War and now are living in Vietnam;

4) Provide equal access for job opportunities to Khmer Krom;

5) Allow Khmer Krom students from Vietnam to attend U.S. universities and

allow more visas for students from Vietnam to allow access to U.S. colleges and universities;

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6) Stop interfering with curriculum and education programs of the Khmer language for Khmer Krom children. Let the Khmer Krom children learn the authenticity of Khmer language, not the new language designed by the government of Vietnamese Communists to brainwash the Khmer Krom children and keep them from

learning the real Khmer language;

7) Allocate a 10% quota on products and services from Vietnam that are being

allowed access to U.S. markets in such ways that products and services must be produced or served by Khmer Krom workers and/or Khmer Krom owned businesses;

8) Permit international organizations and/or U.S. non-governmental organizations

to consider providing their services for the Khmer Krom people in the Mekong Delta

areas of Vietnam;

9) Distribute equally international aid of any form to the Khmer Krom and minority people in Vietnam;

10) Yield a portion of the aid from the U.S. Department of Agriculture to Vietnam

for assisting the Khmer Krom farmers to:

a) Educate with know-how techniques to increase crop yields by such measures

as rotating agricultural products;

b) Make available directly to Khmer Krom farmers the chemicals for plant nutrition, pest control and fertilizers; and

c) Provide capital for equipment and technological assistance and expertise to

Khmer Krom peasants and merchants;

11) Allow the U.S. Embassy in Hanoi and the U.S. Consulate in Ho Chi Minh City

to freely monitor the human rights for the Khmer Krom and other ethnic minorities

in Vietnam;

12) Ask the United Nations High Commissioner for Human Rights to establish

UN offices in the Mekong Delta areas to monitor human rights abuses against the

Khmer Krom people;

13) Return all properties that the government of Vietnam or its agents have confiscated from the Khmer Krom people in all provinces of South Vietnam, including

but not limited to lands, buildings, religious sites, cultural centers, etc.; and

14) Stop forcing the Khmer Krom in the province of Soctrang from having to celebrate the Katinatean on the same day in the entire province.

Statement of Hon. John McCain, a United States Senator from the State of

fArizona

As the United States and Vietnam work to resolve the remaining obstacles to the

conclusion of a bilateral trade agreement, I am pleased to submit this statement

supporting extension of the Jackson-Vanik waiver for Vietnam.

I have strongly supported the process of normalizing economic and diplomatic relations with Vietnam over the past decade. My support for closer ties between our

two countries has always been premised on my belief, which has been affirmed by

the process of normalization, that our interests in Vietnam are served not by isolating that country but by working together in areas where we agree and by lobbying earnestly for change in areas where we differ.

Such an unsentimental, dispassionate approach to a bilateral relationship burdened by the weight of history has paid dividends. Our POW/MIA accounting work,

which I will discuss further below, has accelerated dramatically over the course of

the past decade, with the result that hundreds of American mothers, fathers, wives,

sons, and daughters know the fate of their lost loved ones—a fate grievously unknown to them during the period when we sought to isolate Vietnam rather than

seek its government’s cooperation on the search for our missing personnel. Hundreds of American companies are doing business in Vietnam, and the bustling commercialism of Ho Chi Minh City and other urban centers serves as a reminder that

although we lost the war, Western influence in Vietnam is pervasive and growing.

Moreover, our refugee assistance programs in Vietnam have been quite successful.

It is those refugee programs, in the context of the broader bilateral relationship,

that we gather to review today.

As we all know, the Jackson-Vanik amendment exists to promote freedom of emigration from non-democratic countries. The law calls for a waiver if it would substantively enhance opportunities to emigrate freely. Opportunities for emigration

from Vietnam have clearly increased since the President first waived the JacksonVanik amendment in 1998. The waiver has encouraged measurable Vietnamese cooperation in processing applications for emigration under the Orderly Departure

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Program (ODP) and the Resettlement Opportunity for Vietnamese Returnees agreement (ROVR).

The best measure of the Jackson-Vanik waiver’s success is the thousands of Vietnamese who have freely emigrated to the United States since the President first

waived the Jackson-Vanik amendment in 1998. Then, 3,754 Vietnamese had departed for the United States through ROVR; today, 15,886 have done so. Then,

2,461 former re-education camp detainees had not been cleared by the government

of Vietnam for interview with American officials; today, that number has been reduced to 750. Then, the Vietnamese government was denying U.S. officials access

to Montagnards potentially eligible for refugee resettlement; today, all but 408

Montagnards identified as eligible for interview have been cleared by the Vietnamese government for processing by the United States.

The Jackson-Vanik waiver is working, as measured by its inducement of Vietnamese cooperation with our refugee resettlement objectives. We are approaching

completion of many refugee admissions categories under the Orderly Departure Program, bringing to an end a historic process that has allowed over half a million Vietnamese to emigrate to the United States since the 1980s. The Vietnamese government has agreed to help implement the resumption of ODP processing for former

U.S. government employees, which we suspended in 1996. The United States is also

implementing a new, in-country refugee program to assist those Vietnamese who

have suffered or who fear political or religious persecution.

The Jackson-Vanik waiver has given momentum to this process. Revoking the

waiver would likely stall this momentum, to the detriment of those who seek to emigrate.

The Jackson-Vanik waiver has also allowed the Overseas Private Investment Corporation (OPIC), the Export-Import Bank (EXIM), and the Department of Agriculture (USDA) to support American businesses in Vietnam. Competitors from other

industrialized countries have long had the benefit of lending and insurance guarantees provided by their own governments. Withdrawing OPIC, EXIM, and USDA

guarantees would hurt U.S. businesses and slow progress on economic normalization. It would reinforce the position of hard-liners in Hanoi who believe Vietnam’s

opening to the West has proceeded too rapidly.

We should also be prepared to approve a U.S.-Vietnam bilateral trade agreement

once it is completed. Having visited Vietnam regularly since 1985, I can attest to

the changes in Vietnamese society that have resulted from the limited economic reforms adopted by the government. Although it is a long-term prospect, I take seriously the proposition that the growth of the middle class and greater exposure to

Americans as a result of deepening economic ties between our countries will render

Vietnam more susceptible to the influence of our values.

A number of outstanding differences continue to stand in the way of closer U.S.-

Vietnam relations. Human rights, including the freedom to speak, assemble, and

worship, remain subject to the whims of political leaders in Hanoi. Political and economic reforms lag far behind American expectations. Our companies operating in

Vietnam suffer from bureaucratic red tape and corruption.

I harbor no illusions about the human rights situation in Vietnam. There is clearly room for significant improvement. The question is how best to advance both the

cause of human rights and U.S. economic and security interests in Southeast Asia.

The answer lies in the continued expansion of U.S. relations with Vietnam despite

our continuing differences with the regime in Hanoi, which is struggling to define

the terms of Vietnam’s relationship with the United States.

The choice is Vietnam’s. For our part, we can best influence that debate by institutionalizing our bilateral trading relationship, working together on areas of mutual

interest in regional economic and security affairs, gingerly moving forward on military-to-military ties, continuing our human rights dialogue and other efforts to build

needed respect for individual freedoms and the rule of law, and cooperating in the

search for our missing personnel.

Although the Jackson-Vanik waiver does not relate directly to our POW/MIA accounting efforts, Vietnam-related legislation often serves as a referendum on broader U.S.-Vietnam relations, in which accounting for our missing personnel is the

United States’ first priority. Thirty-nine Joint Field Activities conducted by the Department of Defense over the past seven years, the consequent repatriation of 288

sets of remains of American military personnel during that period, and resolution

of the fate of all but 41 of the 196 missing Americans last known alive in Vietnam

attest to the ongoing cooperation between Vietnamese and American officials in our

efforts to account for our missing service men. Such cooperation served as an important motivation for Secretary of Defense William Cohen’s historic visit to Vietnam

in March of this year. I am confident that such progress will continue.

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Just as the naysayers who insisted that Vietnamese cooperation on POW/MIA

issues would cease altogether when we normalized relations with Vietnam were

proven wrong, so have those who insisted that Vietnam would cease cooperation on

emigration issues once we waived Jackson-Vanik been proven wrong by the course

of events since the original waiver was issued in 1998.

It is important to stress that the Jackson-Vanik amendment relates narrowly to

freedom of emigration. It does not relate to the many other issues involved in our

bilateral relationship with Vietnam, although rejecting the waiver would likely have

an adverse effect on other American interests there. The Jackson-Vanik waiver is

a tool we can selectively use to encourage free emigration. The waiver has contributed to that objective in Vietnam. At a minimum, using it as a blunt instrument

to castigate the Vietnamese government for every issue of contention between our

two countries will not advance America’s interest in free emigration from Vietnam

and may well have broader, if unintended, implications.

Whatever one may think of the character of the Vietnamese regime, such considerations should not obscure our clear humanitarian interest in promoting freedom

of emigration from Vietnam. The Jackson-Vanik waiver serves that interest. Congress should support it.

Statement of Rong Nay, Montagnard Human Rights Organization,

fGreensboro, NC

My name is Rong Nay and I am the Assistant Director of the Montagnard Human

Rights Organization, representing the Montagnard people living both in the United

States and in the Central Highlands of Vietnam.

I would like to thank Congressman Crane and the Members of the Trade Subcommittee for the opportunity to share our feelings about the plight of the

Montagnards that relate to the Jackson-Vanik amendment, free emigration and

trade with Vietnam.

Mr. Chairman and Members of the Subcommittee, on June 18, 1998 and June 17,

1999 we strongly testified against the Jackson-Vanik Waiver for Vietnam for the following reasons:

• The Vietnamese government continues carrying out a policy of punishment and

discrimination against the Montagnard people in the Central Highlands of Vietnam.

• The Vietnamese government continues to deny all basic human rights of the

Montagnard people, and it maintains a policy of Cultural Leveling to force the

Montagnards into extinction. For example, Montagnard languages can not be spoken or taught in school, and the Vietnamese government has destroyed Montagnard

religions. All Montagnard churches in the Central Highlands have been closed since

1975 and it continues to prohibit religious freedom by controlling the activities of

the Montagnard Protestant Church. Even the right to conduct religious services in

our home is also denied. Violations of this nature result in extremely harsh reprisals.

• The Vietnamese government has not made sufficient progress towards a free

emigration policy to warrant the waiver. A large number of eligible applicants has

been denied exit permits or has not been processed because they were former

FULRO movement families, former U.S government employees or religious leaders.

Besides administrative roadblocks, pervasive corruption at all levels of government creates additional obstacles to free emigration. In many instances, applicants

to U.S. resettlement programs are demanded huge amount of money that the

Montagnard people cannot afford. This in effect violates the spirit of the JacksonVanik amendment and also is against the law and policy in the United States.

The Montagnards have been blocked from international humanitarian aid groups

since the collapse of South Vietnam in 1975. Several hundred foreign NGOs were

permitted in Vietnam for relief and development efforts, but no American and almost no other foreign humanitarian aid agency is permitted in the Central Highlands for the Montagnards. Efforts to deliver aid to Montagnards in the villages almost always fail because of corruption within the province people’s committees.

The Vietnamese government maintains ‘‘Restricted Areas’’ in the Central Highlands where elderly Montagnards of past US loyalties are kept and denied medical

treatment. No foreigners are allowed access into these areas. No one in the world

would know that they intentionally do it. But this is being done secretly.

Mr. Chairman and Members of the Subcommittee, we are here in Capitol Hill,

Washington DC, a world far away from the Central Highlands of Vietnam. We are

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honored to have our voice heard again today, and we strongly inform you that the

Vietnamese government has not changed their policy since 1975.

Our Montagnard people have been cheated and discriminated for many years in

Vietnam, but now we are being told to bribe, cheat, and split up our families so that

some of us will have a chance for freedom in America. The Vietnamese government

asks many refugees to act as secret agents of their government to inform them

about the activities of our communities here in the U.S. They use fear to control

our people.

When many Montagnards from the U.S. go back to Vietnam to visit their families,

the local police government of Vietnam forces them to present themselves at the police office and investigates them with many questions about the Montagnards living

in U.S. Most questions are about the former leaders of the Montagnard community.

They are warned not to say anything to their family about the life in the U.S. How

can the U.S. citizenship be forced to do this? This is not free travel or the spirit

of free emigration.

In addition, the police have to follow them everywhere during their vacation day

by saying that: ‘‘We have to protect you,’’ but the U.S citizen has to feed and pay

them for their police service. This is not free travel or free emigration.

We are the survivor groups of the Montagnard people living in the U.S. who strive

to uphold the human dignity of the Montagnard living in the Central Highlands

whose voices remain silent behind closed borders. Today, we are honored to have

our voice heard, to speak, to stand for the Montagnards whose rights have been

stripped away, and to present their situation to the people of the United States. We

fought for freedom and independence against the Hanoi’s violations, assimilation,

and extermination of the Montagnard people. We pray that the Hanoi government

will hear our true voice:

Why do we have no rights to live as human beings?

Why we cannot get our families out of Vietnam?

Why we cannot worship our Christian faith freely?

Why we cannot receive humanitarian aid and NGOs in the Central Highlands?

Why we cannot have the same opportunities in education and development as Vietnamese people?

Today, We ask only to be treated as human beings. We love our families and our

children just the way the Vietnamese do.

The intention of the Jackson-Vanik Admendmen is to promote free emigration,

but our Montagnard people continue to suffer separated from love ones. The Hanoi

government writes FULRO anti-Revolutionary on the paperwork of the Montagnard

people. This technique is to stop our relatives to emigrate to the U.S. Yes, FULRO

was the Montagnard resistance movement, but it no longer exists. The war is over

and our families should be together. We now struggle peacefully. The day of our

freedom and independence is gone. We are a broken people, but we can stand up

with hope and dignity.

The United States government is the only hope to get our Montagnard people out

of Vietnam and help our Montagnard people who remain in the Central Highlands

to have the rights to live and have the opportunity to develop their lives.

I beseech you on behalf of those whose cry has been silenced to help us end the

cultural genocide that has pushed the Montagnard people of South Vietnam to the

brink of extinction. Our people are hiding in fear or rotting in unmarked graves.

We are not free to live in our own land, we are poised at the threshold of extinction

and without help, the Montagnard will become swallowed up by their oppressors

and disappear as a distinct people forever

The Jackson-Vanik Waiver should not be renewed until free emigration and

Human Rights are respected. We believe that Free Trade should only be with a government that honors free emigration and basic human rights.

Thank you so much for the privilege of presenting my testimony

Statement of Dolores Apodaca Alfond, National Alliance of Families,

fBellevue, WA

We thank the committee for the opportunity to submit this statement for the

record. We do this knowing full well that the decision to extend the Jackson-Vanick

waiver as it applies to Vietnam has already been made.

Sadly, our nation is now lead by a group of hypocrites. Men and women who decry

human rights violations, unless there is a profit to be made. Men and women who

are now willing to strip our servicemen of a POW designation, should they become

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captured in an ‘‘Operation other than War,’’ and turn them into ‘‘isolated personnel.’’

That’s the new terminology currently used at the Department of Defense, ‘‘isolated

personnel’’ and ‘‘operations other than war.’’

The National Alliance of Families for the Return of American’s Missing Servicemen continues to be concerned with Vietnam’s failure to provide information concerning our servicemen Prisoner and missing as a result of the War in Southeast

Asia. In previous hearings, we provided indisputable evidence that Vietnam was

salting recovery sites. We also provided extremely compelling evidence that one

man, Army Captain John Mc Donnell, was alive in a POW camp in February 1973.

Captain McDonnell is still among the unaccounted for. Where is Vietnam’s ‘‘full cooperation?’’ The answer is simple. It doesn’t exist. This administrations’ claim of Vietnamese ‘‘full cooperation’’ is a myth created to justify trade with a nation that continues to withhold the truth regarding our POW/MIA’s.

Another myth created to justify trade with Vietnam is their progress in the area

of human rights. Vietnam continues to be an oppressive communist dictatorship.

Human rights violations are rampant. All recognized Human Rights organizations,

worldwide, continue to condemn Vietnam for its’ oppression of religious freedom and

freedom of speech. Yet, the United States turns a blind eye to these gross violations,

and cites the very minimal changes occurring in Vietnam as progress that should

be rewarded.

Would this Congress reward a man who beat his child seven days a week, because

he scaled back and only beat that child six days a week? Of course not. Yet, this

Congress continues to reward Vietnam, while they continue to withhold POW/MIA

information and they continue their human rights violations.

Our expanded aid and trade with Vietnam has not opened Vietnam to democracy.

It has not substantially reduced the incidents of human rights violations. Vietnam

is still ranked high on the list of Amnesty International for their Human Rights violations. Nor, has our expanded trade succeeded in opening all of Vietnam’s records

on American POW/MIAs. Vietnam remains a closed society, oppressing its’ people

and doling out POW/MIA information as it suits their needs.

Let’s be honest as to why we are granting another extension to the JacksonVanick wavier, as it applies to Vietnam. The reason is simple. Big Business profits

and when profits factor into a decision principle goes out the window.

Just as we turned a blind eye to human rights violations in China, we now turn

that blind eye to the human rights violations in Vietnam. We do this not to expose

Vietnam, and other oppressive countries such as China, to western democracy. We

do this so that corporate America can manufacture sneakers or jackets for under

$2.00 and sell them for well over $100.00.

Extending the Jackson-Vanick waiver, as it applies to Vietnam, is NOT about

human rights of the Vietnamese people. It is NOT about seeking the truth about

our POW/MIAs. It is NOT about morality. It’s about profit and we should at least

be honest about it. We should also be ashamed.

Over six years after the United States initiated the normalization of economic re-

[Attachments are being retained in the Committee files.]

Statement of Sandra J. Kristoff, New York Life International, Inc.

f lations with Vietnam, that process—at once technical, emotional, and of great consequence for both countries—appears to be drawing nearer to a conclusion. New

York Life International welcomes this opportunity to reiterate its conviction that

full normalization is profoundly important to the economic and national security interests of the United States. We hope that the remaining steps in the normalization

process can be completed as quickly as possible, and we urge the Subcommittee, and

the House as a whole, to advance that process by accepting the President’s renewal

of the Jackson-Vanik waiver for Vietnam for another year.

Our company, along with so many others in the American business community,

sees tremendous commercial potential in Vietnam. There is no question that a country of some 80 million industrious people represents a singularly attractive market

for life insurance and many other American goods and services. At the same time,

it is equally clear that New York Life’s ability to compete effectively in Vietnam

rests squarely on the existence of a fully normalized trading relationship between

the United States and Vietnam, including the legal framework provided by a bilateral trade agreement. With our Asian, European, and other competitors already actively engaged in the Vietnamese market, it would be a major understatement to

73

say that New York Life is anxious for a rapid conclusion to the normalization process. New York Life deeply appreciates the hard work that negotiators from both the

United States and Vietnam have devoted to the conclusion of a bilateral trade

agreement. Our U.S. negotiators have done a superb job in pursuing an agreement

that is comprehensive, commercially meaningful, and will advance Vietnam’s integration into the global economic community, including the World Trade Organization. The Vietnamese, for their part, have approached this negotiation as an opportunity to advance their country’s economic development through greater competition

and the rule of law.

The results of these efforts were evident in the preliminary agreement that was

reached last summer. We know, of course, that this ‘‘agreement in principle’’ has

not been without controversy in Hanoi. We fully appreciate that the commitments

contained in the preliminary agreement were bound to generate much debate in

Vietnam’s economic policy circles.

Nevertheless, we support the position of Ambassador Barshefsky and her negotiators to stand by last summer’s ‘‘agreement in principle’’ as the basis for moving

towards a final agreement. The elements of a deal remain in place, and we are very

much encouraged by recent signs that the two sides are working to finalize this

technically difficult process.

Certainly where life insurance and other financial services products are concerned, the agreement in principle would have a major impact in expanding the

ability of companies like New York Life to compete in the Vietnamese market. The

agreement reportedly is based extensively on the disciplines that exist within the

WTO’s General Agreement on Trade in Services. We anticipate that Vietnam’s com- mitments to these disciplines would be phased in over a 6-year period, bringing

about a much more transparent and predictable framework for doing business in

that country’s life insurance market.

Since the lifting of the embargo and the beginning of political normalization, the

United States and Vietnam have made great strides in healing painful divisions and

building a productive dialogue. Many Members of Congress deserve enormous credit

for their role in moving the relationship forward. The Administration has worked

diligently to strengthen bilateral ties, while vigorously addressing important issues

such as the POW/MIA effort. New York Life has especially appreciated the tremendous skill and credibility Ambassador Peterson has brought to managing the relationship in Hanoi.

In addition, the American business community has also played a prominent role

in strengthening the friendship between the two countries, and New York Life

International is proud to have been a part of that effort. In this 25th anniversary

year of the conclusion of the Vietnam War, our company is convinced that the time

is ripe to bring the normalization process to its full conclusion. Our involvement in

Vietnam to date persuades us that full economic engagement is the right way to

achieve the U.S. interest in a stable, prosperous, and progressively freer society in

Vietnam.

We remain hopeful that the two governments will conclude the bilateral trade

agreement rapidly, so that Congress can consider and approve that agreement by

the end of its current session. That outcome clearly will require significant efforts

on the part of everyone involved. But the costs of allowing the normalization process

to slide into another year are considerable, both for American business interests and

for the broader national interest in placing U.S.-Vietnam relations firmly on a new

track.

In the interim, it is vitally important that Congress allow the current JacksonVanik waiver to remain in effect for another year, as the President has proposed.

While the waiver currently does not allow for the extension of NTR status, the programs that are available by virtue of the waiver, including those of OPIC and the

Ex-Im Bank, are making important contributions to the expansion of an American

commercial presence in Vietnam.

More importantly, the waiver sends a signal of engagement that is essential to

ensuring continued progress in all areas of the relationship, including with regard

to the ongoing trade negotiations. In particular, renewal of the waiver will provide

a critical message of support for the ongoing process of economic reform and liberalization in Vietnam. While that reform effort has not always progressed as swiftly

or as smoothly as we would like, a rejection of the Jackson-Vanik waiver would certainly be seized upon by opponents of reform as an excuse to reverse the considerable progress achieved during the last decade.

New York Life International is grateful for the Subcommittee’s interest in U.S.-

Vietnam economic and commercial relations. We hope that members of the Subcommittee will join us in urging officials of both the U.S. Administration and the

74

Vietnamese Government to ‘‘seize the moment’’ by rapidly concluding the bilateral

trade agreement.

Statement of Bruce R. Harder, Veterans of Foreign Wars of the United

fStates

Mr. Chairman and Members of the Subcommittee:

The Veterans of Foreign Wars of the United States is pleased to be able to make

a written statement for the record.

This statement is the written testimony of Bruce R. Harder, Director, National

Security and Foreign Affairs of the Veterans of Foreign Wars of the United States.

We understand that the purpose of today’s hearing is to evaluate U.S. trade relations with Vietnam and to consider President Clinton’s renewal of Vietnam’s waiver

under the Jackson-Vanik Amendment to the Trade Act of 1974.

This written testimony presents the VFW leadership’s views on the impact of the

President Clinton’s 12-month renewal of Vietnam’s waiver under the Jackson-Vanik

Amendment to the Trade Act of 1974. The VFW’s remarks are limited to describing

the effect that the President’s action is expected to have on the Prisoner of War

(POW) and Missing in Action (MIA) issue that resulted from the Vietnam War.

Our opinion is based on a recent VFW leadership trip to Southeast Asia that took

place from March 18th to April 2, 2000. The VFW delegation included: the Senior

Vice Commander-in-Chief, John F. Gwizdak, Junior Vice Commander-in-Chief

James N. Goldsmith, Past Commander-in-Chief Billy Ray Cameron, and Director,

National Security and Foreign Affairs, Bruce R. Harder. On the fact-finding trip, the

VFW delegation visited Thailand, Laos, and Vietnam.

The purpose of the trip was to collect facts, receive update briefings, meet key personnel, discuss progress on POW/MIA accounting directly with them, and make an

assessment of the POW/MIA accounting effort in Southeast Asia. Our national officers traveled to Southeast Asia to demonstrate our continuing commitment to the

‘‘fullest possible accounting’’ process for Missing Americans from the war. We traveled to Southeast Asia to gain first hand experience and listen to key U.S. and foreign government officials and foreign veterans’ organizations.

On the trip, the VFW delegation met with top level U.S. government personnel

in each country. Our visit included office calls with the either the U.S. Ambassador

or Chargé de Affairs in the case of Lao P.D.R.; the Commanders of Joint

Task Force Full Accounting Detachments One (Thailand), Two (Vietnam), and Three

(Laos); the Commander of the JTF–FA Joint Field Activity (JFA 00–3L) in Laos,

and other key U.S. diplomats and U.S. military personnel. In addition, the VFW delegation spent three days in the field working out of the Ban Along Base Camp in

Southeastern Laos on a Joint Field Activity searching for remains of missing Americans from the war. As in the past, we found the Americans deployed under the command and control of Joint Task Force-Full Accounting including teams from the

Army’s Central Identification Laboratory Hawaii to be highly motivated, dedicated,

and focused on the mission.

Furthermore, the VFW delegation met with Lao and Vietnam veterans group officials and high-level foreign government officials in Laos and Vietnam to include the

Director of the Vietnamese Office for Seeking Missing Personnel. We wanted to

make sure that the key officials in each country understood that accounting for our

missing comrades is still a priority issue with the VFW. Our views are based on

experience gained during our recent visit, and from additional research and interviews conducted by the VFW.

The POW/MIA issue has been and remains a priority issue with the Veterans of

Foreign Wars of the United States. VFW Resolution Number 443, ‘‘Americans Who

Are Prisoners of War or Missing in Action,’’ provides the VFW’s policy on the POW/

MIA issue as it relates to those Americans unaccounted-for from all our nation’s

past wars. Our policy is broken down into two simple goals. The VFW’s first goal

is to reach the fullest possible accounting of Americans missing from all our nation’s

past wars. Our second goal is to urge the President of the United States of America

and every member of the Congress to speak out on every occasion to expedite the

return of those U.S. servicemen who are still unaccounted for from all our nation’s

past wars. To the VFW, full accounting means the return of either a live American

serviceman or his identified remains to this country and his family for proper military burial with full honors.

With 2,020 (1,517 in Vietnam) Americans still missing from the War in Southeast

Asia, the government still has much work to do before the accounting process is

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complete. The VFW supports the current U.S. government effort to achieve the fullest possible accounting effort for those Americans who did not return home from our

nation’s past wars, but we believe that more can be done to accelerate the accounting effort. For example, assigning additional personnel and providing additional financial resources to the U.S. Army Central Identification Laboratory Hawaii can accelerate the accounting process. In addition, the Defense Prisoner of War/Missing

Personnel Office should be fully staffed and excluded from any planned Department

of Defense personnel or structure reductions. Finally, we should encourage Lao

P.D.R. government leaders to remove the personnel cap that limits the number of

Americans in country to 40 during joint field activities. In theory, if the Lao government allowed the U.S. to double the size of our JFA personnel, we could double the

pace of the accounting process in Laos. Because of environmental factors and other

issues such as aging witnesses, the longer the process, the more difficult the task

of accounting becomes.

The VFW believes that it plays an important role in staying engaged with the

U.S. government and other organizations on the POW/MIA issue. We closely review

the government’s program, policy, and activities for accounting for Americans who

remain ‘‘unaccounted-for’’ from all of our nation’s past wars. As one of the largest

and most respected veteran’s organizations, we believe it is our responsibility to

closely monitor activities and developments in the POW/MIA area and to take an

active role when it is appropriate.

I am responsible for keeping our National POW/MIA Committee, our Department

POW/MIA Chairmen, and our national leaders informed on the POW/MIA issue. We

accomplish our goals by staying in frequent contact with the Defense Prisoner of

War/Missing Personnel Office (DPMO), and other veteran and family organizations

on the issue. In addition, I closely monitor the news media and stay in regular contact with State Department representatives on issues related to POW/MIA accounting.

The VFW has been making trips to Vietnam since July 1991. On our first trip

VFW officials accompanied Congressman Lane Evans of Illinois and representatives

of other Veterans Service Organizations to visit Hanoi, Hue City, and Ho Chi Minh

City. Since that first visit, the VFW has made regular annual visits back to Southeast Asia. In 2000 VFW representatives will visit Vietnam and Thailand on two separate occasions, and Laos on one occasion. Our mission on every trip to Southeast

Asia has been the same. We urge both U.S. Government and foreign government

officials and their veteran’s organizations to diligently work toward resolving the

cases of Americans missing from the war in Southeast Asia. The VFW sends national officers to Southeast Asia each year to help remind all involved that the mission is not yet completed. We will not rest until the mission is accomplished and

our missing comrades are accounted for. We will not forget those who were left behind. Our goal is to bring home every missing American warrior.

Our trips to Vietnam have occurred both before and after the trade embargo was

lifted and diplomatic relations were established. Since the establishment of diplomatic relations between the United States and Vietnam, we have not seen any decrease in the effort to account for our missing men on the part of either the U.S.

or Vietnam. On our visit to both Vietnam and Laos this year, we saw no evidence

that current U.S. government policies on trade were having a negative effect on the

MIA accounting process.

We believe that current U.S. trade policies towards Vietnam have resulted in both

gradual improvements in U.S.-Vietnamese relations in general and proportional improvements in Vietnamese cooperation in efforts to account for missing Americans

from the war. A few examples of better overall U.S.-Vietnamese cooperation are

taken from the VFW report of our most recent visit to Southeast Asia in March–

April 2000.

The following conclusions from our trip report are offered as a result our discussions, meetings, and observations during the subject visit:

Our report states, ‘‘In Vietnam, on the issue of unaccounted for Americans from

the War in Southeast Asia, my conclusion is that the Vietnamese government appears to be cooperating ’in good faith’ with the U.S. government in working to resolve the issue. However, there is always room to improve the process.’’

Evidence that Vietnamese cooperation is happening is as follows:

a. The Vietnamese government primarily assists the U.S. accounting effort with

the Vietnamese Office for Seeking Missing Personnel (VNOSMP) which is part of

their Ministry of Foreign Affairs. Also, it has established a unilateral program to

distribute information about missing Americans to Vietnamese citizens.

b. The VNOSMP has made significant improvement in terms of the quality of

their Unilateral Investigations over past several years. Since April 1996, Vietnam

has conducted 15 unilateral investigations. The results of these unilateral investigaVerDate 20-JUL-2000 14:16 May 02, 2001 Jkt 060010 PO 00000 Frm 00079 Fmt 6633 Sfmt 6602 K:\HEARINGS\71553.TXT WAYS3 PsN: WAYS3
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tions have been delivered to JTF–FA. In April 1999, Vietnam presented comments

on the over 600 ‘‘no further pursuit’’ cases. VNOSMP says it will invest more time

and personnel to unilateral operations to meet the desires of the American Congress, families of the missing, and veterans’ organizations.

c. The Vietnamese Office for Seeking Missing Personnel told us that they regularly receive information from Vietnamese citizens about missing Americans and

share that information with JTF–FA Detachment. Two.

d. VNOSMP cooperated and worked closely with DPMO to provide information to

help complete the DPMO ‘‘Remains Study’’ which was published on June 14, 1999.

According to DPMO, the Vietnamese participated in the effort to an unprecedented

degree, sharing insights with U.S. analysts, facilitating interviews with Knowledgeable sources, conducting investigations when asked, and turning over documents in

response to requests. DPMO is continuing to seek more data about the extent and

limits of Vietnam’s collection of American remains. The process of seeking additional

information on the remains issue continues.

e. VNOSMP obtains access for JTF–FA research and investigative teams.

f. VNOSMP says that it fully understands the importance of documents to the

U.S. identification process. They claim to have provided more than 160 documents

to the U.S. government that are related to missing American servicemen. Mr. Hung

said that VNOSMP stands ready to do more and continues the search for additional

U.S. MIA related documents.

g. Vietnamese officials have agreed to focus their efforts on the 41 Last Known

Alive cases. According to VNOSMP, joint investigations have resulted in determining that 155 individuals from the original Last Known Alive list of 196, have

died. In April and August 1999, two technical meetings were held in Hanoi during

which the most capable U.S. and Vietnamese specialists exchanged information and

discussed ways to investigate the remaining cases.

h. VNOSMP said Tri-lateral Operations (U.S./Vietnam/Laos) have been successful.

To date, Vietnam has sent 33 Vietnamese witnesses to Laos to participate in investigations involving 31 cases. The investigations have resulted in identifying 11 potential burial sites. In addition Vietnamese witnesses have traveled to Cambodia to

take part in the investigation of 4 cases. This resulted in the successful excavation

of one case. Vietnamese documents and witnesses are one of the best potential

sources for resolving many cases of missing Americans in Laos and Cambodia. The

Vietnamese have agreed to continue cooperative Tri-lateral efforts, especially with

Laos.

i. The Oral History Program and document turnover have been relevant for case

investigation and resolution. From January 1992 to the present, 245 oral history

interviews were completed. Vietnamese officials promised continued cooperation in

the search for additional documents, and said they have issued directives asking the

Vietnamese people to bring forward any information they have on U.S. MIAs.

j. On live sighting investigations, VNOSMP said that they would continue to cooperate when requested by the U.S. to assist in investigations. VNOSMP said that

they have participated in more than 130 investigations with over 500 witnesses

interviewed and none of the investigations have resulted in any useful information.

VNOSMP has concluded that all of the live sighting reports to date have been false,

and have result in the waste of time and energy. JTFFA Detachment Two briefed

us that 96 live sighting investigations have been conducted in Vietnam, and that

none of the investigations led to any credible evidence of a live American from the

war was held against his will after Operation Homecoming was completed in 1973.

k. As indicated earlier in the report, bilateral operations between the United

States and Vietnam have been successful. Since January 23, 1992, CILHI recovery

teams have recovered and repatriated 307 sets of remains from Vietnam. To date,

CILHI has identified 136 sets of remains. Five JFAs are conducted in Vietnam each

year.

Also, in Vietnam, leads and excavation sites will probably begin to thin out in

2002. Given the current number of planned investigations and excavations, JTFFA

operations in SRV will continue on a steady pace until at least FY2004. Cases remaining unresolved at that point will be extremely difficult to resolve because of the

lack of information, terrain, and other factors. Their resolution may have to wait

until new leads are uncovered in the future.

Some additional examples of progress on the POW/MIA issue is listed below according to the four criteria used by the Administration to measure Vietnamese cooperation.

The first criteria are the efforts by Vietnam to recover and repatriate American

remains. Since 1973, 563 Americans have been accounted for in Southeast Asia. Of

that total, 406 were accounted—for from Vietnam. Also, since 1988, 59 Joint Field

Activities (JFAs) have been conducted in the SRV (44 since 1992). Four JFAs were

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conducted in SRV last year (1999). Typically, each JFA in SRV involves more than

100 U.S. personnel working with Vietnamese counterparts doing investigations and

excavation operations. Between February 22, 2000 and May 24, 2000, Joint Task

Force-Full Accounting (JTF–FA) conducted 2 Joint Field Activities (JFAs) in Vietnam. The past two JFAs resulted in the repatriation of 6 sets of remains. Over this

period the Central Identification Lab Hawaii (CILHI) has identified 2 individuals

representing 2 different cases. As of March 1, 2000, JTF–FA Detachment Two has

repatriated 307 sets of remains from Vietnam and the Central Identification Laboratory Hawaii has identified 136 individuals who were previously unaccounted— for.

In addition, the SRV has been responsive to U.S. requests to conduct case-specific

unilateral investigations. These investigations include witness interviews and archival research. Each year the SRV reserves two periods during which Vietnamese unilateral teams conduct investigations and then report their findings to U.S. officials.

Vietnamese unilateral investigation teams have provided reports on 48 different

cases. As of June 1, 2000, the total number of unilateral reports received since 1996

is 272. Vietnam’s unilateral efforts have supported the U.S. ‘‘Remains Study’’ that

evaluates the SRV’s official efforts to recover American remains. The SRV responses

provided to U.S. questions reflect extensive research and investigative activity. In

one instance, the SRV’s investigative results lead directly to the identification of

U.S. remains.

The VNOSMP pledged to continue cooperation with the U.S. government to execute joint and unilateral operations designed to resolve the cases of missing Americans from the war to the fullest extent possible.

In November 1998, Mr. Robert L. Jones, DASD DPMO, requested an SRV Foreign

Ministry review of the ‘‘deferred’’ and ‘‘no further pursuit’’ category of unaccountedfor cases. The idea was to determine if the Vietnamese possessed additional information pertaining to these cases. Vietnamese Vice Foreign Minister Bin promised

a formal response to Mr. Jones by the end of March 1999, and the response was

delivered to DPMO on time. Analysts at JTF–FA and DPMO are now reviewing and

analyzing the Vietnamese response.

The second criteria are the continued resolution of ‘‘last known alive’’ (LKA) priority discrepancy cases. Of the 196 persons associated with ‘‘last known alive’’ cases (individuals who survived their loss incidents, but did not return alive and remain

unaccounted-for) in Vietnam. Fate has been determined for all but 41 of these individuals. Determination of the fate for individuals on this list last occurred on March

1, 2000 when the fates of 2 more individuals were determined.

Of the 155 ‘‘last known alive’’ cases whose fate has been determined, DoD has resolved the cases or identified the remains of 40 formerly unaccounted-for Americans

who were originally on the LKA list. Since 1993, 18 last known alive cases have

been resolved. These are the most difficult cases to solve.

The special remains list is a representative sampling of cases for which the U.S.

government has evidence that the SRV government, at one time, possessed remains

of American servicemen that were still unaccounted for in 1993 when the report was

prepared and given to the SRV. The U.S. government has resolved special remains

cases involving 21 individuals. This reduces the original list of 98 individuals on

this list to the present list of 77 individuals.

The third criteria are Vietnamese assistance in implementing the trilateral investigations with Laos. Since 1994 when the agreement for these investigations was

signed, a total of 39 Vietnamese witnesses have participated in operations in Laos

and Cambodia. In March 1999, a Laotian witness participated in an investigation

in Cambodia. As of April 1999, Vietnam identified more than 40 witnesses for participation in future operations in Laos. Eight witnesses were identified since December 1, 1998.

The fourth criteria are accelerated Vietnamese efforts to provide all POW/MIA related documents. Since 1994, when Vietnamese unilateral search teams were created, the Vietnamese Office for Seeking Missing Personnel (VNOSMP) has provided

14 separate turnovers totaling more than 300 documents that consist of 500–600

untranslated pages. Recently, VNOSMP provided 12 documents in two separate

turnovers. These were related to the U.S. study of Vietnam’s collection and repatriation of U.S. remains or ‘‘ Remains Study.’’ In addition, 263 oral histories have been

conducted not including the hundreds completed during JFA operations. Finally,

over 28,000 archival items were reviewed and photographed since January 1993 by

joint research teams.

Since we did not observe a decrease in the POW/MIA accounting and cooperation

effort with the Vietnamese after the lifting of the trade embargo, establishment of

diplomatic relations, and past waiver of the Jackson-Vanik Amendment, it suggests

that this year’s waiver of the Jackson-Vanik Amendment restrictions will not result

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in any decrease in cooperation between our countries on the POW/MIA issue. The

Vietnamese know that the POW/MIA accounting is the single most important issue

governing the relationship between our two countries. Based upon our observations

and conversations with JTF-Full Accounting personnel and other U.S. government

officials during our visit to Vietnam in March 2000, it is my opinion that current

trade relations with Vietnam have not hindered the accounting process for missing

Americans. Also, if improving U.S.-Vietnamese trade relations and normalizing our

diplomatic relationship with Vietnam helps us reach our goal of achieving the ‘‘fullest possible accounting’’ of missing Americans, then these steps seem to be producing the intended positive results.

The VFW has had a POW/MIA initiative for the last several years. Briefly, we

encourage our members to come forward with information and documentation about

Vietnamese casualties from the war. Keeping the information anonymous, we then

present the information to the Vietnamese veterans’ organization when we visit

Vietnam. We have presented information about their losses to their veterans on four

different occasions. We believe this initiative has helped improve relations with the

Vietnamese people, and shows American sincerity in attempting to resolve this

issue. Feedback from Joint Task Force-Full Accounting personnel permanently stationed in Hanoi, indicates that this initiative others like it, have resulted in improved cooperation between U.S. personnel and Vietnamese counterparts. Also, we

have asked the Vietnamese veterans for help in resolving some of the most difficult

cases of our missing in action.

In conclusion, the VFW believes that progress has been made on POW/MIA accounting in Vietnam, Laos, and Cambodia since the establishment of Joint Task

Force-Full Accounting in January 1992. Over the past decade years, we have developed an effective and cooperative relationship with Vietnam on the POW/MIA issue.

Since 1992, this partnership with Vietnam has produced reasonable results in the

accounting process, but more work still remains. Twenty years ago the relationship

between our countries was inhospitable and as a result, the POW/MIA accounting

process was slow and less productive. Our visits to Southeast Asia, our meetings

and discussions with both the Department of Defense and Department of State officials here in Washington, and our constant review of monthly POW/MIA progress,

lead us to the conclusion that we should continue the policy of engagement with

Vietnam. We believe that the current relationship between the U.S. and Vietnam

is helping the POW/MIA accounting process.

Finally, our primary goal is to achieve the fullest possible accounting of Americans missing from the war in Southeast Asia as well as all Americans missing from

all our nation’s wars and conflicts. We think the normalization of trade relations

between the United States and Vietnam helps to accomplish this goal. Our view is

that the current effort with Vietnam, Laos and Cambodia is producing positive results. Certainly, we are not satisfied that it has taken so long to reach this point.

The current accounting effort should have begun the moment the war ended, but

unfortunately our country was unable to develop an effective working relationship

with Vietnam on this issue until years after the war ended. We will continue to remain vigilant and press our government and the governments of Vietnam, Laos, and

Cambodia to reach the fullest possible accounting as soon as possible. No matter

how long it takes, the VFW will continue to support the effort and strive to reach

our goal—the fullest accounting for every missing American warrior.

Mr. Chairman and Members of the Subcommittee, thank you for this opportunity

to present the views of the Veterans of Foreign Wars of the United States on the

issue of U.S.-Vietnam Trade Relations.

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