```

[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]

PRELUDE TO NEW DIRECTIONS IN UNITED STATES-VIETNAM RELATIONS: THE 2000 
                       BILATERAL TRADE AGREEMENT

=======================================================================

                             JOINT HEARING

                               before the

                            SUBCOMMITTEES ON
                          ASIA AND THE PACIFIC

                                  and

                INTERNATIONAL ECONOMIC POLICY AND TRADE

                                 of the

                              COMMITTEE ON
                        INTERNATIONAL RELATIONS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 19, 2000

                               __________

                           Serial No. 106-182

                               __________

    Printed for the use of the Committee on International Relations

        Available via the World Wide Web: http://www.house.gov/
                  international--relations

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
69-535 CC                   WASHINGTON : 2001

                  COMMITTEE ON INTERNATIONAL RELATIONS

                 BENJAMIN A. GILMAN, New York, Chairman

WILLIAM F. GOODLING, Pennsylvania    SAM GEJDENSON, Connecticut
JAMES A. LEACH, Iowa                 TOM LANTOS, California
HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
DOUG BEREUTER, Nebraska              GARY L. ACKERMAN, New York
CHRISTOPHER H. SMITH, New Jersey     ENI F.H. FALEOMAVAEGA, American 
DAN BURTON, Indiana                  Samoa
ELTON GALLEGLY, California           DONALD M. PAYNE, New Jersey
ILEANA ROS-LEHTINEN, Florida         ROBERT MENENDEZ, New Jersey
CASS BALLENGER, North Carolina       SHERROD BROWN, Ohio
DANA ROHRABACHER, California         CYNTHIA A. McKINNEY, Georgia
DONALD A. MANZULLO, Illinois         ALCEE L. HASTINGS, Florida
EDWARD R. ROYCE, California          PAT DANNER, Missouri
PETER T. KING, New York              EARL F. HILLIARD, Alabama
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
MARSHALL ``MARK'' SANFORD, South     ROBERT WEXLER, Florida
Carolina                             STEVEN R. ROTHMAN, New Jersey
MATT SALMON, Arizona                 JIM DAVIS, Florida
AMO HOUGHTON, New York               EARL POMEROY, North Dakota
TOM CAMPBELL, California             WILLIAM D. DELAHUNT, Massachusetts
JOHN M. McHUGH, New York             GREGORY W. MEEKS, New York
KEVIN BRADY, Texas                   BARBARA LEE, California
RICHARD BURR, North Carolina         JOSEPH CROWLEY, New York
PAUL E. GILLMOR, Ohio                JOSEPH M. HOEFFEL, Pennsylvania
GEORGE RADANOVICH, California        [VACANCY]
JOHN COOKSEY, Louisiana
THOMAS G. TANCREDO, Colorado

                    Richard J. Garon, Chief of Staff

          Kathleen Bertelsen Moazed, Democratic Chief of Staff

                                  (ii)
                  Subcommittee on Asia and the Pacific

                   DOUG BEREUTER, Nebraska, Chairman

JAMES A. LEACH, Iowa                 TOM LANTOS, California
DANA ROHRABACHER, California         HOWARD L. BERMAN, California
PETER T. KING, New York              ENI F.H. FALEOMAVAEGA, American 
MARSHALL ``MARK'' SANFORD, South     Samoa
Carolina                             SHERROD BROWN, Ohio
MATT SALMON, Arizona                 ROBERT WEXLER, Florida
JOHN M. MCHUGH, New York             JIM DAVIS, Florida
RICHARD BURR, North Carolina         EARL POMEROY, North Dakota
PAUL GILLMOR, Ohio                   GARY L. ACKERMAN, New York
DONALD A. MANZULLO, Illinois         ALCEE HASTINGS, Florida
EDWARD R. ROYCE, California          [VACANCY]
JOHN COOKSEY, Louisiana

             Michael P. Ennis, Subcommittee Staff Director

         Dr. Robert King, Democratic Professional Staff Member

                         Matt Reynolds, Counsel

                  Alicia A. O'Donnell, Staff Associate

                                 ______

        Subcommittee on International Economic Policy and Trade

                 ILEANA ROS-LEHTINEN, Florida, Chairman

DONALD A. MANZULLO, Illinois         ROBERT MENENDEZ, New Jersey
STEVEN J. CHABOT, Ohio               PAT DANNER, Missouri
KEVIN BRADY, Texas                   EARL HILLIARD, Alabama
GEORGE RADANOVICH, California        BRAD SHERMAN, California
JOHN COOKSEY, Louisiana              STEVEN R. ROTHMAN, New Jersey
DOUG BEREUTER, Nebraska              WILLIAM D. DELAHUNT, Massachusetts
DANA ROHRABACHER, California         JOSEPH CROWLEY, New York
TOM CAMPBELL, California             JOSEPH M. HOEFFEL, Pennsylvania
RICHARD BURR, North Carolina

             Mauricio Tamargo, Subcommittee Staff Director

           Sean Carroll, Democratic Professional Staff Member

                Yleem Poblete, Professional Staff Member

                   Victor Maldonado, Staff Associate

                                 (iii)

                            C O N T E N T S

                              ----------                              

                               WITNESSES

                                                                   Page
Ambassador Charlene Barshefsky, U.S. Trade Representative........     5
The Honorable Stanley O. Roth, Assistant Secretary for East Asian 
  and Pacific Affairs, U.S. Department of State..................    15
The Honorable Timothy J. Hauser, Deputy Under Secretary for 
  International Trade, U.S. Department of Commerce...............    17

                                APPENDIX

Prepared statements:

Hon. Doug Bereuter, a Representative in Congress from Nebraska, 
  and Chairman, Subcommittee on Asia and the Pacific.............    30
Hon. Ileana Ros-Lehtinen, a Representative in Congress from 
  Florida, and Chairman, Subcommittee on International Economic 
  Policy and Trade...............................................    33
The Honorable Dana Rohrabacher, a Representative in Congress from 
  California.....................................................    36
Hon. Charlene Barshefsky.........................................    39
Hon. Stanley O. Roth.............................................    47
Hon. Timothy J. Hauser...........................................    53

Additional material submitted for the record:

Answers to questions for the record by Hon. Doug Bereuter........    57
Articles submitted for the record by Hon. Dana Rohrabacher.......    59

 
PRELUDE TO NEW DIRECTIONS IN UNITED STATES-VIETNAM RELATIONS: THE 2000 
                       BILATERAL TRADE AGREEMENT

                              ----------                              

                      TUESDAY, SEPTEMBER 19, 2000

        House of Representatives, Subcommittee on Asia and 
            the Pacific, joint with the Subcommittee on 
            International Economic Policy and Trade, 
            Committee on International Relations,
                                                    Washington, DC.
    The Subcommittees met, pursuant to notice, at 1:36 p.m., in 
room 2172, Rayburn House Office Building, Hon. Doug Bereuter 
(Chairman of the Subcommittee on Asia and the Pacific) 
presiding.
    Mr. Bereuter. The joint Subcommittee hearing will come to 
order. The Subcommittee on Asia and the Pacific and the 
Subcommittee on International Economic Policy and Trade meet 
jointly today to examine the current and future state of United 
States-Vietnam relations in the context of a new bilateral 
trade agreement [BTA] signed by Washington and Hanoi on July 
13, 2000.
    After taking nearly 5 years of frustrating and difficult 
negotiations--and the difficulties are on the other side--I 
think the new bilateral trade agreement represents an important 
milestone in the process of normalizing incrementally our 
bilateral political, economic, humanitarian, and consular 
relationships with Vietnam.
    Focusing for a moment on the economic relationship, this 
evolving process began in 1994 with the lifting of the Vietnam 
War-era trade embargo and the establishment of Ambassadorial-
level diplomatic relations the following year. Further 
incremental steps such as allowing for the Overseas Private 
Investment Corporation [OPIC] and the U.S. Export-Import Bank 
to support American businesses exporting to or operating in 
Vietnam were taken as the President granted Vietnam a waiver 
from the requirements of the Jackson-Vanik amendment. The 
Congress, in general, has supported this waiver by increasingly 
large margins each of the last 3 years.
    The new BTA represents another step which will be followed 
by President Clinton's trip to Vietnam following the APEC 
summit in November. I believe that this incremental policy and 
the new BTA is in America's own short-term and long-term 
national interests. It is a flexible policy allowing us to take 
advantage of new opportunities such as those in the trade arena 
now available with the BTA, while at the same time preserving 
our leverage to help influence change in the most problematic 
facets of our relationship, such as human rights. Indeed, I 
believe our incremental approach also builds on Vietnam's own 
policy of political and economic reintegration into the world.
    The Subcommittee on Asia and the Pacific has held a number 
of hearings on Vietnam in recent years, conducting both broad 
reviews of the general direction of United States-Vietnam 
bilateral relations and more defined examinations of specific 
issues such as the fullest possible accounting of American POW-
MIAs, the plight of Vietnamese boat people and the failure of 
Vietnam to meet its human rights obligations. Today's hearing 
is the first that focuses primarily on bilateral economic 
relations; however, it certainly does not do so at the 
exclusion of these other important issues. Clearly United 
States-Vietnamese trade relations cannot be viewed as if in a 
vacuum.
    At this time, the BTA has yet to be transmitted to 
Congress. I certainly welcome any insights our U.S. Trade 
Representative Ambassador Barshefsky may have on when we should 
expect to see that transmittal. With adjournment hopefully just 
a few weeks away, there is not time this year for Congress to 
consider and approve the BTA, a prerequisite for the 
agreement's actual implementation. Thus I envision today's 
hearing as an early opportunity to begin the process of 
congressional consideration of such a BTA.
    Before Congress will approve the significant step forward 
in relations, there will be many questions for the 
Administration to answer satisfactorily. For example, is the 
BTA a prelude to new directions in United States-Vietnam 
relations? What actual benefits can the United States generally 
and the American business interests specifically expect from 
the BTA? Does approval of the BTA enhance or serve to postpone 
needed progress in other noneconomic concerns such as POW-MIA 
accounting, human rights, emigration, and political reforms?
    To help our two Subcommittees answer these and many other 
important questions, including those pertaining to the 
President's Vietnam trip, we are very fortunate to have with us 
today a truly outstanding panel of high-level and distinguished 
Administration witnesses. The first panel will consist of 
Ambassador Charlene Barshefsky, the U.S. Trade Representative. 
While the BTA is the result of hard work from many different 
agencies, of course, it is the USTR that has provided the 
yeoman's service in the negotiations with the Vietnamese as was 
the case with the bilateral market access agreement for China's 
accession to the WTO.
    Ambassador Barshefsky, it certainly was a great pleasure to 
work with you on the China PNTR issue, and I understand that in 
a hour or 2, the Senate will be voting on final passage of H.R. 
4444 as passed by the House, and, in my judgment, thankfully 
unamended by the Senate. In that regard, I appreciate that you 
have responsibilities associated with the vote and are limited 
in the time that you can spend with us. That is why you 
constitute the first panel. And I will introduce the other two 
distinguished witnesses shortly after your testimony and 
questions from the panel. But in order to conserve this time 
before you must leave, I want to come back to that later.
    And I would like now to turn to the Chairwoman of the 
Subcommittee on International Economic Policy and Trade, the 
very distinguished gentlewoman from Florida, Representative 
Ileana Ros-Lehtinen, for any introductory comments that she may 
have, and then I will turn to the distinguished Ranking Members 
of the two Subcommittees. I turn to the gentlelady for such 
time as she may consume.
    [The prepared statement of Mr. Bereuter appears in the 
appendix.]
    Ms. Ros-Lehtinen. I thank my colleague in Nebraska, my good 
friend Mr. Bereuter, for the opportunity to co-chair this 
hearing with him. I welcome the opportunity to listen to some 
of our witnesses. And while the witnesses appearing before us 
today may be of like mind in their approach to United States-
Vietnam relations, there are vast differences among the Chairs 
of the two Subcommittees regarding the viability and wisdom of 
trading with a Communist regime such as Vietnam.
    In fact, some of us view Vietnam as a classic example of 
what happens when economic engagement begins without first 
requiring fundamental, concrete changes in government and civil 
society. The result? A sprinkling of limited economic reforms 
to mask the strengthening of Communist totalitarian regimes.
    In Vietnam such entrenchment was clearly demonstrated in 
1999 with the passage of a resolution which stated that, 
``Party committees should strictly criticize and punish those 
party members who, after being assisted by the party 
organization, keep disseminating their own opinion or 
distributing documents contrary to the platform, statutes or 
resolutions of the party.''
    In August of this year, a report for the Vietnamese 
Communist Party's Congress was drafted making reference to the 
so-called process of reform started 15 years ago. However, that 
same document reiterated that, ``During the process of reform, 
it is essential to persist with the goal of socialism based on 
Marxist-Leninism and Ho Chi Minh ideology.'' This coincides 
with the April 1992 Vietnamese Constitution reaffirming the 
role of the Communist Party as the leading force of the state 
and society.
    Article 4 of the Vietnamese Constitution enables the 
security apparatus to enforce an extralegal administrative 
decree against any dissidents under the pretext of 
``endangering national security.''
    The Vietnamese Government continues to systematically 
violate the human rights, civil liberties, and religious 
freedom of its people. It utilizes a maze of laws, decrees, and 
regulations to prohibit religious worship and to justify the 
arbitrary arrest, detention, harassment, physical abuse, and 
censorship of those seeking to exert their religious liberty 
and the right to free association.
    The Vietnamese regime is among the ``totalitarian or 
authoritarian regimes'' specifically rebuked by the State 
Department for its religious restrictions. The intense 
governmental suppression and control came under scrutiny and 
harsh criticism when the Annual Report on International 
Religious Freedom was released earlier this month. However, 
these denunciations fell on deaf ears as the Vietnamese 
Government had already been rewarded in August with the signing 
of the bilateral trade agreement.
    Despite the trade agreement, the Supreme Patriarch of the 
Unified Church of Vietnam is still being detained without trial 
under pagoda arrest. Members of the Hoa Hoa sect of Buddhism 
have been subjected to police surveillance and remain in jail. 
Members of the Cao Dai religion have had their church property 
confiscated. Protestants are still being suppressed through 
police raids, surveillance, and negative propaganda.
    Even foreign investors in June of this year questioned the 
``fanfare and hype'' of communist Vietnam's reform process and 
issued complaints about overregulation, inconsistent 
application of laws, discriminatory pricing, and government 
bureaucracy. Timothy Reinhold, head of the legal working group 
for the private sector forum at which these concerns were 
raised, said, ``It prompts one to ask the question whether 
those currently directing policy really want foreign 
participation in the development of the country.'' Further, 
newspaper reports cited Vietnam's Minister of Planning and 
Investment as ``generally unsympathetic to investor 
complaints.''
    Vietnam is still one of the most repressive countries in 
the world, which, in turn, keeps it as one of the poorest with 
an average annual per capita income of $330.
    The most recent Index of Economic Freedom published by 
Heritage Foundation lists Vietnam 148, out of 161 nations, in 
lack of economic freedom. This marks a decrease from the 1995 
rating. That is, Vietnam's economy is considered to be less 
open today than it was 5 years ago.
    Despite these realities, the single most powerful reason 
for demanding much more from Vietnam before affording it the 
enviable position of United States trading partner and 
preferential trade status, is the yet unresolved issue of 
American POWs and MIAs.
    During my investigation into the torture of American POWs 
in Vietnam by Cuban agents at a camp known as ``The Zoo,'' I 
asked Ambassador Pete Peterson and other U.S. Government 
officials to secure specific information and materials from the 
Vietnamese authorities. The response from the Vietnamese 
clearly depicts the unreliable, duplicitous nature of Vietnam's 
Communist regime. The statement read: ``The evading war of the 
Americans in Vietnam had caused a great damage in human lives 
and property to the people of Vietnam. However, with a policy 
of clemency and humanity, Vietnam treated the American POWs in 
due form. There were absolutely no cases in which American POWs 
in Vietnam were tortured.''
    Is this the type of regime the United States should reward? 
Is this a reliable trading partner? An ally? I hope the 
witnesses who will testify today will address these issues 
along with the other concerns raised by my colleagues on the 
Subcommittees, and I thank Mr. Bereuter for the opportunity.
    [The prepared statement of Ms. Ros-Lehtinen appears in the 
appendix.]
    Mr. Bereuter. I thank the Chairwoman, and I turn to the 
distinguished gentleman from California, the Ranking Member of 
the Asia and Pacific Subcommittee, for such time as he may 
consume in his opening statement.
    Mr. Lantos. Thank you very much, Mr. Chairman. I am anxious 
to hear Ambassador Barshefsky, so I will be extremely brief.
    Vietnam represents an obviously unique case in our foreign 
relations and in our trade relations. This is really an issue 
where many of us have a great deal of ambivalence. On the one 
hand, I fully share the views of my good friend from Florida, 
who outlined in great detail the human rights violations which 
are persisting in Vietnam and for which there is no excuse. Yet 
I think it would be a mistake not to recognize that the United 
States has a major responsibility in normalizing relations with 
Vietnam.
    I fully share the views of my two distinguished colleagues 
in the other body, John Kerry and John McCain, who have 
supported the normalization of relations, and who, I believe, 
are in support of this legislation, as is our good friend and 
former colleague with considerable Vietnam experience, 
Ambassador Pete Peterson.
    I commend President Clinton for his forthcoming plan to 
visit Vietnam, and I look forward to Ambassador Barshefsky's 
testimony.
    Mr. Bereuter. In order to save time, we are going to move 
directly to the statement by Ambassador Barshefsky. Your entire 
written statement will be made a part of the record. You may 
proceed as you wish. We look to at least a small opportunity to 
have questions before you have to leave. But we will have your 
full statement at this point.
    Mr. Rohrabacher. Mr. Chairman, I ask unanimous consent to 
insert my opening statement for the record as well as the 
inserts of several publication articles that I had for the 
opening statement.
    Mr. Bereuter. Certainly, without objection, we will extend 
that to all Members at this point.
    [The prepared statement and articles of Mr. Rohrabacher 
appear in the appendix.]
    Ambassador Barshefsky.

     STATEMENT OF THE HON. CHARLENE BARSHEFSKY, U.S. TRADE 
                         REPRESENTATIVE

    Ambassador Barshefsky. Thank you, Mr. Chairman, Madam 
Chairman, Members of the Subcommittees. Thank you very much for 
inviting me here today to testify on our bilateral commercial 
agreement with Vietnam.
    The landmark trade agreement entered with Vietnam in July 
of this year is most fundamentally an economic agreement which 
opens markets to American goods, services and agriculture and 
promotes economic reform and great opening to the world in 
Vietnam.
    It also represents a decisive stage in the process of 
reconciliation with Vietnam. With the approval of this 
agreement, we begin a fully normalized economic and trade 
relationship, capping a series of decisions made over the past 
decade which have been difficult and emotional at times in both 
countries, but which have served Americans and Vietnamese 
together.
    Throughout this period, as the Clinton Administration has 
approached America's relationship with Indochina, we have set 
as our first priority a full accounting for American service 
personnel listed as missing in action or who were POWs. As 
Ambassador Pete Peterson has noted, this work is proceeding 
with full cooperation with Vietnam through joint field 
activities and review of material evidence. With this 
continuing, we have also worked toward normalized trade between 
the United States and the three nations of Indochina, beginning 
with the end of the trade embargoes and continuing through the 
conclusion of formal bilateral trade agreements with Cambodia, 
Laos, and now Vietnam. This we believe serves America's broad 
interests in the Pacific.
    The integration of Indochina into ASEAN and the larger 
Pacific economy contributes to the cohesion and economic health 
of Southeast Asia, which is in turn of great importance to 
peace and stability in Asia more generally. Our developing 
trade relationship with Vietnam helps us achieve this basic 
goal as it also creates substantial new opportunities for 
American businesses, farmers, workers, and for Vietnamese as 
well.
    Our trade and investment relationship with Vietnam today, 
however, remains hampered by two major features. First, as a 
country covered by the Jackson-Vanik amendment, Vietnam remains 
only one of six in the world that lacks NTR status. As a 
result, Vietnamese products face tariffs approximately 10 times 
higher than those of virtually all other trading partners.
    Second, economic reform within Vietnam has progressed 
slowly, particularly in recent years, owing to the Asian 
financial crisis, weakening the economy's overall potential and 
creating obstacles for American exporters.
    The United States-Vietnam trade agreement addresses both of 
these issues. It marks a major shift of economic policy 
direction for Vietnam, setting a course for greater openness to 
the outside world, promoting internal reform and market 
principles, transparency in law and regulatory policy, and 
helping Vietnam to integrate itself into the Pacific regional 
economy and build a foundation for future entry into the World 
Trade Organization.
    The agreement itself includes six chapters: Goods, 
including agricultural goods; intellectual property; services; 
investment; business facilitation; and transparency. To 
highlight a few specifics, in goods trade Vietnam will cut 
tariffs by a third to a half across a wide range of high-tech 
goods, farm products, and industrial goods. Vietnam will also 
abolish nontariff restrictions such as quotas, eliminate 
discretionary import licensing, and, for the first time, 
guaranteed trading rights for both Americans and Vietnamese 
over a phased-in schedule.
    With respect to intellectual property, Vietnam will 
implement WTO-level standards of protection within 1 year for 
patents and trademarks and within 18 months for copyright and 
trade secrets. Vietnam will also take certain additional steps 
in newer areas such as the protection of satellite signals.
    As to services, Vietnam will liberalize a broad range of 
service sectors opening for the first time opportunity for 
American firms to compete in basic telecommunications services, 
value-added telecom such as Internet services, banking, 
insurance, and other financial services; the professions 
including legal services, architecture, engineering and others; 
and a range of other sectors from audiovisual to health, 
distribution to private education and more.
    With respect to investment, Vietnam will make commitments 
that include the phasing out of such measures as local content 
and export performance requirements; the abolition of almost 
all investment screening, discriminatory pricing; and 
protection against expropriation.
    As to business facilitation, Vietnam will guarantee the 
right to conduct routine but essential practices such as 
setting up offices, advertising, and so on.
    Finally, Vietnam will make an extensive set of commitments 
to transparency. In sharp contrast to past practice, Vietnam 
will reform its administrative policies. It will now provide 
advance notice of all laws, regulations and administrative 
procedures relating to any matter covered by the agreement. It 
will now publish all laws and regulations and inform the public 
of the effective dates and government contact points, and 
Vietnam will establish appeals processes.
    All together, the agreement addresses many of the principal 
concerns of Americans seeking to export to or invest in Vietnam 
and spur a deepening acceleration of economic reform within the 
Vietnamese economy. Over time that should help create 
sustainable growth and greater opportunity for the Vietnamese 
people.
    The agreement is an economic achievement that will have 
shared and substantial benefits. It will also have beneficial 
political consequences, contributing to the development of a 
more unified and stable Southeast Asia as it integrates Vietnam 
once again into the broader world of Asian-Pacific trade and 
investment. And it is an agreement with historic meaning for 
the United States. When Congress approves this agreement with a 
granting of annual normal trade relations, we will take the 
critical step in developing a relationship with Vietnam that 
looks to the future rather than the past, and we will do so in 
a fashion in which I believe everyone who remembers the era of 
the Vietnam War can take pride, both cementing peace and 
reconciliation between the two governments and advancing reform 
and freedom for the Vietnamese people.
    In that regard, I would point to a recent statement made by 
Vietnam's leading independent--leading and most visible 
dissenter Dr. Que, and he said, `` Opening the country 
economically will increase the people's power to make their own 
economic decisions. Integrating into the global economy and 
increasing contact with developing countries will increase the 
people's awareness of what it means to be modern. The sooner 
the trade agreement is ratified and put into effect, the 
better.''
    We look forward to working with you, Mr. Chairman, Members 
of the Subcommittees, to developing a consensus for the best 
way to secure rapid approval of the agreement. Thank you.
    [The prepared statement of Ambassador Barshefsky appears in 
the appendix.]
    Mr. Bereuter. Thank you very much.
    We have only 15 minutes remaining, and I want to hear from 
all Members. I would ask unanimous consent that the normal 5-
minute rule be changed to 3 minutes so that all Members may be 
heard. Is there objection? Without objection, that will be the 
order.
    I have one question that relates to the difference between 
the 1999 agreement in principle and the final agreement July 
13, 2000, Ambassador. I will submit other questions in writing 
in order to save time.
    Ambassador Barshefsky. Fine, thank you.
    [The additional questions appear in the appendix.]
    Mr. Bereuter. The gentleman from California, Mr. Lantos, is 
recognized under a 3-minute rule.
    Mr. Lantos. I was listening very carefully to your usual 
concise and impressive presentation, but I did not hear any 
response on your part to Ms. Ros-Lehtinen's catalog of human 
rights abuses. Now, we have had a long-standing dialogue of the 
deaf ones, ``dialogue des sourdes'' as the French call it, 
between the Administration and those of us who feel that human 
rights criteria should receive a far more important level of 
consideration than, in fact, they have.
    Would you mind, Ambassador Barshefsky, dealing with the 
issues raised by my friend from Florida? Because while some of 
us are conscious of the fact that we have a very heavy 
responsibility vis-a-vis Vietnam for obvious historic reasons, 
we will not stand by as the human rights abuses are swept under 
the rug and the truly outrageous persecution of religious 
groups and others continues.
    Ambassador Barshefsky. I think you will hear more about 
this from the panel that follows me, but if I could make a few 
points.
    I do not disagree with the characterizations made by the 
Chairwoman with respect to the Vietnamese regime or with 
respect to substantial concerns about human rights, religious 
freedom and the like in Vietnam. These are quite amply 
documented in the State Department human rights report and in 
other materials, including from the United Nations. And I 
certainly have no basis to disagree with them, nor would I 
attempt to do so.
    The question presented is how do we best change the 
mentality among the governing body in Vietnam as to the 
expected conduct with respect to human rights as to 
international norms and the vast importance of Vietnam meeting 
those norms with respect to human rights, worker rights, and 
with respect to issues surrounding human dignity.
    The quote I read to you from Dr. Que speaks to one approach 
to that question, and it is the approach generally that the 
Administration has followed in the case of China and now wishes 
to follow in the case of Vietnam.
    Mr. Lantos. If I may stop you, since you raised China, 
which I was trying hard to avoid----
    Ambassador Barshefsky. I know.
    Mr. Lantos. The Administration policy has been a total 
failure with respect to China on the human rights issue. As a 
matter of fact, the Administration's own documents, both the 
religious document, the human rights document, underscores 
quite accurately the deterioration of the human rights 
situation in China.
    So if what we can look forward to vis-a-vis Vietnam is a 
repetition of the China pattern, that would raise very serious 
questions in the minds of many of us with respect to our 
ability to support this legislation.
    Ambassador Barshefsky. If I may say in connection with both 
countries, because I think it is probably hard to avoid the 
comparisons, I would prefer to answer it straight on. The 
question is how one builds internal momentum and a larger 
internal dynamic for reform in a country. We know from 
experience it is very difficult to change countries from the 
outside if there is not inside the country a critical mass of 
reformers in order to speed the process, indeed to generate the 
process, of reform. Integration into the global community is 
the way in which this Administration has decided to approach 
that problem.
    It comports in the case of China with the views of such 
respected dissidents as Martin Lee and Bao Tung and Dai Ching 
and any one of a number on the ground in China who believe that 
integration into the global community will further the process 
of internal reform, such as Dr. Que has indicated similar views 
in Vietnam. We believe that this is really the best way to 
approach the problem. Isolation, whether of China or Vietnam, 
tends to increase repression, tends to decrease the 
accountability----
    Mr. Lantos. I know my time is up, but since you have used 
the world ``isolationism,'' I have to respond to that. Those of 
us who disagree with the Administration's policy are not 
recommending either isolating China or isolating Vietnam, but 
of using our enormous leverage to improve the human rights 
condition.
    Mr. Bereuter. I thank the gentleman. And I thank the 
gentlewoman, the Ambassador, for her response. This is of major 
interest to everyone of us, so if you wish to extend your 
remarks in written form, it certainly would be most welcome.
    Ambassador Barshefsky. Thank you very much.
    Mr. Bereuter. I would like to call on the gentleman from 
California, if he has questions under the 3-minute rule.
    Mr. Rohrabacher. Yes. I associate myself with Mr. Lantos, 
especially with his last observation, that with this 
Administration every time that we insist that there be some 
consideration of human rights given to various trade issues 
with dictatorships and tyrants, we always are thrown back with 
it is either isolation or, you know, some sort of engagement 
that does not include human rights. I resent that, and I think 
that Mr. Lantos put that very well..
    Under the agreement that you are proposing today, or that 
we have negotiated with Vietnam, will the tariffs be the same 
on our products going in as their products coming here?
    Ambassador Barshefsky. No. Our tariffs are among the 
world's lowest, so our tariffs will be lower than their 
tariffs.
    Mr. Rohrabacher. Substantially lower than their tariffs?
    Ambassador Barshefsky. Likely so, but that is the case with 
respect to our relations with much of Europe as well.
    Mr. Rohrabacher. OK. You are saying with this dictatorship, 
we are going to really influence them to go in the right 
direction by letting them ship in their goods to our country 
with a dramatically lower tariff than they are permitting our 
goods to flow into their country. I think people look at us as 
being rather stupid for making such an agreement.
    Ambassador Barshefsky. If I can make a comment on the 
question of human rights, we have had a substantial human 
rights dialogue with Vietnam for the past 8 years.
    Mr. Rohrabacher. Ma'am, I can't let you go on with my time. 
I only have 3 minutes. You want to put a statement about that 
in the record, that is fine.
    Let me ask a little bit about will it still be illegal 
under the new agreement for anyone in the Vietnamese Government 
to release economic information? That now is a criminal offense 
in Vietnam.
    Ambassador Barshefsky. That I would have to get back to you 
on. I don't know the answer.

    Answer: We are not aware of a statute in Vietnam that makes 
it a criminal offense to release economic information. 
Regardless, this agreement addresses this issue by obligating 
Vietnam to ``provide nationals and companies of the other Party 
(i.e., the United States) with access to data on the national 
economy and individual sectors, including information on 
foreign trade.'' (Chapter VI--Transparency Related Provisions 
and Right of Appeal, Article 2)

    Mr. Rohrabacher. Does this agreement include--will it 
result in the fact--in some type of taxpayer subsidies in the 
form of loan guarantees through Export-Import Bank or OPIC that 
would be made available to this Communist dictatorship, to 
businessmen who are building factories in Vietnam?
    Ambassador Barshefsky. The President has waived Jackson-
Vanik, which entitles Vietnam to OPIC and Eximbank financing, 
and the Congress has not overturned that decision.
    Mr. Rohrabacher. Right. And this agreement then sort of 
puts that in cement? Make that law?
    Ambassador Barshefsky. No, this agreement does not--well, 
do anything until Congress approves it.
    Mr. Rohrabacher. Correct. But it will make that a part of 
the law permanently.
    Ambassador Barshefsky. It will make sure that those remain 
available.
    Mr. Rohrabacher. OK. Let's see. We will end up with a 
Communist dictatorship and give them the right to export into 
our country at lower tariffs than they will permit our products 
to go into their country, plus we are going to subsidize 
American businessmen to set up factories in their country with 
taxpayer money. I don't think that the Communist dictators are 
going to miss the message about that at all. They are probably 
going to think that we are a bunch of saps, and I do, too.
    Mr. Bereuter. The time of the gentleman has expired.
    The gentleman from Florida Mr. Davis is recognized.
    Mr. Davis. Thank you, Mr. Chairman, and welcome, Ambassador 
Barshefsky. Could you elaborate a little bit on what you see as 
the condition of the rule of law today in Vietnam and how you 
see that being influenced by this trade agreement once it is 
ultimately approved by Congress?
    Ambassador Barshefsky. The condition of the rule of law is 
very weak; the arbitrary exercise of government power, 
unfettered bureaucratic discretion, a nontransparent trade and 
economic regime, an economic regime, indeed, which is in need 
of substantial restructuring.
    Under this agreement, Vietnam will have to make transparent 
a number of things it has never made transparent before; for 
example, laws and regulations, advance notice of laws, the 
uniform application of the trade regime. These things are very 
basic to us, but do not exist today in Vietnam.
    We need to build legal institutions in Vietnam. This is a 
very long-term prospect. And we need to expect Vietnam to 
adhere to the kinds of commitments it has made with respect to 
transparency and the initial rule of law issues to which it has 
committed in the agreement.
    This will require substantial technical assistance. We are 
working now with USAID, which will assist Vietnam in technical 
terms in implementing the commitments including with respect to 
transparency and the rule of law-related issues. But the 
creation of a rule of law in Vietnam is going to take a number 
of years.
    Mr. Davis. Could you talk about what you think will be the 
major issues we need to be bird-dogging as we oversee 
implementation of the trade agreement?
    Ambassador Barshefsky. I think we will have to pay close 
attention to the entirety of the agreement. Vietnam has never 
entered into an agreement of this comprehensive nature before 
with any country in the world, Communist or non-Communist. This 
agreement will be new to them. Of course, the NTR that would be 
granted by Congress when it approves the agreement is annual 
only, and this will give the Congress the ability to review 
Vietnam's implementation step by step. The agreement itself is 
also subject to renewal after 3 years. That is to say, the 
agreement expires in 3 years until it is affirmatively renewed. 
That will also provide us very positive opportunities to assess 
implementation.
    Mr. Davis. OK. Thank you.
    Thank you, Mr. Chairman.
    Ambassador Barshefsky. Thank you.
    Mr. Bereuter. Thank you very much, Ambassador. I appreciate 
your remarks about the two latter points.
    Chairwoman Ros-Lehtinen is waiving temporarily her time for 
questioning, and we will move to Mr. Royce, the gentleman from 
California.
    Mr. Royce. Thank you, Mr. Chairman. I want to thank you, 
Mr. Chairman, and I want to thank our witnesses for this 
critical hearing.
    Ambassador Barshefsky, before getting to the agreement with 
Vietnam, I would like to briefly discuss the Africa trade bill, 
because within the next few weeks there are some decisions to 
be made. The bill is now law, and, of course, it means a great 
deal to Africa. And, Ambassador, this legislation was written 
in a way that gives trade benefits to those African countries 
that are reforming their economies to be good trade investment 
partners with us.
    The Administration is charged, in consultation with 
Congress, with determining which countries are making this 
progress, and that is the same type of progress we are pushing 
for in Vietnam. And I have written you expressing my concerns, 
and now I would like to raise one country in particular, and 
that is Zimbabwe.
    Many of us have sadly followed Zimbabwe's implosion as the 
government of President Mugabe has made war on its economy, 
launching a systematic attack on the property rights of a wide 
array of Zimbabweans. And today in the Washington Times there 
is an account by a commercial farmer who is leaving her land, 
having seen it looted and illegally taken over. And she writes, 
``Commercial agriculture in Zimbabwe seems to be drawing to a 
close.'' This is very true. The farms are all closing. ``And 
this will be devastating to the country including its food 
security.'' Maybe our influence is limited, but I know that 
now, now is certainly not the time to be validating this 
economic destruction by qualifying the country for the African 
Growth and Opportunity Act. And that is more of a statement 
than a question, but I welcome any response.
    My other question concerns the trade agreement with Vietnam 
that we are looking at, and I wanted to ask there, what areas 
do you expect Hanoi to have the most difficulty with 
politically and logistically in implementing? Do you expect to 
see trouble from Hanoi in some of the implementation process?
    Thank you, Ambassador.
    Ambassador Barshefsky. Congressman, I do not have any 
specific comment to make about Zimbabwe. The interagency team 
on AGOA eligibility is meeting even as we speak. Final 
decisions on countries have not yet been made. And, of course, 
we merely provide the President with recommendations, and 
ultimately he will make decisions as to eligibility.
    Certainly I am pleased to directly look into the question 
of Zimbabwe and get back to you on that.
    Mr. Royce. I appreciate that, because my concern was that 
it would be in consultation with Congress, and I very much 
appreciate you doing so.
    Ambassador Barshefsky. I understand that. Absolutely.
    [The information was not provided.]
    With respect to difficulties Hanoi may have, as I said to 
Congressman Davis, I think we are going to have to watch 
implementation overall very, very carefully. I think it is to 
be expected, particularly in a Communist country, that 
liberalization related to information technologies, for 
example, telecom or the Internet, which this agreement also 
covers, are areas of the agreement that will have to be very, 
very carefully monitored and scrutinized. To be sure, Vietnam 
has several, for example, cybercafes, but we are talking about 
quite a bit broader liberalization than that in the agreement.
    But in general I would say we are going to have to watch 
implementation very, very closely. Annual congressional review 
will be of great, great importance in that regard. The 3-year 
review of the agreement will be of great importance in that 
regard. 
    Mr. Bereuter. Thank you. The time of the gentleman has 
expired.
    The gentleman from North Dakota Mr. Pomeroy is recognized.
    Mr. Pomeroy. Thank you, Mr. Chairman, and I want to 
congratulate you for your legislative victory in the House this 
morning passing the overseas cooperative bill, which encourages 
the use of co-ops in expanding overseas development activities.
    Mr. Bereuter. And I thank you for being an original 
cosponsor.
    Mr. Pomeroy. My pleasure. That is a good bill, and I am 
hoping that is going to make it this session yet.
    Ms. Barshefsky, it is go good to see you again. My brother 
the summer before last participated in a U.S. Commerce 
Department training session for insurance regulators in 
Vietnam. He serves presently as the insurance commissioner in 
North Dakota. He came back quite enthused about the potential 
for the services market there when we get a fair shot at that 
market. Would you have a comment on that?
    Ambassador Barshefsky. I think he is absolutely right to be 
enthused. The services markets in Vietnam are grossly 
underdeveloped and underfunded. There is a lack not only of 
capital, there is a lack of expertise. There is a lack of 
information and know-how with respect, for example, to what a 
modern financial instrument looks like or what modern insurance 
looks like. So there is very substantial, substantial 
opportunities.
    Mr. Pomeroy. With this session winding down, this may be my 
last chance to publicly commend you in a hearing setting for 
the job you have done as our trade representative. You have 
been a tenacious advocate, and the howls from some of our trade 
competitors of the concessions you have wrought at the table I 
think shows third-party validation of your effectiveness.
    I would be remiss in this last exchange potentially with 
you not to mention the North Dakota Wheat Commission 301 
petition filed with you on September 8. Just a little 
background. Congressman Nethercutt, myself, many others, both 
parties, have urged that the petition be acted upon and an 
investigation launched. Commission 301, as you know, was 
designed to combat unjustifiable, unreasonable, and 
discriminatory acts, and, in that petition, we outline to the 
extent we can pull together anecdotal evidence that says 
precisely what is occurring.
    Of course, the backdrop of this is very severely depressed 
markets and horrible grain prices, and we do not think as we go 
up against the Canadian Wheat Board that the trade competition 
has been fairly conducted.
    We think that an investigation to the full extent of the 
Canadian Wheat Board's discriminatory pricing activities is 
required. I would remind you of their adamant refusal to allow 
the full audit that you and I have urged over the last 2 years. 
Like I always say, if they do not have anything to hide, why 
are they so adamantly opposed to the audit? The investigation 
would allow us to unilaterally proceed to give the Canadian 
Wheat Board the look that it deserves. I hope with your help we 
can take a strong stand against these unfair trade practices 
and support our farmers and move forward to launch the 
investigation.
    Do you have a comment as to the status of the 
Administration's review at this time?
    Ambassador Barshefsky. Once a 301 case is filed, it goes to 
an interagency group which looks at the allegations, and which 
gives counsel and the petitioners an opportunity to appear 
before the interagency group to discuss the case. The 
interagency group will make a recommendation to me as to the 
disposition of the case, that is whether we initiate it or not, 
by mid-October, and I then need to make a decision by October 
23.
    Certainly we are very familiar with the activities of the 
Canadian Wheat Board. You and I have discussed many, many times 
our mutual frustration at the secrecy surrounding Wheat Board 
transactions and the fact that state trading in this sector 
produces extremely negative consequences for our producers.
    I look forward to receiving the interagency recommendation 
and am certainly delighted to speak with you about it as well.
    Mr. Pomeroy. Thank you very much.
    Ambassador Barshefsky. Thank you.
    Mr. Bereuter. Mr. Pomeroy, I join you in your commendations 
for the public service that Ambassador Barshefsky has rendered 
and her tenaciousness as a negotiator, and, like you, I just 
handed her a letter about nontariff barriers in the Philippines 
about American meat exports. So I have your same concerns about 
the Canadian Wheat Board.
    The gentlewoman from Florida, the Chairlady of the IEPT 
Subcommittee, is recognized.
    Ms. Ros-Lehtinen. Thank you. I will make it brief because I 
know the Ambassador's time is limited. In your testimony you 
refer to the commitments that Vietnam will undertake. What 
commitments and steps has this country already taken and truly 
adhered to that raises investor confidence in a country with a 
Communist/Socialist economy? How can the U.S. investor really 
feel secure about property rights, about deregulation, about 
rule of law, avenues for redress?
    Ambassador Barshefsky. I think U.S. investors need to 
proceed with great caution and care. Vietnam was making some 
important progress in the early 1990's to roughly 1995, 1996, 
in terms of economic reform, at least passing some rudimentary 
but important laws with respect to the operation of companies, 
with respect to investment, with respect to what they call 
equitization, which is privatization.
    When the Asian financial crisis hit, Vietnam was severely 
and negatively impacted because about two-thirds of all of its 
trade and all of its investment is with the rest of Asia, and, 
of course, the rest of Asia was not trading, and they were not 
investing. So Vietnam experienced rapid outflow of funds and 
very, very poor export performance, a slowed economy, and that 
then slowed the reform effort, the passage of laws and so on.
    There is much to be done in Vietnam. It is a country in 
which an American businessperson would be advised to proceed 
slowly and very, very cautiously.
    Ms. Ros-Lehtinen. Thank you very much.
    Thank you Mr. Bereuter.
    Mr. Bereuter. Thank you, and I thank all of the Members. 
Ambassador Barshefsky, thank you very much for your testimony. 
You will be pleased but not surprised to know that the wheels 
of the Senate debate are grinding more slowly than projected, 
so you will be in time.
    Ambassador Barshefsky. Thank you so much, Mr. Chairman.
    Thank you, Madam Chairwoman.
    Mr. Bereuter. I would like now to call the second panel of 
distinguished witnesses from the Department of State and the 
Department of Commerce. Representing the Department of State is 
Assistant Secretary of State for East Asian and Pacific 
Affairs, Mr. Stanley Roth. Mr. Roth is a valued and frequent 
witness before the Subcommittee and has focused on United 
States-Vietnam relations in many years in many capacities in 
the State Department, the Pentagon, the private sector, the NGO 
community, and here on the Subcommittee itself.
    Representing the Department of Commerce is Deputy Under 
Secretary of Commerce for International Trade Timothy Hauser. 
Mr. Hauser is a 21-year employee of the Department, who serves 
as Chief Operating Officer of the International Trade 
Administration [ITA]. He oversees the day-to-day operation of 
the ITA and its trade promotion, trade policy, and trade law 
enforcement activities. He is the right person to have here 
today.
    Gentlemen, as is consistent with our policy, your entire 
written statements will be made a part of the record. You may 
proceed as you wish. I would appreciate it if you could keep 
your oral comments to 10 minutes apiece.
    Secretary Roth, you are recognized first.

STATEMENT OF HON. STANLEY O. ROTH, ASSISTANT SECRETARY FOR EAST 
      ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF STATE

    Mr. Roth. Thank you very much, Mr. Chairman, for the 
introduction. At some risk, I think, Madam Chairperson, as 
well, at some risk I am just going to submit my written 
testimony for the record without reading it, because listening 
to the statements and questions that were made, I don't think 
the largely historical materials that I provide in my statement 
focus on the key issues here of interest to the Members.
    And so instead I would really to respond to some of the 
themes that have already been said.
    First, I think there is a bit of disconnect between what we 
are saying and a lot of what we are hearing back in terms of 
what is a bilateral trade agreement. The bilateral trade 
agreement, if approved, does not make Vietnam an ally. It is 
not an ally. No one in the Administration claims it is an ally. 
A bilateral trade agreement is not a reward. A bilateral trade 
agreement is a benefit to the United States and to our 
exporters. It improves the terms with which we can do business 
with Vietnam, access to the market. If they do not abide by it, 
as Ambassador Barshefsky said, we will not renew it. There is 
leverage for implementation, but it is not a gift.
    In fact, it is not special, it is the basis for NTR or 
normal trade relations. It is an agreement that is essential 
with every country with whom we have normal trading relations, 
and so it is a prelude if the Congress should decide to approve 
NTR at some future point after this agreement is submitted. So 
this not an unusual step or extraordinary step, it is a normal 
commercial step. The significance comes from the fact that in 
the Vietnamese context, given how far back they have been in 
terms of their economic procedures and the access they have 
provided us commercially, it will require an enormous amount of 
change on their part, much more change, I should say, on theirs 
than on ours. But this is not a gift or reward.
    Second, it is not the Good Housekeeping Seal of Approval. I 
think, as Ambassador Barshefsky said, we have been very blunt 
in criticizing Vietnam in those areas where we think Vietnam 
should be criticized. I don't think anybody could read the 
human rights report or the recent report on religious freedom 
and say that we had coddled Vietnam or failed to call a spade a 
spade. We did.
    We do not see this vehicle as the only means of policy 
toward Vietnam. We have many other tools with which we address 
issues, including, for example, the human rights dialogue that 
was referenced on the area of human rights.
    Third, I think that we haven't really examined trends as 
opposed to a snapshot. For all the concerns about Vietnam's 
human rights record, and they are legitimate concerns that I 
happen to share, I also strongly believe that the human rights 
situation in Vietnam is considerably better than it was 10 
years ago or 20 years ago, and that there have been positive 
developments, even though they are not enough. If you ask me do 
I agree with the characterizations that have been made, sure. 
Is there freedom of speech, press assembly across the board? Of 
course not. Severe problems with freedom of religion? We have 
already said that.
    But if you ask me to compare it with where it has been 
before, if I look at dissident releases, for example, they 
would not have happened in the past. If I look at the very 
large religious rallies that were held over the past year, 
200,000 at one, 500,000 at another, that would not have 
happened in the past. As Ambassador Peterson has said, 
attendance in churches is up. It is not enough. That does not 
mean there is religious freedom. But there have been many 
positive developments in some of these areas, and I don't think 
we should have a hearing go by without acknowledging that there 
has been progress in some areas. We have gotten some dissidents 
out.
    There now have been 60 strikes, even though the system in 
Vietnam does not theoretically allow strikes, that were allowed 
to take place last year. That is not enough. That is not my 
idea of labor rights under international standards, but that is 
a huge change from where we have been in the past.
    I think you can go on and on, and I don't think I need to 
belabor the point other than to say take a look at the trends.
    I think I make exactly the same point with the POW-MIA 
issue. I think we have made enormous progress toward obtaining 
the fullest possible accounting. That does not mean that we 
have gotten all of our questions answered, including the one 
that you, Madam Chairwoman, have raised. We have not gotten the 
answer yet. Ambassador Peterson personally put that question to 
Vietnam and has not gotten a satisfactory answer, and we will 
raise it again.
    We are not claiming it is 100 percent every single thing 
that we asked for is there, but there has been a consistent 
pattern of cooperation on a wide variety of issues with 
enormous progress having been made, and I think that has been 
detailed at great length. I do not need to do that now.
    I think, finally, we haven't taken into context what is 
Vietnam's relationship with the rest of the world and how does 
that relate to our issues? I think it is very important to note 
that over the past few years, Vietnam has been admitted into 
ASEAN. It is, in fact, the Chairperson, Chairman, this year of 
ASEAN. Will be holding the annual ASEAN regional forum meeting 
there. It is in APIC. It is a member, participating widely in 
the Asia-Pacific area, quite different from where Vietnam 
historically has been. All of our friends and allies in the 
region are working with Vietnam. We partake in many 
international meetings with them. I think that there is little 
chance if the United States chose to try to isolate itself from 
Vietnam that, in fact, any other country or any other major 
country would support us, and that is where I think the 
regional context plays as well.
    So, overall, I guess what I am pleading for is not to say 
to you that everything is terrific, that Vietnam is a model 
whether of economic good governance or human rights practice. 
Of course it isn't. But rather, look at how far Vietnam has 
come, the successes we have had with the policy to date and 
where we hope to get in the future, and that is where the BTA, 
or bilateral trade agreement, fits in.
    And that is the final point I want to emphasize. There is 
frequently misunderstanding, whether we are talking about 
China, Vietnam, or other places, when the Administration makes 
the case that if this agreement goes into effect and is 
enforced, that over time it will lead to an improvement in the 
situation. I have many times been questioned how come the 
situation in China is not better 1 year or 2 years later. I 
want to be clear about what we are suggesting. We are not 
suggesting that these agreements, particularly trade 
agreements, are immediate mechanisms for improvements on human 
rights, that it is any kind of a quid pro quo that will lead to 
dramatic immediate changes.
    What we are suggesting is that they set the stage for 
systemic changes, that the kind of reforms that are called for 
under this agreement, the kind of openness that has to take 
place, the greater accountability, the greater stress on rule 
of law, plus the greater exposure to the West as Vietnam trades 
more, as it modernizes and sends more people to be educated, we 
are suggesting that over time all of those factors will have an 
impact on the political process in Vietnam.
    That is not a commitment that I can codify for you and say 
2 years from now there will be 20 percent less dissidents or 
anything like that. What we are saying, it is a process that 
should yield desired results over a period of time.
    Why don't I stop there, Mr. Chairman.
    [The prepared statement of Mr. Roth appears in the 
appendix.]
    Mr. Bereuter. Thank you, Secretary Roth.
    Secretary Hauser, we are pleased to hear from you now.

STATEMENT OF HON. TIMOTHY J. HAUSER, DEPUTY UNDER SECRETARY FOR 
        INTERNATIONAL TRADE, U.S. DEPARTMENT OF COMMERCE

    Mr. Hauser. Thank you, Mr. Chairman, Madam Chairperson, 
Members of the Subcommittees. Thank you for the opportunity to 
appear here today on behalf of the Department of Commerce.
    Ambassador Barshefsky and Assistant Secretary Roth have 
addressed many aspects of our evolving bilateral relationship 
with Vietnam. Let me focus briefly, if I may, on three main 
points about the economic and commercial aspects of this 
relationship.
    First point, Vietnam is changing in fundamental ways. U.S. 
policy is providing both the catalyst and the framework for 
this sea change. The catalyst is the promise of economic 
success. The framework is the bilateral trade agreement.
    I have been watching this process of change closely since 
the spring of 1996 when I led the first U.S. Government trade 
mission to Vietnam. More recently, just last month, Robert 
Mallett, our Deputy Secretary at Commerce, experienced this 
same palpable energy of change when he went to Vietnam.
    Some of the changes going on are extremely visible. One 
example is Vietnam's first security exchange. The Deputy 
Secretary visited that exchange, which was some 8 years in the 
making, just days into its operation.
    Another example which I find fascinating was the fact that 
he received a PowerPoint presentation from the Vice Chairman of 
the People's Committee of Ho Chi Minh city of his vision of a 
software city that he plans to create with the help of an 
American company.
    But perhaps the more significant changes are not quite as 
visible as these. One example of this, and perhaps the most 
telling, was our delegation's roundtable discussion last month 
with young Vietnamese entrepreneurs in Ho Chi Minh City. The 
participants were people who were confident in their ability to 
compete in the global marketplace and who look forward to an 
environment that would allow them to do so.
    I would submit, Mr. Chairman, that these represent real 
changes, none of which I saw 4 years ago during my initial trip 
to Vietnam.
    Second, I believe there is a renewed enthusiasm for 
business in Vietnam. We at the Department of Commerce, as part 
of our daily work, talk with a broad range of American business 
executives. We have also talked extensively with Vietnamese 
officials. To a person, they are extremely enthusiastic about 
the signing of the bilateral trade agreement.
    This renewed enthusiasm is reminiscent of some of the 
initial euphoria over the lifting of the embargo and the 
establishing of diplomatic relations in 1994 and 1995. I was 
still seeing this enthusiasm when I was there in 1996, and we 
are seeing it again today, but I think in a more grounded way. 
As they were then, American companies are attracted to this new 
frontier by the very attractive fundamentals of a young and 
industrious population and a good base of natural resources.
    Over the intervening 4 years, it is true that some of the 
companies became disillusioned by the difficulty of doing 
business in Vietnam. The cost of doing business there is 
extremely high and government policies there at times have been 
schizophrenic. The Asian financial crisis further compounded 
the difficulties for all parties involved.
    But I think the renewed enthusiasm we are seeing today is 
fundamentally different from the high expectations of the first 
wave. Our firms are taking a second, more realistic, look at 
this challenging market. They have gained in-country experience 
over the past 5 years which now gives them an optimistic but 
realistic view of commercial opportunities in Vietnam, and the 
bilateral trade agreement has addressed many of their 
uncertainties.
    My third point, this is not going to be an easy process, 
and the Vietnamese will need our assistance. Vietnam is still 
clearly a country in transition. Much work remains to be done 
on the implementation of the bilateral trade agreement. 
Progress will not be easy, fast, or necessarily even smooth, 
but I believe it will be unstoppable.
    Vietnam is now on the path toward integration into the 
global economic community. Signing the BTA was a significant 
step down that path, but implementation is the key to that 
journey.
    We at Commerce will work closely with USTR, the State 
Department, and the other agencies of the executive branch and 
the Congress to monitor implementation of the agreement. As 
many in Congress have noted, it is important to do the hard 
work of monitoring all of our trade agreements and determining 
the degree to which foreign countries comply with them.
    In addition to monitoring implementation, we at Commerce 
will also help American companies take advantage of the 
agreements's market opening opportunities through a variety of 
initiatives. But we also need to help the Vietnamese make the 
agreement work.
    During the bilateral negotiations, our negotiators told the 
Vietnamese that the United States would provide technical 
assistance to help them implement the agreement. Deputy 
Secretary Mallett reaffirmed this commitment during his visit 
last month.
    We at Commerce have already begun a range of technical 
assistance initiatives in a number of disparate areas. For 
example, as early as 4 years ago I signed a memorandum of 
cooperation on commercial law development with the Vietnamese. 
Since then, we at Commerce have provided assistance in other 
areas as in insurance regulations, standards workshops, 
intellectual property enforcement training, as well as 
meteorological and fisheries cooperation.
    To date, many of these efforts, though positive, have been 
on an ad hoc basis. We need to do more. I think we need to work 
together both in the Administration and with the Congress to 
develop a comprehensive, targeted technical assistance program 
which could be a major investment in the new relationship.
    With that, Mr. Chairman, let me stop. I would be pleased to 
take your questions and those of the Subcommittee Members.
    [The prepared statement of Mr. Hauser appears in the 
appendix.]
    Mr. Bereuter. Under Secretary Hauser, thank you very much 
for your testimony as well.
    We will now proceed, of course, under the 5-minute rule as 
usual.
    The gentlewoman from Florida, chairwoman of the IEPT 
Subcommittee, has left to meet with officials about a plane 
crash involving her constituency, and we will submit questions 
for her under general leave. I will start the questioning under 
the 5-minute rule.
    Secretary Roth, I wanted to ask your opinion or the State 
Department's judgment, if there is such a judgment, whether you 
think Vietnam's decision to sign the trade agreement is an 
indicator that Vietnam's reformers have broken the policy 
paralysis in the Politburo, or is it a sign that conservative 
hard-liner efforts are simply trying to co-opt the reform 
agenda?
    Mr. Roth. I hope that it is the first. I view it more of an 
ebb and flow, not that it is one, you know, final victory. I 
think there is a struggle going on within the regime in Vietnam 
between reformers and those opposed to reform and that it waxes 
and wanes at various points.
    We saw this in the negotiation of the agreement itself, the 
fact that we thought we had the deal and then the fact that it 
did not happen and then the fact that we got the deal with 
concessions made that weren't available before suggest to me 
that this is still being fought out within there. But now that 
it is signed in writing and needs to be implemented I hope that 
the impetus or the strength will go to the reformers.
    Mr. Bereuter. Undoubtedly, it delayed or slowed down the 
course of the negotiations.
    Secretary Hauser, you have mentioned the kind of things 
that you have had ongoing to try to ensure that we have better 
record of implementation of the trade agreement once it is 
signed, approved by Congress; and you mentioned many of these 
things are really ad hoc as opposed to a comprehensive policy.
    Can you tell me anything more about how you might move to a 
more comprehensive policy? What the components of it would be? 
Whether you need additional resources to do that? And if so--as 
we did in the case of China, if so, are they available within 
the Commerce Department or do they depend upon, in part, a 
budget request for Department of Commerce for fiscal year 2002?
    Mr. Hauser. Mr. Chairman, let me differentiate. What I 
think I said was ad hoc was some of our efforts at technical 
assistance, and I think we are taking positive steps across the 
Administration in that regard. I know AID has made resources 
available for two people to work with the Vietnamese Government 
on implementation of the bilateral trade agreement. We have 
ongoing efforts at technical assistance. In fact, as 
Congressman Pomeroy had said, we had some of our experts from 
the insurance industry over in Vietnam. In fact, we have 
another team on insurance there this week. Our Commissioner of 
Patents and Trademarks, Under Secretary Dickenson, I believe, 
is going to be in Vietnam within another week or 10 days, 
again, to bring some existing resources efforts to focus on how 
we can help the Vietnamese live up to the agreement.
    On the issue of implementation of the agreement, we have 
asked the Congress for some assistance across the board in the 
U.S. Government in the fiscal 2001 budget.
    Mr. Bereuter. But not identified specifically for Vietnam?
    Mr. Hauser. Vietnam, among a number of countries. We are 
looking for increased resources, obviously, for key areas like 
China, Japan, Europe. I think there is also a need to be 
putting more resources on this particular issue as this 
agreement comes forward.
    Mr. Bereuter. Secretary Roth, in the past, Vietnam has 
treated United States citizens of Vietnamese background 
differently and more negatively than other United States 
citizens. Given that increased economic and trade ties will 
likely increase travel to and business dealings with Vietnam by 
the part of United States citizens of Vietnamese origin, what 
steps will our government take to end the kind of 
discrimination that seems to exist against Vietnamese 
Americans?
    Mr. Roth. First, one would hope that Vietnam itself would 
come to recognize and see that Vietnamese Americans are a 
positive factor in terms of developing the relationship in 
their own economic development.
    Mr. Bereuter. They should. It is logical.
    Mr. Roth. I think that over time that is likely to be the 
trend.
    Second, we need to continue what we are doing, which is to 
press extremely hard on every single case when we find examples 
of discrimination. I have spent hours in Ho Chi Mihn City, for 
example, discussing consular access for Americans who have been 
detained on criminal matters. I think we have to make it very 
clear that there is no distinction in the minds of United 
States officials between Vietnamese Americans and other 
Americans. That just has to be a priority point when necessary. 
We have to get our Cabinet officials to raise these cases until 
they come to accept it.
    Mr. Bereuter. Thank you, Mr. Secretary.
    My time has expired. The gentleman from Florida, Mr. Davis, 
is recognized 5 minutes.
    Mr. Davis. Thank you, Mr. Chairman.
    Secretary Roth, how would you describe the current state of 
affairs as far as the government's level of respect for 
political and civil rights of its citizens in Vietnam?
    Mr. Roth. Minimal, I guess I would have to put it. As I 
mentioned before, one can't talk about a whole lot of freedom 
of speech, press, assembly and the like.
    At the same time, changing. That I think you see signs that 
you did not see before. I have been traveling to Vietnam for 
the past 20 years, and it is different in many ways. It is 
inconceivable to me to see a demonstration not organized by the 
government. Now you can see that there were demonstrations 
outside their parliament when it meets on various issues. There 
is occasional criticism, not systematic; and sometimes there is 
retaliation in the press. It is usually oblique, but the press 
is different than it had been before, even though it is not 
nearly good enough.
    There has been--in other words, it is episodic, but there 
is some signs that there is a gradual loosening. But there has 
been no conceptual breakthrough yet. I don't think we can say 
yet that Vietnam is on the path to democracy.
    Mr. Davis. How do you see the implementation of this 
proposed trade agreement influencing trends in that regard?
    Mr. Roth. Well, I tried to make the point before that I 
think that over time--and I am not necessarily saying a very 
short, immediate period of time. I think that as trade 
increases, as there is more exposure with the United States and 
the rest of the world, as different standards are used in terms 
of commercial law, in terms of transparency, in terms of 
accountability, I think all of that has to have an impact and 
spillover effect into the political side of the equation in 
Vietnam.
    It is not a one-to-one correlation, which is why I am 
trying not to be absolutely--trying to not overstate and say 
that this guarantees, the BTA, that Vietnam will be a democracy 
or our type of guys or our type of system in another 5 to 10 
years. But I think the trends that it promotes have to be 
helpful in terms of the kind of openness that we all want to 
see.
    Mr. Davis. Thank you.
    Mr. Hauser, Representative Rohrabacher raised a legitimate 
point earlier and that was the net benefit strictly on the 
economics to the United States of this proposed agreement. And 
Ambassador Barshefsky made the point that in the case of some 
exports to Vietnam currently there are no tariffs imposed by 
the United States. I think that is the case with shrimp and 
coffee, for example, two major export items.
    Could you elaborate a little bit more on what the net 
benefits are to the United States as far as the tariff 
reductions both on imports and exports under the agreement?
    Mr. Hauser. I think you would have to look, Congressman, 
beyond just the tariff reductions. I would note that I believe 
something like four-fifths of the some-250 line items that are 
being reduced in the Vietnamese tariffs are for American 
agricultural products, which we know are very competitive and 
in search of world markets. So I think the prospects in those 
sectors--and, again, I am the Department of Industry and 
Services, but my colleagues at Agriculture tell me that 
soybeans, soybean meal, bulk cotton, wheat, wheat flour, 
livestock and a number of other agricultural products would 
benefit from this market opening.
    In addition to the tariff reductions in the agreement, the 
provisions on service industries, for example, go a tremendous 
way to meeting the concerns that we have heard from the 
American business community over the years. In 1996, for 
example, I met with a number of U.S. insurance companies, 
American banks that at the time were able to have a branch 
operating in Hanoi, and the big deal for them was to get 
permission, which they were not getting, to open a branch in Ho 
Chi Minh City. Those kind of restrictions on doing business in 
Vietnam are eliminated in the process of the trade agreement.
    There had also been very strict limitations in terms of 
degree of foreign ownership of particular sectors, whether it 
is issues in telecom, insurance or any of the other service 
sectors. The agreement as negotiated, and if it is approved by 
the Congress, will over time allow increasing American 
ownership, increasing participation in these sectors.
    Similarly, the business facilitation provisions, the 
transparency provisions that are within the six major 
categories Ambassador Barshefsky discussed are all to the 
benefit of American firms seeking to do business in the market. 
So it goes beyond the tariffs, Congressman.
    Mr. Davis. One last question, Secretary Roth, a question 
that would probably have been better directed to Ambassador 
Barshefsky. As this Congress begins to more aggressively tackle 
the human rights issues, the labor and environmental issues 
that are invariably associated with trade, as evidenced by some 
of the efforts of our Chairman here today and Congressman Levin 
on the China bill, to what extent were those subjects brought 
up on the discussions of the bilateral agreement here and to 
what extent do you see that as being a part of Congress' 
consideration when we take up Fast Track on bilateral next 
year?
    Mr. Roth. I really can't address the first part of the 
question, since I was not part of the negotiations, did not sit 
in on them and haven't read the transcripts, but I will get you 
an answer for the record.

    Answer: Concerned by Vietnam's poor human rights record, 
this Administration has worked consistently to engage Vietnam 
on these issues. For 8 years, we have pressed for improvements 
through high level meetings, everyday activities by Embassy 
personnel, and our annual human rights dialogue. We have 
achieved some progress, although significant problems remain.
    The Bilateral Trade Agreement with Vietnam should 
facilitate additional progress on both human rights and labor 
conditions. The Agreement grants Vietnam's citizens significant 
rights to trade and distribute goods and services. Over time, 
increased trade should allow Vietnamese citizens to determine 
their economic destiny, leading to a broader expansion of 
individual liberty. Furthermore, we are confident that 
Vietnam's commitments to improve the rule of law in commercial 
transactions will eventually lead to the extension of the rule 
of law to other, non-commercial activities in Vietnam.
    We have clearly not finished the job. We will continue to 
press for progress until Vietnam meets internationally accepted 
standards for human and labor rights.
    Environmental issues did not figure prominently in our BTA 
negotiations but they figure prominently in our bilateral 
relations. The USG is working with Vietnam on revision of its 
environmental law, improvements in air quality, coral reef 
preservation and coral reef trade management, and watershed 
management to mitigate floods. Vietnam has also agreed to 
conduct joint scientific research on the epidemiological and 
environmental effects of exposure to Agent Orange/dioxin. We 
fully expect the BTA to bring to Vietnam the latest U.S. 
technology and practices related to the environment.

    On the second part of your question, I think it is quite 
clear that the Administration has heard the message, not only 
from the Hill but from segments of American society, that it 
would like to see more attention being given, more emphasis in 
some of our trade agreements on environment, human rights and 
labor issues; and I think that has already surfaced as 
something that the Administration would like to do in the 
future as we look forward. So we know this is coming in terms 
of congressional consideration.
    At the same time, I think it is important, in terms of the 
consideration of this particular agreement, that we not hold 
Vietnam to a different standard than we have held many other 
countries in their bilateral trade agreements and, in other 
words, not change the rules retroactively on them. We did 
negotiate an agreement, and I think we should go ahead and seek 
to get it approved.
    Mr. Davis. Thank you. Thank you, Mr. Chairman.
    Mr. Bereuter. I will advise we probably will have a second 
round.
    The gentleman from California, Mr. Rohrabacher, is 
recognized for 5 minutes.
    Mr. Rohrabacher. Thank you very much.
    Whereas this is likely to be Mr. Roth's last appearance 
before this Subcommittee of this Congress, anyway----
    Mr. Roth. No more hearings?
    Mr. Rohrabacher. No more hearings--I would like to ask him 
a little bit about some testimony that he gave prior to this. I 
seem to remember that you had been downplaying at the last 
hearing the last time we were together my warnings about the 
military escalation in the South China Sea. I have submitted 
for the record, Mr. Chairman, an article from a July 26 article 
from the Chinese army newspaper characterizing their facilities 
in the Spratly Islands as modern fortresses at sea. Mr. Roth, 
would you say that your characterization of my warnings the 
last time you testified before this Subcommittee are more 
accurate than the Chinese characterization of their modern 
fortresses at sea in the Spratly Islands?
    Mr. Roth. Absolutely. I would stand by what I said. Common 
sense suggests if you look at the pictures of the facilities 
that they are hardly modern fortresses.
    Mr. Rohrabacher. When was the last picture that you saw of 
those facilities?
    Mr. Roth. A couple of months. I should say----
    Mr. Rohrabacher. Mr. Chairman, I would submit for the 
record--do we have those pictures? We will submit for the 
record those pictures, and they are modern fortresses with 
helicopter landing pads and facilities for rocket launchers.
    Go right ahead.
    Mr. Bereuter. Without objection, they will be made a part 
of the record.
    [The information appears in the appendix.]
    Mr. Roth. I think the interesting thing to note is, because 
of the diplomatic pressure we have generated, China has now 
engaged in what it said it would not do, negotiating with the 
other claimants on a code of conduct; and that, I think, is 
significant if we get it; and that the claimants are standing 
tough and insisting on construct freeze, no new facilities, 
denying Chinese fishing rights until----
    Mr. Rohrabacher. As you know, up until now the Chinese have 
not been willing to negotiate with the other ASEAN parties, 
claiming that all of the Spratly Islands belong to them..
    Mr. Roth. They are in negotiations, which is a major 
accomplishment.
    Mr. Rohrabacher. If indeed--we will wait and see if your 
optimism is justified.
    Now, in terms of Vietnam, again, for the record let me 
point out that what we have heard today is that we have an 
agreement that will permit the North Vietnamese or the 
Vietnamese, I should say, government, that dictatorship, to 
continue to have very high levels of tariffs against American 
products, while our tariffs are going to be substantially 
lower, perhaps very low in comparison.
    Also, part of this agreement will be a subsidy to American 
businessmen who want to perhaps close factories here and open 
up factories in Vietnam, while our Ambassador, our trade 
representative just stated that businessmen should be very 
cautious, very, very cautious in doing business in Vietnam. Yet 
our agreement permits Export-Import Bank, OPIC, and other U.S. 
taxpayers to subsidize those businessmen in building those 
factories.
    That does not seem like a good deal for America to me. It 
seems to me that we have a terrible trade balance with 
Communist China. It seems that we are setting up the same sort 
of incentives for people to build businesses over there but not 
to sell U.S. products.
    Mr. Roth. I am baffled by your linkage between the BTA and 
these programs. It is Jackson-Vanik which gives these programs. 
We have these programs already. We do not have a BTA yet, and 
we have these programs already. So I think that this has 
nothing to do with BTA.
    Mr. Rohrabacher. Right. This does not lay the foundation 
for our trading relationship for Vietnam in the future. Which I 
think it does, and that, I think, is what we have heard today.
    One last thing about the POWs which you have characterized 
as their ``cooperation.'' Ambassador Pete Peterson when he was 
here a month ago changed his position, by the way, I might add, 
when the floor debate was going on, said they had cooperated. 
But afterwards, when he met with me, admitted that the 
Vietnamese Government has not cooperated with us in providing 
us the records from prisons in which our POWs were being held. 
They haven't provided how much supplies or how many prisoners 
were supposed to be there. They just have not.
    Pete's position is, which I imagine--and I am asking you, 
Mr. Roth--is that the position of the Administration is that we 
do not expect the Vietnamese to provide us the records from 
those prisons because it is unrealistic for us to expect them 
to have those records? Or, after having demanded to see those 
records for 10 years, that we still are asking for those 
records?
    Mr. Roth. Well, I think this is something that you may want 
to pursue in more detail with DIPMIL than with me, since I 
don't work on it day to day. But having seen your exchange and 
heard about it from Pete, what I have been advised is that it 
is the assessment of our experts that they do not have these 
records, and after 25 to 30 years that they have long since 
vanished.
    Mr. Rohrabacher. Vanished?
    Mr. Roth. It is, further, their assessment that they 
probably would not contain useful information if they had them.
    Mr. Rohrabacher. I think that the public will have to 
determine whether we can characterize that position which you 
just articulated as something less stringent than holding their 
feet to the fire. You might say we are letting them off the 
hook.
    Mr. Roth. You can't demand production of documents that do 
not exist, which is one of the problems we have had all along 
is trying to figure out what does and does not exist. It is 
easy to say you have to produce something, but if it isn't 
there, and it is completely credible to me that it might not be 
there----
    Mr. Rohrabacher. Well, whenever something comes down to 
giving them the benefit of the doubt whether those documents 
exist, I guess it is better to give them the benefit of the 
doubt rather than worry about some POWs that have been murdered 
somewhere.
    Mr. Roth. We have gotten an extraordinary amount of 
documents from the Vietnamese.
    Mr. Bereuter. The time of the gentleman has expired. We 
will come back to the gentleman if he wishes.
    I would like to return under the 5-minute rule for a second 
round.
    Secretary Hauser, if the BTA enters into force, which 
sectors do you think will benefit the most? That is my first 
general question.
    And sort of subsets under it, one of the predictions of 
analysts is that the first beneficiaries of the agreement, or 
the larger beneficiaries, initially at least, might be American 
investors versus American--and multilateral investors, as 
compared to American exporters. I wonder if I could get your 
reaction to that.
    Second, you briefly discussed the areas, commodities 
products and so on, where you think we might have the biggest 
natural benefits in terms of exports and suggested you were not 
an agricultural expert. I heard several things mentioned.
    The quantitative restrictions, according to Chapter 1 of 
the agreement, reduced a range of industrial and agricultural 
products, but they specifically list auto parts, citrus and 
beef over a period of 3 to 7 years as being areas where we 
could expect substantial export increase.
    Would you care to react in any kind of degree of 
specificity to those questions and subquestions?
    Mr. Hauser. Yes, thank you, Mr. Chairman.
    As I say, I had gone through where we saw opportunities 
largely arising from the tariff cuts on the agricultural 
spectrum.
    On the industrial side of the ledger, I think the best 
prospects we have identified in Vietnam would be, one, aircraft 
and aircraft parts; two, oil and gas exploration and production 
services; three, power generation and transmission; four, food 
processing and packaging. Let me do two more, computer hardware 
software and services and telecom.
    I think in most of these sectors there is the opportunity 
for export sales. We have been talking to the Vietnamese about 
an aviation agreement. They want to develop a world-class 
airline. We know the American producers are in discussions with 
them. I think there is a good opportunity there. Vietnam is a 
resource-rich country. American technology in the areas of oil 
and gas exploration are world class. I think there is good 
opportunity for sales there.
    Similarly, as the country industrializes, moves down the 
development path, power generation, power project will be very 
important. Again, I think these all create very real sales 
opportunities for American business over the near to medium 
term once the agreement takes place.
    Mr. Bereuter. Thank you.
    We are having a vote a little earlier than I anticipated. I 
was going to ask your opinions about what Deputy Under 
Secretary of Labor for International Labor Affairs Andrew Samet 
is likely to achieve, but I will ask him directly by letter and 
will move to my colleagues so we can complete this round and 
complete the hearing before we go vote.
    The gentleman from Florida, Mr. Davis, is recognized.
    Mr. Davis. Mr. Chairman, I have no more questions.
    Mr. Bereuter. The gentleman has no questions. Perhaps I 
will sneak in one then, if I may; and that is related to the 
Generalized System of Preferences [GSP]. Secretary Hauser, the 
signing of the BTA could bring Vietnam closer to receiving 
United States trade benefits under the GSP. What are the 
conditions we would think under which the United States would 
proceed with granting Vietnam GSP?
    Mr. Hauser. Well, I think as a threshold question--and I am 
not a trade lawyer, Mr. Chairman, but I believe Vietnam first 
needs to become a WTO member before it passes eligibility for 
GSP. We then do have a set of criteria, including issues like 
intellectual property protection, worker rights, etc., that we 
would look at very carefully in making a decision on GSP.
    Again, WTO accession, while we think our agreement tees up 
a number of issues at a WTO world-class standard, is still an 
issue that is some years down the road.
    Mr. Bereuter. And obviously they will be expected still to 
be meeting the economic criteria?
    Mr. Hauser. Yes.
    Mr. Bereuter. The gentleman from California, Mr. 
Rohrabacher, is recognized for 5 minutes.
    Mr. Rohrabacher. I will be submitting for the record an 
article that came out in the last 2 days describing the end of 
the ASEAN negotiations with the Chinese and describing them as 
being total failures in negotiation, Mr. Chairman. I am 
surprised that Mr. Roth characterized it as something else, but 
we will find out.
    Mr. Roth. I just met with the Philippine foreign minister 
yesterday who has been intimately involved in the negotiations, 
and they are ongoing. They are not over.
    Mr. Rohrabacher. Well, we will take a look and see whether 
we are just talking about round one being a failure or whether 
the negotiations themselves are being labeled as failure.
    Also, Mr. Roth, you mentioned that for the first time we 
have seen strikes in Vietnam. Do you know, were any of those 
strikes at other than foreign-owned companies?
    Mr. Roth. I don't know the details of them.
    Mr. Rohrabacher. So you are hailing strikes here, but you 
do not really know whether or not they are permitted to have 
strikes at companies that are owned by anybody else except 
foreigners?
    Mr. Roth. I was simply making the point that, despite the 
fact that these are technically illegal acts, that they did not 
arrest the people. They permitted them to go forward. It was 
part of my point about the generality trend.
    Mr. Rohrabacher. Well, at a hearing when we were trying to 
determine the economic viability of people doing business 
there, it would seem to me it would be very important for us to 
know whether or not the Vietnamese Government was permitting 
strikes at foreign-owned companies but the rest of the country 
they were holding labor with an iron fist.
    Mr. Roth. I will try to answer for the record then.
    Mr. Rohrabacher. All right.

    Answer: According to our Embassy, 17 legal strikes occurred 
during the first half of 2000. Of these, 11 were at foreign-
owned enterprises, and 3 at state-owned enterprises. As noted 
in the 1999 Human Rights Report, an estimated 252 strikes were 
reported from January 1995 through September 1999. Of these, 
some 132 strikes were in enterprises with foreign investment, 
about 40 in state-owned enterprises, and 80 in private 
enterprises. Most of the strikes did not follow an authorized 
conciliation an arbitration process, and thus were illegal; 
however, the Government tolerated the strikes and did not take 
action against the strikers. Neither the Vietnam General 
Confederation of Labor (VGCL) not its affiliate unions 
officially sanctioned these strikes, but they were supported 
unofficially at the local and provincial levels of the VGCL on 
an informal basis.

    Mr. Rohrabacher. Let me say I disagree, obviously, with 
your assessment about whether or not there has been cooperation 
about POWs. I think--and I am very sorry to hear that it now 
seems to be want official position of this Administration that 
the Vietnamese should not be expected to have the records from 
the prisons in which American POWs were held during the war.
    Let me note that Communist regimes are infamous for their 
recordkeeping. They are--this is something that they have 
excelled in. They do not excel in economic growth in Communist 
countries, but they excel in bureaucratic recordkeeping. And I 
am just sorry to hear that we are willing to just give them the 
benefit of the doubt that those records no longer exist, 
because those are some records that could indicate how many 
American POWs that they actually held.
    Mr. Roth, are you aware that Pete Peterson was kept not as 
a prisoner of war but as a ``missing in action'' during the 
first 3 years of his captivity?
    Mr. Roth. No, I wasn't.
    Mr. Rohrabacher. Do you know what he was not in the 
ordinary--in with the other prisoners during that time period?
    Mr. Roth. He has told me some of his experiences.
    Mr. Rohrabacher. That would indicate that perhaps there was 
a--certain people that were being kept that no one knew were 
being kept. These records would indicate that.
    I don't believe that the Vietnamese are being honest with 
us. I believe that they kept hundreds of Americans after the 
war and perhaps murdered them since. But we need to know that 
before we should be entering into an agreement that provides 
U.S. taxpayer subsidies to businessmen who build factories 
there, or permit that country to have a high level of tariffs 
against American products while they can flood their products 
that are being built with slave labor into our markets. It is 
not good for America, and it is not being loyal to our own 
people.
    Thank you very much, Mr. Chairman.
    Mr. Bereuter. Thank you very much, Mr. Rohrabacher.
    Gentlemen, I want to thank you for your testimony today. 
Obviously, we expect to come back to this subject in the next 
Congress. As I mentioned, this was a way of us starting for 
consideration of the BTA when it is officially brought before 
us.
    I was going to ask Ms. Barshefsky when we could expect a 
letter of transmittal, but perhaps we will do that by letter. 
And I would make an announcement that while I am never 
convinced that anything is final in the Senate, I am told that 
the vote on H.R. 4444 was 85 to 15. The Subcommittees are 
adjourned.
    [Whereupon, at 3:04 p.m., the Subcommittees were 
adjourned.]
      
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                            A P P E N D I X

                           September 19, 2000

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
```