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

 
                 UNITED STATES-VIETNAM TRADE RELATIONS

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

                                HEARING

                               before the

                         SUBCOMMITTEE ON TRADE

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 17, 1999

                               __________

                             Serial 106-20

                               __________

         Printed for the use of the Committee on Ways and Means

                                

                      U.S. GOVERNMENT PRINTING OFFICE
 59-940 CC                   WASHINGTON : 2000
------------------------------------------------------------------------------
                   For sale by the U.S. Government Printing Office
 Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

                      COMMITTEE ON WAYS AND MEANS

                      BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
BILL THOMAS, California              FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida           ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut        WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York               SANDER M. LEVIN, Michigan
WALLY HERGER, California             BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia                 JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio                    XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania      KAREN L. THURMAN, Florida
WES WATKINS, Oklahoma                LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida

                     A.L. Singleton, Chief of Staff
                  Janice Mays, Minority Chief Counsel

                                 ______

                         Subcommittee on Trade

                  PHILIP M. CRANE, Illinois, Chairman

BILL THOMAS, California              SANDER M. LEVIN, Michigan
E. CLAY SHAW, Jr., Florida           CHARLES B. RANGEL, New York
AMO HOUGHTON, New York               RICHARD E. NEAL, Massachusetts
DAVE CAMP, Michigan                  MICHAEL R. McNULTY, New York
JIM RAMSTAD, Minnesota               WILLIAM J. JEFFERSON, Louisiana
JENNIFER DUNN, Washington            XAVIER BECERRA, California
WALLY HERGER, California
JIM NUSSLE, Iowa

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.

                            C O N T E N T S

                               __________

                                                                   Page

Advisories announcing the hearing follow.........................     2

                               WITNESSES

Peterson, Hon. Douglas ``Pete,'' U.S. Ambassador to Vietnam......    28

                                 ______

Asia-Pacific Council of American Chambers, and Craft Corporation, 
  Greig Craft....................................................    83
Blumenauer, Hon. Earl, a Representative in Congress from the 
  State of Oregon................................................    24
Boat People S.O.S., Nguyen Dinh Thang............................    40
Citigroup Inc., Lionel C. Johnson................................    54
Coalition Against the Jackson-Vanik Waiver, Diem H. Do...........    68
Kerry, Hon. John F., a U.S. Senator from the State of 
  Massachusetts..................................................     8
Montagnard Human Rights Organization, Y Tin Hwing................    52
National Alliance of Families for the Return of America's Missing 
  Servicemen, Lynn O'Shea........................................    78
Rohrabacher, Hon. Dana, a Representative in Congress from the 
  State of California............................................    14
US-ASEAN Business Council, Inc., Ernest Z. Bower.................    57
U.S. Chamber of Commerce, L. Craig Johnstone.....................    71
U.S.-Vietnam Trade Council, Virginia B. Foote....................    43
Vietnamese American Business Council, Trung Trinh................    64

                       SUBMISSIONS FOR THE RECORD

American Chamber of Commerce in Vietnam, Hanoi Chapter, Hanoi, 
  Vietnam, Peter Ryder, statement................................    89
American Legion, John F. Sommer, Jr., letter.....................    90
Boeing Company, Arlington, VA, statement.........................    91
Caterpillar Inc., statement......................................    92
General Electric Company, Hanoi, Vietnam, Andre Sauvageot, 
  statement......................................................    92
Liberty Flame Foundation, Westminster, CA, Nguyen Pham Tran, 
  letter.........................................................    96
McCain, Hon. John, a U.S. Senator from the State of Arizona, 
  letter.........................................................    97
Minnesota League of POW/MIA Families, White Bear Lake, MN, 
  Richard Daly...................................................    98
National League of Families of American Prisoners and Missing in 
  Southeast Asia, Ann Mills Griffiths, letter and attachments....    99
Nguyen, Dan, Sacramento, CA, letter..............................   112
Veterans of Foreign Wars of the United States, Bruce R. Harder, 
  statement......................................................   113
Vietnamese-American Voters' Coalition, Long Beach, CA, Tanette 
  Nguyen McCarty, statement......................................   116
Vietnamese Nationalist Community of Austin and Vicinity, Austin, 
  TX, Khanh K. Chau, and Hung Quoc Nguyen, letter................   118

                 UNITED STATES-VIETNAM TRADE RELATIONS

                              ----------                              

                             JUNE 17, 1999

                  House of Representatives,
                       Committee on Ways and Means,
                                     Subcommittee on Trade,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:30 a.m., in 
room 1100, Longworth House Office Building, Hon. Philip Crane 
(Chairman of the Subcommittee) presiding.
    [The advisories announcing the hearing follow:]

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

                         SUBCOMMITTEE ON TRADE

FOR IMMEDIATE RELEASE                           CONTACT: (202) 225-1721
June 4, 1999
No. TR-12

                       Crane Announces Hearing on
                      U.S.-Vietnam Trade Relations

    Congressman Philip M. Crane (R-IL), Chairman, Subcommittee on Trade 
of the Committee on Ways and Means, today announced that the 
Subcommittee will hold a hearing on U.S.-Vietnam Trade Relations, 
including the President's renewal of Vietnam's waiver under the 
Jackson-Vanik amendment to the Trade Act of 1974. The hearing will take 
place on Thursday, June 17, 1999, in the main Committee hearing room, 
1100 Longworth House Office Building, beginning at 10:00 a.m.
      
    Oral testimony at this hearing will be from both invited and public 
witnesses. Invited witnesses will include the Honorable Douglas 
``Pete'' Peterson, U.S. Ambassador to Vietnam. Also, any individual or 
organization not scheduled for an oral appearance may submit a written 
statement for consideration by the Committee or for inclusion in the 
printed record of the hearing.
      

BACKGROUND:

      
    Vietnam's trade status is subject to the Jackson-Vanik amendment to 
Title IV of the Trade Act of 1974. This provision of law governs the 
extension of normal trade relations (NTR), including normal tariff 
treatment, as well as access to U.S. Government credits, or credit or 
investment guarantees, to nonmarket economy countries ineligible for 
NTR treatment as of the enactment of the Trade Act. A country subject 
to the provision may gain NTR treatment and coverage by U.S. trade 
financing programs only by complying with the freedom of emigration 
provisions under the Act. The extension of NTR tariff treatment also 
requires the conclusion and approval by Congress of a bilateral 
commercial agreement with the United States providing for reciprocal 
nondiscriminatory treatment. The Act authorizes the President to waive 
the requirements for full compliance with respect to a particular 
country if he determines that a waiver will substantially promote the 
freedom of emigration provisions, and if he has received assurances 
that the emigration practices of the country will lead substantially to 
the achievement of those objectives.
      
    Since the early 1990s, the United States has taken gradual steps to 
improve relations with Vietnam. In February 1994, President Clinton 
lifted the trade embargo on Vietnam in recognition of the progress made 
in POW/MIA accounting and the successful implementation of the Paris 
Peace Accords. The United States opened a Liaison Office in Hanoi later 
that year. On July 11, 1995, President Clinton announced the 
establishment of diplomatic relations, which was followed by the 
appointment of former Congressman Douglas ``Pete'' Peterson as U.S. 
Ambassador to Vietnam. In 1997, the Office of the United States Trade 
Representative began negotiations, which are still ongoing, toward the 
conclusion of a bilateral commercial agreement with Vietnam.
      
    Because Vietnam has not yet concluded a bilateral commercial 
agreement with the United States, it is ineligible to receive NTR 
tariff treatment. However, if the President determines that a Jackson-
Vanik waiver would substantially promote the freedom of emigration 
objectives under the Trade Act of 1974, U.S. exporters to Vietnam are 
given access to U.S. Government credits, or credit or investment 
guarantees, such as those provided by the Overseas Private Investment 
Corporation, the Export-Import Bank, and the U.S. Department of 
Agriculture, provided that Vietnam meets the relevant program criteria.
      
    On March 9, 1998, the President first determined that a Jackson-
Vanik waiver for Vietnam would substantially promote the freedom of 
emigration objectives under the Trade Act of 1974. On April 7, 1998, 
the President issued Executive Order 13079, under which the waiver 
entered into force. The renewal procedure under the Trade Act requires 
the President to submit to Congress a recommendation for a 12-month 
extension no later than 30 days prior to the waiver's expiration. On 
June 3, 1998, the President renewed Vietnam's waiver for the next 12-
month period. On June 3, 1999, the President again issued a 12-month 
waiver. The waiver authority will continue in effect unless disapproved 
by Congress within 60 calendar days after the expiration of the 
existing waiver. Disapproval, should it occur, would take the form of a 
joint resolution disapproving of the President's waiver determination. 
In the 105th Congress, a resolution of disapproval, H.J. Res. 120, was 
considered and failed by a vote of 163 to 260.
      
    In 1998, two-way trade between the United States and Vietnam was 
valued at $827.6 million. United States exports to Vietnam last year 
totaled $274.2 million, and U.S. imports from Vietnam equaled $553.4 
million. Top U.S. exports included machinery and transportation 
equipment, and chemicals and related products. Top U.S. imports from 
Vietnam in 1998 included food and live animals, and miscellaneous 
manufactured articles.
      
    In announcing the hearing, Chairman Crane stated: ``This hearing 
will provide the Subcommittee with an opportunity to review Vietnam's 
Jackson-Vanik waiver and the progress that has been made on pending 
emigration cases of concern to the United States. It is also an 
occasion to assess progress made in cooperation on POW/MIA accounting. 
In addition, Vietnam is a significant potential market of 78 million 
people to U.S. firms and workers in the important Southeast Asian 
region. I look forward to this chance to review the status of the 
ongoing negotiations with Vietnam toward a bilateral trade agreement, 
which must be concluded and approved by Congress before normal trade 
relations can be extended to Vietnam.''
      

FOCUS OF THE HEARING:

    The focus of the hearing will be to evaluate overall U.S. trade 
relations with Vietnam and to consider the President's renewal of 
Vietnam's waiver under the Jackson-Vanik amendment to the Trade Act of 
1974. The Subcommittee is interested in hearing testimony about 
Vietnam's emigration policies and practices, on the nature and extent 
of U.S. trade and investment ties with Vietnam and related issues, and 
on the potential impact on Vietnam and the United States of a 
termination of Vietnam's waiver. Finally, witnesses may also address 
U.S. objectives in the ongoing negotiations with Vietnam to conclude a 
bilateral commercial agreement.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

    Requests to be heard at the hearing must be made by telephone to 
Traci Altman or Pete Davila at (202) 225-1721 no later than the close 
of business, Thursday, June 10, 1999. The telephone request should be 
followed by a formal written request to A.L. Singleton, Chief of Staff, 
Committee on Ways and Means, U.S. House of Representatives, 1102 
Longworth House Office Building, Washington, D.C. 20515. The staff of 
the Subcommittee on Trade will notify by telephone those scheduled to 
appear as soon as possible after the filing deadline. Any questions 
concerning a scheduled appearance should be directed to the 
Subcommittee on Trade staff at (202) 225-6649.
      
    In view of the limited time available to hear witnesses, the 
Subcommittee may not be able to accommodate all requests to be heard.
      
    Those persons and organizations not scheduled for an oral 
appearance are encouraged to submit written statements for the record 
of the hearing. All persons requesting to be heard, whether they are 
scheduled for oral testimony or not, will be notified as soon as 
possible after the filing deadline.
      
    Witnesses scheduled to present oral testimony are required to 
summarize briefly their written statements in no more than five 
minutes. THE FIVE-MINUTE RULE WILL BE STRICTLY ENFORCED.
      
    The full written statement of each witness will be included in the 
printed record, in accordance with House Rules.
      
    In order to assure the most productive use of the limited amount of 
time available to question witnesses, all witnesses scheduled to appear 
before the Subcommittee are required to submit 200 copies, along with 
an IBM compatible 3.5-inch diskette in WordPerfect 5.1 format, of their 
prepared statement for review by Members prior to the hearing. 
Testimony should arrive at the Subcommittee on Trade office, room 1104 
Longworth House Office Building, no later than Tuesday, June 15, 1999. 
Failure to do so may result in the witness being denied the opportunity 
to testify in person.
      

WRITTEN STATEMENTS IN LIEU OF PERSONAL APPEARANCE:

      
    Any person or organization wishing to submit a written statement 
for the printed record of the hearing should submit six (6) single-
spaced copies of their statement, along with an IBM compatible 3.5-inch 
diskette in WordPerfect 5.1 format, with their name, address, and 
hearing date noted on a label, by the close of business, Tuesday, June 
22, 1999, to A.L. Singleton, Chief of Staff, Committee on Ways and 
Means, U.S. House of Representatives, 1102 Longworth House Office 
Building, Washington, D.C. 20515. If those filing written statements 
wish to have their statements distributed to the press and interested 
public at the hearing, they may deliver 200 additional copies for this 
purpose to the Subcommittee on Trade office, room 1104 Longworth House 
Office Building, by close of business the day before the hearing.
      

FORMATTING REQUIREMENTS:

      
    Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
exhibit not in compliance with these guidelines will not be printed, 
but will be maintained in the Committee files for review and use by the 
Committee.
      
    1. All statements and any accompanying exhibits for printing must 
be submitted on an IBM compatible 3.5-inch diskette in WordPerfect 5.1 
format, typed in single space and may not exceed a total of 10 pages 
including attachments. Witnesses are advised that the Committee will 
rely on electronic submissions for printing the official hearing 
record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. A witness appearing at a public hearing, or submitting a 
statement for the record of a public hearing, or submitting written 
comments in response to a published request for comments by the 
Committee, must include on his statement or submission a list of all 
clients, persons, or organizations on whose behalf the witness appears.
      
    4. A supplemental sheet must accompany each statement listing the 
name, company, address, telephone and fax numbers where the witness or 
the designated representative may be reached. This supplemental sheet 
will not be included in the printed record.
      
    The above restrictions and limitations apply only to material being 
submitted for printing. Statements and exhibits or supplementary 
material submitted solely for distribution to the Members, the press, 
and the public during the course of a public hearing may be submitted 
in other forms.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at ``http://www.house.gov/ways__means/''.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      

                                

                      ***NOTICE--CHANGE IN TIME***

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

                         SUBCOMMITTEE ON TRADE

FOR IMMEDIATE RELEASE                      CONTACT: (202) 225-1721
June 14, 1999
No. TR-12-Revised

                    Change in Time for Subcommittee
                     Hearing on U.S.-Vietnam Trade
                   Relations Thursday, June 17, 1999

    Congressman Philip M. Crane (R-IL), Chairman of the Subcommittee on 
Trade of the Committee on Ways and Means, today announced that the 
Subcommittee hearing on U.S.-Vietnam trade relations, previously 
scheduled for Thursday, June 17, 1999, at 10:00 a.m., in the main 
Committee hearing room, 1100 Longworth House Office Building, will now 
begin at 10:30 a.m.
      
    All other details for the hearing remain the same. (See 
Subcommittee press release No. TR-12, dated June 4, 1999.)
      

                                

    Chairman Crane. Will everybody please take their seats so 
we can start our hearing.
    Good morning, and welcome to this hearing of the 
Subcommittee on Trade on United States-Vietnam trade relations. 
Since the early nineties, the United States has taken gradual 
steps to normalize our relations with Vietnam, contingent upon 
Vietnam's full cooperation with us to achieve the fullest 
possible accounting for our missing servicemen and women. The 
steps toward normalization have been marked most significantly 
by the lifting of the trade embargo against Vietnam in 1994, 
followed by the normalization of diplomatic relations in 1995, 
and the appointment of our former colleague Pete Peterson, who 
will testify today, to serve as U.S. Ambassador to Vietnam.
    Last year, the President first issued a waiver for Vietnam 
from the freedom of emigration criteria in the Jackson-Vanik 
amendment to the Trade Act of 1974, the provision of law which 
governs U.S. trade relations with nonmarket economy countries, 
including the extension of normal trade relations. Earlier this 
year, or this month rather, the President renewed Vietnam's 
Jackson-Vanik waiver for another year, finding that the waiver 
would continue to substantially promote the emigration 
objectives in the statute. Because Vietnam is not yet eligible 
for NTR, normal trade relations, trade status in its relations 
with the United States, the practical effect of the waiver has 
been to enable U.S. Government agencies, such as the Overseas 
Private Investment Corporation, the Export-Import Bank, and the 
U.S. Department of Agriculture, to provide financing to 
Americans interested in doing business with Vietnam, provided 
that Vietnam meets the relevant program criteria. This is a 
necessary first step on the way to full normal trade relations 
with Vietnam.
    This week, the Office of the U.S. Trade Representative is 
engaged in the latest round of negotiations with the Vietnamese 
on a bilateral commercial agreement which will serve as the 
foundation for an extension of reciprocal NTR after the 
agreement is concluded and approved by Congress. In recent 
months, there has been significant progress in the 
negotiations, and I am hopeful that an agreement can be reached 
in the near future which will provide U.S. firms and workers 
with access to the Vietnamese market, which is the 12th most 
populous in the world. As we anticipate the conclusion of the 
bilateral agreement, continued full cooperation by Vietnam in 
all areas of our bilateral relationship is absolutely essential 
to prepare for congressional consideration of the agreement on 
its merits, and the subsequent extension of NTR.
    I look forward to our witnesses' testimony on a broad range 
of bilateral issues and policy objectives in U.S. relations 
with Vietnam. I now recognize Mr. Levin, the Ranking Minority 
Member of the Subcommittee, for an opening statement.
    Mr. Levin. Thank you, Mr. Chairman. Thank you for this 
hearing today on the important subject of United States-Vietnam 
trade relations. It goes without saying that our relationship 
with Vietnam is a complicated one. It is bound up with very 
deeply felt emotions about the recent past. It cannot easily be 
separated from the task of building commercial ties that will 
carry us into the future. But it is important that we pursue 
that task. Building the foundation for a strong commercial 
relationship is not only in our national economic interest, it 
is also in our security interest and our diplomatic interest. 
In helping to develop the foundations for a market economy and 
a democratic society in Vietnam, we can make an important 
contribution to fostering regional stability.
    There are two questions, one near-term and another long-
term, for this Subcommittee and the Congress as a whole. The 
near-term question, do we support the President's renewal of 
the Jackson-Vanik waiver for Vietnam? The longer-term question, 
will we support a bilateral trade agreement and full 
normalization of trade relations with Vietnam?
    I support the President's renewal of the waiver for 
Vietnam. In 1994, we took an important step towards repairing 
relations between our two countries. In recognition of 
Vietnam's efforts to locate missing United States servicemen 
and women in Southeast Asia, we lifted the comprehensive 
embargo that we had imposed on that country since 1975. We took 
another step in 1995 when we reopened the United States embassy 
in Hanoi. We took a further step last year in terms of the 
waiver. The House rejected the disapproval resolution by a vote 
of 163 to 260. We are making progress. It would be a mistake to 
go backward. Rejecting the waiver would send the wrong message, 
and would only hinder our efforts to improve relations and to 
encourage the development of a free market and the rule of law 
in Vietnam.
    Further normalization of trade relations is a much 
different issue. Here, while negotiators are making progress, a 
number of important issues remain outstanding. I look forward 
to hearing from all of our colleagues on both sides of the 
rotunda and to our former colleague, Ambassador Peterson. In 
that, in particular, we must ensure that United States rights 
are enforceable in evolving economies like Vietnam, where laws 
are not always administered in transparent ways. One area of 
particular concern in the case of Vietnam is the slow pace of 
economic reform. I expect that several witnesses will testify 
today about the problems of corruption, piracy of intellectual 
property, lack of reliability in government-published economic 
data, and other obstacles. These problems must be fully 
addressed in a trade agreement.
    Another area of importance is the potentially distorting 
effects that evolving economies' labor market structures may 
have on competition, as when core worker rights are not 
enforced. For example, Vietnam estimated in 1997 that 
approximately, and ``29,000 children below the age of 15 were 
victims of exploitative labor.'' And ``that estimate may have 
been low,'' according to the State Department's most recent 
report on Vietnam.
    In addition to raising the critical human rights concern, 
the prevalence of child labor in Vietnam raises a significant 
concern about the terms on which Vietnamese companies compete 
with U.S. companies. The President said in his State of the 
Union Address and last weekend at the University of Chicago 
that our trade policy should encourage, as he said, a leveling 
up, not a leveling down. Consistent with that goal, he 
expressed American support for an international convention 
banning abusive child labor in his address yesterday to the 
ILO, International Labor Organization. Normalization of United 
States trade relations with Vietnam must be predicated on, 
among other conditions, significant progress towards the 
elimination of child labor practices in that country.
    I understand that our trade negotiators are working hard at 
putting together a bilateral trade agreement with Vietnam. I 
hope that in addition to insisting on commitments such as 
reductions in tariffs, liberalization of investment rules, and 
expansion of trading rights, they will also insist on 
commitments in the areas that I have touched upon. Again, we 
look forward to the testimony of our three distinguished 
colleagues, the Ambassador, and other witnesses.
    Thank you, Mr. Chairman.
    Chairman Crane. Thank you. We have a full schedule today. 
In the interest of time, I ask our witnesses to please limit 
your oral testimony, to 5 minutes each. Any longer written 
statements will be made a part of the permanent record.
    Our first panel will consist of our colleagues, Senator 
John Kerry of Massachusetts, Congressman Dana Rohrabacher of 
California, and Congressman Earl Blumenauer of Oregon. I know, 
Senator Kerry, that you are on a tight time constraint. So 
after your testimony, if our other two witnesses would hold 
just a second for any questions that anyone may have of Senator 
Kerry, and then he can be excused to return to other business 
at some other chamber here on the Hill.
    We'll start with you, Senator Kerry.

STATEMENT OF HON. JOHN F. KERRY, A U.S. SENATOR FROM THE STATE 
                        OF MASSACHUSETTS

    Senator Kerry. Mr. Chairman, Ranking Member Levin, thank 
you very much. I appreciate your courtesy. I will be brief. I 
have already given my full text to the clerk. I thank you for 
including that in the record. Thank you for inviting me to 
testify again. I regret that my good friend and colleague, 
Senator McCain, was unable to join me this morning, but he, I 
know shares the point of view that I will express and ask that 
I so state.
    Mr. Chairman, I very strongly support the President's 
decision to renew the waiver of Jackson-Vanik. May I say that I 
think the Congress of the United States made the correct 
decision last year not to interfere with that decision. 
Everything that has happened in the course of the last year, in 
my judgment, underscores why that was the right decision and 
important. In point of fact, the last year arguments were made 
to you, as a rationale for not extending it, that cooperation 
on a number of fronts would stop. On its face, those arguments 
were proven wrong by virtue of continued, in fact increased, 
cooperation in a number of areas and continued cooperation in 
others.
    I would just say to the Subcommittee with all respect and 
candor, that we continue to have a very broad range of 
interests in Vietnam. Needless to say, first and foremost, 
obtaining the full fullest possible accounting of American 
servicemen missing from the war, promoting freedom of 
emigration, promoting human rights and freedoms, encouraging 
them to maintain a course of economic reform, and opening their 
markets to American companies, and ultimately to adopt a much 
more open society.
    We care about stability in the region. We have interests 
with respect to China, the South China Sea, commerce in the 
region, ASEAN, a host of similar interests with respect to 
Cambodia, the influence Vietnam can provide with respect to the 
Khmer Rouge accountability question, and so many others. I 
suggest there are a broad range of issues on the table.
    Let me just say very quickly, Mr. Chairman, for 20 years we 
had no progress at all on MIA/POW, none. No progress, no 
accountability, no family learned the fate of their loved one 
for 20 years. It wasn't until we began a process of careful, 
staged, step-by-step engagement with Gen. Vesse, with President 
Bush, with Gen. Scowcroft, and continued that through this 
administration, that families have begun to be able to learn 
what happened to their loved ones. The fact is that in the last 
6 years, there have been 33 joint field activities to 
repatriate remains, 266 sets of remains have been repatriated 
and 117 of them have been identified. They have provided 
reports on their unilateral investigations to help us on 162 
different cases.
    The fact is that since we requested that they be set up, 
Vietnam has provided assistance through unilateral document 
search teams. Those could stop tomorrow. If we want to go 
backward, we can go backward. But every official involved with 
the process believes we are making gains by proceeding 
forwards. The search teams have handled over documents in some 
14 separate turnovers, 300 documents, some 500 to 600 
untranslated pages, and we are working on those now. In 
addition, the Government of Vietnam has identified 31 witnesses 
and 40 more in the future to participate in investigations on 
the borders. They have proven to be crucial in our 
accountability efforts in Laos.
    When I began as Chairman of the POW/MIA Committee, Mr. 
Chairman, we had 196 individuals who were on the list of ``last 
known alive cases.'' We had no identification of them at all. 
We are now at a state where we have determined the fate for all 
but 43 of those 196 on the list. The only way we did that was 
with cooperation.
    Let me just say a final comment. The record shows that last 
year's waiver in fact created an incentive for further 
cooperation. Since the waiver was renewed last year, Vietnam 
has made substantial and consistent progress on emigration 
issues, particularly on the ROVR agreement, where we are up to 
96 percent now of all people interviewed. We have had 
resumption of the Orderly Departure Program for former U.S. 
Government employees which we had suspended in 1996, and we are 
making enormous progress there.
    I will acknowledge, I would like to see them do more and 
move faster, particularly in human rights. I would like to see 
China do more. I would like to see a host of countries on this 
planet do a lot more faster. But the fact is, that while it 
isn't everything we want it to be, liberalization continued 
over the course of last year. Vietnamese now have access to the 
Internet, with some limitations. Participation in religious 
activity has increased, even for some groups such as Buddhists 
and Catholics that had been the targets of government 
repression.
    On the labor front, we all wish their labor law would 
embrace more. But the fact is, that there were 60 organized 
strikes, including strikes against state-owned enterprises that 
were allowed to take place. That is a change. That is a 
difference. The Vietnamese Government is now drafting 
legislation on freedom of association. Since the extension of 
the Jackson-Vanik waiver last year, 24 prisoners of conscience 
were released. Now there isn't one of us sitting here who 
wouldn't like it to be zero prisoners of conscience, and that 
there are complete laws adopted. But every one of us 
understands that even in this country, there was a 200-year 
road developing our own labor relations, developing our own 
rights to strike, developing our own extension of rights to 
people. It was only in our lifetime and some of our public 
service that everybody in this country even got the right to 
vote, in the sixties with the Voting Rights Act. We have still 
got things to fight about.
    I think it is important to measure this progress 
appropriately. To move back on Jackson-Vanik would be to sort 
of turn the clock back in a way that I think would be 
counterproductive to the efforts we are making. I hope, Mr. 
Chairman, that this Subcommittee and the Full House will 
recognize that the road is sometimes rocky, but at least we are 
on the road and moving in the right direction.
    I thank the Chair.
    [The prepared statement follows:]

Statement of Hon. John F. Kerry, a U.S. Senator from the State of 
Massachusetts

    Mr. Chairman, it is an honor for me to testify again this 
year before the Subcommittee on the President's decision to 
renew the waiver of the Jackson-Vanik amendment for Vietnam. As 
you know, I supported the President's decision last year to 
renew the waiver, and I support his decision this year to 
extend the renewal. I continue to believe that our national 
interests are promoted by waiving the amendment and that 
overturning the waiver would have serious negative consequences 
for our bilateral relations with Vietnam and our larger 
interests in Southeast Asia.
    The United States continues to have important and varied 
interests in Vietnam and in the region. First is the overriding 
humanitarian interest in continuing the process of obtaining 
the fullest possible accounting of American servicemen missing 
from the war.
    Second, we have an interest in promoting freedom of 
emigration--an area in which the government of Vietnam has made 
substantial process particularly over the last year.
    Third, we have an ongoing interest in promoting human 
rights and democratic freedoms around the world, including in 
Vietnam where the composition of the population--over 60 
percent of Vietnam's population are under 25 years of age--and 
the process of economic development hold the promise of 
political liberalization over time.
    As the twelfth largest country in the world with a 
population of 78 million, Vietnam is a potentially significant 
market for American goods and services. It is in our interest 
to help Vietnam develop that market by continuing the course of 
economic reform that it began in the late 1980s.
    Vietnam is an integral part of Southeast Asia--a region 
where political stability has been sporadic at best. The region 
is still recovering from the impact of the Asian financial 
crisis, and although the situation in Cambodia has improved 
over the last year, Cambodia and Burma continue to be potential 
flash points. Our interests in promoting stability in this 
often volatile region dictate that we have an active presence 
and effective working relationships with all of the countries 
including Vietnam.
    We also have overriding strategic and political interests 
in counter balancing China's position and growing influence in 
Southeast Asia. Over the last few years China has been 
aggressively courting the countries of Southeast Asia even 
those, such as Vietnam, which were historical enemies. China 
has mended fences with Cambodia's Prime Minister Hun Sen. China 
has been the number one supplier of arms to the military junta 
in Rangoon and has continuously worked to develop Burma as an 
outlet for Chinese goods from land-locked Yunnan province. 
Although Vietnam has been invaded by China many times, Beijing 
has made a concerted effort to improve relations with Hanoi. A 
trip to the border provides a first hand picture of the budding 
trade relationship between China and Vietnam.
    Last, but certainly not least, as I emphasized in my 
testimony last year, we have an interest, a responsibility, and 
a national need to heal the wounds of a nation and put the past 
behind us once and for all. The step by step process of 
normalizing our relations with Vietnam is a means of healing 
those wounds.
    The real question is how we promote these interests most 
effectively? Those who oppose the Jackson-Vanik waiver want to 
turn the clock back to the policy that we had in place for some 
20 years after the war--a policy of denial. But Mr. Chairman, 
as I indicated in my testimony last year, that policy was a 
complete failure and the history of the POW/MIA issue clearly 
demonstrates this point.
    For years after the war, we tried to promote our primary 
interest in Vietnam--to resolve the cases of American 
servicemen still missing from the war--by denying Vietnam the 
benefits of trade and diplomatic relations. The policy produced 
few positive results. Progress on the POW/MIA issue came only 
when we began to engage the Vietnamese and to recognize that 
the Vietnamese needed and wanted a relationship with the United 
States. This recognition was implicit in the Bush 
Administration's roadmap which set out a step by step process 
for normalization of relations between the United States and 
Vietnam.
    We have made enormous progress in the process of POW/MIA 
accounting as a result of the cooperation that we have 
received, and continue to receive, from the Vietnamese. In the 
last six years American and Vietnamese personnel have conducted 
33 joint field activities (JFAs) in Vietnam to recover and 
repatriate remains. 266 sets of remains have been repatriated 
and 117 remains have been identified. In addition to working 
jointly with the United States on remains recovery, the 
government of Vietnam since 1993 has provided reports on their 
unilateral investigations of 162 cases.
    When I became Chairman of the Senate Select Committee on 
POW/MIA Affairs in 1991, 196 individuals were on the list of 
``discrepancy'' or ``last known alive'' cases. These were cases 
in which individuals survived their loss incidents but they 
remain unaccounted for because they did not return alive and 
their fate was uncertain. These are the most difficult and 
heartbreaking cases. We have now determined the fate for all 
but 43 of the 196 on this list. This means, Mr. Chairman, that 
their families and friends finally know what happened to them.
    Since agreement was reached in December 1994 on joint U.S.-
Vietnamese-Lao trilateral investigations in Laos, 31 Vietnamese 
witnesses have participated in operations in Laos; the 
government has identified another 40 to participate in future 
investigations, eight of these identified since the beginning 
of December 1998. These witnesses have proved crucial to our 
accounting efforts in Laos. For example, information provided 
by Vietnamese witnesses resulted in the recovery and 
repatriation of remains associated with two cases in 1996: one 
involving eight Americans and another involving four. In the 
last year a Vietnamese witness has also participated in an 
investigation in Cambodia.
    One of the critical questions at the core of the accounting 
process is what documents or information does Vietnam or its 
citizens possess that could provide answers. When we started 
this process several years ago, we had little access to 
information. That has changed dramatically. We have a full time 
archive in Hanoi where Americans and Vietnamese work side by 
side to resolve remaining questions. Thousands of artifacts, 
documents and photographs have been turned over by Vietnamese 
officials for review. Over 28,000 archival documents have been 
reviewed and photographed by joint research teams. We have 
conducted over 260 oral history interviews in addition to those 
conducted during the joint field activities. In response to an 
American request, Vietnam in 1994 created unilateral document 
search teams. Since that time they have provided documents in 
14 separate turnovers totaling 300 documents of some 500-600 
untranslated pages. Most recently the Vietnamese provided 12 
documents in two separate turnovers in support of our study of 
Vietnam's collection and repatriation of American remains. 
These teams have undertaken research not only in archives in 
Hanoi but also in archives in more than 19 provinces in the 
country.
    Mr. Chairman, last year those who opposed the waiver of the 
Jackson-Vanik amendment suggested that progress on POW/MIA 
accounting would decrease. That simply has not been the case. 
Cooperation has continued, and we have made further progress on 
this issue. Joint field activities continued. More remains were 
repatriated. The Vietnamese continued to conduct unilateral 
investigations and document searches and to cooperate in the 
trilateral investigations. Leads that might help to resolve the 
outstanding discrepancy cases continued to be investigated by 
Vietnamese and American teams.
    During my tenure as Chairman of the Senate Select 
Committee, I spent countless hours and made numerous trips to 
Vietnam in an effort to develop and improve cooperation on the 
POW/MIA issue. I am convinced that we made progress on this 
issue because of engagement and cooperation, not isolation or 
containment. And I am equally convinced that the best way to 
promote our broad range of interests in Vietnam continues to be 
to engage the Vietnamese and to follow our present policy of 
step by step normalization of bilateral relations with Vietnam.
    The waiver of the Jackson-Vanik amendment is a modest but 
important step in the continued normalization of our relations 
with Vietnam. It simply enables the Export-Import Bank and OPIC 
to operate in Vietnam--a step that is for the benefit of 
American companies and by extension the American economy. It is 
important to note that this waiver does not extend most-
favored-nation tariff treatment, or as it is now called NTR 
(normal trade relations), to Vietnam. That step will come only 
when the United States and Vietnam have completed negotiations 
on a bilateral trade agreement.
    Those who oppose the Jackson-Vanik waiver argue that we are 
moving too fast, that Vietnam's performance in the areas of 
emigration, human rights, and some would even say POW/MIA is 
unsatisfactory, and that our policy of engagement has yielded 
few tangible results. I disagree and I think the record backs 
me up.
    The use of carrots or incentives creatively has been at the 
core of our policy toward Vietnam since the President, with the 
overwhelming express support of the Senate, lifted the 
unilateral U.S. trade embargo in 1994. There is no question 
that the waiver of the Jackson-Vanik amendment has served as an 
incentive for continued progress on emigration--the one and 
sole issue on which the extension of MFN, US governmental 
credits and credit insurance is dependent under the provisions 
of the amendment.
    In the last year Vietnam has made substantial and 
consistent progress in fulfilling its commitments under the 
ROVR agreement, which provides for resettlement in the United 
States of eligible Vietnamese who had returned to Vietnam from 
refugee camps in the region. Processing of eligible cases 
accelerated dramatically in 1998 to the point that the program 
is almost at completion. Last year at this time the government 
of Vietnam had cleared about 78 percent of ROVR applicants for 
interview. As of the beginning of this month, 19,975, or 96 
percent, had been cleared. INS has approved 15,833 of these for 
admission to the U.S. as refugees, most of whom have already 
left for the United States.
    Last May Vietnam had taken no action on 1353 ROVR cases; as 
of this June, that number was reduced to 79. Similarly the 
number of cases denied clearance by the Vietnamese government 
has fallen from 776 last May to 422 this June. Most of these 
were cases in which addresses for the applicant were incorrect 
or the eligible individuals failed to attend a clearance 
interview. Once we provided the Vietnamese government with 
updated information, many of these cases were resolved. In 
fact, the main obstacle to ROVR processing at this point is not 
lack of cooperation by the government but rather failure of 
some cleared applicants to appear at our ODP (Overseas 
Departure Program) office for the INS interview.
    Similarly the waiver has encouraged increased Vietnamese 
cooperation on the Orderly Departure Program (ODP) under which 
over 500,000 Vietnamese have emigrated as refugees or 
immigrants to the U.S. since the 1980s. As a result the 
Administration expects that it will complete processing of 
nearly all ODP caseloads, including ROVR, by the end of this 
fiscal year. The Vietnamese Government has made a commitment to 
achieve this goal for all U.S. refugee programs including ROVR 
and Montagnard cases. Since the waiver was extended last year, 
Vietnamese cooperation on the Montagnard cases has accelerated. 
220 individuals have been cleared for interview; of these INS 
has approved 118 for resettlement in the United States. In 1996 
our government suspended the ODP program for former U.S. 
government employees in Vietnam. The Vietnamese government has 
agreed to our recent request to resume that program. Finally, I 
would note that continued Vietnamese cooperation has enabled us 
to make progress on the so-called ``HO'' program for former re-
education camp detainees.
    Clearly Vietnam has made substantial and measurable 
progress in the area of emigration. Frankly, its record in the 
area of human rights is not as impressive. Vietnam continues to 
be a one-party state that tolerates no organized political 
opposition and denies or curtails many basic freedoms, such as 
freedom of the press or speech.
    Human rights is and must continue to be on our bilateral 
agenda with Vietnam. The United States and Vietnam have 
established a regular, bilateral human rights dialogue in which 
general issues as well as specific cases are raised. The 
seventh session of that dialogue is about to be scheduled. I 
know that Ambassador Peterson repeatedly raises human rights 
issues with the highest levels of the Vietnamese government, 
and that Secretary Albright raised these issues with the Deputy 
Prime Minister when he was in Washington in December. I 
consistently raise human rights issues during my trips to 
Vietnam. These entreaties and the gradual improvement in our 
relations has had some positive results. In the last year some 
24 prisoners of conscience were released in two amnesties. In 
addition liberalization continues to take place slowly by 
degrees.
    There is no question that Vietnam is changing as it 
exposure to and interaction with other countries increases. 
Vietnamese enjoy more personal liberty than they ever had 
before; they own shops, have economic mobility, and speak to 
foreigners in most cases without fear. They have more access to 
information and foreign media and although the newspapers are 
``state papers,'' they are increasingly outspoken about 
corruption and governmental inefficiency. Vietnamese now have 
access to the Internet, although with some limitations. 
Vietnamese generally are free to practice their religion; in 
fact, participation in religious activities increased in the 
last year, even for some groups such as Buddhists and Catholics 
that have been the targets of government repression. On the 
labor front, there is no question that Vietnam's labor law and 
practice fall short of international standards. But the fact 
that last year, 60 organized strikes including strikes against 
state-owned enterprises were allowed to take place is a 
positive step. The Vietnamese government is now drafting 
legislation on freedom of association.
    Some argue that the only way to change Vietnam's human 
rights record is to deny them the benefits of trade, force OPIC 
and EXIMBANK to close their doors, and freeze our relationship 
here and now. As one who has made more than a dozen trips to 
Vietnam over the last nine years and who has witnessed how this 
country has changed in such a short time period, I honestly 
believe that they are wrong. If we want to promote human rights 
and political change in Vietnam, we need to expand our 
contacts, not contract them, through all the tools at our 
disposal--trade, aid, exchange programs, participation in ASEAN 
and other regional and international institutions. And we need 
to maintain the ability to discuss this issue at the highest 
levels of government. Vietnamese leaders know full well the 
importance that we place on human rights and that progress on 
this issue will be part of the context in which our relations 
develop.
    Let me turn briefly to the economic relationship. Clearly 
Vietnam wants to normalize economic relations with the United 
States and to join the WTO. Without undertaking serious 
economic reforms, Vietnam can achieve neither. Over the past 
year I have had numerous conversations with high level 
Vietnamese leaders about the importance of undertaking these 
reforms, which are necessary for the development of Vietnam's 
economy and the conclusion of a bilateral trade agreement with 
us. Not surprisingly there is some reticence about taking such 
politically sensitive steps. Nevertheless, I believe that the 
Vietnamese leaders now understand that they have no choice if 
they want to modernize their economy. This is reflected in the 
fact that the negotiations for a US-Vietnam trade agreement 
have increased in pace and improved in substance.
    If these negotiations are brought to a successful 
conclusion, Vietnam will be obligated to undertake major 
changes in its trade and investment regimes that will greatly 
benefit American companies by increasing their access to the 
Vietnamese market. The Jackson-Vanik waiver, which enables 
Eximbank and OPIC to continue operations in Vietnam, serves as 
an important incentive for Vietnam to take these steps and to 
stay on the economic reform course. If we remove that 
incentive, we run the risk of setting that process back as well 
as the ongoing negotiations for a bilateral trade agreement.
    I know that the Subcommittee will hear testimony this 
morning from some who argue that Vietnam has not cooperated 
fully on the POW/MIA issue. Obviously I disagree, but let me 
repeat two important points that I made when I testified before 
the Subcommittee last year. First, during my many trips to 
Vietnam I have met with the American teams--teams composed of 
our military personnel--who work on this issue daily with the 
Vietnamese. Every one of these teams has indicated to me that 
Vietnamese cooperation has been outstanding. Second, to those 
who argue that Vietnam is withholding documents or even 
remains, I say if that is so, the only way you are going to 
find out is to continue the process and the policy we now have 
in place.
    Mr. Chairman, I believe the record over the last few years 
clearly proves that our step by step approach to normalizing 
relations with Vietnam is working and is consonant with the 
many interests we have in that country and the region. 
Reversing that policy by disapproving the President's extension 
of the waiver will reduce our influence and threaten future 
progress on POW/MIA, emigration, human rights, economic reform 
and trade, and other interests I have not discussed, such as 
stemming the flow of illegal drugs. In short, it would do 
irreparable harm to our relationship and our interests not only 
in Vietnam but also in the region.
    The decision to treat Vietnam as a country, rather than a 
war, was made when we normalized diplomatic relations in 1995. 
We cannot and should not turn the clock back now. The President 
made the right decision when he decided to extend the waiver 
for another year. Congress should let that decision stand.
      

                                

    Chairman Crane. Thank you, Senator Kerry.
    Do we have any questions for Senator Kerry before he 
departs?
    Mr. Neal.
    Mr. Neal. Mr. Chairman, as the junior Senator from 
Massachusetts, not only is he a terrific Senator, but he has 
special credibility I think on this issue. He has been a 
leader. He has never shirked once his responsibility. He has 
not been afraid of the criticism that he has run up against on 
this issue. But that is part, I think, of the challenge of 
leadership that John Kerry has demonstrated time and again. A 
great friend, and as I indicated before, a terrific U.S. 
Senator.
    Senator Kerry. Thank you, very much.
    Mr. Levin. Mr. Chairman. I don't really have any questions, 
maybe because I agree with the Senator. But I do think you not 
only have special credibility, but a sustained interest. It is 
really helpful. I do think we need this kind of discussion. I 
think it is very healthy that we have it. We are here talking 
about an annual waiver. We are not discussing anything more 
than that. These issues will continue to be before us and the 
pressure will continue from a lot of us that there be continued 
progress. Where there is retrogression, we will speak out. I 
think your moving on beyond your special credibility has lended 
a lot to this discussion. On the House side, I think I speak 
for people maybe on both sides of this question or on all 
sides. We hope you will continue to find time to help us 
engage.
    Senator Kerry. I thank you, Congressman. Let me just say I 
was over there earlier in the year and met with the key 
leaders, as I have tried to do each time I'm there. I have 
impressed on them as hard as I know how the concerns that my 
colleagues express, and in addition to that, the need for the 
economic reforms. I mean it is very clear that WTO membership 
and the conclusion of the trade agreement are dependent on the 
adoption of the sort of moving upward, as you mentioned 
earlier, that the President has cited.
    I am happy to say that subsequent to those conversations we 
had, there has been significant progress. I think there has 
been a reengagement on the trade issue. That is the way I think 
we will raise a number of standards and ultimately meet our 
interests. So I intend to continue to do that.
    I thank the Congressman for his comments.
    Chairman Crane. And we thank you, Senator Kerry, for your 
participation today and your ongoing participation and 
involvement. We regret your tight time constraints.
    Senator Kerry. My apologies, Mr. Chairman.
    Chairman Crane. Well, we appreciate the fact that you made 
it.
    Senator Kerry. Thank you for your courtesy, and I thank my 
colleagues for their courtesy.
    Chairman Crane. Thank you.
    Our next witness then will be Congressman Dana Rohrabacher.

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

    Mr. Rohrabacher. I remember, before the Senator leaves, I 
remember the Senator----
    Chairman Crane. Senator Kerry.
    Mr. Rohrabacher [continuing]. I remember the Senator 
calling our Vietnamese counterparts across the table to task on 
the idea of how can you have Leninism when you don't have 
Marxism. What justification is there any more, calling them to 
task on their own philosophical inconsistencies. I remember 
that very well.
    Thank you very much, Mr. Chairman. It has been 1 year since 
President Clinton issued the Jackson-Vanik waiver for Vietnam. 
The legislation I have sponsored, House Joint Resolution 58, 
disapproves of the extension of that waiver. During the past 
year, rather than open up its state-managed economy, the 
Vietnamese Communist regime has further tightened its grip on 
civil liberties, religion, and freedom of expression. There has 
been no move, I repeat, no move toward free and fair elections 
in Vietnam. We are not on the right road. We are not on any 
road at all when it comes to free and fair elections.
    Nor has there been any move toward establishing an 
independent judicial system, no move in that direction. Instead 
of implementing honest economic reforms, Communist 
mismanagement, corruption, and the dominance of state-run firms 
have turned off most investors who only a short time ago were 
so optimistic about Vietnam. In fact, international 
businesspeople polled by the Hong Kong-based Political and 
Economic Risk Survey, rates Vietnam as the most stressful 
country in Asia for foreigners because of its stubborn 
bureaucracy. The survey noted a substantial exodus of 
expatriate investors who find doing business in Vietnam not 
worth the effort. A recent study, completed by the U.S. General 
Accounting Office at my request, concluded that because of 
Communist secrecy and corruption, there is no independent means 
to verify real economic and financial statistics in Vietnam or 
to effectively identify and resolve economic and financial 
problems.
    The Jackson-Vanik provision was intended to be a tool for 
improving migration and human rights in Communist and fascist 
regimes. The President's Jackson-Vanik waiver enables U.S. 
companies to be eligible for U.S. tax-payer supported trade 
finance programs such as those provided by the Export-Import 
Bank and OPIC, the Overseas Private Investment Corp. That is 
the essence of what we are talking about today, whether or not 
those taxpayer-supported financing programs should be made 
available to American companies doing business in this 
dictatorship in Vietnam.
    My cosponsorship of the resolution, and has been joined by 
Chris Smith and Loretta Sanchez, and these cosponsors will 
focus on the ongoing abuses and corruption that deny fair 
migration to Vietnamese and Montagnard people. The sponsor of 
the Senate version of this resolution, Bob Smith, will 
articulate the many problems that exist in obtaining the 
fullest accounting for American prisoners of war and those who 
are still missing in action. I would respectfully disagree with 
Senator Kerry. There has not been full cooperation in this 
area. A number of demands we made about records long ago, that 
I personally made in the presence of Senator Kerry, about the 
records of their prison system, for example, have not been made 
available to us.
    My focus today will be on the repressive political and 
economic policies of the Vietnamese Communist leaders that make 
Vietnam and its dictatorship one of the worst investment risks 
in the world. It is outrageous to back ill-advised business 
ventures with American tax dollars. Again, that is what we are 
talking about when we have this waiver. We are opening up these 
subsidies and these guarantees by American taxpayer dollars to 
these companies.
    Business investment should be made in democratic countries. 
Let these companies invest in the Philippines, for example, 
where they are struggling for democracy. If companies choose to 
invest in Vietnam or other dictatorships, they should do so at 
their own risk, not having their bets backed by American 
taxpayer guarantees and subsidies. There is no real evidence to 
support the claims that Vietnam is liberalizing. As I say, this 
is the reason that you are going to liberalize through this 
international investment and commercial investment in the 
country.
    To the contrary, Vietnamese Communist leaders have issued 
new decrees that ban opposition within their party and continue 
their ban on an independent media and dissent in Vietnam 
itself. Hanoi has continued to jam the broadcasts of Radio Free 
Asia and has arrested Vietnamese-Americans who attempt to bring 
prodemocracy literature into Vietnam. In the recent words of 
one of Vietnam's most famous dissidents, the Communist Party 
Politburo has ``immersed the whole population in stagnancy, 
corruption, and poverty.''
    There are more reasons why investing in Communist Vietnam 
is bad for America and sets back democratic reforms, actually, 
setting back democratic reform, giving these leaders the idea 
they can continue these policies and still get these taxpayer 
guarantees for investment in their country. Since 1993, Hanoi 
has been pledged some $13.1 billion in international 
development assistance, but the Communist backsliding on 
reforms have caused the donors to reconsider their future 
pledges.
    Economic growth this year is predicted to be half of what 
it was in 1997. In May, the Vietnamese Communists' Prime 
Minister, Nguyen Tan Dung, said that Vietnam faced tough times 
ahead, with a gross national product expected to decline, while 
industrial output is at its lowest level in several years. He 
also spoke of an unhealthy situation in the financial and 
monetary systems, particularly Hanoi's international payment 
balance, debts to foreign borrowers, and a high amount of 
overdue debt.
    Reuters News Agency recently reported that private industry 
in Vietnam is growing at an alarmingly low rate because of the 
country's firms, they are lacking in confidence to invest in 
business. Many private companies complain about high taxes and 
government policies that favor bloated state firms. Hanoi's 
leaders recently proclaimed that state-run industries would 
play ``a leading role'' in the economy. A 1998 World Bank 
report showed that the Vietnamese private sector amounted to 
less than 3 percent of industrial output.
    What are we trying to subsidize these people for? They 
aren't even making the moves necessary for their own success. 
Corruption is rampant, on top of that. That is what happens 
when you don't have a free press and you only have a one-party 
system. You have corruption. Vietnam has received $1.7 billion 
in low-interest loans from foreign donors last year, yet you 
have this corruption. This week, an Australian expert stated 
giving the Vietnamese government money to spend makes it easier 
for them to prop up state-supported industries and to slow down 
the liberalization process. Again, when we are talking about 
Export-Import Bank loans and such subsidies, that is what comes 
with the waiver we are talking about today.
    I am enclosing for the record, and I would ask permission 
to enclose, this GAO report on Vietnam Economic Data for the 
record.
    Chairman Crane. Without objection.
    [The information follows:]

U.S. General Accounting Office Report to Congressional Requesters

June 1999 VIETNAM ECONOMIC DATA, Assessment of Availability and 
Quality, GAO/NSIAD-99-109, GAO/NSIAD-99-109

                     U.S. General Accounting Office        
   National Security and International Affairs Division    
                                     Washington, D.C. 20548
                                                       June 1, 1999

The Honorable Dana Rohrabacher
The Honorable Zoe Lofgren
House of Representatives

    B-279772

    The recent financial crisis in East Asia and the overall importance 
of the region to the United States has highlighted the need for 
reliable and timely economic and trade data on individual countries in 
the region. In recent years, the United States has taken several steps 
to normalize relations with Vietnam and is currently negotiating a 
long-term trade agreement with its government. You asked us to examine 
economic data on Vietnam, which has been experiencing considerable 
economic growth and development as it transitions from a centrally 
planned to a more market-based economy. To respond to your requests, we 
examined the availability, transparency, and quality of published 
economic and trade data on Vietnam.

                            Results in Brief

    Vietnam has released data on a number of key economic 
indicators such as the gross domestic product (GDP), imports 
and exports, foreign investments, and growth rates. However, it 
has not made available some other important data on the 
economy. For example, it does not publish the state budget and 
does not provide standard financial information used by the 
International Monetary Fund (IMF) for its monthly International 
Financial Statistics (IFS) publication. Virtually all countries 
in the world, including transitional economies and the poorest 
countries, publish their country pages in the IFS.
    When data is available, it is highly aggregated and 
difficult to interpret because the data collection, analysis, 
and reporting methods used to produce it are not transparent or 
readily available to users. While the quality of the data has 
improved in recent years, published indicators such as GDP 
contain weaknesses because they do not include important 
components of the economy. For example, small businesses, the 
service sector, and remittances from overseas are 
underreported, while growth and foreign investment estimates 
may be overestimated. Without more accurate data, it is 
difficult to effectively evaluate economic conditions in 
Vietnam and identify economic and financial problems that may 
be occurring. Several international agencies, such as the IMF 
and the World Bank, have recognized that data deficiencies 
exist and are currently providing technical and financial 
assistance to the Vietnamese government to help it improve the 
availability and quality of its data.

                               Background

    Data on Vietnam's economy and trade originates primarily 
from the General Statistical Office (GSO), a Vietnamese 
government agency. Other agencies such as the Ministry of 
Industry and the State Bank of Vietnam also provide some data. 
The GSO publishes monthly and annual reports on the economy and 
population that include information on the labor force, GDP, 
foreign investment, industrial sectors, retail sales, prices, 
and inflation rates, among others.
    The IMF, the World Bank, and the United Nations also 
publish economic and trade data on Vietnam, but as a standard 
practice they rely primarily on the government for much of the 
information. The IMF has a permanent representative in Vietnam 
who monitors economic conditions, and the Fund periodically 
sends missions to Vietnam to collect additional information and 
provide technical assistance. As it does with most other 
countries, the IMF summarizes Vietnam's economic and financial 
condition in periodic staff reports that are available to the 
public and generates confidential studies that examine specific 
topics such as banking.
    For its part, the World Bank publishes the World 
Development Indicators (WDI) in collaboration with 26 other 
public and private agencies, including the IMF, the 
International Labour Organization, the United Nations, the 
World Trade Organization, Moody's Investors Service, Price 
Waterhouse, and Standard and Poor's Rating Services. The 1998 
WDI includes a broad range of economic, population, and 
environmental data on 210 countries from 1960 to 1996. The 
United Nations publishes National Accounts Statistics on 
different countries, including Vietnam, each year. The United 
Nations Development Programme (UNDP) also issues a number of 
reports and evaluations of poverty and economic conditions in 
Vietnam. There are other publications with a narrower focus, 
such as the IMF's Direction of Trade Statistics Yearbook and 
the United Nations' Monthly Bulletin of Statistics.
    U. S. agencies such as the Departments of Treasury, 
Commerce, and State and the Trade and Development Agency rely 
mainly on international agencies for data on Vietnam's economy. 
However, several U. S. federal agencies jointly publish an 
annual report on Vietnam, the Country Commercial Guide, written 
by an in-country expert. The Department of Commerce also 
releases data on bilateral trade between the United States and 
its trading partners, including Vietnam. The United Nations 
publishes similar bilateral trade data reported by member 
states.
    Several economic magazines and journals also provide 
economic and trade data on Vietnam. The Vietnam Business 
Journal, for example, publishes indicators of Vietnam's 
economy, foreign investment, imports, and exports, using the 
government and international agencies as its sources. The 
Economist Intelligence Unit Ltd., also issues quarterly reports 
on the Vietnamese economy and covers major economic and trade 
indicators. It pools data from various sources, including its 
own estimates.

                      Gaps in Availability of Data

    Although the government does publish many key economic 
indicators, there are major gaps. For example, by law, 
Vietnam's state budget is classified as a secret document and 
therefore cannot be made available to the public. Under much 
pressure from international agencies and donors, in 1998 top 
government officials indicated they would release the budget, 
but as of March 1999, they had not yet done so. The government 
includes some estimates of the budget in its aggregate economic 
indicators, but it does not provide a breakdown of the data, 
making it difficult to determine specific allocations. In 
addition, although the GSO did publish aggregate budget figures 
in its 1994 Statistical Yearbook, it did not do so in 1996.
    State-owned enterprises (SOE) are a key component of the 
budget and of the country's overall economy. The government has 
traditionally granted SOEs special advantages over other 
businesses through greater access to credit, control over 
markets, and other forms of indirect support. The IMF has 
reported that SOEs may account for as much as 40 percent of 
Vietnam's GDP. However, the government releases very little 
information about how much it spends to support SOEs and their 
true financial conditions. Some donors have raised concerns 
about the financial viability of SOEs in Vietnam and have 
warned that without reliable information, financial problems 
may develop undetected.
    Furthermore, the IMF's monthly IFS reports do not contain a 
country page for Vietnam because the government has not 
released certain key indicators and other needed statistics. 
Country pages generally include data on exchange rates, money, 
banking, interest rates, production, prices, foreign reserves, 
international trade, balance of payments, and government and 
national accounts. Virtually all countries in the world publish 
their country pages in the IFS. According to IMF officials, the 
Vietnamese government has not done so in part because for many 
years Vietnam used a national accounts system modeled after 
that of the former Soviet Union and different from 
international reporting standards (the 1993 System of National 
Accounts) advocated by the IMF, the United Nations, and the 
World Bank. Vietnam adopted these standards in the late 1980s 
but has not fully implemented the system and has not been 
willing to release some statistics.
    In 1998, the IMF said it was waiting for the government to 
approve publication of Vietnam's country page that the IMF had 
prepared. Neighboring Cambodia and Lao PDR, both of which have 
also transitioned from the Soviet accounting system, have 
published their country pages since April 1996. Rwanda and 
Ethiopia, which had the lowest per capita incomes in the world 
\1\ (about a third of Vietnam's), have also been publishing 
their country pages.
---------------------------------------------------------------------------
    \1\ Human Development Report, UNDP, 1997.
---------------------------------------------------------------------------
    The amount of information reported in the WDI provides 
another indication of a country's overall data availability. 
The WDI contains up to 526 series of data indicators for 
individual countries, covering economic and trade conditions as 
well as other demographic, environmental, and social 
indicators. Vietnam and Lao PDR, for example, provided data for 
only about 250 indicators between 1990 and 1995, while China, 
the Philippines, and Thailand provided over 400 indicators 
during the same period (fig. 1). In 1995, the median number of 
indicators available for the 63 countries that the WDI 
classified as low income was 322. Vietnam provided 256 
indicators for that year. Only 10 of the other low-income 
countries provided fewer indicators than Vietnam.\2\
---------------------------------------------------------------------------
    \2\ Afghanistan, Bosnia-Herzegovina, Cambodia, Eritrea, Lao PDR, 
Liberia, Myanmar, Somalia, the Sudan, and Tajikstan. 

[GRAPHIC] [TIFF OMITTED] T9940.001

[GRAPHIC] [TIFF OMITTED] T9940.002

         Transparency of Data Collection and Reporting Methods

    If the accuracy and quality of published economic and trade 
data are to be properly assessed, the methods used by the 
sources of the data to collect, analyze, and present the data 
must be transparent. In other words, data transparency means 
that methods should be clearly defined and explained and made 
readily available to data users. Without such information, 
users cannot adequately determine the value and meaning of the 
published figures. For example, data can be very different 
depending on whether it is developed through expert opinion, 
sampling, or census. If an agency relies on other agencies for 
data, it is also important that it disclose the sources and 
methods it uses to review and revise the data.
    In the case of Vietnam, information on data collection and 
reporting methods generally is either missing or unclear. The 
GSO does not publish the methods used to collect and process 
economic and financial figures and does not identify potential 
data limitations or gaps. International agencies that re-
publish the GSO's figures in their reports also do not disclose 
the methods they use to evaluate or revise the data. This 
process is consistent with how these agencies report data for 
other countries. Most tables we reviewed cited their sources as 
the GSO or another Vietnamese agency and staff estimates. But 
the methods used to produce these staff estimates were not 
specified. We also found that even when staff estimates were 
cited, the published data often did not differ from the 
original GSO figure. However, the IMF recently reported 
estimates that differed from those published by the GSO.
    The Country Commercial Guide primarily cited unofficial 
estimates as its sources, without reporting the data collection 
methods used, but its figures matched those we found in GSO 
publications.

                       Quality of Available Data

    Although many of the published figures from the GSO, IMF, 
the World Bank, and the Asian Development Bank corresponded 
with each other, one should not interpret this to mean that 
they are valid or correct, but simply that they came from the 
same source the Vietnamese government (see app. I).
    According to international agency officials and other 
experts, the quality of available data on Vietnam has improved 
in recent years. They all agreed, however, that data on many 
key indicators such as GDP, growth rate, and foreign 
investments still contained several weaknesses. In a June 1998 
assessment of economic conditions in Vietnam, the UNDP 
concluded that Vietnam ``is in the midst of an information 
crisis which needs to be urgently redressed to avert financial 
crisis \3\ and advocated more reliable data on the banking and 
corporate sectors in particular. Most banks are partially or 
wholly state owned, and information on their debt levels, loan 
portfolios, and investments is not available in sufficient 
detail or is of questionable reliability. Some international 
agency officials, for example, have raised concerns that these 
banks have made many large loans to SOEs whose assets are 
largely overstated. The IMF has indicated that the banking 
sector in Vietnam is in worse condition than what the official 
data shows. Moody's has also cited weaknesses with the banking 
system and considerable uncertainty [arising] from the lack of 
transparency in the reporting of official foreign exchange 
reserves as key factors in giving Vietnam a low-credit 
rating.\4\
---------------------------------------------------------------------------
    \3\ East Asia: From Miracle to Crisis, Lessons for Viet Nam, UNDP 
Viet Nam, 1998. Italics in the original.
    \4\ Global Credit Research: Vietnam, Moody's Investors Service, 
1999.
---------------------------------------------------------------------------
    Vietnam does not effectively measure certain components of 
the economy in its calculations of GDP, which is a measure of 
the total output of a country's goods and services. For 
example, GDP figures do not accurately reflect the large 
informal economy, small businesses, telecommunications, or the 
service sector. Similarly, official trade estimates do not 
include illegal smuggling of consumer goods, which has been 
estimated to account for a significant portion of the economy, 
according to IMF and other international agency officials. A 
State Department official also noted that this reporting 
problem occurs in other developing countries.
    Other indicators reported by the government, on the other 
hand, may be overestimated. For example, the government 
announced that the economy grew at a rate of 5.8 percent in 
1998, but IMF officials made their own in-country assessment 
and estimated a growth rate of between 3 and 4 percent. The 
government also reported $1.9 billion in disbursements of 
foreign direct investments in 1998, but the IMF estimated only 
$600 million, and Moody's estimated $800 million. According to 
a State Department official, Vietnam counts the value of land 
it contributes to joint business ventures as part of a foreign 
direct investment. The IMF does not. This may account for part 
of the discrepancy between official and independent estimates. 
It also illustrates the importance of transparency in data 
collection and reporting methods.
    There are also a number of unexplained differences between 
reports published by different international agencies and even 
between those published by the same agency. One example is the 
average employment (the average number of employees per 
enterprise) in the private sector, an important component of 
Vietnam's economy in terms of growth and development. According 
to the 1996 IMF staff report, average employment between 1992 
and 1995 was between 7.4 and 5. 1 employees. In another IMF 
staff report 16 months later, the average employment for the 
same period was reported as between 1.8 and 1.2 employees. It 
is not clear why a 1992 figure was revised in 1998, but agency 
officials noted that there are often long delays and frequent 
adjustments of prior data by Vietnamese government sources. The 
data series cited its sources as the GSO and staff estimates.
    International agencies have various efforts underway to 
help Vietnam with its data collection and reporting. The Asian 
Development Bank is developing a project to assist Vietnam in 
preparing its state budget and calculating GDP. The IMF has 
also been helping Vietnam develop its IFS country page. This 
aid has included providing preliminary analytical tables 
necessary for completing the country page in accordance with 
IMF methodology. Other ongoing assistance is geared mainly 
toward the collection of social and demographic data. Further 
monitoring will be needed to determine whether these efforts 
are effective in improving the quality of data.
    In the late 1990s, the IMF developed and issued two sets of 
standards for data production and dissemination by its member 
states. The key objectives of one set of standards (known as 
the General Data Dissemination System) are to improve data 
quality; provide a framework for evaluating needs and setting 
priorities for data improvement; and guide countries in the 
provision of comprehensive, timely, accessible, and reliable 
economic, financial, and sociodemographic statistics. A more 
detailed set of standards (the Special Data Dissemination 
Standard) focuses on specific elements of data quality. A 
number of countries in East Asia, including the Philippines and 
Thailand, have voluntarily subscribed to the Special Data 
Dissemination Standard, but Vietnam and none of the poorest 
developing countries receiving loans from the World Bank's 
International Development Agency have subscribed to this 
standard.

                   Agency Comments and Our Evaluation

    We sent a draft of this report to the Departments of 
Treasury and State and to the Central Intelligence Agency 
(CIA). Treasury and the CIA indicated that they had no 
comments. The Department of State provided oral comments. 
Generally, State concurred with our overall findings and 
conclusions. It also provided some technical comments, which we 
incorporated where appropriate.

                         Scope and Methodology

    To assess the availability, transparency, and quality of 
published economic and trade data on Vietnam, we met with 
officials from a number of U. S. and international agencies, 
including the Departments of Commerce, State, and the Treasury, 
the Trade and Development Agency, the CIA, the IMF, the World 
Bank, the United Nations Statistics Division, and the UNDP. We 
conducted a literature search and contacted researchers in the 
field. In addition, we contacted the Embassy of Vietnam in 
Washington, D. C., and the U. S. Embassy in Hanoi.
    We requested information on the methods agencies use to 
evaluate data and on the strengths and limitations of the data. 
We also compared data from different sources and from different 
time periods, concentrating on 1992, 1994, and 1996. Although 
we did not conduct a systematic comparison of Vietnam's data 
with that of other countries, we did make some comparisons with 
readily available data in the WDI.
    We did not travel to Vietnam, although we did meet with a 
Vietnamese embassy counselor in Washington, D.C. We limited the 
documentation for this report to nonclassified information. In 
addition, we did not address perspectives from the business 
community regarding the availability and quality of Vietnam's 
economic data.
    We performed our review from March 1998 to March 1999 in 
accordance with generally accepted government auditing 
standards.
    We are sending copies of this report to the Honorable 
Madeleine K. Albright, Secretary of State; the Honorable Robert 
E. Rubin, Secretary of Treasury; the Honorable William M. 
Daley, Secretary of Commerce; and appropriate congressional 
committees. Copies will also be made available to others upon 
request.
    Please contact me at (202) 512-3092 if you or your staff 
have any questions or would like additional information. Major 
contributors to this report were John Oppenheim, L Xun Hy, and 
Stan Kostyla.
                                           Kwai-Cheung Chan
                          Director, Special Studies and Evaluations
      

                                

    Mr. Rohrabacher. The report underscores that Vietnam is one 
of the only countries in the world where discussing or 
publishing economic figures is a crime, punishable by prison or 
labor camp confinement. We cannot have normal or free trade 
relations with a country that refuses to disclose its basic 
financial and trade statistics.
    Mr. Chairman, the resolution I introduced, disapproving the 
Jackson-Vanik waiver for the Vietnamese dictatorship, does not 
intend to isolate Vietnam, nor stop U.S. companies from doing 
business in Vietnam. We can do that--they can do that anyway. 
They can go sell American products over there. However, if 
private banks or insurance companies will not back up or insure 
private business ventures in Vietnam, American taxpayers should 
not be asked to recklessly do so. Instead, my resolution sends 
a strong message to the Hanoi regime that the United States 
will stand by our democratic principles. Those were the 
principles that we have the Jackson-Vanik regulations for in 
the first place. We shouldn't ignore those principles that 
helped democratize the Soviet Union.
    The Vietnamese Communists have manipulated American and 
international generosity to further impoverish and repress 
their own people. I ask my colleagues to suspend the 
President's waiver for the coming year, and support my 
resolution of disapproval.
    Thank you.
    [The prepared statement follows:]

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

    It has been one year since President Clinton issued a 
Jackson-Vanik waiver for Vietnam. The legislation I have 
sponsored, House Joint Resolution 58, disapproves of the 
extension of that waiver.
    During the past year, rather than open up its state-managed 
economy, the Vietnamese communist regime has further tightened 
its grip on civil liberties, religion and free expression. 
There has been no move toward free or fair elections in 
Vietnam, nor has there been any move toward establishing an 
independent judicial system. Instead of implementing honest 
economic reforms, communist mismanagement, corruption and the 
dominance of state-run firms have turned off most investors, 
who only a short time ago were so optimistic.
    In fact, international business people polled by the Hong 
Kong-based Political and Economic Risk Survey rates Vietnam as 
the most stressful country in Asia for foreigners because of 
its stubborn bureaucracy. The Survey noted a substantial exodus 
of expatriate investors who find doing business in Vietnam not 
worth the effort.
    A recent study completed by the U.S. General Accounting 
Office, at my requests, concluded that because of communist 
secrecy and corruption, there is no independent means to verify 
real economic and financial statistics in Vietnam, or to 
effectively identify and resolve economic and financial 
problems.
    The Jackson-Vanik provision was intended to be a tool for 
improving migration and human rights in communist or fascist 
regimes. The President's Jackson-Vanik waiver enables U.S. 
companies to be eligible for U.S. taxpayer-supported trade 
financing programs such as Export-Import Bank and OPIC. My co-
sponsors of the resolution, Chris Smith and Loretta Sanchez, 
will focus on the ongoing abuses and corruption that deny fair 
migration of Vietnamese and montagnard people. The sponsor of 
the Senate version of this resolution, Senator Bob Smith, will 
articulate the many problems that exist in obtaining the 
fullest possible accounting for American prisoners of war and 
those who are still missing in action.
    My focus will be on the repressive political and economic 
polices of the Vietnamese communist leaders that makes Vietnam 
a dictatorship and one of the worst investment risks in the 
world. It is outrageous to back ill-advised business ventures 
with American tax dollars. Business investments should be made 
in democratic countries. If companies choose to invest in 
Vietnam, they should do so at their own risk, not having their 
bets backed by taxpayer guarantees and subsidies.
    There is no real evidence to support claims that Vietnam is 
liberalizing through international aid and commercial 
investment. To the contrary, Vietnamese communist leaders have 
issued new decrees that ban opposition parties, independent 
media and dissent within the Communist Party.
    Hanoi has continued to jam the broadcasts of Radio Free 
Asia and has arrested Vietnamese Americans who attempted to 
bring pro-democracy literature into Vietnam. In the recent 
words of one of Vietnam's most famous dissidents, the Communist 
Politburo has ``immersed the whole population in stagnancy, 
corruption and poverty...''
    Here are more reasons why investing in communist Vietnam is 
a bad for America and sets back democratic and economic reform:
     Since 1993, Hanoi has been pledged some 13.1 
billion in international development assistance but the 
communists' backsliding on reforms have caused donors to 
considering conditioning future pledges. Economic growth this 
year is predicted to be half of what it was in 1997.
     In May, Vietnamese communist Deputy Prime Minister 
Win Tan Dung said that Vietnam faced tough times ahead, with 
the gross domestic product expected to continue declining, 
while the industrial output is at its lowest level in several 
years. He also spoke of an unhealthy situation in the financial 
and monetary system, particularly Hanoi's international payment 
balance, debts to foreign borrowers and a high amount of over-
due debt.
     Reuters news agency recently reported that private 
industry in Vietnam is growing at an ``alarmingly low rate'' 
because the country's firms lack confidence to invest in their 
business. Many private companies complain about high taxes and 
government policies that favor bloated state firms.
     Hanoi leaders recently proclaimed that state-run 
industries would play a ``leading role'' in the economy. A 1998 
World Bank report showed the Vietnamese private sector 
accounted for less than 3 percent of industrial output.
     Corruption is rampant. Vietnam received $1.7 
billion in low-interest loans from foreign donors last year. 
This week, an Australian expert stated, ``Giving the Vietnam 
Government money to spend, makes it easier for them to prop up 
state-supported industries and to slow down the liberalization 
process.''
     I am enclosing for the record of this hearing the 
GAO report, Vietnam Economic Data: Assessment of Availability 
and Quality.'' The report underscores that Vietnam is one of 
the only countries in the world where discussing or publishing 
economic figures is a crime, punishable by prison or labor camp 
confinement. We cannot have ``normal'' or ``free'' trade 
relations with a country that refuses to disclose its basic 
financial and trade statistics.
    Mr. Chairman, the resolution I introduced, disapproving of 
the Jackson-Vanik waiver for the Vietnamese dictatorship, does 
not intend to isolate Vietnam or stop U.S. companies from doing 
business in Vietnam. However, if private banks or insurance 
companies will not back-up or insure private business ventures 
in Vietnam, American taxpayers should not be asked to 
recklessly do so. Instead, my resolution sends a strong message 
to the Hanoi regime that the United States will stand by our 
democratic principles.
    The Vietnamese Communists have manipulated American and 
international generosity to further impoverish and repress 
their people. I ask my colleagues to suspend the President's 
waiver for the coming year and support my resolution of 
disapproval.
      

                                

    Chairman Crane. Thank you, Mr. Rohrabacher.

STATEMENT OF HON. EARL BLUMENAUER, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF OREGON

    Mr. Blumenauer. Thank you, Mr. Chairman. I appreciate the 
opportunity to join you once again. Although I respect my 
colleague from California, I couldn't disagree more with his 
assessment. This is not about reckless investment policies on 
the part of organizations like OPIC. What we are talking about 
is an attempt to be realistic in terms of dealing with Vietnam 
and our relationship with that country. Although I sort of 
smile as I think about some of the situations that have 
occurred in Singapore, where people have been imprisoned for 
revealing economic data that would be very simply accepted here 
in the United States. I think about some of the situations that 
are occurring in Malaysia and Singapore where despite some of 
our best interests, there are things in the political arena 
that we wouldn't feel very comfortable with. Reading the 
Straits Times is not exactly my version of a free press. But I 
do think that for us to be realistic about how we are going to 
promote our values, our goals and economic, not just economic 
prosperity, but in terms of human relations, we need to take a 
step back, take a deep breath. I respectfully suggest that 
rejecting this resolution of disapproval is a step in the right 
direction.
    Last year on the eve of the Jackson-Vanik waiver vote, I 
received a call from my daughter who was traveling in Vietnam, 
a college student visiting her brother over there, who was 
struck by the kindness of the Vietnamese people, who was amazed 
at the energy and vitality that she witnessed, and who was 
learning more about the tragic history of the relations between 
our two countries, and was amazed at how positive the attitudes 
and feelings were. I went from that conversation with a college 
junior to the floor of the House, and heard people who were 
really describing two different worlds. I feel like some people 
are frozen in amber in terms of what happened a generation ago.
    I feel that we have an opportunity here to try and repair 
not just economic opportunities for a significant and growing 
country, but to deal with a tragic period of the history of 
both our countries. On the known terms for evaluating the 
Jackson-Vanik waiver, it should, in fact, be extended. Senator 
Kerry made that reference I thought, eloquent and well. We 
have, in fact, made progress in each of these areas. I know our 
friend, former Member Pete Peterson, the Ambassador is going to 
be able to document that. I have been struck in the 
conversations with him with the work that he has been able to 
do. We are on the verge of approving a trade agreement that 
will open up even more opportunities between the two countries 
and accelerate the progress even further.
    There are problems that occur, that continue, no doubt 
about it. But opportunities on things like human rights, 
transparency of economic activities, where we can make more 
progress. The Jackson-Vanik waiver, in continuing this process, 
is going to allow us to make more progress, not less. The 
United States, frankly, has made a history of much of the last 
half century, of making the wrong judgments on Vietnam. We were 
on the wrong side of history in terms of the colonial struggle. 
We ended up making an enemy that we didn't have to make, and we 
paid a tragic price for it.
    Today, Vietnam is changing rapidly. An overwhelming 
majority of the people in Vietnam weren't even alive during the 
Vietnam war. A transfer of power is taking place slowly with 
the new generation. It has a transformational effect. 
Disallowing the waiver will not give us more leverage. It will 
not make it easier for Ambassador Peterson to make progress. It 
will not hasten democratic behavior. I think the record is 
clear that we have made more progress in documenting what 
happened to our missing in action in Vietnam than any other war 
in our history, not just the progress that we have made here. 
The record I think is clear and it is because of the hard work 
of people like Senator Kerry and Ambassador Peterson, and to 
somehow ignore that, to try and go back, making that way 
harder, is going to set that back.
    If we want to put an end to the practices of child labor, 
which are not simple in developing countries, which can make 
the difference sometimes between a family being able to survive 
or not, to be able to promote economic interchange between 
those countries will hasten the end of child labor and make it 
easier to make those transitions, give us more levers in which 
to work.
    I think this resolution presents a major opportunity to 
either accelerate the repositioning and redefinition of our 
relationship or to take a step back. I personally hope that we 
will reject this resolution, that we will support the extension 
of the waiver, and that your Subcommittee will continue the 
important work of providing a framework for this to occur.
    Thank you, Mr. Chairman.
    Chairman Crane. Thank you, Mr. Blumenauer.
    Mr. Levin.
    Mr. Levin. Well, it is useful to have the two of you here 
and present very different perspectives. Maybe the best thing 
is now to hear from the Ambassador. I don't know if you have 
time to stay, you probably have to go onto other matters. I do, 
in this debate, hope that we can have some challenging 
discussion about each other's arguments. For example, in terms 
of OPIC and Ex-Im, I think we should understand that we don't 
quite guarantee the results here that we eliminate risk. There 
is still considerable risk, even with OPIC and Ex-Im. It isn't 
as if the taxpayers are assuming all the risk. I think you know 
that.
    Mr. Rohrabacher. But what we are doing is assuming a large 
portion of the risk. My point is this. When you are talking 
about dictatorships, and I don't care if it's Vietnam or China 
or elsewhere, why are we encouraging businesses by assuming 
some of the risk or subsidizing the interest rates that they 
have to get for loans to do business in these countries? Why 
are we encouraging businesses to do that when we have the 
Philippines and other countries struggling to be democratic 
societies and we're encouraging them? That way, they don't--
we're actually directing the flow of capital investment into 
the dictatorship, and by the way, away from our country. That 
makes no sense.
    Mr. Levin. As you know, I am kind of hardnosed about the 
conditions that we should insist on in these negotiations. I 
have a broader view than some. I think we should drive a hard 
bargain mainly because of the impact on our own economy, but 
also because we are trying to move or help move these countries 
toward free markets, both capital and labor. We are trying to 
move them toward a rule of law. The question becomes how do we 
most effectively do that? I don't think the line can be a 
strict one, if they are a state economy, we don't engage them. 
Because the whole purpose is to move them away from it. It is a 
matter of judgment. My only point is I think we need to look 
hard at the facts and kind of avoid the kind of automatic 
choosing up of sides here, and make a considered judgment 
whether to involve ourselves will reach our objectives. I can 
understand there are differences.
    Mr. Rohrabacher. The reason Jackson-Vanik is part of the 
law is because we were faced with a similar challenge in the 
past generation or 20 years ago. We had to face the Soviet 
Union, which was of course a major hostile, totalitarian power. 
The reason there is a Jackson-Vanik restriction is because we 
realized that by waiving that restriction, the Soviet Union 
would not become more democratic. Congress put this in place 
because of the very principle, as you make a standard, and then 
these dictatorships will move toward the standard if you have 
that present.
    What we are telling the Vietnamese, we are going to waive 
the standard even though you are not complying. We moved the 
Soviet Union toward democracy, not by giving most-favored-
nation status, but by denying these type of loans from Export-
Import Bank and OPIC and others.
    Mr. Levin. I will finish. True there are some on this panel 
who were never in favor of Jackson-Vanik and would have 
abolished it immediately. I think it served a useful purpose. 
But the question is whether Vietnam today is the Soviet Union 
of 30 years ago, and whether an annual waiver here, we're 
talking about an annual waiver, might be a useful instrument to 
help move that country toward free capital and labor markets, 
and toward a rule of law. There can be differing and are 
different judgments, but I think that is the framework we ought 
to have that discussion within.
    Mr. Blumenauer. If I may, OPIC is not about reckless 
investments. They have not lost any taxpayer money. The 
portfolio is managed to turn a profit, and people are assuming 
risks themselves when they go there.
    Mr. Levin. They clearly are. I support it. We'll carry on 
this debate on the floor. But you have helped to kick it off.
    I think the Ambassador, Mr. Chairman, is now raring to go, 
our former colleague. So maybe with deference to our 
distinguished colleagues from Oregon and California, we can 
call on our former colleague.
    Chairman Crane. Well, just a moment.
    Mr. Rangel, do you have any questions?
    Mr. Rangel. No, Mr. Chairman. Thank you, my colleagues. I 
regret that saving Social Security prevented me from being 
here, but thank you.
    Chairman Crane. Well, we thank you both for your testimony 
and appreciate your appearance today.
    Our next witness is Hon. Douglas Pete Peterson, U.S. 
Ambassador to Vietnam, and a former colleague.
    Proceed when ready, Pete.

STATEMENT OF HON. DOUGLAS ``PETE'' PETERSON, U.S. AMBASSADOR TO 
             VIETNAM; AND FORMER MEMBER OF CONGRESS

    Ambassador Peterson. Thank you very much, Mr. Chairman, 
distinguished Members of the Subcommittee, my very good 
friends. Good to see you again.
    I appreciate very much the opportunity to return to discuss 
the President's provision to waive Jackson-Vanik for Vietnam 
for 1 additional year. Last year I told you that our engagement 
policy in Vietnam was working, and had in fact produced major 
progress on U.S. top priority goals, policy goals for Vietnam. 
This year too has been marked with significant progress. In the 
MIA search efforts, in the freedom of emigration, of which this 
is all about, over the improved respect for human rights, which 
I will speak a little bit more about later, and certainly, in 
promoting regional stability, and without a doubt has helped to 
open up the markets of Vietnam.
    The Jackson-Vanik waiver remains an essential element in 
our policy of engagement. Without it, it takes away the very 
tools that I need to work with Vietnamese to reach the very 
policy goals that I have referred to. I am confident that the 
extension of Jackson-Vanik will further advance the national 
interests of the United States in Vietnam.
    In June of last year, frankly, we had very little evidence 
to judge the impact of Jackson-Vanik renewal because we just 
had too short a track record. In fact, most of our comments 
were based on hopes rather than on pure evidence. This year, 
though, I can bring to you clear evidence, and without 
reservation say that the Jackson-Vanik waiver has resulted in 
positive progress in every way. Certainly, it has promoted 
greater freedom of emigration, and all of the details are in 
the testimony of which I have submitted for the record. I refer 
that to you for greater detail.
    It has helped move the MIA cooperation to a level of what I 
now refer to as a partnership, a significant partnership, given 
the fact that we are on a two-way street. We are helping the 
Vietnamese determine the losses that they sustained, up to 
300,000 MIAs in this case. It has helped open the markets by 
giving American business a level playingfield, if you will, in 
working in the very difficult, I might add, business 
environment in Vietnam.
    The U.S. policy engagement with Vietnam has assisted our 
old--the Vietnamese to work the political and reform projects 
that have actually helped them to work to the integration of 
Vietnam into the family of nations. It has led, frankly, to the 
recent admission to Vietnam into APEC, the Asia Pacific 
Economic Cooperative, a very significant accomplishment, I 
might add. Though it may not solely have been a consequence of 
Jackson-Vanik, our engagement in Vietnam was a major party to 
that membership.
    It must be noted too that we have observed some 
improvements in Vietnam's human rights performance, though the 
picture is still mixed, to be honest with you. The Vietnamese 
last year released over 7,000 prisoners, many of them, 24 
persons of significant concern to us as a nation as persons of 
conscience. Mr. Que, Mr. Hoat, and Thich Do are among those. I 
might just parenthetically say Dr. Que, who still lives in Ho 
Chi Minh City, has recently released a statement that said that 
he is in favor of our bilateral trade agreement and has also by 
virtue of that, suggested support of the Jackson-Vanik waiver 
as well.
    I think too, according to my records and observation, there 
has been an improvement in religious freedom efforts as well. 
We will hopefully have Mr. Seiple and Mr. Freeman go out to 
Vietnam to talk human rights issues and religious rights issues 
in July.
    The areas of emigration, though, which is what we are 
examining here today, there has been huge success. Five hundred 
thousand Vietnamese immigrated to the United States. Just last 
year, nearly 10,000 individuals had immigrant visas issued to 
come to the United States. We expect nearly 30,000 applicants 
for immigrant visas to come to us in the year 2000. We place 
great priority on the HO Program, the program for former 
reeducation camp detainees, and the ROVR Program, the 
Resettlement Opportunity for Vietnamese Returnees, the both of 
which have had significant success. In fact, I would say we are 
coming to a completion of those programs, though not to suggest 
that we're done with the refugee efforts in Vietnam.
    I might add also that recently, the Vietnamese have agreed 
to open a program that we suspended having to do with former 
government employees. We have that program essentially ongoing 
at this moment.
    Let me jump to the MIA issue. It remains our first priority 
and of great personal interest to me. The cooperation is indeed 
excellent. We have had three JFAs and new access to documents 
this year. We have repatriated six remains this year, and we 
have planned and have the potential to repatriate seven in 
July. We have had nine identifications and we have had 
significant progress on the no-further-pursuant cases, 598 
cases of which the Vietnamese have reviewed for us, and have 
submitted us specific evidence on each of these cases of which 
we might very likely be able to close in the near future.
    The worker rights, of which Mr. Levin had noted, is a 
special interest to all of us, but I want to reiterate a point 
that Senator Kerry made, having to do with the fact that we do 
have in Vietnam, Vietnam does have a strong worker rights law. 
The Vietnamese had 60 strikes last year in the various 
capacities, and not against just foreign institutions I might 
add.
    The economic development in Vietnam is moving on very, very 
well. We are hoping that we will in fact be able to conclude a 
bilateral trade agreement this year. It's certainly not 
absolute, but the negotiators are in Washington this week 
trying to find solutions to some of the outstanding problems. 
There still are some issues that are very, very troublesome, 
but I hope that we will in fact be able to do that.
    But our objective through an engagement policy is to create 
a prosperous Vietnam. Why? Certainly, because we want to sell 
American products to Vietnam. But to be honest with you, the 
major issue is to find a vehicle in which to ride over to the 
goals, the policy goals that the United States has having to do 
with the rule of law, the acceptance of greater standards, 
higher standards of human rights, the integration of Vietnam 
into the world community, and the adoption of international 
standards throughout their whole society, and certainly to 
conclude our MIA Program.
    Renewal of Jackson-Vanik now will continue the successful 
process of reconciliation that we have started. It will 
facilitate development of our now very solid relationship with 
Vietnam, and I am convinced that the Vietnamese are committed 
to further pursuit to a peaceful and constructive relationship 
with the community of nations. I would point out finally that 
the 1999 snapshot of Vietnam bears virtually no resemblance to 
the isolated, bankrupt, and highly controlled society of just a 
decade ago. Our relationship is continuing to become very 
complex, and with that complexity will bring obviously some 
disagreements, but we can work them out.
    The policy of engagement and Jackson-Vanik being a part of 
that, and very important part of that engagement, will continue 
to bring us enormous success, a historical success, I might 
add. Our policy in Vietnam is exactly correct. We are exactly 
where we should be. We are doing the right thing in Vietnam 
finally. Renewal of Jackson-Vanik will take us to the next 
steps of our relationship. I strongly, as strongly words can 
express, ask your support for us to do the right thing. That is 
to renew Jackson-Vanik for Vietnam this next year.
    Thank you very much.
    [The prepared statement follows:]

Statement of Hon. Douglas ``Pete'' Peterson, U.S. Ambassador to 
Vietnam; and Former Member of Congress

    Mr. Chairman, I would like to thank you for once again 
inviting me to consult with you about the President's decision 
to discuss Vietnam's Jackson-Vanik waiver for another year. 
Last year, I told you that U.S. engagement with Vietnam had 
produced progress on top-priority U.S. foreign policy goals in 
Vietnam. This year, too, has been marked by progress in the 
effort to account for our missing from the Vietnam War (MIA 
issue), freedom of emigration, improving respect for human 
rights, promoting regional stability and opening markets for 
U.S. business. Since it was first granted in March 1998, the 
Jackson-Vanik waiver has been an essential component our policy 
of engagement and has directly furthered progress with Vietnam 
on these and other U.S. policy goals. I am confident that 
extension of the waiver this year will continue to advance U.S. 
national interests in Vietnam.
    In June 1998, when we asked Congress to support the waiver, 
we had only a very short track record to judge the impact of 
the Jackson-Vanik waiver in achieving the results it was 
intended to achieve. We had more hopes than we had evidence. We 
promised then to review our achievements after one year. Now, a 
year later, clearer evidence is in, and overall our hopes have 
been well-rewarded. The results have been very positive. We 
have made good progress on emigration issues and expect 
imminent completion of a number of special refugee programs in 
Vietnam. The waiver, itself, has substantially promoted greater 
freedom of emigration from Vietnam, the primary objective of 
the Jackson-Vanik amendment. The waiver has helped the U.S. 
government influence Vietnam's progress toward an open, market-
oriented economy. It has also benefited U.S. business by making 
available a number of U.S. government trade promotion and 
investment support programs that enhance their ability to 
compete in this potentially important market. At the same time, 
Vietnam has continued to work with us closely on the MIA issue 
where we are moving from cooperation to what we hope will be a 
partnership. The U.S. policy of engagement has built on 
Vietnam's own policy of political and economic reintegration 
with the rest of the world which led most recently to Vietnam's 
admission to the Asia Pacific Economic Cooperation (APEC) 
forum. We also have seen some improvements in Vietnam's human 
rights performance, although the picture there is still mixed.
    President Clinton decided on June 3 to extend Vietnam's 
Jackson-Vanik waiver because he determined that doing so would 
substantially promote greater freedom of emigration in the 
future in Vietnam. He based this determination on the country's 
record of progress on emigration and on Vietnam's continued and 
intensified cooperation on U.S. refugee programs. Overall 
Vietnam's emigration policy has opened considerably in the last 
decade and a half. As a consequence, over 500,000 Vietnamese 
have emigrated as refugees or immigrants to the United States 
under the Orderly Departure Program (ODP), and only a small 
number of refugee applications remain.
    Thousands of Vietnamese have left Vietnam and gained 
admission to the United States under our immigration laws. In 
1998, 9,742 immigrant visas were issued to Vietnamese under 
ODP. The Department of State expects that over 25,000 
Vietnamese will apply for immigrant visas in this fiscal year 
and projects that number to rise to 30,000 in fiscal year (FY) 
2000.
    Understandably, greater scrutiny has been given to 
Vietnam's performance on those special refugee programs 
established by the United States as part of our humanitarian 
response to the consequences of the war including the program 
for Former Re-education Camp Detainees (``HO'') and the 
Resettlement Opportunity for Vietnamese Returnees (ROVR). I am 
pleased to be able to inform you that Vietnam's cooperation has 
intensified in the last year, in large part as result of the 
Jackson-Vanik waiver. Consequently, we anticipate that we will 
complete processing of nearly all the current ODP caseloads, 
including ROVR, before the end of this fiscal year. Vietnam has 
pledged to take all necessary steps to meet this goal. 
Moreover, the Vietnamese government recently agreed to help 
implement our decision to resume the ODP program for former 
U.S. government employees that we suspended in 1996.
    After getting off to a disappointing start, ROVR processing 
accelerated dramatically in 1998 and is nearly completed. As of 
June 1, 1999, the Government of Vietnam (GVN) had cleared for 
interview 19,975 individuals, or 96 percent of the ROVR 
applicants. By contrast, at this time last year, the GVN had 
cleared 78 percent of applicants. The Immigration and 
Naturalization Service (INS) has approved 15,833 ROVR 
applicants for admission to the United States as refugees, 
14,715 of whom have departed Vietnam.
    At the end of May 1998, the GVN had not yet taken action on 
1,353 ROVR cases. By June 1 of this year, the GVN reduced that 
number to 79 cases. Likewise, progress has been made on cases 
initially denied clearance for interview by the GVN. As of May 
1998, 776 cases were listed by the Vietnamese as having been 
denied clearance for interview. Most were denied because of 
incorrect addresses or the failure of individuals eligible for 
ROVR to attend a clearance interview. ODP provided updated 
information to the GVN, and as result, many denials were 
reversed and the number of cases denied clearance fell to 422 
cases by the beginning of this month.
    ODP has given particular attention to completion of the HO 
program for applicants detained for at least three years in a 
re-education camp because of their association with the USG. As 
of the end of May, there were only 287 HO cases involving 1,480 
individuals who had not yet been interviewed by the INS. A sub-
group of the HO program consists of applicants covered by the 
``McCain amendment,'' which includes eligible sons and 
daughters of former re-education camp detainees who were 
approved for entry into the United States as refugees before 
April 1, 1995. At the end of May, there were only 558 cases 
remaining. The primary obstacle to processing the remaining HO 
and McCain Amendment case loads is failure of the applicants to 
apply to the GVN for exit permission, a factor beyond the 
control of either the Vietnamese or the U.S. governments.
    As these programs draw to a close, U.S. officials will work 
closely with the Vietnamese to ensure that all interested 
applicants have the opportunity to be interviewed, and if 
qualified, emigrate to the United States. Completion of ODP and 
ROVR programs will not mean the end of U.S. refugee processing 
in Vietnam. We are designing a new program to address the 
rescue needs of individuals who have suffered recent 
persecution on account of race, religion, nationality, 
membership of a particular social group, or political opinion. 
In sum, I expect Vietnam's cooperation on immigration will 
continue and be reinforced with the extension of the Jackson-
Vanik waiver.
    Whenever consideration is given to taking any action with 
respect to the normalization of our bilateral relationship with 
Vietnam, we must review progress on obtaining the ``fullest 
possible accounting'' for our missing from the Vietnam War. 
This remains our highest priority with Vietnam, one of great 
personal interest to me. Here, I am pleased to be able to say 
Vietnam's cooperation on obtaining the fullest possible 
accounting of our missing from the Vietnam war continues to be 
excellent. As a result, the President once again issued, on 
February 3, a determination that Vietnam is ``fully cooperating 
in good faith with the United States.'' Since the President 
made his annual review for this determination, the United 
States and Vietnam have conducted three Joint Field Activities; 
we have repatriated six remains and identified remains of nine 
individuals representing eight cases; and Vietnamese teams have 
provided reports regarding their unilateral investigations of 
38 cases. In addition, the Vietnamese recently provided 12 
documents in two separate turnovers to support a U.S. study of 
Vietnam's collection and repatriation of American remains. 
Also, since December 1, 1998, Vietnam has identified eight 
witnesses for participation in future trilateral investigations 
in Laos.
    The Administration remains very concerned about Vietnam's 
performance on human rights. Vietnam continues to deny or 
curtail basic freedoms to its citizens. The government 
maintains an autocratic one-party state that tolerates no 
organized opposition. A number of people remain in jail or 
under house arrest for the peaceful expression of their 
political or religious views. And, the country's labor 
practices fall short of international standards.
    Nonetheless, we have seen some improvements which we 
believe can be attributed to deepening U.S. engagement with 
Vietnam as well as to Vietnam's increased contact with the 
outside world. In recent years, increased citizen-to-citizen 
contacts through the media, internet, trade and investment, 
travel and cultural and educational exchanges have exposed the 
Vietnamese people to international standards and values.
    Let me tell you about several important gains that have 
been made. Last fall, as part of two large amnesties of 
prisoners, the GVN released a number of prisoners of 
conscience, including several leading dissidents such as Doan 
Viet Hoat, Nguyen Dan Que and Thich Quang Do.
    The conditions for individual religious observance also 
have improved recently. Worshipers associated with officially-
recognized sects practice their religion with few restrictions. 
Places of worship are being repaired and renovated, often with 
funding from abroad. Attendance at regularly scheduled and 
holiday services is high and in many cases growing. However, 
restrictions on religious institutions themselves remain in 
place, including on clerical appointments, seminary activity 
and transfers of clergy.
    Vietnam also is making progress in the area of worker 
rights. In 1998, 60 independently organized strikes protesting 
unfair wages and working conditions occurred. That these 
strikes were unofficially supported at local and provincial 
levels by the Vietnamese General Confederation of Labor, the 
party-dominated umbrella labor organization, suggests 
perceptible progress in the regime's attitude toward 
independent worker activities. The GVN is currently drafting 
legislation on freedom of association. Improvements are also 
being made in collective bargaining. Multi-year contacts are 
increasingly being negotiated. And, labor leaders are more 
responsive to worker concerns in selecting the issues to 
address in contracts.
    We have both ongoing and regularly scheduled dialogues with 
Vietnam on the issue of human rights. These discussions offer a 
constructive forum where the U.S. government can inform Vietnam 
of U.S. views and concerns and to press for progress. The next 
human rights dialogue is scheduled for July 12-14. We will 
raise freedom of speech, association and religion, Vietnam's 
administrative detention decree, prison conditions, labor 
rights, information on former prisoners of conscience, as well 
as specific detention cases of concern.
    Between rounds, the pressure on the Vietnamese does not 
abate. My staff and I, as well as State Department officials 
here in Washington, raise human rights concerns at every 
opportunity and at the highest levels. Secretary Albright 
discussed human rights with Vietnamese Deputy Prime Minister 
and Foreign Minister Nguyen Manh Cam when he met with her last 
October. Ambassador for Religious Affairs Robert Seiple plans 
to visit Vietnam next month. The objective of all of these 
encounters is to engage the Vietnamese and persuade them to 
make positive changes. The more we engage, the greater 
opportunity we have to urge greater respect for human rights.
    Vietnam faces many serious economic issues as it enters the 
21st century, ones with significant social and political 
ramifications. It must cope with globalization by integrating 
into the regional and world economy. It must promote 
development of the private sector to increase economic 
productivity and sufficient growth to meet the aspirations of a 
young and growing population. It must develop a transparent, 
predictable business climate based on the rule of law. And it 
must complete the transition from a centrally planned to a 
market economy. The Vietnamese leadership has recognized the 
need to pursue these goals, and gradually, progress is being 
made.
    U.S. business still finds Vietnam a tough place to operate. 
Reform has not progressed at the pace that many had hoped. 
Nonetheless, U.S. businesses continue to view this nation of 
nearly 78 million as an important, potentially lucrative 
market. They believe that the U.S. government has an important 
role to play in encouraging the GVN to accelerate and broaden 
its program of economic reform. For business too, the answer is 
engagement not isolation.
    Bilateral trade negotiations and WTO accession provide 
additional leverage, holding out the prospect of normal trade 
relations. These processes provide us with the opportunity to 
obtain from the Vietnamese commitments to undertake necessary 
economic reforms and to make changes to their trade and 
investment regimes that will directly benefit U.S. businesses. 
This week in Washington, another round of negotiations on the 
bilateral trade agreement is taking place, and I feel that an 
agreement may be within reach in the coming weeks. This 
agreement is necessary if we are to fully normalize our 
bilateral relationship extending normal trade relations to the 
country. It also will act as a catalyst to simulate fundamental 
and far-reaching economic reforms improving the transparency 
and predictability of its business regime and moving Vietnam 
significantly closer to WTO and other international economic 
standards. In fact, prominent dissident Nguyen Dan Que, in a 
June 13 communique, announced his support for a bilateral trade 
agreement based on his belief that the agreement would be a 
force for change in Vietnam. And it will be open up Vietnam's 
economy creating new, commercially meaningful opportunities for 
U.S. firms. Withdrawal of the waiver at this time would 
certainly derail these negotiations at a critical juncture.
    U.S. business also benefits from continued access to U.S. 
government export promotion and investment support programs 
such as those offered by the Export-Import Bank (EXIM), the 
Overseas Private Investment Corporation (OPIC), the U.S. 
Department of Agriculture (USDA) and the Trade and Development 
Agency (TDA). U.S. manufacturers, farmers and workers stand to 
gain significant opportunities from these programs, including 
opportunities that lead to the development of jobs in the U.S. 
OPIC financing and insurance programs are available for U.S. 
investors and several potential projects are currently in the 
pipeline. EXIM is putting the finishing touches on agreements 
which will allow it to make a range of export support programs 
available to U.S. exporters. USDA also has made available 
grants and credit guarantees that will open the Vietnamese 
market to increased U.S. agricultural exports. TDA has made 
numerous grants for feasibility studies that will give U.S. 
companies the leg up to win project bid. These programs have 
just begun operating since last year as a result of the 
Jackson-Vanik waiver, and we now stand poised to reap the 
considerable benefits they have to offer. Withdrawal of the 
waiver would end the availability of these programs to our 
businesses operating in Vietnam, restricting their ability to 
compete on a level playing field with Asian and European 
competitors who have access to similar programs.
    A prosperous Vietnam integrated into world markets and 
regional organizations will contribute to regional stability. 
The U.S. seeks to encourage Vietnam along the path of reform so 
that as it enters the 21st century, it will become a reliable 
and peaceful regional and international player. The best way to 
achieve this is to work with other nations to increase trade, 
the free flow of information and know-how, and people-to-people 
exchanges with Vietnam. Vietnam itself decided over a decade 
ago to embark on an economic reform program, known as doi moi, 
and a policy of political and economic reintegration with the 
world. Already a member of ASEAN since 1995, Vietnam took 
another step forward when it joined APEC in November 1998. As 
Vietnam increasingly integrates itself into these regional 
organizations and the rest of the international community, it 
gains a greater stake in being a constructive world player. 
Vietnam has also placed high priority on improving relations 
with the United States. It is in our national interest to 
respond positively to these overtures.
    To those who would argue that rather than incrementally 
normalizing our relationship with Vietnam, we should eschew 
further contact with the country and its communist regime and 
withdraw the Jackson-Vanik waiver from Vietnam, I would reply 
that to do so would be to deny ourselves the most effective 
tool we have to encourage the process of change in Vietnam. As 
Vietnam has opened to the world, permitting foreign goods, 
ideas, people and investment to enter its borders, tangible 
change has occurred. Vietnamese society in 1999 bears little 
resemblance to the isolated, bankrupt and tightly-controlled 
society of a decade ago. With continued opening of the economy, 
the middle class will grow, the population will become more 
educated and exposed to more ideas, and Vietnam will continue 
to evolve to become a more open society. But change comes in 
increments. By extending the Jackson-Vanik waiver and taking 
other steps along the path of normalization, including 
extension of normal trade relations, the U.S. will advance our 
interest in encouraging Vietnam's on-going transition.
      

                                

    Chairman Crane. Thank you, Mr. Ambassador. You were here to 
listen to the testimony of our colleague from California, Mr. 
Rohrabacher. He made in his testimony some charges about what's 
been going on in Vietnam since we had the last time to have an 
exchange, the last year on this. I am curious, he says the 
Communist regime has further tightened its grip on civil 
liberties, religion, and free expression. You have been there 
present to witness what's happening. How would you evaluate 
that?
    Ambassador Peterson. Clearly, the civil liberties have not 
been tightened. Clearly I would say the religious rights issue 
has not been tightened. The press issue is mixed. In fact, they 
did pass a law recently which we haven't truly evaluated just 
yet, nor do I think have they. But there is a problem with 
freedom of the press. It's not what we want it to be, but we 
are on the inside tinkering with policy with them, and making 
strong suggestions that this is one area that they have 
absolutely every opportunity and to the benefit of the nation 
to open up and to allow the whole process to be more 
transparent. Transparency is a major point of every meeting 
that I have with any Vietnamese leader, large or small.
    He also made a point about the lack of free elections. I 
would like to just walk through what the last election for the 
national assembly looked like. The election had roughly 800 
candidates, something like that, it may have been a little 
more. There are 450 seats in the national assembly. When the 
election was over, the cross-section of the national assembly 
was changed dramatically. Sixty-one members of the national 
assembly are not party members. Three of the members that were 
elected to the national assembly do not belong to any 
organization. They are totally independent. They ran as 
independents. Just came off the street, ``I want to run.''
    Chairman Crane. Jesse Venturas.
    Ambassador Peterson. Perhaps. One of those three members is 
a former major in the South Vietnamese Army. It was rather 
cute, actually. Of those three members, the papers had a review 
and said ``and three members were elected with no political 
support at all,'' which in their thought was I thought rather 
interesting. But what they have now is a national assembly that 
is assuming a much greater role, because now it's constituency-
based. It has taken a greater role in policy. Its cross-
section: 26.6 percent women, all of the minorities are 
represented, they have a much better cross-section of the 
religious activities, labor, all of those activities are 
represented in that body.
    I don't know that it's a free election like the one we'll 
have next year, but it is clearly changed. I think that we 
should give credit to that and encourage them to move further 
on that point.
    Chairman Crane. Another quote from his testimony, 
``Repressive political and economic policies of the Vietnamese 
Communist leaders makes Vietnam a dictatorship and one of the 
worst investment risks in the world.'' How would you evaluate 
that?
    Ambassador Peterson. Well, the United States has well over 
400 companies, a number of them represented here today, of 
which you will hear testimony. They are a better measure of 
risk than I. Clearly they recognize Vietnam as an opportunity. 
If in fact the conditions were so severe as that, they wouldn't 
be there. That's the first point.
    The second point is though, to be honest with you, doing 
business in Vietnam is quite difficult, as it would be for any 
country that is under major transition as this country, and 
where a country is trying to find its way in becoming a party 
to the global economic regime. Their effort and their 
commitment with us in the negotiations with our bilateral trade 
agreement have really been incredibly fruitful in them 
addressing some of the most onerous issues that you could ask 
any former Communist government or a Communist government to 
look at in looking toward the development of free market. They 
are opening their market. They are changing tariffs. They are 
having to build new institutions. It is a whole different 
ballgame. While we are not talking here today about the trade 
agreement, I hope to do that later this year. It would be a 
major hope on my part. But from the standpoint of Vietnamese 
taking on the difficult issues, they clearly have done so. I 
think that the businessmen would be better qualified to answer 
that question in greater detail.
    Chairman Crane. One final question was his statement that 
Hanoi has continued to jam the broadcasts of Radio Free Asia.
    Ambassador Peterson. Frankly, I believe they continue to 
try to. I think it's a left-handed effort. They are certainly 
not being totally successful and are being quite intermittent 
about it, because our people are intercepting it and listening 
to it, my staff. So it's not something that isn't getting 
through. It does get through. I think that that is becoming a 
much less of concern, even to the Vietnamese. I hear them not 
talking about that very much.
    I would add another point that one of the things that my 
friend Congressman Rohrabacher made a point about, we shouldn't 
do business with anyone that isn't a democracy. I hope everyone 
recognizes that if we ever had adopted such a plan, we wouldn't 
be the nation we are. Nor would a whole host of other nations 
be who they are, because we just have had such a huge success 
by engagement and bringing those nations into the window of 
democracy. So I think that clearly by engagement that 
opportunity exists in Vietnam as it did in Chile and a whole 
host of other countries of which we have had I think great 
success.
    Chairman Crane. Thank you, Mr. Ambassador.
    Mr. Levin.
    Mr. Levin. Let me just ask you I think a question, a 
general one that our constituents ask. There has been much 
discussion about engagement, and at times, deprecation of that 
term and what it means. So based on your tenure so far, if you 
were talking to our constituencies, you have talked in the past 
years and in a sense the whole American people are now your 
constituency, but based as your tenure, what is the case for a 
waiver for continued involvement, the progress you have seen, 
the road ahead? Sum it up based on your on-the-ground 
experiences in Vietnam, your experience as Ambassador.
    Ambassador Peterson. Sandy, since I have been there, I have 
seen significant improvement across the whole spectrum of 
issues and goals, objectives that the United States has 
interest in Vietnam. They have become much more open. They are 
willing to conduct a dialog on virtually any subject no matter 
how tough it is, how unpleasant it might be. They are looking 
for solutions. They want very much to be friends to America. 
They recognize America, like so many other nations do in the 
world, as the symbol of freedom and the society that they would 
like to pattern their country after, I believe.
    What I see in the generational transition is significant, 
as was noted by Congressman Blumenauer, that 80, 85 percent of 
the population is under age 40. Over 40 percent of the 
population is under age 18. These are people who want a better 
quality of life, and they are looking to America to help them 
to do that. Our MIA search effort has indeed come down to a 
partnership. It's not just cooperation any more. There is a lot 
of unilateral work that the Vietnamese are giving to us. They 
are suggesting ways for us on how to do things better and how 
to save money in the process of doing it. They have shown a 
deference to our concerns having to do with the incarceration 
of individuals who have broken Vietnamese law in their frame of 
reference, but it's law, which frankly, should be changed. With 
our expression of concern, we have encouraged them to settle 
these disputes rather than incarceration by administrative 
procedure, and they have done that.
    Two years ago, they wouldn't have done that. Those are just 
a few examples of the changes that are taking place in Vietnam. 
I noted that if you were to take a snapshot of Vietnam in 1999, 
it has no resemblance of anything in the past of even 1 month 
ago, because things are changing so much and so fast.
    Mr. Levin. Thank you.
    Chairman Crane. Mr. Rangel.
    Mr. Rangel. Ambassador, we are so proud to have an American 
like you represent us, but even more proud that you are a 
former Member of this House. I was just speaking with 
Congressman Neal, who commented that after all you have been 
through, to hear you testify on behalf of a country that you 
were held captive for 6 years, makes you a very, very special 
human being. I know that you do it not just for them or for us, 
but for humankind as we try to improve the quality of life for 
them. Of course, we all benefit.
    Throughout your testimony, in my mind, I just struck out 
North Vietnam and substituted Cuba. We have had Americans lose 
their life in Japan, and Germany, and Vietnam, and Korea, and 
certainly I have been shot by Chinese. Yet we think that it 
helps democracy by exposing them, by engaging them, by showing 
them how it works, and everything that you have said, I will 
take your word for it because it's working, because it's just 
so easy to be vindictive and want to get even.
    What is the difference with Cuba? Why would it not work the 
same way with Cuba? Why can't we let our businesspeople 
showcase democracy and competition at its best? They too love 
Americans, if not our government. What are your thoughts about 
free trade with as many people as you have said, where would we 
be today if we were just restrictive in looking at the type of 
government, oh we didn't trade with them unless they were ``a 
democracy.'' What are your views, Ambassador, on that?
    Ambassador Peterson. Well, that may be above my pay grade 
to answer that in specific terms. However, I would only suggest 
that the successes that we have found in Vietnam have come 
because we have engaged, because we have had a very 
professional and constructive dialog with them on virtually 
every issue of which we have had outstanding. I think that 
success is telling. Clearly, in order to find solutions, one 
has to talk to the parties and air out those differences and 
come to those compromises and conclusions, of which we have 
done in Vietnam.
    We are not finished in Vietnam. I don't want to leave that 
impression. We have a long way to go. We are working very, very 
hard. I am very proud of my staff and the desk officers here 
and a lot of departmental officers within the administration, 
because we have to be committed in order for them to have a 
commitment in return. We have to be inspiring and we have to 
lead. We have to be out front. We're the big guy. I am very 
proud that we have taken that opportunity and enhanced our 
relationship with Vietnam to where we can in fact move to the 
future and exploit these wonderful opportunities to raise the 
quality of life for 80 million people, and by so doing, give 
them an opportunity to have a big bite of the apple that all 
the rest of us enjoy in America.
    Mr. Rangel. We're proud of you. Thank you, Mr. Chairman.
    Chairman Crane. Mr. Neal.
    Mr. Neal. Thanks, Mr. Chairman. I think Charlie summed it 
up pretty well. The emotion that you evoke when you come back 
to the House, Pete, you were a great pal while you were here 
and it's terrific to see you in your new role.
    Two questions. One of the hardest things for Members of 
Congress which you experienced for 6 years and probably because 
of your history, you know better than everybody, when you go to 
the events that memorialize Vietnam, that question of prisoners 
of war is still a burning issue for many, many of the troops 
that served and their families. Senator Kerry gave a pretty 
good accounting this morning, I thought, of numbers. But would 
you care to shed some light on how you feel that that is moving 
and progressing?
    Ambassador Peterson. I think the MIA search efforts, POW 
search efforts in Vietnam have been successful in historic 
proportions. Never before in mankind history, that I know 
about, have two former belligerents gone back to the 
battlefield and attempted to do what we are doing.
    We have now brought this list of missing down 
substantially. I believe the number is roughly 2,060 in all of 
Southeast Asia, and in Vietnam it's roughly 1,540. But as I 
noted in my testimony, in those cases of no further pursuit, 
the Vietnamese have just handed a result back to an 
investigation of which we are now going back through our 
records. It appears that we could in fact resolve roughly 600 
cases if it is accurate, if the information we have is accurate 
and we can in fact fulfill all of the legal requirements 
associated with that, which would bring down these numbers even 
more substantially.
    But I can assure you that this commitment that we are 
involved with to reach the fullest possible accounting is of 
the most serious, and the first priority that we have in our 
mission in Vietnam.
    I would say too that this work that we are doing is not 
just for those who we lost. It is for those who are wearing the 
uniform today, because it's a demonstration of the commitment 
of our Nation to make that determination and to their families 
that we will get answers as to whatever loss that might be 
sustained in a future combat role. So, I am very proud of this. 
We could cite all the members. I think it's actually in my 
testimony. But if there's any program that I am most proud of, 
frankly, it is that one.
    We have recently commissioned a film, a short film, that 
shows exactly how we do it and goes through the whole process 
that I will try to send you a copy, that I think you would find 
very rewarding. I hope that you would be able to share that 
with some of your constituents as well.
    Mr. Neal. Second question, the Asian financial crisis. We 
keep seeing inconsistent information in data that are delivered 
here. What is your read on the impact of that so-called ``Asian 
flu?''
    Ambassador Peterson. Well, I have just finished a 
nationwide tour of really five cities in which we have 
discussed that with all sorts of various groups in America. We 
have tried to bring the message that it appears in some of the 
countries in Asia that the financial crisis seems to be 
bottoming out. It looks like we will probably get some 
generally positive GDP growth rates next year. But none of 
these countries is out of the woods.
    Vietnam was less negatively impacted and has maintained a 
positive growth rate throughout this whole process because it 
was less subjected to this process because it didn't have a 
stock market nor convertible currency. Nevertheless, it has 
lost its export markets, it has lost a lot of its FDI, and it 
is struggling. But if you look at Thailand, you look at 
Malaysia, you look at, certainly, Korea, those countries are 
certainly coming back. Singapore wasn't really hurt by this. 
Now with the elections in Indonesia, that looks promising as 
well. The Philippines has done very well, as well. So we are 
very optimistic about the prospects of having administered the 
proper medicine to the financial crisis by the world community. 
We see a recovery certainly in the next year.
    Mr. Neal. Thanks, Pete.
    Chairman Crane. Well again, let us express our appreciation 
to you, Mr. Ambassador, for your willingness to continue to 
serve faithfully, both in your tour of duty in Vietnam as well 
as coming back here and giving us updates. Your insights are--
oh, excuse me. Mr. Watkins has a question before you leave.
    Mr. Watkins. Thank you. Mr. Ambassador, let me say how 
pleased I am to hear you, and I think speaking for nearly all 
Americans, I would say all, that we are delighted you are 
serving as Ambassador there. We know the American people are 
served well.
    I have two questions I would like to ask. What do you feel 
and see are the trade barriers that we have there with our 
trade relations with Vietnam? What do you see on the ground 
there in Vietnam?
    Ambassador Peterson. Well, the trade agreement of which we 
are negotiating with Vietnam right now is essentially a WTO 
principle-based trade agreement. All of the barriers that have 
been in place in Vietnam to protect the state-owned enterprises 
and to essentially control the domestic market are in place. 
With the BTA, the bilateral trade agreement, we are negotiating 
removals of those barriers. There are many and varied. Even 
with that, however, as I noted, 400 American companies or 400-
plus American companies are already doing business there and 
have found ways to overcome some of those barriers. Some of 
those companies are doing quite well, I might add.
    So the tariff structure, the licensing structure, the 
closure of some sectors of the market, and frankly, just the 
slowness of the Vietnamese to react to business requests.
    Mr. Watkins. That kind of leads me to the second question 
there. Do you feel you, through the Embassy there, that we are 
being able to expedite and overcome those things there? Do we 
have the kind of corporation there that helps us--I know we 
have got to work toward a bigger trade agreement, but we know 
those kind of engagements, as you were talking about, but are 
those various barriers, are they willing to work with you?
    Ambassador Peterson. Yes, they are. In fact, they are not 
just working with us. Obviously there are many other foreign 
nations who are doing business there.
    Mr. Watkins. Right, exactly.
    Ambassador Peterson. The donors community has been very 
effective, I think, in bringing forth recommendations for 
accelerated reforms in removing of those barriers. But so far 
as American business and American interests are concerned, our 
best effort, our best opportunity is to negotiate a conclusion 
to the bilateral trade agreement, and then bring it up to you 
and bring it through the process of confirmation here.
    Mr. Watkins. That's all I have, Mr. Chairman.
    Chairman Crane. Well again, thank you, Mr. Ambassador. We 
look forward to your testimony in the future since we have to 
renew the Jackson-Vanik waiver annually.
    Ambassador Peterson. Thank you, Mr. Chairman, I appreciate 
it, and all the Members.
    Chairman Crane. With that, the Subcommittee will stand in 
recess subject to call of the Chair. We have one 15-minute and 
two 5-minute votes. We will reconvene after that.
    [Recess.]
    Chairman Crane. Will everybody please take seats. The 
Subcommittee will reconvene. I now would like to invite our 
next panel. Nguyen Dinh Thang, executive director, Boat People 
S.O.S.; Virginia Foote, president, U.S.-Vietnam Trade Council; 
Y Tin Hwing, member, Montagnard Human Rights Organization; 
Lionel Johnson, vice president and director, InterNational 
Government Relations of Citibank; and Ernest Bower, president, 
U.S.-ASEAN Business Council.
    I would like now to yield to our distinguished Ranking 
Minority Member, Mr. Rangel, who wants to make a special remark 
or one of our witnesses.
    Mr. Rangel. I just want to thank Lionel Johnson, as well as 
the Majority for giving us an opportunity to be involved in 
this panel. We were fortunate that Mr. Johnson, who is the vice 
president, director, of InterNational Government Relations with 
Citibank was able to join with us. I want to thank the Chair. 
Thank you for being here.
    Chairman Crane. Let me tell our witnesses to please try and 
confine your oral presentations to under 5 minutes. Any printed 
statements, however, will be made a part of the permanent 
record. With that, we shall then proceed in the order I 
presented you here.
    I am not pronouncing it right, probably. Is it Thang or 
Thang?
    Mr. Thang. The first try is pretty good.
    Chairman Crane. OK. You go first.

STATEMENT OF NGUYEN DINH THANG, EXECUTIVE DIRECTOR, BOAT PEOPLE 
                  S.O.S., MERRIFIELD, VIRGINIA

    Mr. Thang. Thank you, sir. Mr. Chairman and Members of the 
Subcommittee, last year President Clinton granted Vietnam the 
waiver for the Jackson-Vanik amendment with the promise that it 
would substantially promote free and open emigration. Other 
witnesses before me have brought up other issues such as MIA/
POWs, trade relations with Vietnam, child labor, constructive 
engagement; all those issues are very important. But for the 
moment, I would like to focus your attention on the gist of the 
Jackson-Vanik amendment, which is free and open emigration. The 
waiver should be evaluated based on whether it has 
substantially promoted free and open emigration, or not.
    The statutory definition of free and open emigration is 
that no citizen should be denied the right or opportunity to 
emigrate, and that no citizen should be made to pay more than a 
nominal fee on emigration or on the visas or other documents 
required for emigration. According to that definition, 
emigration in Vietnam has become less free and less open since 
last year's waiver because of more rampant corruption. 
According to our own survey of refugees arriving in the U.S. 
over the past 6 months, on the average, each of them must pay 
$1,000 U.S., or four times the annual per capita income in 
Vietnam, for access to interviews and exit permission. That is 
clearly more than a nominal fee.
    One refugee arriving in Texas earlier this year was 
demanded $10,000 U.S. As he could not afford the money, he was 
coerced by the authorities into a false marriage with a lady 
who agreed to pay the required sum. He had to take this woman 
and her child to the U.S., leaving behind his own child in 
Vietnam. Another applicant was demanded $40,000 U.S. As he did 
not have that kind of money, how could he, the authorities 
demanded that he marry a woman with four children and bring 
them all to the U.S. He refused because he had taken the 
Buddhist vow of celibacy. He is now under arrest, I mean under 
house detention in Vietnam.
    According to our estimates there are some 10,000 otherwise 
estimates, eligible individuals who have been denied access to 
various U.S. refugee programs because of corruption. This 
estimate is conservative. At a meeting with a delegation of 
Vietnamese-American leaders and several congressional staffers 
in late 1997, our Ambassador to Vietnam, Pete Peterson, placed 
the number at around 20,000 to 30,000 individuals. None of 
those cases has been resolved.
    It is obvious that considering the extremely corrupt system 
in Vietnam, there cannot be free and open emigration. Neither 
can any trade relations with Vietnam be normal in its true 
sense.
    The U.N. Development Program 2 days ago reported that 40 
percent of its aid to Vietnam for an ongoing project had been 
lost. Its report recommends that all proposals in the pipeline 
should be annulled. The UNDP also estimates that only 5.5 
percent of the $5 billion in international development aid to 
Vietnam actually goes to the Vietnamese citizens. That's not 
normal. Last month, Vietnam's ministry of finance reported that 
one-third of the country's total civil service assets, worth 
$5.8 billion, are unaccounted for. That is not normal.
    Reacting to a growing number of public allegations of 
corruption against its leaders, the Communist party earlier 
this year issued an order prohibiting its members from 
criticizing their leaders. Since then, many anticorruption 
crusaders among its own rank have been harassed, intimidated, 
or even arrested and detained. The politburo member accused by 
these crusaders of high level corruption now heads the party's 
anticorruption campaign. That's not normal.
    At yesterday's meeting with international donors and 
foreign investors in Vietnam, Vietnamese Government officials 
rejected calls for more transparency and less bureaucracy. The 
director of the World Bank in Vietnam made the following 
observation. ``Last year, we met at a time when we were very 
concerned. Today the situation is more serious than it was last 
year.''
    Over the past 12 months, Mr. Chairman, the Vietnamese 
Government has become more corrupt, less tolerant, more 
repressive, less transparent. This Congress has championed the 
cause of less government and more power to the people in 
America. The people of Vietnam deserve no less. United States 
policy toward Vietnam should empower the people, not strengthen 
the government's grip on power. For the past year, the Jackson-
Vanik waiver has achieved exactly the opposite. I therefore 
recommend that this Subcommittee disapprove the renewal of the 
waiver until and unless Vietnam has taken concrete steps to 
reform its stifling and corrupt bureaucracy, make its fiscal 
and administrative system transparent and accountable to the 
people, and respect open and free emigration.
    Proponents of the waiver present a different picture. To 
find out for yourselves, I suggest that this Subcommittee 
request the General Accounting Office to conduct a survey of 
refugees arriving from Vietnam to this country over the past 6 
months about the extent and level of corruption they were 
subjected to in Vietnam, and another survey of all United 
States businesses and governmental organizations with 
activities in Vietnam about the extent and level of corruption 
they have been subjected to. Then you will have a true story 
and a real picture.
    Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Nguyen Dinh Thang, Executive Director, Boat People S.O.S, 
Merryfield, Virginia

    The Jackson-Vanik Amendment stipulates that a communist 
country must honor free and open emigration of its citizens as 
precondition for certain economic privileges from the U.S. The 
President may waive this requirement if he can certify that the 
waiver promotes the objective of the amendment.
    The statute gives specific definition of what it means by 
free and open emigration: No citizen should be denied the right 
or opportunity to emigrate, and no citizen should be made to 
pay more than a nominal fee on emigration or on the visas or 
other documents required for emigration.
    We have interviewed many refugees arriving to the U.S. 
within the past six months. They had to pay on the average US 
$750 for access to the interview, and then US $250 apiece for 
an exit permit. At the airport, they again paid between $100 to 
$150 in order to get on the plane. These are huge sums of 
money, considering that the annual salary of an average 
government worker is $250 a year. Most of these refugees 
arrived in the U.S. with large debts. Emigration is clearly not 
free in Vietnam. Those who did not pay saw the door to U.S. 
refugee programs shut until they paid. Emigration is clearly 
not open in Vietnam.
    Corruption has many grave consequences on US refugee 
programs and on the refugees themselves. One refugee, now in 
Texas, was demanded US $10,000 in exchange for access to the 
Resettlement Opportunity for Vietnamese Returnees (ROVR) 
program. Of course he did not have that kind of money. The 
Vietnamese authorities then forced him to enter into a false 
marriage with a woman who agreed to pay the required sum. 
Without any choice, this man had to leave his own child behind 
and take the woman and her child to the U.S. instead.
    That is not the most outrageous example. For the past three 
years we have tried to help a repatriated boat person get a 
ROVR interview. He is demanded a bribe of US $40,000. Like the 
one above, this man is being coerced into a false marriage with 
a woman with four children. He has resisted so far because he 
has taken the Buddhist vow of celibacy. The police currently 
keeps him under house detention. This man is among the 650 
returnees still denied interview clearance despite promises of 
cooperation by Vietnam.
    Even in the ROVR program, which is of high priority to the 
US government, corruption has thrived. The consequences of 
corruption are much more aggravating in other U.S. refugee 
programs inside Vietnam. According to our conservative 
estimate, corruption has effectively denied some 10,000 
otherwise eligible individuals access to the Humanitarian 
Operation program for former political prisoners and the U11 
program for former U.S. government employees. They do not have 
the financial means to secure required documents in order to 
apply. Some have managed to apply but the Vietnamese 
authorities have refused to forward their applications to the 
US government. These victims of persecution, economically, 
socially, and politically marginalized because of their 
alliance with the US during the war, are being left behind.
    The Administration has ignored these blatant violations of 
the Jackson-Vanik Amendment in its rush to establish normal 
trade relations with Vietnam.
    The level and extent of corruption in Vietnam makes trade 
with that country anything but normal. Before taking a stand, 
members of this subcommittee need to carefully review the 
following recent events.
     Late last year, Edouard Wattez, the U.N. 
Development Program (UNDP) representative in Hanoi, made public 
his concern that very little (5.5 per cent) of the $5 billion 
in international development aid to Vietnam actually goes for 
basic social services to Vietnamese citizens, and that such aid 
might have hindered genuine economic reforms. (Cash handouts 
slow economic reform process, South China Morning Post, Nov. 
25, 1998.)
     In a report released two days ago, UNDP estimates 
that 40 percent of its money spent on a project in Vietnam was 
lost. It recommends that ``all proposals in the pipeline should 
be annulled'' (UN Report Shows Wasted Vietnam Aid, The 
Associated Press, June 14, 1999). Vietnam's Ministry of Finance 
recently admitted that one third of the country's total civil 
service assets, worth 5.8 billion US dollars, are unaccounted 
for (Vietnam Sets Stage for New Government Purge, STRATFOR's 
Global Intelligence Update, May 25, 1999).
     In its latest report, the Hong Kong-based 
Political and Economic Risk Consultancy (PERC) noted that 
Asia's economic crisis has resulted in greater transparency for 
most Asian economies. Vietnam, however, remains far in the 
negative end of the spectrum: scoring 8.50, where 0 is the best 
possible score and 10 the worst (Asia crisis results in greater 
transparency-PERC,T1 05:57 a.m. Nov 30, 1998 Eastern). In its 
report to Congress released two weeks ago, the General 
Accounting Office concluded that Vietnam lacks fiscal 
transparency and that financial and trade data published by its 
government are unreliable. (Vietnam Economic Data: Assessment 
of Availability and Quality, GAO, June 1999)
     Survey results released last week by Business 
Software Alliance and Software & Information Industry 
Association ranks Vietnam top in the world in software piracy; 
97% of all software applications used in Vietnam are pirated 
(Two-fifths of installed software pirated-survey, Reuters, 
09:57 a.m. Jun 07, 1999 Eastern). One should note that most of 
the computer systems in Vietnam are operated by government 
agencies or state-owned enterprises (SOEs).
     At the meeting with government officials two days 
ago, international donors and foreign investors expressed 
concern over the lack of transparency among SOEs and over the 
opaque bureaucracy that breeds corruption. Their calls for 
concrete reforms were rejected. At the conclusion of the 
meeting, Andrew Steer, director in Vietnam for the World Bank, 
publicly expressed his frustration: ``Last year we met at a 
time when we were very concerned. Today the situation is more 
serious than it was last year.'' (Disappointed donors see 
Vietnam slowing reforms, Reuters, Jun 15, 1999.)
     Three months ago, the public security police 
arrested Dr. Nguyen Thanh Giang, an anti-corruption crusader, 
and harassed 11 communist veterans who had written to the 
Communist Party alleging politburo member Pham The Duyet of 
high-level corruption. The politburo has since issued an order 
prohibiting party members from publicly criticizing their 
leaders (Vietnam Clamps Down on Free Speech, The Associated 
Press, June 7, 1999). The accused politburo member is presently 
in charge of Vietnam's anti-corruption campaign.
    Considering the extremely corrupt system in Vietnam, there 
can not be free and open emigration; trade relations with 
Vietnam can not be normal.
    This Congress has advocated for less government and more 
power to the people--the people in America, that is. The people 
of Vietnam deserves no less. U.S. policy toward Vietnam should 
empower the people, not strengthen the government's grip on 
power. For the past year, the Jackson-Vanik waiver has achieved 
exactly the opposite.
    I would like to recommend that the Subcommittee on Trade 
request the General Accounting Office to conduct a survey of 
refugees arriving from Vietnam over the past 6 months about the 
extent and level of corruption they were subjected to request 
the General Accounting Office to conduct a survey of all U.S. 
businesses and non-governmental organizations with activities 
in Vietnam about the extent and level of corruption they have 
been subjected to hold off the renewal of the Jackson-Vanik 
waiver until the Vietnamese government takes concrete steps to 
reform its stifling and corrupt bureaucracy, make its fiscal 
and administrative system transparent, and respect open and 
free emigration.
      

                                

    Chairman Crane. Thank you.
    Ms. Foote.

 STATEMENT OF VIRGINIA B. FOOTE, PRESIDENT, U.S.-VIETNAM TRADE 
                            COUNCIL

    Ms. Foote. Chairman Crane, Congressman Rangel, I am very 
pleased to be here today, as representing the United States-
Vietnam Trade Council. I testify in strong support of the 
renewal of the Jackson-Vanik waiver for Vietnam. If there are 
no objections, I would like to submit my full statement into 
the record, which includes two fact sheets we have put together 
on the importance of this waiver and of NTR's status for 
Vietnam.
    Chairman Crane. Without objection, so ordered.
    Ms. Foote. Thank you. And a letter also that we sent 
recently to Ambassador Barshefsky on the bilateral trade 
agreement talks signed by 144 American companies and trade 
associations, and a chronology of the overall normalization 
process between the United States and Vietnam which began in 
the Reagan administration.
    The trade council was founded in 1989 as an association 
with strong membership from the American business community. We 
have offices in Washington and Hanoi, and have worked through 
our educational affiliation, the United States-Vietnam Forum, 
to improve relations between the U.S. and Vietnam with 
educational exchange programs, conferences, congressional 
delegations. We are now providing technical assistance on some 
of the difficult issues that are raised by the bilateral trade 
agreement.
    I would like to address why I think it is very important 
for you to vote to renew the Jackson-Vanik waiver for Vietnam 
again this year. Beginning in the late eighties, Vietnam 
embarked on a bold economic reform program, which has shown 
impressive results. From 1988 to 1996, over $28 billion in 
foreign investment was committed to Vietnam. Because 
normalization with the United States was far slower than with 
other nations, American involvement in Vietnam has lagged 
behind other nations, and still operates under severe 
handicaps. Without NTR status, a trade agreement, and initially 
without trade support programs, American companies and 
individuals nonetheless began traveling, investing, and trading 
with Vietnam. By 1997, the United States was the eighth largest 
investor and eighth largest trading partner, with $1.2 billion 
in investment committed, and 1 billion dollars' worth of two-
way trade. As of May 1999, the United States was the ninth 
largest investor, with $1.37 billion committed in foreign 
projects, and down to $830 million in two-way trade. Americans 
are traveling to Vietnam in great numbers. In 1997, Vietnam 
issued 98,000 visas for Americans traveling to Vietnam. This 
year, the number is 180,000.
    But by 1997, Vietnam's impressive growth rate had peaked. A 
downturn set in. Foreign investment has dropped off 
dramatically and hit a low last year of $1.37 billion for the 
year. Although Vietnam is in one sense a step removed from the 
Asia financial crisis because of its nonconvertible currency 
and plans for the stock market still in the works, 70 percent 
of the investment in Vietnam is from other Asian countries, and 
nearly 70 percent of its international trade comes from the 
region as well, and the crisis has hit them hard.
    It is in this difficult environment that the United States 
is now negotiating a trade agreement with Vietnam, and once 
again discussing the annual waiver of the Jackson-Vanik 
renewal. The United States has pegged the Jackson-Vanik waiver 
to progress on the ROVR Program specifically, and on emigration 
in general. On the merits of progress on the ROVR Program 
alone, Jackson-Vanik ought to be renewed. In assessing the 
Orderly Departure Program for emigration over all, Jackson-
Vanik ought to be renewed.
    On the economic front, the renewal of Jackson-Vanik is 
equally important for achieving U.S. goals. American 
involvement in the economic integration process in Vietnam is 
welcome, and is extremely important to the overall development 
of Vietnam in the long run. American companies and American 
government negotiators are setting a high standard for trade, 
investment, labor, and business practices. American companies 
are actively involved in training programs through my council 
and individually. American products are popular in Vietnam. The 
population of 77 million, half of them under 25, they are well 
educated, and there is a potential for Vietnam to be a 
significant trading partner.
    In the process of negotiating a comprehensive trade 
agreement with Vietnam, the two sides have agreed to general 
principles and they are working on the very difficult task of 
designing phase-in schedules. Vietnam has been very welcoming 
of technical assistance from the United States. In response to 
this, the Department of State, AID, USIA, and with the 
involvement of the private sector of AIG, Citibank, Oracle, New 
York Life, Raytheon, and other companies, the trade council has 
been running very successful technical assistance programs, 
providing legal expertise to the Vietnamese through the firm of 
Powell, Goldstein, to work with them on building the legal 
infrastructure needed to deal with these difficult and complex 
issues of reform.
    The United States should stay involved in this process. It 
is in our interest to see a strong and healthy Vietnam in 
Southeast Asia. Yes, Vietnam has a corruption problem. Yes, 
Vietnam is bogged down by its own bureaucracy. Yes, they are 
fearful of massive unemployment if they let the state 
enterprise system go. Yes, they worry about the lessons of the 
region of the economic crisis. But are these problems unique to 
Vietnam? No, they are not.
    Vietnam has set out on an economic reform path that many 
countries began years ago. It is a process that is taking place 
more slowly than many hoped for Vietnam, and with American 
companies coming in late, it has not been easy for them. But 
companies are confident that progress is being made. There are 
major infrastructure projects in the pipeline, and with the 
help of Ex-Im and OPIC, American companies are in a strong 
position to win important contracts in this next year. With 
fully normalized relations, the United States could become one 
of the top investors in Vietnam.
    In addition, since the initial waiver of Jackson-Vanik, the 
Vietnamese have greatly sped up the process of trade 
negotiations, and we have set an ambitious goal to finish the 
agreement this year, and hopefully get it to you in Congress. 
The issues on the table, such as liberalizing trade and 
investment regimes, and the strengthening of intellectual 
property rights, these are issues of great importance to anyone 
doing business in Vietnam, now or in the future, and to anyone 
hoping to see the standard of living increase in Vietnam.
    Vietnam is strategically and economically important, and 
will be greatly affected by United States policy overall, and 
by the course of bilateral relations, even in the short run. 
The Jackson-Vanik waiver has produced important results since 
it was initially waived by President Clinton in March 1998. It 
is crucial that the waiver be renewed again this year.
    Thank you very much.
    [The prepared statement follows:]

Statement of Virginia B. Foote, President, U.S.-Vietnam Trade Council

    Chairman Crane, members of the Committee, I am pleased to 
be here today representing as President of the U.S.-Vietnam 
Trade Council to testify in strong support of the Jackson-Vanik 
waiver renewal for Vietnam. If there are no objections, I would 
like to submit for the record two fact sheets we have put 
together on the importance of this waiver and NTR status, a 
letter we sent recently to Ambassador Barshefsky on the 
bilateral trade agreement talks signed by 144 American 
companies and trade associations, and a chronology of the 
overall normalization process between the United States and 
Vietnam which began in the Reagan Administration.
    The U.S.-Vietnam Trade Council, founded in 1989, is a trade 
association with strong membership from the American business 
community. With offices in Washington and Hanoi we have worked 
along with our educational affiliate, the U.S.-Vietnam Forum, 
to improve relations between the United States and Vietnam with 
educational exchange programs, annual conferences, 
Congressional delegations and programs designed to provide 
assistance on international trade norms and standards.
    Today I would like to address why the renewal of the 
Jackson-Vanik waiver for Vietnam is so important to both the 
United States and to Vietnam. Beginning in the late 1980's 
Vietnam embarked on a bold economic reform program which showed 
impressive results almost immediately. Vietnam went from near 
famine to become the third largest rice exporter behind 
Thailand and the United States in a matter of a few years. 
Growth rates climbed to 8 and 9%. Foreign investors flocked to 
Vietnam. From 1988-1996 over $28 billion in foreign investment 
was committed. And with a very low per capita income of only 
$250 per year in the early 1990's, the international donor 
community began generous overseas development assistance 
programs reaching pledges of $2.7 billion in 1998, adding to 
the approximately $10 billion pledged since 1993.
    Also beginning in the late 1980's, the Vietnamese 
government committed to end its isolation and began working to 
normalize relations worldwide. In this area, Vietnam has had 
tremendous success in establishing relations in Europe, within 
Asia and with the United States. Vietnam joined ASEAN in 1995 
and APEC last year, and is committed to joining WTO.
    The Reagan and Bush administrations recognized Vietnam's 
goal of ending its international isolation and responded with a 
policy of normalizing relations with Vietnam through a step-by-
step process pegged to cooperation on the U.S.'s principal goal 
of seeking the fullest possible accounting for our missing in 
action from the Vietnam War.
    As the attached timeline shows, this process has proceeded 
slowly through three administrations but has led to the lifting 
of the trade embargo, the establishment of diplomatic relations 
and the beginnings of economic normalization including the 
initial waiving of the Jackson-Vanik amendment last year. In 
response, Vietnam has greatly enhanced its efforts on issues of 
high priority to the U.S. including the MIA/POW efforts, 
immigration goals, and now economic integration.
    But because the U.S. normalized relations far more slowly 
than other nations did, American business involvement in the 
Vietnam has lagged behind other nations and still operates with 
severe handicaps. Without NTR status,* a trade agreement, and 
initially without trade support programs, American companies 
and individuals nonetheless began traveling, investing and 
trading with Vietnam. By 1997 the United States was the eighth 
largest investor and eighth largest trading partner with $1.2 
billion in investment committed and with $1 billion worth of 
two way trade. As of May 1999, the U.S. was ninth largest 
investor with $1.37 billion commitment to foreign investment 
projects, and $830 million in two way trade.
    * Only 6 countries do not have NTR status: Afghanistan, 
Cuba, Laos, North Korea, Serbia, and Vietnam
    And Americans are traveling to Vietnam in great numbers. In 
1997 Vietnam issued 98,000 visas for Americans wishing to 
travel to Vietnam, over 66,000 for Vietnamese Americans wanting 
to visit their homeland. In 1998, Vietnam issue 180,000 for all 
Americans.
    But by 1997, Vietnam's impressive growth had peaked. A 
downturn set in. Foreign investment dropped by 40% in 1997 and 
hit a low of 1.37 billion for all of 1998. The growth rates in 
1998 dropped to around 5%. The easy parts of economic reform 
had been accomplished. Harder issues loom large. And although 
Vietnam was in a sense one step removed from the Asian 
financial crisis with a non-convertible currency and plans for 
a stock market still in the works, 70% of its foreign 
investment had been coming from Asian countries as is nearly 
70% of its international trade.
    It is in this difficult environment that the U.S. is now 
negotiating a trade agreement with Vietnam and once again 
discussing the annual waiver of the Jackson-Vanik amendment.
    U.S. policy has pegged the Jackson-Vanik waiver to progress 
on the ROVR program specifically and immigration in general. On 
the merits of progress on the ROVR alone, Jackson-Vanik ought 
to be renewed. And in assessing the Orderly Departure 
immigration program overall, Jackson-Vanik ought to be renewed. 
Close to half a million Vietnamese have come to the United 
States under ODP and by this time last year there were some 
7,000 applicants left to be processed. The State Department now 
thinks they will be able to close all but a handful of ODP 
cases by the end of 1999. As of this time last year another 
2,500 ROVR cases out of a universe of nearly 20,000 were left 
to be cleared for interview, with an estimated half of these 
cases missing due to address or name errors. The State 
Department again says the government of Vietnam has now cleared 
over 96% of the ROVR cases. Since the initial waiver of 
Jackson-Vanik, the Vietnamese have allowed all remaining ODP 
cases--including the Montagnard cases which are of particular 
concern to the U.S.--to be processed under the new and far 
quicker system developed by the Vietnamese initially just for 
ROVR cases.
    On the economic front, the renewal of a Jackson-Vanik 
waiver is equally important for achieving U.S. goals. American 
involvement in the economic integration process is welcome in 
Vietnam and could be extremely important to overall development 
in the long run. American companies and government negotiators 
set a high standard for trade, investment, labor and business 
practices. American management and technology is greatly 
admired in Vietnam. American companies are actively involved in 
training programs through the Trade Council and individually. 
American products are popular. With a population of 77 million 
with over half under the age of 25 and well educated, Vietnam 
has great potential as a significant trading partner.
    In the process of negotiating a comprehensive trade 
agreement with the United States, Vietnam has accepted the 
general principles outlined in our draft and is now working on 
the very difficult task of designing phase-in schedules. It has 
been very welcoming of technical assistance on these issues 
from the U.S. In response to this, with support from the 
Department of State, AID, and USIA, and from the private sector 
including AIG, Citibank, Oracle, New York Life, and Raytheon, 
the Trade Council has run a successful technical assistance 
program with legal expertise from the law firm of Powell, 
Goldstein, Frazer and Murphy. The negotiations involve 
difficult and complex issues.
    The United States should stay involved in this process. It 
is in our interest to see a stronger and economically healthy 
Vietnam in the Southeast Asian region. Yes, Vietnam has a 
corruption problem. Yes, Vietnam is bogged down by its 
bureaucracy. Yes, they are fearful of massive unemployment if 
they let the state enterprise system go. Yes, they worry about 
what lessons are to be learned from the economic crisis in the 
region. But are these problems unique to Vietnam? They are not.
    Vietnam has set out on an economic reform path that other 
countries began years ago. It is a process that has been slower 
than many hoped and with American companies coming in late, it 
has not been easy for our companies to operate in Vietnam. But 
companies are confident that progress is being made, and the 
major infrastructure projects are in the pipe line, and with 
the help of Exim and OPIC American companies are in strong 
positions to win important contracts this year. With fully 
normalized economic relations, the United States could well 
join the top ranks of investors in Vietnam.
    In addition, since the initial waiver of Jackson-Vanik, the 
Vietnamese have greatly sped up the trade negotiations and set 
an ambitious goal of finishing the agreement this year. The 
issues on the table, such as liberalizing the trade and 
investment regimes and the strengthening of intellectual 
property rights, are of great importance to anyone doing 
business in Vietnam, now or in the future, or anyone hoping to 
see Vietnam's standard of living increase.
    Vietnam's strategic and economic role in the region will be 
greatly affected by U.S. policy overall and by the course of 
bilateral relations even in the short run. The bi-partisan 
policy of a step-by-step process of normalizing relations with 
Vietnam, while very slow, has produced positive results for 
American interests. The Jackson-Vanik waiver has produced 
important results since it was initially waived by President 
Clinton in March of 1998 year and it is crucial that the waiver 
be renewed again this year at this important time in our 
relationship.
    Thank you.
      

                                

ATTACHMENT A--THE JACKSON-VANIK AMENDMENT FOR VIETNAM

     What is the Jackson-Vanik Amendment? On March 11, 
1998, President Clinton issued a Jackson-Vanik waiver for 
Vietnam based on the country's improvements of emigration 
procedures, particularly its cooperation on the Resettlement 
Opportunity for Vietnamese Returnees (ROVR). On July 30, 1998, 
the U.S. House of Representatives voted 260-163 in favor of 
extending the waiver for Vietnam. When the waiver was first 
issued in March 1998, American projects in Vietnam became 
potentially eligible for trade and investment support programs 
from the Export-Import Bank of the U.S. (EXIM) and the Overseas 
Private Investment Corporation (OPIC).

     Why the Jackson-Vanik waiver is important? The 
availability of export promotion programs is a critical factor 
in a number of major procurement decisions being made now in 
Vietnam. The Jackson-Vanik waiver also allows the U.S. 
Department of Agriculture and the U.S. Maritime Administration 
to make their trade support programs available for projects in 
Vietnam. The ability of U.S. companies to utilize these 
programs now places them on a more level playing field with 
their foreign competitors who have enjoyed a high level of 
government support for their projects in Vietnam. Though the 
U.S. currently is the eighth largest investor in Vietnam, the 
investment and trade opportunities for U.S. companies could 
expand significantly with continued availability of EXIM and 
OPIC financing.

     What role does Congress play now? On an annual 
basis, the President must submit to Congress by June 3rd a 
request to renew his authority to issue waivers of the Jackson-
Vanik amendment in principle, and a decision to continue 
waivers for individual countries where he determines this will 
substantially promote freedom of immigration from that country. 
Congress then has the opportunity to reject the overall 
authority, or to withhold it for an individual country through 
a joint resolution of disapproval which must pass both the 
House and Senate before September 1st. If Congress does not act 
the authority is automatically renewed.

      What the 1999 Jackson-Vanik waiver for Vietnam 
does not do: The waiver does not grant Normal Trading Relations 
(NTR, formerly MFN) status to Vietnam as the Jackson-Vanik 
waiver is only one step in the NTR process. A bilateral trade 
agreement must first be negotiated and signed and then Congress 
must vote whether or not to approve the granting of NTR status 
to Vietnam. Vietnam is currently negotiating its bilateral 
trade agreement with the U.S. It is hoped that will be 
concluded by mid-year 1999 and that a request for NTR could be 
submitted to Congress in the Fall of 1999.
      

                                

ATTACHMENT B--VIETNAM NTR STATUS AND THE BILATERLATERAL TRADE AGREEMENT

     Why does the U.S. need a bilateral trade agreement 
with Vietnam? A bilateral trade agreement with Vietnam is 
important to the U.S. because together with a Jackson-Vanik 
waiver, it allows for Normal Trade Relations (NTR) status to be 
extended to U.S. goods entering Vietnam, and reciprocally to 
Vietnamese goods entering the U.S. The bilateral trade 
agreement, which addresses issues relating to trade in goods, 
trade in services, intellectual property rights and foreign 
investment, not only guarantees NTR but creates more open 
market access, and greater transparency for U.S. exporters and 
investors in Vietnam. Through this trade agreement and 
provision of NTR status, the U.S. will receive the same status 
that Vietnam affords its other trading partners such as the EU, 
Australia and Canada.
     How does Vietnam receive NTR status under U.S. 
Law? In order to receive NTR status from the U.S., the 
following criteria must first be met under Title IV of the 
Trade Act, as amended: 1) A waiver of the Jackson-Vanik 
Amendment must be renewed annually by the President; and 2) the 
U.S. and Vietnam must conclude a bilateral trade agreement. 
Once a bilateral trade agreement is concluded by the two 
governments, it will be submitted to Congress with a request 
for the granting of NTR for Vietnam. Nondiscriminatory 
treatment can only be extended through a joint ``approval 
resolution'' passed by both the House and the Senate. NTR 
status for Vietnam would then be subject to annual renewal each 
summer through the continuation of the Jackson-Vanik waiver. 
Currently, countries that do not have NTR status include 
Afghanistan, Cuba, Laos, North Korea, Serbia & Montenegro, and 
Vietnam.
     What are the Congressional procedures? Pursuant to 
Section 152 (b) of the Trade Act of 1974, as amended, an 
approval resolution for NTR status is first introduced (by 
request) to the House and the Senate and then is referred to 
the House Ways and Means Committee and the Senate Finance 
Committee. Both the House and the Senate must vote in favor of 
NTR for it to be granted. Because Vietnam is a JacksonVanik 
country, the NTR request has built in procedures for 
Congressional consideration--the agreement cannot be amended 
and the request must be voted on by the House and the Senate 
within 60 session days from when the President's request is 
submitted to Congress, with a maximum of 45 legislative days in 
committee and 15 days on the floor within which time a vote 
must be taken. Debate on the floor is limited to 20 hours each 
for both Houses.
      What is the optimal time frame? As other issues 
could potentially crowd the agenda for next year, the hope is 
the trade agreement can be concluded by summer of 1999 so that 
congressional approval process can be completed by the end of 
the calendar year.
      

                                

ATTACHMENT C

                                                     March 15, 1999

Ambassador Charlene Barshefsky
United States Trade Representative
600 17th St, NW
Washington, DC 20503

    Dear Ambassador Barshefsky,

    As members of the American business community, we applaud the hard 
work and effort of you and your staff on obtaining a comprehensive 
trade agreement with Vietnam and urge that steps be taken towards its 
timely completion.
    We have been following closely the developments surrounding the 
negotiations and feel that a critical juncture has been reached. As 
other issues could potentially crowd the agenda for next year, we hope 
that real and substantial progress toward the agreement's conclusion 
can be made in the next few months so that congressional approval can 
be completed this year. This, as you know, is very important for 
American companies since the conclusion of a trade agreement, with the 
reciprocal extension of Normal Trade Relations (NTR), is an essential 
building block for the development of economic ties.
    It is our understanding the U.S. has responded positively to 
Vietnam's recent proposal which shows progress by the Vietnamese on key 
issues. We hope the next round of talks in March 1999 will lead to even 
further progress towards reaching agreement.
    We look forward to working with you and your staff and stand ready 
to actively support your efforts to conclude a comprehensive trade 
agreement with Vietnam and to complete congressional approval this 
year.

            Sincerely,

American Companies:

ABB Inc. Amata (Vietnam) Company Ltd.

America Frontier

American International Group

American Rice American Vietnam Veterans Ltd.

Amrepro Inc.

American Standard Sanitaryware Inc.

American President Lines, Ltd.

Arthur Andersen Vietnam

Asian Fame Development

Baker & McKenzie

Bayer Agritech Saigon

Berkeley Mills

Black & Veatch

The Boeing Company

British-American Tobacco Vietnam

Cargill

Carrier Vietnam Ltd

Caterpillar

Chadwick Marketing Ltd.

Chase Manhattan Bank

Chicago Bridge and Iron Company

CIGNA International

Citigroup

Coca-Cola Indochina

Columbia International Clinic

Commerce Advisory Partners

Connell Bros. Co. Ltd.

CPC Vietnam Ltd.

Craft Corporation

Dat Thanh Ltd. Co.

Delta Equipment and Construction Co.

Dragon Capital Ltd.

Direct Line Cargo

Eastman Chemical Company

Eastman Kodak Company

East West Trade & Investment Inc.

Ecology and Environment Inc.

Ellicott International

Esso Vietnam Estee Lauder

Fashion Garments Ltd.

Fila USA, Inc

Finansa Ltd.

Ford Motor Company

GEMCO Industries

General Electric

Guidant Corporation

Hoffman La Roche

HTE (Vietnam) Co. Ltd.

Iambic, Ltd.

IBM

IPAC Vietnam

Indochina Assg. Management

Industrial Associates

International, Inc.

International Business Center Corporation

International Business Consulting Group

John Hancock Mutual Life Insurance Co.

KHM, Inc.

Law Offices of David Day Leif J. Ostberg, Inc.

Lukemax Company

M & T Vietnam

Malichi International Ltd.

Manna Consultants Inc.

Marriott Hotel Saigon

Manolis & Company Asia

McDermott, Inc.

Mekong Research

Merevry Int'l Group

MIDAS Agronomics Company, Ltd.

Millar and Ngo at Law

Mobil Corporation

Monsanto Motorola, Inc.

New York Life International

NIKE

Novelty (Vietnam) Ltd. Co.

Oracle

Ohsman and Sons Company, Inc.

Otis Saigon Elevator Company Limited

Pacific Architects and Engineers, Inc.

Pacific View Partners, Inc.

Pacmar Inc.

Pac-Mark Pact, Inc.

PAI Corporation

Patton and Co.

Petroleum Equipment Supplies Association

Phu My Hung Corporation

Picnpay Stores Inc.

Polaris Co. Ltd.

Procter & Gamble Pragmatics, Inc.

Price Waterhouse Coopers

Raytheon Company

Rhone-Poulenc Rorer Bangladesh Ltd.

Right Stuff, Inc.

Rollins International

Saigon Investment GAA Ltd.

Saigon Travel Service

Salland Industries Ltd.

Samuels International

Sanofi Vietnam

SAIS-John Hopkins Southeast Asia Studies

Scientific Atlanta Sealand Services, Inc.

Shea and Gardner, Esq.

Sofitel Plaza Saigon

Thermco Hawaii, Inc.

Trade Span International

Transworld Ventures Group Inc.

Triumph International (Vietnam) Ltd.

Unisys Corporation

United Technologies Corporation

Universal Leaf Tobacco Co.

Universal Semiconducter, Inc.

U.S. Trading & Investment Company

VACO Corporation Vietnam Management Fund

Vietnam Venture Group Inc.

Trade Associations:
American Chamber of Commerce, Hong Kong

American Chamber of Commerce, Philippines

American Chamber of Commerce, Shanghai

American Chamber of Commerce, Thailand

American Chamber of Commerce, Vietnam

California-Southeast Asia Business Council

Direct Selling Association

Footwear Distributors & Retailers of America

International Farmers Aid Association

National Association of Manufacturers

National Retail Federation

San Francisco Global Trade Council

Sporting Goods Manufacturers Association

Telecommunication Industry Association

Toy Manufacturers of America, Inc.

US-ASEAN Business Council

U.S. Chamber of Commerce

U.S. Council for International Business

U.S.-Vietnam Trade Council

U.S. Wheat Association

Vietnamese American Business Council

Vietnamese-American Chamber of Commerce of Hawaii

      

                                

ATTACHMENT D

                  Chronology of U.S.-Vietnam Relations
------------------------------------------------------------------------

------------------------------------------------------------------------
April 30, 1975............................  North Vietnamese forces take
                                             over the Southern part of
                                             Vietnam, ending the war and
                                             unifying the country.
                                             Washington extends embargo
                                             to all of Vietnam and
                                             breaks diplomatic
                                             relations.
1978......................................  Secret talks between Hanoi
                                             and Washington on
                                             normalizing relations break
                                             down
1988......................................  Under the Reagan
                                             Administration, Vietnam
                                             begins cooperation with
                                             United States to resolve
                                             fate of American servicemen
                                             missing in action (MIA)
September 1989............................  Vietnam completes Cambodia
                                             withdrawal.
April 1991................................  Under the Bush
                                             Administration, Washington
                                             presents Hanoi with
                                             ``roadmap'' plan for phased
                                             normalization of ties. The
                                             two sides agree to open
                                             U.S. government office in
                                             Hanoi to help settle MIA
                                             issues.'
April 1991................................  U.S. begins humanitarian aid
                                             projects for war victims to
                                             be administered by U.S.
                                             Agency for International
                                             Development (USAID).
October 1991..............................  Vietnam supports U.N. peace
                                             plan for Cambodia.
                                             Secretary of State James
                                             Baker announces Washington
                                             is ready to take steps
                                             toward normalizing
                                             relations with Hanoi.
December 1991.............................  Washington lifts ban on
                                             organized U.S. travel to
                                             Vietnam.
1991......................................  U.S. Congress authorizes the
                                             United States Information
                                             Agency (USIA) to begin
                                             exchange programs with
                                             Vietnam.
April 1992................................  Washington eases trade
                                             embargo by allowing
                                             commercial sales to Vietnam
                                             for basic human needs,
                                             lifts curbs on projects by
                                             U.S. non-governmental and
                                             non-profit groups and
                                             allows establishment of
                                             telecommunications links
                                             with Vietnam.
July 2, 1993..............................  President Clinton clears way
                                             for resumption of
                                             international lending to
                                             Vietnam.
Sept. 13, 1993............................  Clinton eases economic
                                             sanctions to let U.S firms
                                             join in development
                                             projects.
Jan. 27, 1994.............................  Senate in favor of a
                                             resolution urging the
                                             Administration to lift
                                             embargo, saying this would
                                             help get a full account of
                                             MIAs.
Feb. 3, 1994..............................  President Clinton lifts
                                             trade embargo.
Jan. 28, 1995.............................  United States and Vietnam
                                             sign agreements settling
                                             old property claims and
                                             establishing liaison
                                             offices in each other's
                                             capitals.
May 15, 1995..............................  Vietnam gives U.S.
                                             presidential delegation
                                             batch of documents on
                                             missing Americans, later
                                             hailed by Pentagon as most
                                             detailed and informative of
                                             their kind.
June 1995.................................  Veterans of Foreign Wars
                                             announces support of U.S.
                                             normalization of diplomatic
                                             relations with Vietnam.
July 11, 1995.............................  President Clinton announces
                                             ``normalization of
                                             relations'' with Vietnam.
Aug. 6, 1995..............................  Secretary of State Warren
                                             Christopher visits Hanoi
                                             and officially opens U.S.
                                             embassy.
May 1996..................................  U.S. presents Vietnam with
                                             trade agreement blueprint.
July 12, 1996.............................  U.S. National Security
                                             Adviser Anthony Lake visits
                                             Hanoi to mark first
                                             anniversary of
                                             normalization and press
                                             forward on slow-moving
                                             economic and strategic
                                             ties, stressing that MIA
                                             issue tops Washington's
                                             agenda.
April 7, 1997.............................  U.S. Treasury Secretary
                                             Robert Rubin and Finance
                                             Minister Nguyen Sinh Hung
                                             sign accord in Hanoi for
                                             Vietnam to repay debts of
                                             approximately $145 million
                                             which Vietnam assumed from
                                             former government of South
                                             Vietnam.
April 10, 1997............................  Senate confirms Douglas
                                             ``Pete'' Peterson, Vietnam
                                             War veteran and former
                                             prisoner of war, as
                                             Ambassador.
April 16, 1997............................  United States and Vietnam
                                             reach agreement on
                                             providing legal protection
                                             for copyright owners.
May 9, 1997...............................  Peterson takes up post as
                                             U.S. Ambassador in Hanoi.
May 9, 1997...............................  Vietnam's Ambassador to the
                                             United States, Le Van Bang,
                                             arrives to take up post in
                                             Washington, DC
June 1997.................................  Secretary of State Madeleine
                                             Albright attends ceremony
                                             to lay cornerstone for U.S.
                                             consulate in Ho Chi Minh
                                             City.
August 1997...............................  U.S. government under the
                                             U.S. Agency for
                                             International Development
                                             (USAID) begins a commercial
                                             law program.
October 1997..............................  Vietnam institutes new
                                             processing procedure in
                                             ROVR program significantly
                                             improving progress.
November 1997.............................  Vietnam opens consulate in
                                             San Francisco, CA
March 1998................................  U.S. opens talks on a Civil
                                             Aviation Agreement held.
March 10, 1998............................  President Clinton issues
                                             waiver of Jackson-Vanik
                                             Amendment for Vietnam,
                                             paving the way for OPIC,
                                             EXIM, USDA and MARAD
                                             operations.
March 26, 1998............................  Minister of Planning &
                                             Investment Tran Xuan Gia
                                             and Ambassador Pete
                                             Peterson finalize signing
                                             of the OPIC bilateral for
                                             Vietnam.
July 23, 1998.............................  The U.S. Senate votes 66-34
                                             to continue funding for the
                                             U.S. Embassy in Vietnam
                                             based on ongoing
                                             cooperation on the POW/MIA
                                             issue.
July 30, 1998.............................  The U.S. House of
                                             Representatives votes to
                                             renew the Jackson-Vanik
                                             waiver for Vietnam by a 260
                                             to 163 vote margin.
October 1998..............................  Deputy Prime Minister and
                                             Foreign Minister Nguyen
                                             Manh Cam makes Vietnam's
                                             highest level visit to
                                             Washington since
                                             normalization.
October 1998..............................  Deputy Prime Minister Hanh
                                             visits U.S. for planning
                                             meeting on military-to-
                                             military activities.
October 1998..............................  U.S. and Vietnam agree to
                                             negotiate a Science &
                                             Technology Agreement.
December 28, 1998.........................  Bilateral Copyright
                                             Agreement enters into
                                             force.
January 1999..............................  EXIM team visits Vietnam to
                                             negotiate an EXIM bilateral
                                             agreement.
January 29, 1999..........................  The U.S. receives a proposal
                                             from the Vietnamese
                                             indicating substantial
                                             progress on the U.S.-
                                             Vietnam bilateral trade
                                             negotiations.
March 1999................................  The most recent round of
                                             trade talks are held in
                                             Hanoi.
------------------------------------------------------------------------

      

                                

    Chairman Crane. Thank you, Ms. Foote.
    Mr. Hwing.

   STATEMENT OF Y TIN HWING, MEMBER, MONTAGNARD HUMAN RIGHTS 
            ORGANIZATION, GREENSBORO, NORTH CAROLINA

    Mr. Hwing. Mr. Chairman and Members of the Subcommittee, my 
name is Y Tin Hwing. I am a member of Montagnard Human Rights 
Organization. I represent the Montagnard people living both in 
the United States and in the central highlands of Vietnam. I 
would like to thank Congressman Crane for the opportunity to 
participate in today's hearing on the President's proposed 
renewal of Vietnam's waiver under Jackson-Vanik amendment to 
the Trade Act of 1974.
    I arrived in the United States as a refugee just a few 
months ago, on February 12, 1999. It has taken me years to get 
my exit permission. When I mean years, 7 years, from Vietnam, 
from the Vietnamese Government. I now live in Greensboro, North 
Carolina, with my wife and two children. I have five children 
remaining in Vietnam. During the war with Vietnam, I worked as 
a Special Forces combat interpreter, and later I worked for the 
U.S. Embassy personnel in Daklak Province. I rose to the rank 
of captain. My last job before Saigon fell was protocol liaison 
for the Ministry of Ethnic Minorities in Saigon. I was arrested 
and put in prison for 9 years as a result of my work with the 
United States during the war. The war was so terrible for our 
people. More than 1 million Montagnard men, women, and children 
were killed, and 85 percent of our villages were destroyed or 
abandoned. After the fall of South Vietnam, 20 percent of our 
Montagnard people were killed by the Communist forces. Sixty 
percent were imprisoned, like myself, and 20 percent joined the 
Montagnard Resistance Force.
    I think you know the United States Government asked our 
people to stand by her in the Vietnam War. We stood side-by-
side, toe-to-toe with our American brothers and sisters with 
pride. We sacrificed our lives for the principle of freedom and 
American values. Today, your great country is our only hope of 
getting our remaining eligible families out of Vietnam. In the 
last year since the Jackson-Vanik waiver, the conditions of 
emigration for our people are worse. Families continue to 
suffer, separated from loved ones.
    It is such a privilege to be here today in this free 
country. In Vietnam, my Montagnard people and other Vietnamese 
citizens do not have the freedom to speak out. Most of our 
people live in fear because Vietnam is a police state.
    I have with me today, which I will give to the 
Subcommittee, the statements of several Montagnard families who 
were forced to pay large amounts of money to get their exit 
permission. In some cases, they were forced to substitute 
Vietnamese children or spouses illegally. Our people are so 
poor. Please, understand that they are desperate when they are 
split apart from their families and leave a loved one behind. 
They only do this because they do not have enough money or land 
to sell to the person who offers to help with their exit 
papers. Please, understand too, that this process is happening 
with the full knowledge from the Vietnamese Government. The 
immigration bureau knows who of our people are eligible and 
they inform the Vietnamese who are rich to buy a chance for 
their child to come to the United States for education. Our 
people suffer because they often are afraid. They are 
desperate. They lack knowledge. Finally, they see it as the 
only way they can get their family out of Vietnam. This is not 
right. We should not have to sell our opportunity for a life of 
freedom in the United States, after all the suffering our 
Montagnard people have endured.
    I would like also to mention that the U.S. immigration 
policy has made it very difficult too. INS often requires 
extensive paper and documentation that our Montagnard people 
never had because of our culture and traditions. Many of our 
people missed the deadline because they never heard about the 
program. They didn't know how to apply, and especially, they 
didn't have money to pay the bribe in order to get their exit 
permits.
    For all these reasons, dear Subcommittee Members, we 
Montagnard people need your help to leave Vietnam. We need help 
with United States policy and also with the Vietnamese policy 
also. Nothing is more precious than families being together. 
The Vietnamese Government knows this. It should stop punishing 
our people and truly promote goodwill, economic normalization, 
and friendship between our two great countries. We came here 
today to tell you the truth about the conditions experienced by 
our Montagnard people. We sincerely hope that you will hear our 
voice. The United States is our best hope for our families and 
our people. God bless you and the United States of America.
    Thank you.
    [The prepared statement follows. Attachments are being 
retained in the Committee files.]

Statement of Y Tin Hwing, Member, Montagnard Human Rights Organization, 
Greensboro, North Carolina

    Mr. Chairman and Members of the Subcommittee. My name is Y 
Tin Hwing and I am a member of the Montagnard Human Rights 
Organization. I represent the Montagnard people living both in 
the U.S. and in the Central Highlands of Vietnam. I would like 
to thank Congressman Crane for the opportunity to participate 
in today's Hearing on the President's proposed renewal of 
Vietnam's waiver under the Jackson-Vanik Amendment to the Trade 
Act of 1974.
    I arrived in the United States as a refugee just a few 
months ago on February 12, 1999. It has taken me years to get 
my exit permission from the Vietnamese government. I now live 
in Greensboro, North Carolina with my wife and two children. I 
have five children remaining in Vietnam. During the war with 
Vietnam I worked as a Special Forces combat interpreter and 
later worked for U.S. Embassy personnel in Daklak Province. I 
rose to the rank of Captain. My last job before Saigon fell was 
protocol liaison for the Ministry of Ethnic Minorities in 
Saigon. I was arrested and put in prison for nine years as a 
result of my work with the United States during the war. The 
war was so terrible for our people. More than a million 
Montagnard men, women and children were killed and 85% of our 
villages were destroyed or abandoned.
    After the fall of South Vietnam, 20 % of our Montagnard 
people were killed by Communist forces, 60% were put in prison 
(like myself) and 20% joined the Montagnard Resistance Force.
    I think you know the U.S. government asked our people to 
stand by her in the Vietnam War. We stood side by side with our 
American brothers and sisters with pride. We sacrificed 
ourselves for the principles of freedom and American values. 
Today, your great country is our only hope of getting our 
remaining eligible families out of Vietnam. In the last year 
since the Jackson-Vanik waiver, the conditions for emigration 
for our people are worse. Families continue to suffer separated 
from loved ones.
    It is such a privilege to be here today in this free 
country. In Vietnam, my Montagnard people and other Vietnamese 
citizens do not have the freedom to speak out. Most of our 
people live in fear because Vietnam is a police state.
    Those of you on the Trade Subcommittee, along with 
Honorable Ambassador Peterson, are concerned about investment 
in Vietnam, economic normalization and the United States and 
Vietnam being partners in the global community. This is a good 
thing. We are for this, too. What you may not realize is that 
fear, greed, corruption and distrust control everything in 
Vietnam. These negative things are controlling the emigration 
process, too.The corruption is not good for business, and it is 
not good for Vietnam's people. Vietnam has not fully cooperated 
in the last year. Many of our same families still cannot leave 
Vietnam because they cannot afford the bribes.
    Vietnam has not honored its commitment for free emigration 
for all its citizens. If we really want to help Vietnam be an 
equal partner in the world community, is it not right to expect 
it to honor its word? That is good business. We want Vietnam to 
develop fully with trade. Yet, we also want the country of our 
birth to honor its word and live up to agreements set forth 
between the U.S and Vietnam. Families have a right to be 
together.
    I have with me today which I will give to the Committee, 
the statements of several Montagnard families who were forced 
to pay large amounts of money to get their exit permission. In 
some cases they were forced to substitute Vietnamese children 
or spouses illegally. Our people are so poor. Please understand 
that they are desperate when they split apart their families 
and leave a loved one behind. They only do this because they do 
not have enough money or land to sell to the person who offers 
to help them with their exit papers. Please understand, too, 
that this process is happening with full knowledge from the 
Vietnamese government. The immigration bureau knows who of our 
people are eligible and they inform Vietnamese who are rich to 
buy a chance for their child to come to the U.S. for education. 
Our people suffer because they often are afraid, they are 
desperate, they lack knowledge and finally, they see it as the 
only way they can get their family out of Vietnam. This is not 
right. We should not have to sell our opportunity for a life of 
freedom in the U.S. after all the suffering our Montagnard 
people have endured.
    I would like to also mention that the U.S. immigration 
policy has made it very difficult, too. INS often requires 
extensive paperwork and documentation that our Montagnard 
people never had because of our culture and traditions. Many of 
our people missed the deadline because they never heard about 
the program, they didn't know how to apply and especially, they 
didn't have the money to pay the bribes in order to buy their 
exit permits.
    For all these reasons, dear Committee members, we 
Montagnard people need your help to leave Vietnam. We need help 
with U.S. policy and with Vietnam's policy. Nothing is more 
precious than families being together. The Vietnamese 
government knows this. It should stop punishing our people and 
truly promote goodwill, economic normalization and friendship 
between our two great countries. We came here today to tell you 
the truth about the conditions experienced by our Montagnard 
people. We sincerely hope that you will hear our voice. The 
United States is our best hope for our families and our people.
      

                                

    Chairman Crane. Thank you, Mr. Hwing.
    Mr. Johnson.

 STATEMENT OF LIONEL C. JOHNSON, VICE PRESIDENT AND DIRECTOR, 
       INTERNATIONAL GOVERNMENT RELATIONS, CITIGROUP INC.

    Mr. Lionel Johnson. Thank you, Mr. Chairman. I would like 
to express my appreciation for the opportunity to appear before 
the Subcommittee today regarding United States and Vietnam 
trade relations, and specifically, the proposed renewal of the 
President's waiver of Jackson-Vanik. I would like to 
particularly thank the distinguished Member from New York, Mr. 
Rangel, for his very kind words of introduction.
    I have prepared a written statement setting forth the 
details of our largest subsidiary, Citibank's, operations in 
Vietnam. Given today's lengthy witness list, I would ask that I 
be permitted to submit it for the record. I will at this moment 
make just a few very brief comments.
    Mr. Chairman, disapproval of the President's Jackson-Vanik 
waiver for Vietnam at this time would be devastating. Despite 
many fits and starts, we have made very significant progress in 
our bilateral relationship over the past few years. We have 
done so with the bipartisan support of the Congress of the 
United States. The Vietnamese have worked diligently to address 
many concerns that we have raised during this process, and 
disapproval would undermine the progress and would undercut the 
efforts of Vietnamese reformers who are advocating for more 
openness, more engagement for the international community, and 
more liberalization in economic affairs.
    It is important that we focus as well on the next major 
issue coming down the pike. That is the bilateral trade 
agreement that the Ambassador earlier indicated could be 
reached this year. This agreement is critical to continued 
progress in our bilateral economic relationship, and concluding 
the negotiations will be a complicated exercise, but I believe 
the U.S. negotiators under the able leadership of Joe Damond of 
USTR are up to the task. They are to be commended for the great 
progress that they have made thus far under very challenging 
circumstances.
    I am acutely aware, however, that the trade accord will 
face a tough road in Congress. It will require strong 
leadership from this Subcommittee and others in Congress to 
move it forward to enactment. I urge you to make that effort, 
however, and I assure you that we in the business community 
will make every effort to support you and will be there working 
along side you.
    Mr. Chairman, and Members of the Subcommittee, the decision 
the Congress will make on these issues will have a significant 
and lasting impact on our bilateral relations with Vietnam. As 
a representative of Citigroup, I urge you to reject the 
resolution of disapproval and allow the President's waiver of 
the Jackson-Vanik amendment to stand.
    Thank you.
    [The prepared statement follows:]

Statement of Lionel C. Johnson, Vice President and Director, 
International Government Relations, Citigroup Inc.

    Mr. Chairman, members of the subcommittee, my name is 
Lionel C. Johnson, and I am Vice President and Director of 
International Government Relations of Citigroup Inc. I 
appreciate this opportunity to appear before you regarding the 
importance of normalizing U.S.-Vietnam trade relations. I wish 
to specifically address the importance of renewal of the 
President's waiver of the Jackson-Vanik Amendment with regard 
to Vietnam.
    Citigroup's largest subsidiary, Citibank, has operated in 
Vietnam since 1993, when President Bush eased trade 
restrictions and allowed U.S. companies to establish 
representative offices. Shortly after President Clinton lifted 
the trade embargo, Citibank applied for a branch license in 
Hanoi and opened for business there in January 1995. Since that 
time, Citibank has provided a wide range of banking services, 
primarily to our multinational and top tier local corporate 
clients. Our services range from trade and investment finance 
to electronic banking, foreign exchange and project finance 
advisory services. Negotiations toward a trade agreement have 
been moving forward at a significant pace and, as Ambassador 
Peterson has underscored, we may even see an agreement 
concluded this year.
    In less than four years, Citibank has become the largest 
foreign bank in the country. We also have played a leading role 
in the American business community and have fully encouraged 
normalized relations between our two countries. We believe that 
our efforts have helped the Administration to make progress in 
other areas, as well, including achieving the fullest possible 
accounting of POW/MIAs.
    Vietnam holds great potential as a market for U.S. products 
and services. With a population of 75 million people--more than 
half under the age of 25--and with tremendous infrastructure 
and human development needs, Vietnam is a country that deserves 
our attention, and more importantly, our support for the reform 
process currently underway.
    Although significant opportunities exist for firms seeking 
to do business in Vietnam, U.S. companies have been 
disadvantaged in comparison to our competitors from other 
countries for several reasons.
    First, because the United States did not have diplomatic 
relations with Vietnam until 1994, our business engagement 
lagged behind that of companies from other parts of the world 
that had been there for several years.
    Second, the lack of a bilateral trade agreement and normal 
trade relations status for Vietnam puts U.S. firms at a 
disadvantage in investing in Vietnam, moving goods in and out 
of the country, and leaves us without strong protections for 
intellectual property.
    Third, U.S. firms have been hampered by their inability to 
access government-backed financing and insurance from the 
Export-Import Bank and the Overseas Private Investment 
Corporation. America's private sector would simply not be 
competitive in Vietnam without access to Eximbank and OPIC 
programs. Our European and Asian competitors have dedicated 
significant government resources toward developing market share 
in Vietnam. To be competitive, U.S. companies need access to 
government financing, and to get that financing they are being 
forced to go to third countries. As a condition of securing 
that financing, they are required to source their products in 
those countries. That means they aren't buying Caterpillar 
tractors, or GE turbines, or other products produced in the 
United States. And that means the jobs that would have been 
created here to build those products will instead go to those 
countries.
    Since the President issued his waiver of Jackson-Vanik last 
spring, we have made significant strides toward providing U.S. 
companies with financing support in Vietnam. OPIC is now 
operating in Vietnam, and Ex-Im is moving toward completion of 
the steps needed to begin operations.
    Mr. Chairman, disapproval of the President's Jackson-Vanik 
waiver for Vietnam at this time would be devastating. Despite 
many fits and starts, we have made significant progress in our 
bilateral relationship in the past few years. And we have done 
so with the bipartisan support of the United States Congress. 
The Vietnamese have worked diligently to address the many 
concerns that we have raised during this process. Disapproval 
would undermine this progress and would undercut the efforts of 
Vietnamese reformers who are advocating for more openness, more 
engagement with the international community, and more 
liberalization in economic affairs.
    It is important that we focus as well on the next major 
issue coming down the pike--the bilateral trade agreement that 
the Ambassador indicated could be reached this year. This 
agreement is critical to continued progress in our bilateral 
economic relationship. Concluding the negotiations will be a 
complicated exercise but I believe that our negotiators, under 
the able leadership of Joseph Damond, are up to the task. They 
are to be commended for the great progress they have made so 
far, under challenging circumstances.
    I am acutely aware, however, that the trade accord will 
face a tough road in Congress. It will require strong 
leadership from members of this subcommittee and others in 
Congress to move it forward to enactment. I urge you to make 
that effort, and I assure you that we in the business community 
will be working alongside you.
    Mr. Chairman and members of the subcommittee, the decision 
that Congress makes on this issue will have significant and 
lasting impact on our bilateral relations with Vietnam. As a 
representative of Citigroup, I urge you to reject the 
resolution of disapproval and allow the President's waiver of 
the Jackson-Vanik Amendment to stand.
    Thank you.
      

                                

    Chairman Crane. Thank you, Mr. Johnson.
    Mr. Bower.

  STATEMENT OF ERNEST Z. BOWER, PRESIDENT, US-ASEAN BUSINESS 
                         COUNCIL, INC.

    Mr. Bower. Mr. Chairman, thank you for the opportunity to 
testify before your Subcommittee today. I am the president of 
the US-ASEAN Business Council, which represents over 400 
American companies and States. We have members in every state 
of this country.
    ASEAN is the Association of South East Asian Nations, 
including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, 
the Philippines, Singapore, Thailand, and last, Vietnam. That 
10-country market is our third largest market for the United 
States, and Vietnam is an important part of that market.
    On behalf of the more than 400 member companies of the 
council, I would like to say that we are committed to building 
and strengthening the United States-Vietnam relationship. We 
view strong commercial relations as an integral part of that 
bilateral relationship.
    We have seen progress in Vietnam in the last 10 years. I 
would like to note that we have seen the regularizing of 
diplomatic relations in 1995, Vietnam joined ASEAN in the next 
year. We have exchanged United States Ambassadors and 
Vietnamese Ambassadors in 1997, and Vietnam joined APEC, the 
Asia Pacific Economic Cooperation Forum, which Ambassador 
Peterson mentioned, in 1998, just last year.
    We do see change in Vietnam. I was there in November with 
10 senior officers of American corporations. We had extensive 
talks with Vietnam's leadership, including political, trade, 
and business leadership. We saw there a commitment to reform 
and to integrate into the regional market and to the world 
market. We want to support this commitment to reform. We hope 
that you will do so by renewal of the Jackson-Vanik waiver for 
Vietnam.
    I have made more extensive comments in my testimony, which 
I hope to submit to the record. I will try to be brief in light 
of so many witnesses. But I would like to make several points. 
We believe that the waiver promotes United States commercial 
interests in Vietnam in the following ways. Without the support 
of Ex-Im and OPIC, U.S. companies would be at a distinct 
disadvantage vis-a-vis our competition, which rely heavily on 
their own export credit agencies in the market.
    Also, failure to renew the Jackson-Vanik waiver would put 
U.S. policy and U.S. commitment to an important member of the 
ASEAN group in question among the ASEAN members. The U.S. 
companies would be hurt in their ability to take advantage of 
the ASEAN free trade area market, which as I mentioned earlier, 
consists of 10 countries, original market of well over 500 
million people, a GDP approaching $1 trillion. As I mentioned 
before, ASEAN is our third largest overseas market, and it is 
our fastest growing major market, taking a 150-percent increase 
in U.S. exports to that region between 1990 and 1997.
    We also believe that the waiver for Jackson-Vanik is a 
crucial step to the accelerating momentum for the completion of 
a bilateral trade agreement this year. The United States-
Vietnam trade agreement sets high standards in the area of 
labor practices,  market  openness,  and  investment  
protections.  With  this  formal government-to-government 
agreement in place, Vietnam would have the framework to change 
policy. This is important because we believe that they do want 
to change their policies, but they need our help to make that 
possible. Without the waiver, the U.S. business community faces 
the prospect of a delay in the trade agreements' long-awaited 
provisions on reform of tariff levels and nontariff barriers, 
intellectual property rights, investment and services. By 
renewing the waiver, the United States creates a positive 
environment for Vietnam to commit the necessary economic 
reforms, and complete the negotiations this year.
    I would finally like to say that one thing this council 
stands very strongly for is the fact that United States 
companies, when operating in Southeast Asia, and Vietnam is no 
exception, raise the level of commitment to areas such as 
environmental rights, worker rights, labor practices, fair 
labor standards, and human rights. We believe that a job is a 
human right. We believe that by participation in the rest of 
Southeast Asia, that U.S. companies have raised the levels in 
these important areas in the last 30 years. U.S. companies 
train workers and transfer technology more readily than our 
competitors, and we promote democratic values, set a positive 
example, and improve the general quality of life by providing 
fair pay, safe working conditions, and health and education 
benefits.
    The Jackson-Vanik waiver is an essential component for our 
continued progress in the bilateral relationship in the areas I 
have just mentioned, and in the advancement of United States 
commercial, social, and political interests in Vietnam. For 
these reasons, the U.S. business community represented by the 
US-ASEAN Business Council, stands firmly in support of the 
waiver.
    Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Ernest Z. Bower, President, US-ASEAN Business Council, 
Inc.

    Thank you, Mr. Chairman, for the opportunity to testify 
before your Subcommittee. My name is Ernest Z. Bower. I am the 
President of the US-ASEAN Business Council, a private, non-
profit organization which works to expand trade and investment 
between the United States and the member countries of ASEAN, an 
acronym for the Association of Southeast Asian Nations. ASEAN 
members include Brunei Darussalam, Cambodia, Indonesia, Laos, 
Malaysia, Myanmar (Burma), the Philippines, Singapore, 
Thailand, and Vietnam.
    On behalf of the more than four hundred companies and 
states the Council represents, many of whom are heavily 
involved in the development of Vietnam's market economy, the 
US-ASEAN Business Council has long promoted strong US-Vietnam 
commercial relations. We view strong commercial relations as an 
integral part of the bilateral relationship.
    Despite Vietnam's great potential and the qualitative ways 
the U.S. private sector can contribute to the country's 
economic development, the prospects for the U.S.-Vietnam 
commercial relationship have until recently been somewhat 
stagnant. These times have tested the patience of those wanting 
to become more involved in the country's development. The 
government of Vietnam continues to deliberate on how much 
economic and political control it should cede as the country 
makes the difficult transition between a centrally planned 
system and a true market economy, and as it becomes more 
involved in the international marketplace.
    The encouraging news is that the government of Vietnam 
has--within the last six months--given clear signals to the 
foreign business community that it wants to be more responsive 
to investor concerns. Consultations with government officials 
are becoming more commonplace and systematic, while the tenor 
of these discussions has become more frank and open. This 
progress has taken place within the context of increased levels 
of understanding and cooperation between both our countries to 
produce a viable Bilateral Trade Agreement (BTA).
    To sustain this momentum, and in light of its benefits to 
the US-Vietnam bilateral relationship, U.S. commercial 
interests, and the promotion of U.S. socio-political objectives 
in Vietnam, the US-ASEAN Business Council fully supports 
renewal of the Jackson-Vanik waiver.
    1. The waiver promotes continuing normalization of 
bilateral relations between the U.S. and Vietnam--an objective 
of all parties.
    Throughout the process of normalization of relations 
between the United States and Vietnam, both sides have sought 
to build confidence by undertaking actions that show commitment 
to progress. For the Vietnamese, this has included working 
toward adapting their commercial and legal practices to be more 
in line with international standards. President Clinton's 
decision to waive the Jackson-Vanik amendment last year 
signaled to the Vietnamese our willingness to further normalize 
our relations. Failure to renew the waiver would send a 
negative message to Hanoi and call into question our 
intentions. Renewing the waiver will signal U.S. confidence 
that our two countries can work together on areas of mutual 
benefit toward conclusion of the BTA and beyond.
    2. The waiver promotes U.S. commercial interests in a large 
emerging market by:
    a. Supporting the competitiveness of US business in 
Vietnam. The Jackson-Vanik waiver allows for the operation of 
the Export-Import Bank of the United States (Ex-Im) and the 
Overseas Private Investment Corp. (OPIC) in Vietnam. Without 
the support of these government agencies, U.S. companies would 
be at a distinct disadvantage to foreign companies which rely 
heavily on their own export credit agencies for market 
penetration. There is a close correlation between the 
activities of trade support agencies and market share.
    b. Distributing to both countries the benefits of increased 
bilateral trade and investment. Allowing Ex-Im and OPIC to 
continue to operate in Vietnam would undoubtedly increase the 
level of commerce between the two countries, benefiting each. 
For the Vietnamese, greater interaction means more products for 
their consumers, access to technology and capital, and new 
investment. For the United States, we look forward to increased 
export and investment opportunities, more export-related jobs, 
and greater confidence in long-term business prospects. US 
companies would also be able to take advantage of Vietnam's 
commitment to the ASEAN Free Trade Area (AFTA) and other 
regional economic cooperation agreements to access ASEAN's ten 
(10) country market, which comprises over 500 million people 
with a GDP approaching US $1 trillion dollars.
    c. Accelerating the momentum for completion of a Bilateral 
Trade Agreement this year. The U.S.-Vietnam trade agreement 
sets high standards in the areas of labor practices, market 
openness and investment protections. With this formal 
government-to-government agreement in place Vietnam would have 
the framework to change policy. Without the waiver, the US 
business community faces the prospect of a delay in the Trade 
Agreement's long-awaited provisions on reform of tariff levels 
and non-tariff barriers, intellectual property rights, 
investment, and services. By renewing the waiver, the United 
States creates a positive environment for Vietnam to commit to 
necessary economic reforms and complete the BTA negotiations 
this year.
    d. Encouraging Vietnam, and by extension the other members 
of ASEAN, to maintain trade and investment liberalization 
commitments. Vietnam has made progress in adapting to 
requirements of regional groupings such as ASEAN and the Asia-
Pacific Economic Cooperation (APEC) which it joined late last 
year. The Jackson-Vanik waiver, coupled with a trade agreement, 
will bring home to Vietnam the advantages of this commitment as 
it qualifies for Normal Trading Relations status with the 
United States.
    3. The waiver promotes the activities of US corporations 
that facilitate the sociopolitical reform process. Engagement 
is the most effective way for the United States to contribute 
to real improvements in human rights, workers rights and the 
standard of living in Vietnam. With the Jackson-Vanik waiver 
supporting Ex-Im and OPIC operations and the completion of the 
trade agreement, US companies can increase their engagement and 
improve their competitive position.
    The presence of U.S. companies abroad helps to promote the 
values we as a nation espouse, including human rights, 
environmental protection and fair labor standards. U.S. 
companies train workers and transfer technology more readily 
than any of their competitors. American companies promote 
democratic values, set a positive example, and improve the 
general quality of life by providing fair pay, safe working 
conditions, and health and education benefits. Please note that 
these efforts to promote American values help our companies 
become more profitable in foreign countries. Open societies and 
economies are more transparent and wealthy, creating more 
opportunities and customers for American goods and services.
    American foreign investment is an extremely effective means 
of advancing economic and social development, and should not be 
abandoned in favor of measures which have no chance of success. 
Indeed, impeding what economic engagement America has with 
Vietnam by revoking the Jackson-Vanik waiver will have no 
positive impact on the daily lives of the people there and may, 
in fact, hurt the cause of political reform by removing an 
incentive for liberalization.
    The Jackson-Vanik Waiver is an essential component for 
continued progress in the bilateral relationship and the 
advancement of US commercial and socio-political interests in 
Vietnam. For these reasons, the US business community stands 
firmly in support of the waiver.
    Thank you for the opportunity to share my thoughts with you 
today.
      

                                

    Chairman Crane. Thank you. For the entire panel, how do you 
think the Vietnamese would respond if the President's Jackson-
Vanik waiver were overturned?
    Mr. Thang. Mr. Chairman, we are not talking about denying 
Vietnam permanently that waiver. We are only suggesting that we 
should postpone the approval of the waiver until after Vietnam 
has taken steps to reform its system, very corrupt system.
    Other presenters have mentioned about disadvantages to 
United States companies in doing business in Vietnam without 
the waiver. However, I think that the greater disadvantage is 
caused by corruption. It is illegal under our law to pay bribes 
to foreign governments. It is not the same standard for other 
ASEAN companies doing business in Vietnam. We're being placed 
at disadvantageous situation there.
    I am just asking that we should request preconditions to 
granting the waiver to Vietnam. That would be an incentive for 
Vietnam to move forward with reforms.
    Ms. Foote. I obviously have a different view. I think it 
would be an enormous shock to Vietnam if we did not renew the 
Jackson-Vanik waiver. I think it would send the bilateral 
relationship into a complete tailspin. It is a small thing in 
that it does not, unlike China, it does not grant Vietnam MFN 
status. In a sense, we have not achieved a lot of what Jackson-
Vanik will be about a year from now. Ex-Im and OPIC have small 
programs going on in Vietnam. They are not big programs.
    On the other hand, it is a crucial part of the overall 
process of normalization that has been worked on by the two 
governments together for 10 years. It has been step-by-step, 
inch-by-inch sometimes. To now pull out a piece that was worked 
on so hard and which has proven to have been the right decision 
a year ago, there are, as Ambassador Peterson and Senator Kerry 
pointed out, there are concrete things to point to that have 
happened in the last year on POW issue, on emigration, and on 
trade, that have been steps very much in the right direction, 
very much in favor of continuing the normalization process. For 
us to pull out this peg now I think would be devastating.
    Chairman Crane. Mr. Hwing.
    Mr. Hwing. Sir, I think it is a good opportunity for the 
United States to have some sort of trade with Vietnam, because 
Vietnam in general has suffered badly during the war. So now I 
think it is about time to reconcile and then get things back on 
track.
    Thank you, sir.
    Chairman Crane. Mr. Johnson.
    Mr. Lionel Johnson. Mr. Chairman, I think that the waiver 
of the Jackson-Vanik with regard to Vietnam undergirds the very 
important relationship that we have between our two countries, 
a relationship that is clearly at a crossroads. We have a great 
opportunity to continue moving it forward toward full 
normalization.
    I would agree with Ms. Foote that the denial would set our 
relationship back many, many years, and I think would send a 
signal to Vietnamese reformers that their efforts have not been 
understood and appreciated in the West, and particularly by the 
United States, a country with whom most Vietnamese would like 
to have a very strong bilateral relationship.
    Chairman Crane. Mr. Bower.
    Mr. Bower. I would just say that it is not easy work being 
involved in the process of change. Vietnam is clearly a country 
that is undergoing enormous change right now. U.S. companies by 
being involved and the U.S. Government by their involvement, 
led by Pete Peterson, are doing very hard work. We need the 
Jackson-Vanik waiver to be able to do that hard work. If we 
failed to renew, I think the Vietnamese would--we would be 
sending them a mixed signal that would not only send efforts to 
extend cooperation and engagement backward probably several 
years, but it would also send the same signal, as I mentioned 
in my testimony, to their neighbors in Southeast Asia, which as 
I hope I have made the case, is a very important market to this 
country, and will be the source of a lot of creation of jobs 
and wealth for us and for them in the coming decade.
    Chairman Crane. Thank you.
    Mr. Rangel.
    Mr. Rangel. Mr. Johnson, what effort, if any, is Citibank 
conducting in normalization of our trade relations with Cuba?
    Mr. Lionel Johnson. I think what we have done with regard 
to Cuba, I think has to be regarded in the context of our 
overall efforts to bring some rational thinking and new 
thinking, fresh approach to the use of unilateral economic 
sanctions as an instrument of foreign policy. We have, over the 
last 3 years since I have been in this position, been a leader 
of USA Engage Coalition, which has been in the forefront, Mr. 
Rangel, of efforts to change the means by which the U.S. 
Government, that is, the executive branch and the legislative 
branch, impose sanctions.
    Mr. Rangel. That's generally. But have you done anything 
specifically as it relates to Cuba?
    Mr. Lionel Johnson. As it relates to Cuba, we have 
participated in a number of discussions here in Washington and 
in the community in Florida, where we have a large operation, 
about the political developments there. We have not, however, 
we do not have operations, we do not have a presence clearly in 
Cuba. But we have been in the forefront of the dialog that has 
been taking place in policy circles here in the United States 
to take a fresh approach to the use of sanctions and 
particularly with regard to the Helms-Burton law, which we 
regard as----
    Mr. Rangel. Please send to me all of the efforts that 
Citibank has made as it relates to Cuba.
    [The information was not available at the time of 
printing.]
    Mr. Rangel. Ms. Foote, what is the requirement to be a 
member of the council that you represent?
    Ms. Foote. Membership dues. It is a membership 
organization, like other bilateral trade associations.
    Mr. Rangel. They must have a vested interest in businesses 
in Vietnam or just an interest in wanting to do business in 
Vietnam?
    Ms. Foote. I would say most of our members are actually 
doing business or have an office in Vietnam. They may be 
representative offices. They might not have contracts yet, but 
they are certainly all interested in doing business there.
    Mr. Rangel. But would some of these be multinationals doing 
business in other countries?
    Ms. Foote. I would say all of them are multinationals.
    Mr. Rangel. My question to you and Mr. Bower will be very 
much what I am asking Mr. Johnson. That is, most everything 
that you have said about the good that can come to the 
Vietnamese people through exchange and engagement and trade, 
and I assume that the same thing should apply to Cuba.
    Ms. Foote. I don't know much about the Cuba relationship, 
but I do know that I have been asked by----
    Mr. Rangel. When did you learn about Vietnam, when they 
hired you? I mean did you have any training at all in trade and 
what it means or is it just that you----
    Ms. Foote. On international trade issues. I only learned 
about Vietnam starting 10 years ago when I was part of founding 
the organization. Actually there are quite a few companies that 
are interested in forming a similar council to the United 
States-Vietnam Trade Council who have come to me recently 
asking for information on what are the similarities, how did we 
operate.
    Mr. Rangel. But you are an international trade expert, not 
just one?
    Ms. Foote. I would say I have become a Vietnam trade 
expert, though.
    Mr. Rangel. But you put in your testimony the countries 
that we don't have----
    Ms. Foote. Yes. There is a list of non-MFN countries, yes.
    Mr. Rangel. I'm asking, do you know of any reason why all 
of the good that can come to Communist Vietnam, why the same 
thing wouldn't apply to Communist Cuba?
    Ms. Foote. Personally, I agree with you.
    Mr. Rangel. Mr. Bower
    Mr. Bower. I agree too. I think Lionel Johnson mentioned 
the effort through USA Engage to fight sanctions. I would stand 
up behind this engagement argument. I, like Ms. Foote, am not 
familiar in detail about the Cuba relationship, spending most 
of my time on Southeast Asia, but I think we could give a lot 
of examples to people who were interested in Cuba about how 
engagement has really facilitated change in the countries that 
I work on.
    Mr. Rangel. It is my personal and political opinion that 
trade associations could enhance their credibility if they 
brought to this Congress how expanded trade and engagement 
helps the United States of America rather than the specific 
self interests that businesses would have as it relates to a 
particular country. Because it could very well be that if you 
are paid just to represent countries in order to expand their 
trade and profits, then the argument as to what good it is to 
America as opposed to what good it is to your clients may be 
lost.
    But if indeed what you are saying is that for a better 
world and a stronger America, that what you are saying about 
Vietnam is true with most countries that we are trying to 
expand our influence by showcasing American capitalism, then we 
would know that in addition to representing your clients, that 
you are representing the best interests of the United States.
    I think businesses, unlike politicians, who have to go for 
votes, don't have to bend to what's popular, but can stick to 
what really works for business and explaining what works for 
us.
    Thank you all so much for your testimony.
    Dr. Thang.
    Mr. Thang. Yes. I would like to request 1 minute to make a 
comment on the previous question by the Chairman. I agree with 
Ms. Foote that disapproval of the waiver at this moment would 
send a shock to the Vietnamese Government. I believe that it is 
time for the Vietnamese Government to get a shock treatment. 
Here are the reasons why. Vietnam, based on some of the 
statistics that I have here, Vietnam has the highest piracy 
rate in the world, standing at 97 percent. Vietnam is the least 
transparent system in the region. Vietnam has the least freedom 
of the press in the region, much worse than even China, 
Communist China.
    I would like to quote some of the authorities on Vietnam 
issues. For instance, Edouard Wattez, the UNDP representative 
in Hanoi, in an interview with South China Morning Post in 
November 1998, said that ``Ironically and worrisome when 
looking back, the pace of reform appears to have slowed since 
1993, when aid began to arrive in large amounts to Vietnam.''
    Another quote from former Prime Minister of Vietnam, Pham 
Van Dong, ``There are many bad people who occupy high positions 
in the party, state organs, and mass organizations, who have 
power in their hands. They are degraded, they are chasing 
power, money, and benefits.'' That statement was made on May 
15, 1999.
    Finally, a statement by the representative of the European 
Union, Wolfgang Erck. ``Reform policy has been slowed down and 
economic policy is less courageous than it was at the beginning 
of the nineties. We have the impression that there is less 
tolerance now, more limitations for the press and religious 
communities, and we have concerns of other sectors such as 
political prisoners.'' He made this statement last week.
    To wrap up, I believe that it is time to send a very strong 
signal to Vietnam that they will have to be very serious, they 
cannot thumb their nose at us. They cannot flaunt our laws. 
They cannot continue to victimize the refugees. Corruption, the 
rampant corruption in the emigration process, may undermine our 
national security.
    Thank you, Mr. Chairman.
    Chairman Crane. I want to thank you, and I want to thank 
all of the witnesses for your presentations today. We 
appreciate the input, and just because you won't be sitting in 
a panel before the Subcommittee does not mean we don't want 
your ongoing input. So please stay in communication with us 
all.
    With that then, let me adjourn this panel and invite our 
final panel to come to the dias: Trung Trinh, executive 
director, Vietnamese American Business Council; Diem Do, 
cochairman, Coalition Against the Jackson-Vanik Waiver; L. 
Craig Johnstone, senior vice president, International, 
Economic, and National Security Affairs, U.S. Chamber of 
Commerce; Lynn O'Shea, New York State director, National 
Alliance of Families for the Return of America's Missing 
Servicemen, and Greig Craft, vice chairman, Asia-Pacific 
Council of the American Chambers of Commerce.
    If you will all be seated in the order in which I 
introduced you. Let me remind you all again, if you can please 
keep your oral presentations to 5 minutes or less. Your written 
statements will all be made part of the permanent record. We 
will proceed in the order in which I presented you.
    Mr. Trinh, you are first.

   STATEMENT OF TRUNG TRINH, EXECUTIVE DIRECTOR, VIETNAMESE 
                   AMERICAN BUSINESS COUNCIL

    Mr. Trinh. Good afternoon, Chairman Crane, and Congressman 
Rangel. My name is Trung Trinh. I am the executive director of 
the Vietnamese American Business Council. Thank you for giving 
me the opportunity to speak with you on the United States-
Vietnam trade relations.
    VABC was established in 1998 to provide members with 
networking opportunities in order to develop businesses in 
Vietnam. VABC members are small and medium-sized American 
companies, many of which have been doing business in Vietnam 
since the lifting of the United States trade embargo in 1994. A 
list of our members and individuals of VABC has been provided 
with our written statement.
    I came to this country in 1981 as a refugee. I settled in 
Northern Virginia with my family and worked for the Fairfax 
County government for 8 years as a human resources specialist, 
and then for various organizations and companies before 
starting my own business in 1990. As a Vietnamese-American 
entrepreneur, I was excited at the decision of the United 
States Government to lift the trade embargo with Vietnam in 
1994. Seeing the potential, I decided to go back to Vietnam to 
explore business opportunities.
    In 1995, I opened and operated the first American product 
showroom in Ho Chi Minh City with the cooperation of the 
Foreign Trade and Investment Development Center in that city. 
One of the goals of the showroom was to provide small and 
medium-sized American companies with a cost-effective way to 
display and market their products there. The showroom was not 
successful for a number of reasons. The most obvious reason was 
the lack of financing. Vietnamese buyers could not afford to 
buy the products. Hopefully, this problem will be alleviated 
with the help of OPIC and Ex-Im Bank.
    I was also involved with the negotiation of a joint venture 
project to set up an aircraft component repair and overhaul 
station in Vietnam. The negotiation was successful. A business 
cooperation contract was signed between an American company and 
a Vietnamese aircraft repair station. However, the project has 
been canceled due to the lack of financing on the American 
part.
    Lately, recognizing the need for business training in 
Vietnam, myself and a number of organizations in the United 
States have implemented a hotel management internship program 
in which Vietnamese students are placed in an on-the-job 
training program in the United States. The program has been 
very successful and it's still going on.
    During the course of doing business in Vietnam, I 
recognized the challenges and the frustration of small and 
medium-sized American companies in developing business in 
Vietnam. One of the main reasons is the lack of money in 
Vietnam for financing and for the purchase of American goods 
and services. My former country remains a poor country over 25 
years after the war. Another reason is the lack of practical 
experience in Vietnam. Small American companies cannot afford 
to put the people on the ground in Vietnam for a long period of 
time just to gain the experience.
    VABC was founded in February 1998 by a group of American 
companies and entrepreneurs. It is a response to the need that 
I saw in trying to do business in Vietnam just after the 
embargo was lifted. VABC provides a vehicle for our small and 
medium-sized members to share their experiences and avoid 
costly mistakes. In spite of difficulties in doing business in 
Vietnam, VABC and its members are committed to pursuing 
business opportunities in Vietnam. Our members are currently 
involved in over 15 projects. I have submitted a list of the 
more important projects to the Subcommittee.
    Trade is a two-way street. For Vietnam to do business with 
the United States, it needs hard currency that it will only 
obtain by economic development. Exports will play a larger role 
in this development. By normalizing the trade relations with 
Vietnam, Vietnam will be able to export. By exporting, Vietnam 
will be able to afford American products and services which 
they want very much. Therefore, we urge you to consider the 
renewal of the waiver of the Jackson-Vanik amendment, and that 
you support the successful negotiations of the bilateral trade 
agreement.
    We believe that a mutually beneficial trade relationship is 
important to both countries and should be given a high 
priority. We should stop dwelling on the past and move forward 
to the future. Again, I appreciate the chance to speak in front 
of you on behalf of the Vietnamese American Business Council.
    Thank you.
    [The prepared statement follows:]

Statement of Trung Trinh, Executive Director, Vietnamese American 
Business Council

    Good morning. My name is Trung Trinh. I am the Executive 
Director of the Vietnamese American Business Council (VABC). 
Thank you for giving me this opportunity to speak with you on 
US Vietnam trade relations.
    VABC was established in 1998 to provide its members with 
networking opportunities in order to develop businesses in 
Vietnam. VABC members are small and medium-sized American 
companies many of which have been doing business in Vietnam 
since the lifting of the US trade embargo in 1994. A list of 
the member companies and individuals of VABC has been provided 
with our written statement.
    I came to this country in 1981 as a refugee. I settled in 
Northern Virginia with my family and worked for the Fairfax 
County government for 8 years as a Human Resource Specialist 
and then for various organizations and companies before 
starting my own business in 1990 .
    As a Vietnamese American entrepreneur, I was excited at the 
decision of the US government to lift the trade embargo with 
Vietnam in 1994. Seeing the potential, I decided to go back to 
Vietnam to explore business opportunities.
    In 1995, I opened and operated the first American product 
showroom in Ho Chi Minh City with the cooperation of the 
Foreign Trade and Investment Development Council of the city. 
One of the goals of the showroom was to provide small and 
medium-sized American companies with a cost-effective way to 
display and market their products there. The showroom was not 
successful for a number of reasons. The most obvious reason was 
lack of financing. Vietnamese buyers could not afford to buy 
the products or set up inventories. Hopefully, this problem 
will be alleviated with the help of OPIC and the EXIM Bank.
    I was also involved with the negotiation of a joint venture 
project to set up an aircraft component overhaul and repair 
station in Vietnam. The negotiation was successful. A Business 
Cooperation Contract was signed between the American company 
and a Vietnamese aircraft repair station. However, the project 
has been cancelled due to the lack of financing.
    Lately, recognizing the need for business training in 
Vietnam, I have implemented a Hotel Management Internship 
program in which Vietnamese students are placed in an American 
On the Job Training program. This program has been very 
successful.
    During the course of doing business in Vietnam, I 
recognized the challenges and the frustrations of small and 
medium-sized American firms in developing business 
opportunities there. One of the main reasons is the lack of 
money in Vietnam for financing and for the purchase of US goods 
and services. My former country remains a poor country over 
twenty years after the war. Another reason is the lack of 
practical experience in Vietnam. Small US companies cannot 
afford to put people on the ground in Vietnam for long periods 
just to gain experience.
    VABC, which was founded in February of 1998 by a group of 
American companies and entrepreneurs, is a response to a need 
that I saw in trying to do business in Vietnam just after the 
embargo was lifted. VABC provides a vehicle for our small and 
medium-sized company members to share their experiences and 
avoid costly mistakes.
    In spite of difficulties in doing business with Vietnam, 
VABC and its members are committed to pursuing business 
opportunities in Vietnam. Our members are currently involved in 
over 15 projects. I have submitted a list of the more important 
projects to the Committee.
    Trade is a two way street. For Vietnam to do business with 
the US, it needs hard currency that it will only obtain by 
economic development. Exports will play a large role in this 
development. By normalizing the trade relations with Vietnam, 
Vietnam will be able to export and by exporting Vietnam will be 
able to afford American products and services, which they want 
very much.
    Therefore, we urge you to consider the renewal of the 
waiver of the Jackson-Vanik amendment and that you support the 
successful negotiation of the bilateral trade agreement.
    We believe that a mutually beneficial trade relationship is 
important to both countries and should be given a high 
priority. We should stop dwelling in the past and move forward.
    Again, I appreciate the opportunity to speak on behalf of 
the Vietnamese American Business Council.
      

                                

Attachment A

             PARTIAL LIST OF VABC'S MEMBERS AND ASSOCIATES

     Ablondi, Foster, Sobin and Davidow, Washington DC
     Charter Resources International, LC, Richmond, VA
     Council on International Educational Exchange, Hong Kong
     Engineering Management Services, Inc., Vienna, Virginia
     Global Spectrum, Washington DC
     J.R. Short Milling Co., Chicago, IL
     MC Pacific, Westminster, California
     Ocoran Corporation, Arlington, Texas
     Pacific Affairs Associates, Honolulu, Hawaii
     Pacific Trading Company, Portland, OR
     Peter Vogt & Associates, Inc., Washington DC
     Prolific Systems, Freemont, California
     PV Hotel International Consultants, Washington DC
     SouthEast Services, Westminster, California
     Vietnam Development Partners, LLC, Denver, Colorado
     Vietnam Resource Group, Washington DC
     VINA Express Corporation, New York, New York
     Vitech, Seattle, Washington
     Worldwide Marketing Group, Inc., Rockville, Maryland

Individual Members:

     Leo Dorsey, Harrisburg, PA
     Jeff Farrell, Coldwell Banker, Santa Barbara, CA
     Quang Nguyen, San Jose, CA
     Phung Vu, Washington DC

Non-resident Members:

     Central Club of Directors, Ha Noi, Vietnam
     Hoang Le Corporation, Ha Noi, Vietnam.
     Phuong Hong Pte., HCM City, Vietnam
      

                                

Attachment B

              TYPICAL PROJECTS COORDINATED BY VABC MEMBERS

Completed Projects:

     Project Management Training for Vietnamese officials, 
funded by the World Bank in 1994 (Engineering Management Services, 
Vienna, VA)
     Export Training in Ha Noi in 1994 and in 1998 (Ablondi, 
Foster, Sobin and Davidow, Washington DC)
     Opened and operated the first American Product Showroom in 
Vietnam in 1995-1996 (Vietnam Resource Group, Washington DC).
     Opened the first US travel agency in Vietnam in 1997 
(Global Spectrum, Washington DC)
     Successfully negotiated a business cooperation contract to 
set up and operate a aircraft component Repair station in Vietnam in 
1997 (Vietnam Development Partners, LLC, Denver, CO)
     Hosted various trade delegations from Vietnam (Vietnam 
Resource Group).
     Coordinated 8 trade missions to Vietnam for small and 
medium sized American companies (Vietnam Resource Group).
     Coordinated an internship program for Vietnamese students 
in Orlando, Florida in 1997 (PV Hotel International Consultants, 
Washington DC)

Current Projects:

     Coordinate with the Training Center of the Ministry of 
Planning and Investment to set up a training program designed to 
provide Vietnamese executives with business management training.
     Cooperate with the Department of Planning and Investment 
both in Ha Noi and HCM cities to organize a Conference on Trade and 
Investment in which American companies could be issued business 
licenses to explore the market without going through time-consuming 
bureaucratic procedures.
     Continue working to introduce various trade shows in the 
US to Vietnamese companies.
     Proposal for a documentary film promoting a new Vietnam
     Import food products from Vietnam
     Introduce MBA training programs to Vietnam
     Promote educational exchange programs.
     Continue developing internship programs in different 
fields ie: Hotel/Tourism, Agriculture, Information Technology, Banking.
      

                                

    Chairman Crane. Thank you, Mr. Trinh.
    Mr. Do.

  STATEMENT OF DIEM H. DO, COCHAIRMAN, COALITION AGAINST THE 
         JACKSON-VANIK WAIVER, WESTMINSTER, CALIFORNIA

    Mr. Do. Mr. Chairman, Congressman Rangel, first I would 
like to express my appreciation for the opportunity to address 
this Subcommittee today. I would like to summarize my extended 
testimony which has been submitted to the Subcommittee. The 
Coalition Against Jackson-Vanik Waiver, representing 30 
organizations and communities across the Nation, strongly 
opposes the waiver of the Jackson-Vanik amendment for Vietnam 
for the following reasons:
    First, the Vietnamese Government has not made sufficient 
progress toward free emigration to warrant the waiver. Second, 
the Vietnamese Government continues to deny its citizens all 
basic human rights. Third, Vietnam's transition to a market 
economy has slowed down significantly and remains incomplete.
    Now I would like to elaborate more on the reasons why we 
oppose the waiver.
    On free emigration, Vietnam claimed that it had dropped the 
exit permit requirement in the ROVR Program. This is a step 
toward satisfying the free emigration requirement under 
Jackson-Vanik amendment. The reality is that Vietnam has not 
dropped its requirement for exit permits. It has only delayed 
this requirement until after the applicant is interviewed and 
approved by the U.S. interviewing team, at which time the 
problem with exit permits will resurface.
    In addition, a large number of eligible applicants have 
been denied exit permits or not processed because they are 
former political prisoners, former U.S. Government employees, 
or religious leaders.
    On human rights, the very first sentence of section 402(a) 
of the Trade Act of 1974 said that the amendment is to assure 
the continued dedication of the United States to fundamental 
human rights. With that in mind, clearly Vietnam's human rights 
record does not warrant the waiver of the Jackson-Vanik 
amendment.
    Just 2 months ago on April 19, 1999, the Vietnamese 
Government issued Administrative Decree 26, titled ``Decree of 
the government concerning religious activities.'' In this 29-
article-long decree, the Vietnamese Government laid out some 
serious restrictions on religious freedom. This contradicts 
both Senator Kerry and Ambassador Peterson's observation that 
religious freedom has improved. Following are just two examples 
of the most blatant violations committed by this decree.
    Article 20 dictates that the consecration of those who 
carry the title of Hoa Thuong in the Buddhist religion, of 
cardinals, bishops, administrators in the Catholic Church, and 
of dignitaries of equivalent function of other religions, must 
receive the approval of the prime minister. Article 25 of the 
same decree dictates that in order to organize a particular 
gathering within a place of worship, it is necessary to obtain 
authorization from the president of the People's Provincial 
Committee. Just weeks after the Administrative Decree 26 was 
issued, on May 7, 1999, Reverend Tran Dinh Ai and 19 others 
from the Vietnamese Assemblies of God Church were detained 
after police burst in on their second day of a 3-day spiritual 
retreat and bible study session in Hanoi. Currently, Reverend 
Tran Dinh Ai is still being detained. He is currently, seeking 
help for himself and his family to leave the country.
    It is important to note that human rights violations in 
Vietnam are not limited to religious freedom. Two years ago, on 
April 14, 1997, the Vietnamese Government issued administrative 
decree 31, titled ``Government administrative detainment 
policy,'' which gives the police the power to detain anyone 
suspicious of infringing on the national security from 6 months 
up to 2 years without trial. Numerous well-known and outspoken 
dissidents have fallen victim to this draconian decree.
    On transition to a market economy, one of the reasons that 
the United States chose to pursue the policy of engagement with 
Vietnam is to facilitate Vietnam's transition to a market 
economy. Such a transition can be beneficial to both countries. 
However, since the lifting of the trade embargo, Vietnam's 
economic reform has slowed down significantly to the point of 
inaction. In an article on May 21, 1999, Ari Kokko, a Vietnam 
expert from the Stockholm School of Economics said that, ``I 
think the lack of reform has made it clear Vietnam is really 
still a command economy at heart in spite of the changes over 
the past years.'' Even our Ambassador Peterson was quoted in 
the same article that, ``Vietnam had an opportunity to seize 
some initiative, but Vietnam failed to do so because it became 
frightened about the impact of such reform, and they 
essentially opted for the status quo.''
    In conclusion, Vietnam has clearly regressed, not 
progressed. Waiving the Jackson-Vanik amendment now and then 
hope and pray that the Vietnamese Government will reform just 
does not work. With billions of dollars already invested, it is 
time to take a more effective approach. Pressure must be 
applied. The United States should use economic leverages to 
exchange for concrete, verifiable steps toward reforms. We 
strongly believe that waiving the Jackson-Vanik amendment now 
is premature. The Jackson-Vanik waiver should only be given 
after Vietnam reciprocates with measurable steps toward full 
economic and human rights reforms.
    Thank you.
    [The prepared statement follows:]

Statement of Diem H. Do, Cochairman, Coalition Against Jackson-Vanik 
Waiver, Westminster, California

    Distinguished Members of Congress,
    First, I would like to express my appreciation for the 
opportunity to address this committee today. The Coalition 
Against Jackson-Vanik Waiver, representing 30 organizations and 
communities across the nation, strongly opposes the waiver of 
the Jackson-Vanik amendment for Vietnam for the following 
reasons:
    (1) the Vietnamese government has not made sufficient 
progress towards free emigration to warrant the waiver,
    (2) the Vietnamese government continues to deny its 
citizens all basic human rights, and
    (3) Vietnam's transition to a market economy has slowed 
down significantly and remains incomplete.
    Maintaining the Jackson-Vanik amendment in the case of 
Vietnam will help to put pressure on the Vietnamese government 
for more concrete reforms in the areas outlined above. Now, I 
would like to elaborate more on the reasons why we oppose the 
waiver.

                            Free emigration

    Vietnam claimed that it had dropped the exit permit 
requirement in the Resettlement Opportunity for Vietnamese 
Refugees (ROVR) program. This is a step towards satisfying the 
free emigration requirement under Jackson-Vanik amendment.
    The reality is that Vietnam has not dropped its requirement 
for exit permit. It has only delayed this requirement until 
after the applicant is interviewed and approved by the U.S. 
interviewing team, at which time the problem with exit permit 
will resurface. In addition, a large number of eligible 
applicants have been denied exit permit or not processed 
because they are former political prisoners, former U.S. 
government employees or religious leaders.
    Beside administrative roadblocks, pervasive corruption at 
all levels of government creates additional obstacles to free 
emigration. In many instances, applicants to U.S. resettlement 
programs are demanded huge amount of money that they cannot 
afford. This in effect violates the spirit of the Jackson-Vanik 
amendment that requires a country not to impose ``more than a 
nominal tax, levy, fine, fee, or other charge on any citizen as 
a consequence of the desire of such citizen to emigrate to the 
country of his choice.''

                              Human Rights

    The very first sentence of section 402(a) of the Trade Act 
of 1974 said that the amendment is ``to assure the continued 
dedication of the United States to fundamental human 
rights...'' With that in mind, clearly Vietnam's human rights 
record does not warrant the waiver of the Jackson-Vanik 
amendment.
    Just two months ago, on April 19, 1999, the Vietnamese 
government issued Administrative Decree 26, titled Decree of 
the Government Concerning Religious Activities. In this 29-
articles long decree, the Vietnamese government laid out some 
serious restrictions on religious freedom. Following are 
examples of the most blatant violations committed by this 
decree:
    Article 20 dictates that ``the consecration of those who 
carry the title of `Hoa Thuong' in the Buddhist religion, of 
cardinals, bishops, administrators in the Catholic Church, and 
of dignitaries of equivalent function of other religions, must 
receive the approval of the Prime Minister.''
    Article 21 reads that ``the nomination and transfer of 
clergy, religious and specialists in religious activities must 
obtain the approval of the Peoples Committee whose 
administrative management covers the territory of their 
activities.''
    Article 24 requires that ``religious organizations and 
officials, in order to invite to Vietnam religious 
organizations and officials from abroad, must obtain the 
authorization of the Bureau of Religious Affairs.''
    Article 25 dictates that ``in order to organize a 
particular gathering within a place of worship, it is necessary 
to obtain authorization from the President of the Peoples' 
provincial committee.''
    Just weeks after Administrative Decree 26 was issued, on 
May 7, 1999, Reverend Tran Dinh Ai and 19 others from the 
Vietnam Assemblies of God Church were detained after police 
burst in on their second day of a three-day spiritual retreat 
and bible study session in a Hanoi hotel. Of this 20 people, 18 
were released on May 9, 1999 after being charged with breach of 
the peace. The remaining two, Evangelist pastor Lo Van Hen's 
whereabouts were currently unknown and Reverend Tran Dinh Ai is 
still being detained in a hotel with four guards. He has 
appealed for help for himself and his family to leave the 
country.
    It is important to note that human rights violation in 
Vietnam is not limited to religious freedom. Two years ago, on 
April 14, 1997, the Vietnamese government issued Administrative 
Decree 31, titled Government Administrative Detainment Policy, 
which gives the police the power to detain anyone suspicious of 
``infringing on the national security'' from 6 months up to 2 
years without trial.
    More recently, Reuters reported on 5/20/99 that the 
government ``has amended its strict press law to tighten state 
control over official media and set rules that all reporting 
must be of benefit to the country.'' Not only they clamped down 
on free speech for every citizen, the Vietnamese Communist 
Party restricted their own party members' free speech. On 6/7/
99, the Associated Press reported that the Politburo decided to 
ban party members from ``distributing documents that question 
party policies and decisions, and may not write anonymous 
letters or make accusations against people they disagree 
with.''

                     Transition to a market economy

    One of the reasons that the United States chose to pursue 
the policy of ``engagement'' with Vietnam is to facilitate 
Vietnam's transition to a market economy. Such a transition can 
be beneficial to both countries. However, since the lifting of 
the trade embargo in 1994 and more recently since the Jackson-
Vanik waiver in 6/98, Vietnam's economic reform has slowed down 
significantly to the point of inaction.
    In a Reuters article on 5/21/99, Ari Kokko, a Vietnam 
expert from the Stockholm School of Economics, said: ``I think 
the lack of reforms has made it clear Vietnam is really still a 
command economy at heart, in spite of the changes...over the 
past few years.'' That same article also reported that 
investors still moan about incomplete laws, tough foreign 
exchange rules, tight labor laws, lengthy licensing procedures, 
restricted access to certain sectors of the economy, corruption 
and a lack of infrastructure.
    Even our Ambassador Pete Peterson was quoted in the same 
article that Vietnam had an opportunity to seize some 
initiative, ``but Vietnam failed to do so because they became 
frightened about the impact of such reforms and they 
essentially opted for the status quo.''
    In an article on 5/25/99, reporter Ken Dilanian of the 
Inquirer quoted Kazi Matin, chief economist of the World Bank 
in Vietnam, that ``the economy is certainly in a tailspin,'' 
and ``(new) foreign investment has virtually disappeared.'' In 
fact, big companies are leaving Vietnam in droves such as Cigna 
and Chrysler just to name a couple.
    The same article reported that there is still a state board 
that sets the prices of staple products such as cement and 
steel. In fact, Mr. Bradley LaLonde, director of Citibank's 
Vietnam operations, who testified last year before this same 
committee in favor of waiving the Jackson-Vanik amendment, was 
quoted in that same article saying that ``Vietnam is run by a 
group of people who are resistant to change. They want a 
government-controlled economy.''
    Clearly, investors are becoming increasingly disillusioned 
with a government that makes Vietnam one of the world's most 
frustrating places to do business. Obviously, pressures are 
needed to push Vietnam forward in the transition to a market 
economy.

                               Conclusion

    For more than a decade, foreign investors and the 
international community have been pouring money into Vietnam 
with little success. That is because there is no real pressure 
to force the Vietnamese government toward a more long-term and 
constructive path of reform. The approach taken by the 
Vietnamese government since 1986 has been more to stave off 
their own collapse rather than rescuing the country.
    Waiving the Jackson-Vanik amendment now, and then hope and 
pray that the Vietnamese government will reform just does not 
work. With billions of dollars already invested in Vietnam, it 
is now time to take a different approach so that long-term 
growth and a business friendly environment can be ensured. 
Pressures must be applied so that the right course and the 
right pace of reform are taken. The United States should use 
economic leverages such as the Jackson-Vanik Waiver, MFN 
status, other forms of preferential tariff treatment and other 
benefits such as EXIM, OPIC, TDA...to exchange for concrete, 
verifiable steps toward reforms.
    We strongly believe that waiving the Jackson-Vanik 
amendment for Vietnam without any real, tangible concessions 
from Vietnam is premature at this point. Trade benefits should 
only be given when Vietnam reciprocates with measurable steps 
toward full economic and human rights reforms.
    In summary, I believe that free trade does not mean trade 
at any cost and without conditions. In the case of Vietnam, 
certain conditions must be met in order for meaningful, long 
lasting trade relations to develop. The guiding principle of 
our country has always been cooperating and partnering with 
free government, free country where human rights and values are 
respected. Let's not betray that principle by making Vietnam an 
exception.
      

                                

    Chairman Crane. Thank you.
    Mr. Johnstone.

    STATEMENT OF L. CRAIG JOHNSTONE, SENIOR VICE PRESIDENT, 
  INTERNATIONAL, ECONOMIC AND NATIONAL SECURITY AFFAIRS, U.S. 
                      CHAMBER OF COMMERCE

    Mr. Craig Johnstone. Thank you, Mr. Chairman. Particular 
thanks to you and the Members of this Subcommittee for giving 
the U.S. Chamber of Commerce the privilege of testifying before 
you on Vietnam and on the extension of the Jackson-Vanik 
waiver. I also want to thank the American Chamber of Commerce 
in Vietnam for the hard work it has done to promote U.S.-
Vietnam trade, and to thank the Asia-Pacific Association of 
American Chambers of Commerce for the strong support they have 
given to analysis and advocacy on this issue.
    I am not going to belabor the points I have made in my 
written testimony. Allow me to highlight the essential 
elements. First, the U.S. Chamber of Commerce strongly supports 
the extension of the waiver of Jackson-Vanik. Extension makes 
good business sense. It contributes to the creation of jobs in 
our own country and in Vietnam. It allows us to compete fairly 
with other countries, countries that would continue to do 
business with Vietnam even if we did not.
    Second, the U.S. Chamber is strongly supportive of the 
efforts of our trade negotiators to work out a bilateral trade 
agreement with Vietnam. We understand that these negotiations 
have made good progress. If a good agreement is reached, and by 
that I mean an agreement that would truly open Vietnamese 
markets to U.S. goods, the Chamber will be in the forefront of 
those giving it our support.
    Third, we would hope that we can move toward Vietnam's 
accession to the WTO, a process that would bring Vietnam more 
fully into the community of international trading nations in 
ways that would further open markets and create jobs in 
America. Our position on these three objectives is unambiguous.
    But quite frankly, these are not the neuralgic issues in 
the United States-Vietnam relationship. There are three major 
other issues that transcend the business interests. First is 
the issue of our POWs and MIAs. I served as the United States 
Government negotiator with the Vietnamese Government in Paris 
from 1978 to 1980. I am all too familiar with this issue and 
the cruel and insensitive way in which the Government of 
Vietnam manipulated it to seek political advantage. I have 
nothing but contempt for how the matter was handled in its 
early days by the Vietnamese Government. But there has been a 
wholesale change in Vietnamese conduct on this issue. I can't 
speak in detail in the same sense that Ambassador Peterson was 
able to on this issue, but quite frankly, if he, our Ambassador 
to Vietnam and a former prisoner of war, is satisfied that the 
best way to get full accountability on POWs and MIAs is by 
staying the course in our Vietnam relationship, then that is 
good enough for me, and I think it ought to be good enough for 
just about everyone.
    Second, on human rights. This, in my view, is also not a 
close call. We do not approve of many of the policies of the 
Government of Vietnam and how it conducts itself. Read through 
the State Department Human Rights Report and ask yourself 
whether you could condone all of the actions of the Government 
of Vietnam. No American could. But this isn't really the issue. 
We have a choice of working to integrate Vietnam more fully 
into the community of nations, chipping away at bad practices 
and letting the power of open markets and open communications 
stimulate the growth of democracy. Or we can reverse course and 
try to coerce or isolate Vietnam. Quite frankly, coercion and 
isolation offer no chance of success. By all accounts, openness 
and integration are working slowly, but tangibly. We need to 
stay the course, not despite our human rights concerns, but 
because of them.
    Finally and most importantly, there is a legacy of the war. 
It hangs over us all. I worked in Vietnam from 1965 to 1970. My 
first job there was in Chau Doc Province, where I was assigned 
with one other civilian and the Special Forces A Team. My job 
was to advise the local Vietnamese Government and to assist 
refugees fleeing communism in the mountain areas of Chau Doc. 
The Special Forces team commander was Major John Arnn, a 
wonderful man who took me, fresh out of college, under his wing 
and taught me how to survive in an often hostile environment. 
He became my first and best friend in Vietnam.
    In December 1965, Major Arnn volunteered to deliver some 
supplies to one of my refugee camps. On the way, he was 
ambushed and killed. Around Memorial Day each year, I visit the 
Vietnam Memorial and touch his name on the wall, along with the 
names of other dear friends that died in the war. It would be 
easy for me to say forget Vietnam, keep it isolated, we owe 
that to the men and women who fought and died there. Quite 
frankly, that was my view for some time. I will admit to you 
that it was fueled in part by my conviction and resentment that 
we lost that war.
    The military historians describe Vietnam as a war in which 
we won all the battles and lost the war. But I think they 
missed the point. Vietnam was not really a war in its own 
right. It was one of the many battles in the cold war. A better 
way of looking at it is to recognize that we lost the battle, 
but we won the war.
    The issue before us is whether to live in the past, 
dwelling on the lost battle, or to move to consolidate the 
gains of cold war victory. We won the cold war. Will we win the 
winning? Engagement, trade, steady pressure on democracy and 
human rights, accountability on POWs and MIAs, increased 
contacts and exchanges, these are the tools needed to win the 
cold war winning. We do not honor our Vietnam heros by trying 
to isolate Vietnam. We honor them by realizing the fruits of 
their hard fought cold war victory.
    Thank you.
    [The prepared statement follows:]

Statement of L. Craig Johnstone, Senior Vice President, International, 
Economic and National Security Affairs, U.S. Chamber of Commerce

    Thank you, Mr. Chairman, for the opportunity to testify 
today before this Subcommittee on Trade on the critical issue 
of U.S. trade relations with Vietnam. I am Craig Johnstone, 
Senior Vice President for International, Economic and National 
Security Affairs at the U.S. Chamber of Commerce.
    The U.S. Chamber of Commerce is the world's largest 
business federation, representing more than three million 
businesses and organizations of every size, sector and region. 
We also count among our members 85 American Chambers of 
Commerce abroad, including those in Hanoi and Ho Chi Minh City. 
Since the embargo was lifted in 1994, many of our corporate 
members are reentering Vietnam for the first time in 20 years. 
Other members, many of them small and medium-sized businesses, 
are entering Vietnamese markets for the first time ever.
    The U.S. Chamber of Commerce believes that normalization of 
trade relations with Vietnam is in the long-term interest of 
the United States. Last year, Congress upheld the Jackson-Vanik 
waiver for Vietnam when it resoundingly defeated a disapproval 
resolution by a vote of 260 to 163. The U.S. Chamber of 
Commerce urges Congress to uphold the Jackson-Vanik waiver 
again this year.
    Although a powerful gesture, the waiver of the Jackson-
Vanik amendment for Vietnam is only the first step in 
normalizing trade relations. The U.S. Chamber of Commerce 
supports the completion of a bilateral commercial agreement 
that provides meaningful market access to the American business 
community. Moreover, we want to integrate Vietnam into the 
global trading system by broadening and binding its market-
opening commitments as a member of the World Trade Organization 
(WTO).

                  Legacy of the U.S.-Vietnam Conflict

    Before discussing future U.S.-Vietnam economic relations, 
it is imperative to acknowledge our common past. From my own 
experience, I know that few Americans can address the topic of 
Vietnam without feeling a strong set of emotions. Many U.S. 
citizens still struggle with the idea that we should see 
Vietnam as more than just a war, but as a country and a people 
of considerable potential.
    The U.S. Chamber of Commerce is sensitive to the legacy of 
the U.S.-Vietnam conflict. The U.S. government must continue to 
assign top priority to obtaining the fullest possible 
accounting of American servicemen missing from the war. 
Concerns about emigration, human rights and religious freedom 
must be discussed openly as well.
    The best policy to secure Vietnamese cooperation on these 
issues is through political and economic engagement. In today's 
global economy, Vietnam's leaders have no choice but to 
participate in and adhere to the rules of the international 
trade and investment community, providing us with significant 
leverage to effect positive change. The opposite route--turning 
our back on Vietnam--almost certainly will result in an abrupt 
end to cooperation, recriminations on both sides, and a 
strengthening of the position of hard-liners in the Vietnamese 
government who do not want to open the country to foreign goods 
and ideas.
    In addition, attempting to isolate Vietnam is pointless in 
light of the number of countries that have already normalized 
relations with Hanoi. We would risk ceding the potential of 
this market to competitors in Europe, Japan and the rest of 
Asia. We also would lose our opportunity to reach out to the 
younger generation--Vietnamese who were not born when the war 
ended account for over half of the population--who are 
receptive to new ideas from outside their country.

                     Engagement with Vietnam Works

    There is strong evidence that engagement with Vietnam 
works. Since the United States normalized relations with Hanoi, 
Vietnam has cleared for interview 96 percent of all applicants 
under the Resettlement Opportunity for Vietnamese Returnees 
(ROVR) agreement. In the last year alone, the number of 
outstanding ROVR cases dropped from 1,353 in May 1998 to 79 as 
of the beginning of this month.
    Likewise, the Vietnamese government last year announced 
that it would permit U.S. officials to interview emigration 
applications for the Montagnards under the Orderly Departure 
Program. Since that time, 220 individuals have been cleared by 
the Vietnamese government for interview by the U.S. Immigration 
and Naturalization Service.
    Cooperation in both of these areas is important in meeting 
the legal requirements for a waiver of the Jackson-Vanik 
amendment. The statute is meant to encourage movement toward a 
free emigration policy in countries with non-market economies. 
The Vietnamese government has clearly met the conditions for a 
waiver.
    Engagement is working in other areas. With respect to human 
rights in Vietnam, commercial engagement has yielded some 
results. At the local level, U.S. Chamber members help to 
promote fundamental rights wherever they operate by 
establishing benchmarks for corporate practices in such 
critical areas as personnel management, corporate citizenship, 
fairness and equal opportunity. This has had a positive impact 
on Vietnamese workers and local government officials. Still, 
despite these positive signs, we are under no illusions that 
Vietnam has a long way to go on human rights and falls 
desperately short of our own standards of freedom and 
democracy.
    More importantly, Vietnam has given top priority to 
cooperating with the United States in seeking the fullest 
possible accounting of POWs/MIAs. Efforts by the Vietnamese 
government have resulted in the recovery and repatriation of 
the remains of several American MIAs in the last year alone. 
Vietnamese officials also continue to provide the United States 
with key documentation in other cases.

                   Potential of the Vietnamese Market

    Why is the American business community so interested in a 
country that bristles with tariffs, excise taxes and 
surcharges, import quotas and other quantitative restrictions 
such as licenses, and foreign exchange controls?
    The answer is simple: the Vietnamese market holds huge 
potential for American business. At present, two-way 
merchandise trade is $830 million. This modest number reflects 
the fact that the trade embargo was lifted only a few years ago 
and that the average GNP per capita in Vietnam is barely over 
$300, according to World Bank figures. Yet, annual growth rates 
have averaged 7 percent despite the limitations of a centrally 
planned economy. This growth rate, coupled with a population of 
78 million, the second largest in Southeast Asia, holds large 
market opportunities over the long-term.
    The Vietnamese economy is undergoing a slow transformation 
from a centrally planned economy to one based on open markets. 
We will likely be frustrated with the pace of this 
transformation, but the U.S. Chamber of Commerce has been 
active in encouraging the Vietnamese government to do more.
    In October 1998, U.S. Chamber President & Chief Executive 
Officer Tom Donohue visited Hanoi as part of a four-nation tour 
of Asia to assess the impact of the Asian financial crisis. 
After being briefed by U.S. Ambassador Peterson, Donohue met 
with two of the most powerful men in Vietnam: Prime Minister 
Phan Van Khai and Secretary General of the Communist Party Le 
Kha Phieu. Donohue advised the Vietnamese leaders that American 
companies want to invest in Vietnam, but are being held back by 
the country's snail-paced approach to market reforms, 
corruption, and the lack of transparency in the banking and 
legal sectors. American capital--desperately needed and wanted 
in Vietnam--simply will not stay in the country unless it is 
treated well.
    Our affiliate organization--the Center for International 
Private Enterprise--has been working in Vietnam since 1993 to 
promote greater understanding of market economics and the 
benefits that a strong, growing and open private sector can 
bring to the national economy. Earlier this year, CIPE began 
assisting the National University of Ho Chi Minh City in airing 
radio call-in broadcasts on issues of interest to private 
firms. In addition, CIPE is helping the Vietnam Chamber of 
Commerce and Industry transform itself into an independent 
voice of fledgling private entrepreneurs in Vietnam and the 
leading advocate of further reform.

                          Jackson-Vanik Waiver

    The first step in normalizing trade relations with Vietnam 
is the Jackson-Vanik waiver. The U.S. Chamber of Commerce 
strongly believes that the United States should continue to 
extend the waiver for three reasons:
     Vietnam has met the legal requirements for the 
Jackson-Vanik waiver. As mentioned, Vietnam has cooperated 
closely with the United States in clearing applicants under the 
ROVR program.
     The waiver paves the way for the U.S. Export-
Import Bank and the Overseas Private Investment Corporation to 
operate in Vietnam. Foreign firms operating in Vietnam already 
have access to trade promotion programs in their home 
countries. This has given them a head start over American 
companies. If the waiver is revoked, access to these trade 
promotion programs would end, and American companies would once 
again be placed at a competitive disadvantage in relation to 
foreign competitors.
     The Jackson-Vanik waiver enables the negotiation 
of a commercial agreement. Maintaining the waiver conveys the 
message to Vietnam's leadership that the United States is 
committed to completing the negotiations. Without a commercial 
agreement, U.S. companies will be unable to obtain meaningful 
access to the Vietnamese economy.

                     Possible Commercial Agreement

    U.S. companies seeking to do business in Vietnam must 
contend with a broad range of tariff and non-tariff barriers to 
goods, services, agricultural products and investment. We have 
an opportunity to level the playing field by completing a 
commercial agreement with Vietnam that provides meaningful 
market access to U.S. companies. Coincidentally, a delegation 
of 20 Vietnamese negotiators are in town this week to talk with 
Administration officials about an agreement.
    Last November, the U.S. Chamber's Board of Directors 
identified ingredients for a commercial agreement that would 
provide meaningful market access to the business community. 
While those ingredients are summarized below, the Board's 
entire statement is attached to my written testimony.
     Reduce tariffs. Vietnam must agree to significant 
tariff reductions as part of the commercial agreement.
     Non-tariff measures. In the course of negotiating 
the commercial agreement, Vietnam must agree to publish all 
non-tariff measures (NTMs). Vietnam must commit to fixed 
endpoints to phase out the NTMs. A measure not included in this 
group should not be permitted to be claimed as an NTM later.
     Trading rights. Trading rights essentially are a 
hidden NTM. Vietnam must permit the right to trade in key 
industries. To the extent that discriminatory trading rights 
remain, they should be linked to the NTM list.
     Abolish import licenses and quotas. These 
administrative measures add unnecessary costs to doing 
business, distort market allocations, and encourage smuggling. 
Furthermore, they are inconsistent with the norms and 
principles of the WTO.
     Open service sectors to foreign participation. 
Vietnam should permit greater foreign participation in its 
service sectors, including retail and wholesale distribution, 
leasing, banking and insurance, telecommunications, 
professional services and others.
     Provide full protection of intellectual property 
rights. Vietnam must agree to protect U.S. intellectual 
property rights and proactively combat piracy.
     Eliminate performance requirements. Vietnam should 
agree to refrain from imposing performance requirements (e.g., 
local content, technology transfer, export requirements) on 
foreign-invested enterprises.

                              Future Steps

    Once a commercial agreement is completed that provides 
meaningful access to American business, it will be submitted to 
Congress for an up-or-down vote. I mention this because it is 
possible that an agreement could be completed in the near 
future and that you will be asked to consider it.
    Congressional approval of a commercial agreement also will 
pave the way for the United States to extend normal trade 
relations (NTR) status to Vietnam. This will further strengthen 
our leverage over Vietnam. It is important to note that even 
after a commercial agreement is completed and approved by 
Congress, the President may still revoke NTR status if he 
determines that Vietnam is not cooperating with U.S. efforts to 
achieve a full accounting of military personnel lost during the 
Vietnam War.

                               Conclusion

    The U.S. Chamber of Commerce strongly endorses a policy of 
engagement with Vietnam. We urge Congress to once again uphold 
Vietnam's Jackson-Vanik waiver. We also encourage Congress to 
take advantage of visits by Ambassador Peterson, briefings by 
officials from the Office of the U.S. Trade Representative, and 
meetings with the business community to become familiar with 
negotiations over a commercial agreement. We believe we have an 
historic opportunity here at the end of the millenium to set 
the U.S.-Vietnam relationship on the path to a constructive and 
positive future.
    Mr. Chairman, this concludes my formal presentation. I 
would be happy to respond to any questions.
      

                                

U.S. CHAMBER OF COMMERCE BOARD OF DIRECTORS' STATEMENT ON NORMALIZATION 
OF TRADE RELATIONS WITH VIETNAM

    The U.S. Chamber of Commerce believes that normalization of 
trade relations with Vietnam is in the long-term interest of 
the United States. Since 1993, Vietnam has recorded annual 
growth rates averaging 8 percent despite the limitations of a 
transitional economy. With a population of 78 million, the 
twelfth largest in the world, Vietnam has the potential to 
become a large market for U.S. goods and services if market-
opening reforms are implemented.
    The United States and Vietnam each must contribute to 
ensure that normalization of trade relations produces mutual 
benefits. The United States must continue to waive the Jackson-
Vanik amendment for Vietnam. In turn, Vietnam must embark on 
substantive reforms to foster the development of a free-market 
economy and to participate fully in the global trading 
community.

     A. Continued Waiver of the Jackson-Vanik Amendment for Vietnam

    The U.S. Chamber believes that the United States must continue to 
extend the Jackson-Vanik waiver to Vietnam for the following reasons:
    Vietnam has met the legal requirements for the waiver. The 
Jackson-Vanik amendment is meant to encourage movement toward a free 
emigration policy in countries with non-market economies. Since the 
1980s, Vietnam has allowed the emigration of tens of thousands of its 
citizens under the Orderly Departure Program. In 1998, the Vietnamese 
government cleared for interview over 80 percent of the close to 20,000 
applicants for emigration under a U.S.-endorsed program known as 
Resettlement Opportunities for Vietnamese Returnees.
     The Jackson-Vanik waiver supports U.S. companies. The 
waiver paves the way for U.S. companies operating in Vietnam to obtain 
access to trade promotion programs of the U.S. Export-Import Bank, the 
Overseas Private Investment Corporation and the Trade Development 
Agency. The programs are vital to meet the challenges of doing business 
in Vietnam's emerging market. Without them, Vietnamese companies in 
many cases could turn to suppliers in Japan and Europe.
     The Jackson-Vanik waiver enables bilateral negotiations 
seeking commitments from Vietnam on market access, services, 
intellectual property and investment. The United States and Vietnam 
currently are negotiating a commercial agreement as part of the process 
for granting Vietnam normal trade relations (NTR). Maintaining the 
Jackson-Vanik waiver conveys the message that the United States is 
committed to concluding the trade negotiations, which will include 
meaningful market access for U.S. companies.

           B. Reform of Vietnam's Trade and Investment Regime

    The U.S. Chamber believes that Vietnam must start now to 
reform substantially its trade and investment regime. U.S. 
companies seeking to do business in Vietnam must contend with a 
broad range of restrictions including tariffs, excise taxes and 
surcharges, import quotas and other quantitative restrictions 
such as licenses, and foreign exchange controls. In addition, 
the lack of transparent regulations has added administrative 
burdens to doing business in Vietnam and provided cover for 
corruption to flourish. The initial optimism that many foreign 
investors felt about the economy of Vietnam has been dispelled 
by the difficulty of doing business there. Foreign direct 
investment in Vietnam dropped to $4.5 billion last year 
compared to $8.5 billion in 1996 and $6.6 billion in 1995. It 
continues to drop in 1998.
    The U.S. Chamber notes that Vietnam should wean itself from 
currency and capital controls in favor of broader macroeconomic 
measures to deal with external shocks. In the absence of 
further reform, Vietnam's exports will decline because of low 
consumer demand in other Southeast Asian countries and Japan. A 
further decline in foreign direct investment and an 
increasingly scarce supply of foreign currencies could result 
in lower growth in real incomes and higher unemployment. 
Moreover, Vietnam risks losing even more ground to its 
Southeast Asian neighbors who are undertaking reform.
    The U.S. Chamber will only endorse a U.S.-Vietnam 
commercial agreement that satisfactorily addresses the 
following issues:
     Make regulations more easily available to the 
public. Regulations in Vietnam are often unpublished or subject 
to change without notice. The lack of transparency encourages 
corrupt practices. Vietnam should ensure that regulations are 
easily accessible and applied with consistency on the basis of 
the principle of national treatment and nondiscrimination. In 
addition, Vietnamese agencies should adopt a uniform process 
for permitting public comment and review of proposed changes in 
regulations.
     Base regulations on a ``permissive'' system. Under 
the current regulatory system in Vietnam, there is a 
presumption of illegality unless something is expressly 
permitted. Government officials thus are reluctant to make 
decisions because of concerns that they will be held 
responsible if the decision is later deemed to be 
inappropriate. Vietnam instead should adopt a regulatory system 
whereby everything is assumed to be ``permitted'' unless 
expressly prohibited. A ``permissive'' system would reduce the 
amount of regulations and still allow the Vietnamese government 
to enumerate cultural concerns regarding public safety, morals, 
etc.
     Abolish import licenses and quotas. These 
administrative measures are inconsistent with the norms and 
principles of the World Trade Organization (WTO). They add 
unnecessary costs to doing business, distort market 
allocations, and encourage smuggling.
     Reduce tariffs. Vietnam should agree to binding 
reductions in its import duties as requested in the U.S. 
government's tariff request.
     Use the transaction value of imports instead of 
government reference prices for customs purposes. Vietnam 
Customs imposes tariffs on 34 broad product categories, 
including consumer goods, based on reference prices established 
by the government rather than c.i.f. prices declared by the 
importers. The reference prices are often higher than the 
c.i.f. price because they are meant to remedy alleged under-
invoicing of imports. Vietnam should adopt the disciplines of 
the WTO Agreement on Customs Valuation.
     Reform system of land-use rights. At present, 
land-use rights in Vietnam consist of leases that are not 
transferable without government approval. In addition to 
granting approval, the government also sets the price for the 
transfer. This process keeps the price of land use artificially 
high and adds greatly to the cost of doing business. Moreover, 
banks are unable to accept land as collateral because of the 
non-transferability.
     Ease foreign exchange controls. Foreign investors 
have few ways of obtaining foreign currency to import raw 
materials and other supplies except through income earned on 
export sales. Restrictions on the repatriation of profits 
should be eased. Vietnam should also take steps to make the 
dong convertible.
     Open service sectors to foreign participation. 
Vietnam should permit greater foreign participation in its 
service sectors, including retail and wholesale distribution, 
leasing, banking and insurance, telecommunications, 
professional services and many others.
     Provide full protection and enforcement of 
intellectual property rights. The completion of a copyright 
agreement between the United States and Vietnam is a welcome 
development. The U.S. Trade Representative should closely 
monitor Vietnam's implementation and enforcement.
     Eliminate performance requirements. Vietnam should 
not impose performance requirements (e.g., local content, 
technology transfer, export requirements) on foreign-invested 
enterprises. It should adopt fully the disciplines contained in 
the WTO Agreement on Trade-Related Investment Measures.
     Privatize state-owned enterprises. The Vietnamese 
government has embarked on a program of ``equitizing'' 
(partially privatizing) state-owned enterprises. To date, 
however, only 150 to 200 state-owned enterprises have been 
registered for ``equitization'' out of a total 6,000. This 
process should be accelerated to improve the strength of state-
owned enterprises (and hence lower the need for protectionist 
measures) and provide some relief to Vietnam's banking system.
     Phase out state-directed lending. State-directed 
lending distorts the efficient allocation of capital. In 
addition, the practice provides little incentive for state-
owned enterprises, the main recipients of the loans, to 
rationalize their operations in order to attract capital. 
Vietnam should also end the practice of permitting state-owned 
enterprises to borrow from banks on the basis of state 
guarantees and without collateral.
     Develop and use international ``best practices'' 
in infrastructure development. The Vietnamese government should 
use standard joint-venture regulations and common contractual 
terms so that foreign investors can understand the rules and 
more easily arrange financing for infrastructure projects.
    The U.S. Chamber believes that Vietnam's commitment to 
undertake these reforms is a prerequisite to taking the next 
steps to normalize trade relations. These steps include (1) 
extension of NTR to Vietnam and (2) Vietnam's accession to the 
WTO. The U.S. Chamber supports both objectives.
      

                                

    Chairman Crane. Thank you.
    Ms. O'Shea.

  STATEMENT OF LYNN O'SHEA, NEW YORK STATE DIRECTOR, NATIONAL 
   ALLIANCE OF FAMILIES FOR THE RETURN OF AMERICA'S MISSING 
                SERVICEMEN, BELLEVUE, WASHINGTON

    Ms. O'Shea. Mr. Chairman, Mr. Rangel, I thank you for the 
opportunity to be here today to express the total opposition of 
the National Alliance of Families to the waiver of the Jackson-
Vanik amendment as it applies to trade with Vietnam. At the 
close of the war, there were 2,583 American servicemen 
unaccounted for. The families of our POW/MIAs have 
traditionally accepted the fact that a significant number of 
those cases may never be resolved. But as a practical matter, 
Members of Congress should know that more than 800 of our POW/
MIAs were simply presumed to be dead based solely on the 
passage of time, with no real evidence of death. In fact, in 
many of those cases, there was evidence of capture and 
captivity. These are men that the Vietnamese could readily 
account for and these men became the discrepancy case list that 
Senator Kerry referred to earlier.
    As Senator Kerry spoke, he mentioned that there were only 
47 of those cases left, indicating that that showed great 
progress by the Vietnamese in helping us account for these men. 
What Senator Kerry did not say was that those men for the most 
part were accounted for administratively. They have not been 
accounted for by the recovery of their remains or a proper 
identification of remains. They have been accounted for on 
paper only.
    This Subcommittee has heard testimony from witnesses to the 
effect that Communist Vietnam is doing everything it reasonably 
can to account for our POW/MIAs. These witnesses also say that 
Vietnam is cooperating in full faith and the family members 
should trust the Government of Vietnam to be honest and fair in 
achieving a fullest possible accounting. They might also say 
that our former allies, the South Vietnamese, should trust the 
Vietnam Communist Party to promote progress in human rights. 
This is not happening.
    Recently, the U.N. issued a report citing increased 
religious oppression in Vietnam. We cannot reward a nation that 
is moving backward. That is what Vietnam is doing. They are not 
cooperating on the POW/MIA issue, and their human rights record 
is abominable.
    Now there are witnesses that state we should give them 
more, more trade, more money, more loan guarantees, the 
business to go over there. Why? Who gives the reward before the 
reward is deserved? That is what we would be doing if we 
extended the waiver of Jackson-Vanik.
    The businesses here today are asking for loan credits and 
guarantees so that taxpayers' money will back up their 
investments in Vietnam. While we realize that that backup is 
not 100 percent, that is still taxpayers' money that is being 
gambled with. These corporations are not willing to go to 
Vietnam and gamble their own capital. They want a backup. They 
do not trust the Vietnamese, yet they expect the families of 
our POW/MIAs to trust the Vietnamese to provide a full and 
proper accounting, when past history has shown that is not what 
the Vietnamese do.
    We believe that there are only two key issues remaining 
between the U.S. Government and Communist Vietnam that must be 
resolved before Congress can favorably consider any further 
concessions in advance to Hanoi. These two issues are the fair 
and honest accounting of our missing men and democracy for the 
Vietnamese people.
    I would also like to bring up one point when I think it was 
Ambassador Peterson was discussing remains, repatriation, and 
how many remains identification have been made over the last 
several years. I think it is important for this Congressman to 
know that the phrase ``remains identification'' and accounting 
has been applied very, very loosely. There are headstones in 
Arlington National Cemetery with names on them that have no 
remains underneath. These are administrative identifications. 
They are burying names, not remains. They are pointing to this 
reduction of the list of missing as progress that is being made 
with the Vietnamese in a full accounting. It's not happening.
    In closing, all I can say is on behalf of our membership, 
the mothers, fathers, sons, daughters, wives and children of 
our missing men, we should not further reward Vietnam with any 
concessions until Vietnam takes the proper steps in the 
accounting of our missing and shows vast progress in human 
rights.
    Thank you.
    [The prepared statement follows:]

Statement of Lynn O'Shea, New York State Director, National Alliance of 
Families for the Return of America's Missing Servicemen, Bellevue, 
Washington

    Mr. Chairman, distinguished members of the Committee, thank 
you for the opportunity to testify today. Renewal of the 
Jackson Vanik Waiver, as it applies to trade with Vietnam is a 
matter of great importance not only to POW/MIA family members 
and veterans, but to the American people as well. I am hopeful 
that this hearing will lead to a better understanding of the 
concerns of POW/MIA family members at this critical juncture of 
our nation's postwar relationship with Communist Vietnam.
    At the close of the war 2583 American servicemen remained 
unaccounted for. As family members of the POW/MIA's we have 
traditionally accepted the fact that a significant number of 
POW/MIA cases may never be resolved. But as a practical matter, 
members of Congress should carefully consider the fact that 
more than 800 of our loved ones were simply ``presumed'' to be 
dead, based solely on the passage of time, with no real 
evidence of death.
    Mr. Chairman, in considering the men who were ``presumed'' 
dead we should not lose sight of the fact that young servicemen 
captured during the 1970's would only be in their 40's today, 
and in the absence of evidence to the contrary, the National 
Alliance of Families can only assume that at least some of 
these men are still alive. As a matter of policy, the US 
Government does not rule out the possibility that American POWs 
could still be held.
    Intelligence reports indicate that at the time of their 
loss, some 305 Americans were either known to be alive and in 
the custody of communist forces, or lost in close proximity to 
communist units. In the early stage of our postwar relations 
with Communist Vietnam this 305 member grouping became known as 
the ``Discrepancy Case List,'' which was designed as a 
yardstick to measure the level of cooperation afforded us by 
Communist Vietnam in resolving the overall issue. Thus far, the 
remains of only about 50 of the men on this crucial list have 
been returned and identified. Over 250 American servicemen who 
were on the initial list have never been returned, nor have 
their identifiable remains been recovered and identified. This 
is totally unacceptable.
    Additionally, only a small number of the remains of 47 of 
our loved ones who died while being held in prison camps in 
South Vietnam during the war have been returned. Moreover, 
although over 80% of US losses in Laos and 90% of those in 
Cambodia occurred in areas occupied by Vietnamese forces during 
the war, Vietnam continues to ignore repeated US requests for 
case-specific records on our missing men lost in these 
countries. Although Vietnam has provided thousands of 
documents, records, photographs and other material to our 
government, most of this material pertains to Americans who 
have been accounted for, and only a very small percentage of 
such material pertains to those who are still missing.
    Today this distinguished Committee might hear testimony 
from witnesses to the effect that Communist Vietnam is doing 
everything it reasonably can to account for our loved ones. 
These same witnesses might say that Vietnam is cooperating ``in 
full faith,'' and POW/MIA family members should trust the 
government of Vietnam to be honest and fair in achieving a 
fullest possible accounting. They might say that our former 
allies, the South Vietnamese, should trust the Vietnam 
Communist Party to promote progress in human rights. Communist 
Vietnam currently enjoys a surplus of more than 50% in trading 
with America while our nation is subjected to a more than 50% 
deficit. And even though Hanoi's trade negotiators have 
declined to conclude a fair and equitable bilateral commercial 
agreement with the United States, your Committee might hear 
testimony favorable to Vietnam calling for even broader 
commercial and economic ties.
    We find it confusing that those lobbying for increased 
trade with Vietnam are calling upon the U.S. Government to 
provide credits and investment guarantees, and other conditions 
before their private capital investments are ventured. 
Concerning the aspect of ``credits,'' what the lobbyists seem 
to be saying is that they want members of Congress to help 
their constituent corporations with so called ``credits'' from 
the taxpayer funded U.S. Export Import Bank. But as you are 
probably aware the Communist Party of Vietnam currently equips 
and maintains one of the largest military and police forces in 
the entire world. As a result Vietnam currently has very 
limited capacity to purchase American products, unless it also 
receives loans from some taxpayer funded entity. But being a 
police state, Vietnam is unlikely to reduce the size of its 
forces, and is, therefore almost certain to default on any such 
loans.
    Concerning the ``guarantees'' sought by lobbyists, 
apparently they are referring to insurance protection from the 
U.S. taxpayer funded Overseas Private Investment Corporation 
(OPIC), which as you know is similar to the Federal Deposit 
Insurance Corporation (FDIC). The obvious question that comes 
to the minds of POW/MIA family members is: if American 
businessmen do not trust the Communist Government in Vietnam 
with their investments, how can they expect those whose loved 
ones are still missing to trust that same government in 
providing an honest accounting for their sons, husbands, 
fathers and brothers. This is perhaps the most obscene aspect 
of the on going debate concerning U.S. Vietnam relations.
    In essence, we believe that there are only two key issues 
remaining between the United States and Communist Vietnam that 
must be resolved before Congress favorably considers any 
further concessions in advance to Hanoi, especially OPIC and 
Export Import Bank financing. These two issues are a fair and 
honest accounting for our missing men, and democracy for the 
Vietnamese people. We have no objections to American firms 
conducting trade with any nation, but trade and Commerce are 
private matters and those engaging in such trade with Communist 
Vietnam should do so at their own risk.
    In looking at the degree of rigidity of the Communist Party 
of Vietnam, especially its insistence that only a one party 
system will be tolerated, we find it equally unfair to expect 
the Vietnamese people to trust the Communist Party of Vietnam 
to move forward with progress toward democracy. Over the past 
few years we have heard considerable rhetoric concerning human 
rights, but we believe that without democracy as a foundation, 
it is impossible to insure basic human rights in any nation. 
Concerning emigration by Vietnamese citizens from that country, 
the process has severely hampered by bribery and corruption. 
Applicants are routinely forced to pay bribes in exchange for 
required documents, clearances and exit permits. Traditionally 
the emigration process has been tightly controlled by the 
Ministry of the Interior, formerly the Ministry of Public 
Security. This premier intelligence and security organization 
of the Vietnam Communist Party is almost entirely funded by 
monies extorted from citizens seeking to leave Vietnam, and the 
acquisition of passports and exit permits is an extremely 
cumbersome process.
    We can all remember a time, not too long ago, when America 
supported and encouraged democracy around the world. Next to 
God, duty, honor and country, were the most important things in 
our lives, and your Committee would have had to search far and 
wide in order to find even one witness to come here and lobby 
on behalf of a Politburo led dictatorship such as Vietnam. But 
money is a powerful force, and the current attitude of profit 
before principle is prevalent throughout the highest levels of 
our government and national corporate community.
    We believe that this situation is indicative of the decayed 
and degraded state of moral and patriotic feeling that has 
gradually spread across the nation. Our government is racked by 
scandals, illegal political contributions are rampant, and 
senior officials have been convicted of selling our nation's 
most important secrets to foreign countries, not because of 
their ideology, but based entirely on monetary greed. We need 
only look at the recent unprecedented actions of our children 
in schools across America to fully comprehend the impact of the 
profit before principle attitude on our society as a whole.
    In the past few years POW/MIA families have watched closely 
as various Committees of Congress conducted inquiries 
concerning illegal campaign contributions, as well as the 
impact of such contributions on American foreign policy. We 
feel frustrated, however, that most of these investigative 
efforts have been focused on China, with very little apparent 
interest in Vietnam. This is despite the fact that former 
Deputy Assistant Secretary of Commerce, Mr. John Huang, and 
others associated with the Indonesian based Lippo Group, have 
clearly been implicated in influencing U.S. policy toward 
Vietnam, but only recently have they been indicted. The Lippo 
Group, with close ties to businesses in Arkansas, is one of the 
largest investors in Vietnam and this organization realized 
considerable advantage from increased commercial and economic 
ties between the U.S. and Vietnam. POW/MIA family members are 
concerned that Congress has not undertaken its responsibility 
for oversight in scrutinizing motivation for quickly lifting 
the trade embargo against Vietnam in 1994, as well as the 
granting of diplomatic recognition to Vietnam in 1995.
    On our Independence Day in July, 1995 POW/MIA family 
members were appalled when Senators Bumpers of Arkansas and 
Harkin of Iowa traveled to Hanoi to gauge the potential for 
establishing diplomatic relations with Communist Vietnam. 
Shortly after their return to the U.S. both gave the proverbial 
``green light'' to President Clinton. Senator Harkin also 
called for guarantees for investors in Vietnam by the OPIC. 
POW/MIA family members were disheartened to learn that Senator 
Harkin's wife is the head of the OPIC. Shortly after the trade 
embargo was lifted Vietnam granted its first and only real 
estate license to Collier-Forbes International, and POW/MIA 
family members would like to when and how negotiations for this 
agreement occurred, and just exactly who was involved. We are 
also keenly interested in congressional scrutiny of the 
activities of the U.S. Vietnam Trade Council during the period 
1991 to 1996.
    Family members of the missing throughout the years have 
become fully aware of Communist Vietnam's expertise in 
political struggle, especially concerning the art of deception. 
In exploiting character defects, such as greed, Hanoi's 
strategists are fully capable of working with large 
contributors to gain the cooperation of some key officials here 
in the United States to develop influence groups. In such 
instances groups traveling to Vietnam receive special 
treatment, such as travel assistance, transportation, briefings 
and meetings by both U.S. and Vietnamese officials are not 
unusual.
    POW/MIA family members fully support the general concept of 
healing tours, but we must remind those involved that we will 
not tolerate anyone taking advantage of this tragic situation 
in order to heal themselves or further their own agenda. When 
sensitive investigations are conducted into the fates of those 
on the Discrepancy Case List, or those who have been 
``presumed'' dead, we not only expect, but demand that rather 
than amateurs, such investigations be supervised and conducted 
solely by experienced, qualified, professional investigators 
with formal agency level training.
    In addition to a long term experience factor, we expect 
that personnel conducting such investigations, including the 
Joint Task Force-Full Accounting (JTF-FA) will not only be 
certified through formal training, but proficient in the art of 
interrogating witnesses and fluent in the language pertinent to 
the area of loss. A thorough knowledge of Vietnamese Communist 
policies and procedures regarding the capture, evacuation, 
detention and exploitation of foreign personnel should also be 
considered a basic requirement for qualification.
    We also expect those involved in the remains identification 
process be fully qualified in the science of forensic 
anthropology. The Central Identification Laboratory Hawaii 
(CIl-HI) make their identifications based on remains recovered. 
They must stop their no remains ``death by association'' 
identifications. U.S. officials must stop referring to these no 
remains identification as remains recovered. Burying names 
without remains is creative accounting to further foster the 
myth of Vietnamese cooperation.
    One important unilateral step by our own government POW/MIA 
family members would like to see taken, prior to any further 
concessions in advance to Vietnam, is the declassification of 
all POW/MIA related information not directly associated with an 
ongoing live sighting investigation.
    We believe it imperative that family member organizations 
have access to all such information. We are dismayed that prior 
to September 1997, information regarding the Source of U.S. 
remains, as well as information as to whether remains had been 
stored in warehouses by Vietnam prior to repatriation was 
provided to us. However, subsequent to the resignation of BG 
James Wold, the head of the Defense Prisoner of War and Missing 
Personnel Office (DPMO) in August 1997, this information has 
purposely been withheld.
    In all honesty I must tell you that a great deal of 
skepticism exists among members of our organization. The 
general consensus is that regardless of what transpires during 
this hearing, additional concessions by our government to 
Communist Vietnam in advance of a full accounting will be a 
proverbial ``done deal.''
    Mr. Chairman, there are many great people in our 
organization. We should all remember that we cannot judge the 
greatness of people by measuring what it takes to get them 
going, we can only judge the greatness of people by measuring 
what it takes to make them stop.
    I can assure you that even if Congress is not willing to 
support us by disapproving the President's waiver of the 
Jackson-Vanik amendment, we, at the National Alliance of 
Families for the Return of America's Missing Servicemen will 
not stop until we have achieved our goal, the return of our 
live prisoners of war, a truthful accounting of the missing and 
the proper identification of remains. Thank you for the 
opportunity to testify.
      

                                

    Chairman Crane. Thank you.
    Mr. Craft.

STATEMENT OF GREIG CRAFT, PRESIDENT, CRAFT CORPORATION; MEMBER, 
  BOARD OF GOVERNORS, AMERICAN CHAMBER OF COMMERCE IN HANOI, 
 VIETNAM; AND VICE CHAIRMAN, ASIA-PACIFIC COUNCIL OF AMERICAN 
                            CHAMBERS

    Mr. Craft. Mr. Chairman, Mr. Rangel, thank you for the 
opportunity to testify today before you. Like my colleagues, in 
an effort to be brief, my testimony which is submitted, will 
elaborate on a lot of the points that I will not cover right 
now, but I would like to highlight a few things.
    In my capacity as vice chairman of APCAC, which is the 
acronym for the Asia-Pacific Council of American Chambers, we 
represent 40,000 businessmen and women in the region. We 
represent 6,600 companies, including Vietnam, and our 
membership manages trade volumes in excess of $200 billion. I 
note this only because we are out there in the region, and I 
think we recognize what is going on in the region, and being at 
the forefront of a lot of these issues, I think we have the 
experience to share with you some of our experiences.
    I think it is also important to note that business is 
sometimes unfairly accused of only being in the region to make 
money, to make profits, and that we overlook the issues of 
MIAs, the POWs, human rights. I think nothing could be further 
from the truth. On the contrary, we do believe that the 
engagement that we are involved in does help promote democracy 
and does help promote a lot of the ideals that America is 
trying to put forth in many of these areas.
    As an example of what business does, I think we cannot 
overlook the technology transfers, the training programs that 
go on, and education that happens by bringing young Vietnamese 
as an example to the United States and the training that goes 
on in those countries. We do believe that we serve America's 
national interest by fueling the growth of American jobs in 
exports which have contributed so significantly to our American 
economic success in the past few years. It is our position that 
Vietnam, with its young and well-educated population of nearly 
80 million people, offers significant opportunities to help 
sustain this economic growth, provided American companies can 
remain competitive.
    I think it is unfair to categorize programs such as OPIC 
and TDA or Ex-Im as corporate welfare or only looking to the 
American taxpayer to guarantee risk that maybe we are not 
otherwise prepared to make. In the case of many companies, we 
have SMEs, we have large corporations, Fortune 500 companies in 
Vietnam, are taking enormous risk in making investment there. 
They have made that investment well before we had access to 
OPIC, Ex-Im and TDA.
    However, as a personal example, I can tell you, our company 
since 1995 has led the development of Vietnam's first direct 
reduced iron plant. This is a $300 million project, which will 
be the first American involvement in Vietnam's emerging steel 
market. It is product that can also be used here in the United 
States. More importantly, this American-led consortium which 
will include companies such as Raytheon and Midrex, will use 
U.S. technology, services and equipment.
    We awarded the first TDA grant to Vietnam in 1997, and we 
have submitted an application to OPIC for financing. It does 
not mean that we are only looking for an elimination of the 
risk in order to pursue this project, but on the contrary, what 
happens, without access to some of these government programs? 
What happens is the Vietnamese have no recourse but to turn to 
foreign suppliers, foreign suppliers of raw materials, foreign 
suppliers of financing, and indeed, ultimately foreign 
ownership.
    Denial of the programs available with the Jackson-Vanik 
extension will only force Vietnam to go to other countries for 
their investment. It also misses the point that it punishes 
Vietnam, but it does not change anything. They will have access 
to many, many other countries, programs, financing programs, 
and offer opportunities for their companies to step in and fill 
voids that we are simply cut out of. So in effect, denial of 
these programs becomes a form of unilateral sanctions, which in 
the end, hurts everyone, both Vietnamese and Americans. We do 
not believe this should be our policy.
    Last year, I testified before this Subcommittee and stated 
denying Jackson-Vanik waiver was the wrong action at the wrong 
time. Today, I say to you that renewing the Jackson-Vanik 
waiver is the right action at the right time.
    Thank you very much.
    [The prepared statement follows.]

Statement of Greig Craft, President, Craft Corp.; and Member, Board of 
Governors, American Chamber of Commerce in Hanoi; On Behalf of Asia-
Pacific Council of American Chambers, Hanoi, Vietnam

    Mr. Chairman and committee members--good morning. My name 
is Greig Craft. In my capacity as Vice Chairman of APCAC (Asia-
Pacific Council of American Chamber) I am honored to be here 
today to share our position on extension of Jackson-Vanik, as 
well as to provide you first hand observations as a result of 
several years of residency in Hanoi. First, let me state 
unequivocally that all American business people in Vietnam 
share the fullest possible accounting of American servicemen 
missing from the war. Second, all American business people have 
an interest in promoting freedom of emigration, which the 
Government of Vietnam has made significant progress. Lastly, in 
addition to pursuing commercial opportunities, we all have an 
ongoing interest to promote human rights and democratic freedom 
throughout the world. The process of economic development bodes 
well for eventual political liberalization in Vietnam as well.
    Despite our turbulent past, the United States and Vietnam 
have made significant progress toward normalization of 
relations. Ordinary citizens show much goodwill toward 
Americans living in Vietnam and there are many humanitarian 
programs being carried out by people of both countries. Tens of 
thousands of Vietnamese-Americans have returned to Vietnam to 
visit and work. They are eager and enthusiastic to contribute 
to Vietnam's modernization. Taking advantage of opportunities 
in Vietnam will help sustain, and indeed, increase, job 
opportunities for American workers involved in the manufacture 
and export of American products to Asia. And equally important, 
it will help once and for all to ease the pain and divisiveness 
that have troubled our national psyche for 25 years. It is time 
to continue building a new relationship with Vietnam, and time 
to move on to a new era of peace and forgiveness. Constructive 
engagement by the US Government towards Vietnam is a policy 
which should continue in our national interest.
    The members of APCAC represent more than 40,000 businessmen 
and women, and more than 6,600 companies in 18 Asia-Pacific 
countries, including Vietnam. Our membership manages trade 
volumes in excess of $200 billion and investments of over $50 
billion in the region. We serve American's national interests 
by fuelling the growth of American jobs and exports which have 
contributed so significantly to America's economic success in 
recent years. It is our position that Vietnam, with its young 
and well educated population of nearly 80 million, offers 
significant opportunities to help sustain this economic growth, 
provided American companies can remain competitive there 
through access to essential US government programs such as 
EXIM, OPIC and TDA. American companies operating in Vietnam 
have invested over $1.2 billion to date, with an additional $2 
billion in advanced stages of development. This is impressive, 
coming after only 4 years since the President announced 
``normalization of relations'' with Vietnam. But this could 
increase substantially if full normalization was in place.
    There has been significant and notable progress in recent 
years. Vietnam has the second largest population in SE Asia and 
the opportunities for US manufacturers are immense. Well know 
American brands are already market leaders in many instances. 
Access to television programming such as MTV, CNN and NBC only 
adds to this consumer brand awareness. Vietnam's strategic 
location on China's southern border cannot be overlooked--this 
makes it of pivotal political importance to the United States 
as well. Vietnam's desire to join the world community is 
evidenced by it's entry into ASEAN and APEC, and preparations 
to join the WTO. However, as a part of its globalization 
initiative Vietnam want and needs to fully normalize relations 
with the United States. It is in the national interest of the 
United States to maintain a fully normalized economic and 
political relationship with Vietnam. If further developed, it 
will not only help sustain economic growth in America, but 
equally important, will provide stability in the region. We in 
the business community can help further this process, and 
ultimate healing, but only if we have the ability to remain 
engaged in Vietnam on a day to day basis. This means we must be 
able to compete equally with foreign companies who enjoy 
sovereign financing and support from their respective 
governments. Continuation of the Jackson-Vanik waiver is 
therefore essential to maintain ongoing American involvement in 
Vietnam, for the benefit of American enterprises.
    On a personal note, since 1995 our company Craft 
Corporation, have led the development of Vietnam's first Direct 
Reduced Iron plant--a $300 million project which will be the 
first American involvement in Vietnam's emerging steel 
industry. It will create a valuable feedstock required even by 
our own steel producers in the US. Our American led consortium, 
including involvement of US companies such as Raytheon and 
Midrex, will utilize US technology, US services, and US 
equipment in the implementation of this strategically important 
project. We were awarded the first TDA grant to Vietnam in 1997 
and have submitted an application to OPIC for financing and 
insurance. However, without access to these government programs 
there would be no alternative but to turn to foreign financial 
sources, foreign equipment and ultimately foreign ownership.
    Denial of the programs available with the Jackson-Vanik 
extension will only force Vietnam to go to other countries for 
their investment, raw materials and trade. Denial of these 
programs becomes a form of unilateral sanctions which in the 
end hurts everyone, both Vietnamese and American. This should 
not be our policy. Last year I testified before this committee 
and stated ``denying the Jackson-Vanik waiver extension is the 
wrong action at the wrong time.'' Today I say to you: Extending 
Jackson-Vanik waiver is the right action at the right time.
    Thank you for considering our views.
      

                                

    Chairman Crane. Thank you. For all of our panelists, what 
potential opportunities are there for U.S. firms in the 
Vietnamese market? Does anyone have a view on that? Yes, Mr. 
Johnstone?
    Mr. Johnstone. Mr. Chairman, it has an enormous population 
base, some 78 million people, the second largest country in 
Southeast Asia. I think as it grows economically, one can 
expect there to be a substantial increase in the potential 
market for American exporters there. So there is no question, 
and I think you can see it from the standpoint of the interest 
that American business has in being there, their willingness to 
take risks in being there because it is a difficult place to do 
business. Still, we see a substantial potential for Vietnam as 
an export market for American goods and to create American 
jobs.
    Chairman Crane. Any other? Yes, Mr. Do.
    Mr. Do. Mr. Chairman, I have a very different viewpoint. We 
have to keep in mind that the average per capita income for a 
Vietnamese is hovering between $250 to $300 maximum. We all 
know that the wealth in Vietnam resides within the party 
membership. The 100 richest people in Vietnam are all party 
members and officials. With that kind of scenario, it is 
doubtful that the Vietnamese population, the general population 
that I'm speaking about can have the resources or money to 
afford to buy any kind of goods or export that we might be able 
to export over there.
    I think the best way to benefit American business interest 
in the long run is to help Vietnam to build a stable, 
democratic society, ruled by the rule of law, so that everyone 
has equal opportunity for prosperity. Only then can we have a 
truly potentially beneficial export market.
    Chairman Crane. Yes, Mr. Trinh?
    Mr. Trinh. I would just like to add one fact into the 
discussion. Annually there are about 200,000 Vietnamese 
overseas going back to Vietnam to visit their country and their 
relatives. Regardless of the political belief of different 
people, the fact that the Vietnamese-Americans are going back 
to Vietnam is a good way to introduce the people in Vietnam to 
democracy, the new way of thinking, and that is something 
that's intangible, but it is coming. People in the country, 
they appreciate that. We know that we have about a million 
Vietnamese-Americans here in the United States. That population 
is very important. Thank you.
    Chairman Crane. Yes, Mr. Craft.
    Mr. Craft. I would like to add, Mr. Chairman, the question 
that you asked on opportunities there. It is interesting, there 
also sometimes is a misperception in the United States about 
what is going on in Vietnam currently. It is interesting to 
note we have, as Ambassador Peterson mentioned, over 400 
companies there. These include Fortune 500 companies such as 
Coca Cola, Pepsi, and Ford Motor Co. which has an automobile 
assembly plant. Also the statistics of saying, as Mr. 
Rohrabacher mentioned, that there has been a study done that 
there is an exodus of companies leaving Vietnam, U.S. 
companies, I think that is a little bit inaccurate. We have 
over $1.2 billion invested there, only in 4 years since the 
embargo has been lifted. That is an incredible number.
    I think the press sometimes inaccurately portrays this. 
What is happening is that because of the Asia recession, you 
have got a lot of companies that are consolidating operations. 
So they may be consolidating a lot of operations to Singapore, 
or Bangkok, or Hong Kong, so it doesn't necessarily represent a 
wholesale exodus from Vietnam.
    Chairman Crane.
    Mr. Rangel.
    Mr. Rangel. Thank you.
    Mr. Do, can you tell me briefly, something about the 
organizations you represent, the membership?
    Mr. Do. Yes. Right. The coalition, like I said, represents 
about 30 organizations in communities across the U.S. Just to 
name a few, the Vietnamese-American Community in southern 
California----
    Mr. Rangel. How many people are members of these 
organizations, the membership?
    Mr. Do. The total Vietnamese-American population in 
southern California is roughly 350,000 people.
    Mr. Rangel. And do you have the cities that they are 
located in?
    Mr. Do. I'm sorry?
    Mr. Rangel. Do you have the cities where they are located?
    Mr. Do. Westminster is the base, in Orange County.
    Mr. Rangel. Are all of the organizations in California?
    Mr. Do. No. They are stretching from Minnesota to Portland, 
Oregon, to San Jose, Houston, the local community here, just to 
name a few.
    Mr. Rangel. Could you send me some information so that we 
would know more about them?
    Mr. Do. I certainly can submit a list of all of the 
members.
    Mr. Rangel. Good. So that we will know the Congresspeople 
who represent them.
    Mr. Do. Certainly.
    [The following was subsequently received:]

                          MEMBER ORGANIZATIONS

Vietnamese Interfaith Council in the USA
Vietnamese Community of Oregon
Vietnamese Community of Seattle, Washington
Vietnamese Community of Southern California
Vietnamese Community of Clark County, WA
Vietnamese American Community of Illinois
Vietnamese Community of Boston, MA
Vietnamese Community of Georgia
Vietnamese-American League of San Diego
Vietnamese Community of New York
Vietnamese Community of Houston & Vicinity
Vietnamese Community of Oklahoma
Vietnamese Community of Louisiana
Vietnamese Association of Charlotte, NC
Alliance of Vietnamese Associations in Northern California
Vietnamese Community of Minnesota
Vietnamese Community of NW New Jersey
Vietnamese Community of NW Pennsylvania
Vietnamese Community of Syracuse, New York
Vietnamese Community of Endicott, New York
Vietnamese Community of Utica, New York
Vietnamese Community of Dallas, Texas
Vietnamese Community of Fort Worth, Texas
Vietnamese Community of San Joaquin Valley
Vietnamese Community of Jacksonville, Florida
Vietnamese Community of Orlando, Florida
Vietnamese Community of South Florida
Vietnamese Community of Florida
Vietnamese Community of Los Angeles
Vietnamese Community of Washington, D.C., Virginia, and Maryland

    Mr. Rangel. Ms. O'Shea, I gather from your testimony that 
you heard the testimony of Ambassador Peterson, who is a 
patriot and a hero, and enjoyed a great reputation for truth 
and honesty as a Member of the Congress. He had indicated that 
great progress was being made with MIAs, with religious 
freedoms, and all of those areas. Does your organization have 
any reason to challenge his testimony?
    Ms. O'Shea. Well, we disagree, yes. Within the last month, 
month-and-a-half, the United Nations Committee on Religious 
Tolerance issued a report. They were highly critical of Vietnam 
and their oppression of religious freedoms. They said that, and 
I'm sorry I don't have the report with me to give you the exact 
wording, but it said that they were taking a step backward and 
that they were cracking down on new religious freedoms.
    Mr. Rangel. But your major thrust of the National Alliance 
is with the missing servicemen.
    Ms. O'Shea. That is correct.
    Mr. Rangel. And he went into great detail as to progress he 
thought was being made in this area.
    Ms. O'Shea. Well, it's the definition of progress. If you 
consider it progress that they are burying people without 
remains and considering those people accounted for fully, I 
guess you could consider that progress. The members of our 
organization do not. We believe to account for someone, you 
must have identifiable remains, and that is what is returned to 
the family for burial.
    Mr. Rangel. Is your organization in direct communication 
with our Ambassador?
    Ms. O'Shea. Not that I know of, no. Actually though, I do 
believe that during the recess, some of our members did speak 
with Ambassador Peterson on several points.
    Mr. Rangel. What would you think could possibly be a better 
source as to what is going on in North Vietnam than the United 
States Embassy? Where would you get your information?
    Ms. O'Shea. Well in the past, prior to having an embassy 
there, the information was funneled----
    Mr. Rangel. Now that we have an outstanding representative 
there of the greatest reputation, who was a prisoner for 6 
years.
    Ms. O'Shea. We are not challenging Ambassador Peterson's 
reputation. The POW issue, the negotiations on POW/MIAs has 
historically been handled through the joint task force full 
accounting in Hanoi, and not as a matter at the embassy level.
    Mr. Rangel. But don't you think at least as it relates to 
your organization, that it would be helpful to at least test 
the information that you have with our representatives in North 
Vietnam?
    Ms. O'Shea. I am not sure I understand what you mean by 
testing information.
    Mr. Rangel. Don't you think the Ambassador could help your 
organization have a better understanding of the problems that 
we are having in Vietnam?
    Ms. O'Shea. I am sure he has a great insight on those 
problems. But I am only questioning the statement he made about 
remains identification and accounting for men when we know for 
a fact that they are burying names and not remains. People are 
getting headstones with no remains under them.
    Mr. Rangel. I am just saying I think it would make a lot of 
sense for some communication to be had by your alliance with 
the Ambassador. That is all I am suggesting.
    With the Chamber of Commerce, I know that the Chamber has 
participated in efforts to remove the embargo from Cuba. It 
would help me, Mr. Johnstone, if you could just put together 
all of those efforts and forward it to me, because most 
recently I think it included some humane and religious 
organizations that were embarked under the leadership of the 
Chamber.
    Mr. Craft, while your chamber concerns itself with Asia and 
the Pacific, there's hardly anything that you have said that 
your business interests, I mean the humane interests and 
bringing democracy, you have no reason to believe that that 
would not pertain to Cuba if we removed the embargo and 
engaged? Is there any reason you believe that we cannot be 
equally as successful in Cuba?
    Mr. Craft. Absolutely not. I think it certainly could be. I 
think Vietnam in a way has been an idea model for you to 
follow. I think furthermore, it's very interesting that--by the 
way, one of our APCAC priority positions that we have been 
bringing to the Hill this week is that we do not support 
unilateral sanctions. We feel that they are counter-productive, 
and of course an embargo such as this is a form of unilateral 
sanctions.
    Mr. Rangel. Is your group a part of the U.S. Chamber of 
Commerce?
    Mr. Craft. Yes. We are.
    Mr. Rangel. OK, good. Because they have been doing good 
work.
    Thank you, Mr. Chairman.
    Mr. Do. Mr. Chairman, can I just have 1 minute to address a 
question you asked the previous panel?
    Chairman Crane. Yes, indeed.
    Mr. Do. Thank you. On the potential impact of withholding 
the Jackson-Vanik waiver, I just want to add two more points. 
History has taught us that the Vietnamese Communists are very 
smart, very shrewd negotiators. For the last few years, at 
least since the lifting of the trade embargo, they have been 
getting a free ride from the United States. By withholding the 
waiver right now, I think we will send a very strong message 
that we as a nation are very serious about negotiating with 
them on our own terms, not their terms.
    Second, I think by putting a little bit of pressure on them 
right now, it will help to strengthen the hands of the 
reformers within the Vietnamese Government who are pushing 
forward with more reforms. So pressure will help the reforming 
effort in Vietnam, not hinder it. Those are the two points I 
wanted to add. Thank you.
    Chairman Crane. Well, I thank you. I thank all of you 
panelists for your participation. As I told the previous panel, 
even though you may not be sitting here at the dias all the 
time, will you please stay in touch and keep communications 
flowing to us, because we need all the input we can get.
    With that, with the bells going off again, the Subcommittee 
will stand adjourned.
    [Whereupon, at 1:43 p.m., the hearing was adjourned.]
    [Submissions for the record follow:]

Statement of Peter Ryder, American Chamber of Commerce in Vietnam, 
Hanoi Chapter, Hanoi, Vietnam

    Mr. Chairman, thank you for the opportunity to speak today 
in support of the re-waiver of the Jackson Vanik Amendment as 
it affects Vietnam.
    My name is Peter Ryder and I am the President of LukeMax 
Company, a privately held U.S. firm that has established and 
invested in a number of businesses and projects in Vietnam. I 
have been actively involved in the Vietnamese market since 
1992, and during this period I have witnessed first-hand the 
extraordinary socio-economic changes that have taken place as 
Vietnam has begun the process of transformation from an 
internally-oriented demand-driven economy to a globally-
connected market-oriented economy. From my first days in 
Vietnam, through to today, I have believed that Vietnam as a 
market holds great potential for American investors, American 
exporters, and American service providers, and I have been at 
the forefront of American efforts to see that this potential is 
realized. In our own small-scaled but not insignificant way, my 
company has begun to realize some of this potential as an 
investor and business developer in the fields of real estate, 
information technology, engineering, consumer products, 
finance, and education.
    Today I come to you with the opinions of not just one 
businessperson in Vietnam, but as a Governor and representative 
of the American Chamber of Commerce in Vietnam. This 
organization was founded in 1994 to develop trade, commerce and 
investment between the United States and Vietnam. The 
association now has over 550 members working towards this 
mission. The members hail from across the U.S. and represent 
Fortune 50 companies to small entrepreneurs representing 
construction, energy, telecommunications, agriculture, tourism, 
manufacturing and reforestation among others. The one belief we 
all hold true is that in a country of 78 million people, rich 
with natural resources there is a market for American products 
and ingenuity.
    However, in order for each of these enterprises to succeed, 
American companies need to be on a level playing field with 
other foreign investors. To date over 1.2 billion U.S. dollars 
have been invested or pledged in Vietnam. To protect and grow 
this investment, assistance from trade promotion programs is 
required. For example, when American businesses bid for a 
project they are often competing against other OECD countries, 
such as Japan, England, France and Belgium, which have ten year 
financing from their trade support organizations. Without some 
assistance it is virtually impossible for American companies to 
compete, please do not take the support away. Without the 
Jackson-Vanik waiver American businesses would be put a major 
disadvantage, one that may not be recoverable.
    The second opportunity for growth for American companies is 
by completing the Bilateral Trade Talks, which are being 
discussed this week. Ratification of a trade agreement between 
the U.S. and Vietnam will not only improve the situation for 
the companies already based in Vietnam, but it could open doors 
for other American companies. Companies that have petitioned 
for the trade agreement include IBM, Arthur Andersen, CIGNA, 
Motorola, Cargill, Finasa, Procter & Gamble, Unisys, John 
Hancock and Triumph. Currently, Vietnam is one of the few 
countries that does not have normal trade relations with the 
United States. To move forward in the bilateral trade 
negotiations and eventually reach agreement the Jackson-Vanik 
waiver is required. The proposed agreement would transition 
Vietnam towards the WTO standards and encourage them as a 
player in the world economy.
    There is still a third mechanism by which supporting 
American businesses in Vietnam can in turn put pressure on the 
Vietnamese government to reform. By having American 
businesspeople on the ground in Vietnam we are able to 
influence new legislation. For example, last year AmCham was 
one of the twenty business groups that formed a Private Sector 
Forum. This association now meets quarterly with Deputy Prime 
Minister Nguyen Manh Cam to improve the business environment 
for foreign investors. If there were not support for American 
businesses we would not be part of the foreign community 
influencing the rules governing the business environment in 
Vietnam.
    As you can see it is vitally important to American business 
interests and the development of the Vietnamese market economy 
to waive Jackson-Vanik amendment again this year. Without this 
waiver we will fall far behind the other investors in 
developing a market for American goods and loose any impact on 
future legislation.
      

                                

                                    The American Legion    
                                     Washington, D.C. 20006
                                                      June 22, 1999

Honorable Phillip M. Crane, Chairman
Subcommittee on Trade, Committee on Ways and Means
U.S. House of Representatives
Longworth
Washington, DC 20515

    Dear Mr. Chairman:

    It is unacceptable to The American Legion for the United States to 
put business concerns over the fate of Vietnamese citizens who fought 
alongside us during the Vietnam war, and who have sacrificed so much 
for so long and are still unable to freely emigrate to this country.
    The American Legion recognizes that the U.S. business community is 
concerned with maintaining and strengthening economic ties in Vietnam, 
but we cannot let these commercial interests take precedence over the 
destiny of our former allies who assisted us and are still loyal to our 
cause. The retention of the Jackson-Vanik waiver can be a powerful sign 
to show that we honor our commitments to human rights.
    Obstacles continue to exist on the road to free emigration for 
Vietnamese who want to come to the United States and other countries in 
the free world. Ethnic groups that were allied with the Americans 
during the war, namely the Montagnards, and former employees of the 
U.S. government are still discriminated against by the Vietnamese 
government when applying and processing through the Resettlement 
Opportunities for Vietnam Returnees program (ROVR), the Orderly 
Departure Program (ODP), and others.
    What better way to show that we truly are committed to allowing 
those Vietnamese who have remained faithful to the United States to 
emigrate than by denying U.S. exporters to Vietnam access to U.S. 
Government credits. This would be a powerful signal that we demand 
increased progress and cooperation on the part of the Vietnamese 
government.
    The American Legion strongly urges you and sub-committee members to 
not grant the Jackson-Vanik waiver for this year.
                                        JOHN F. SOMMER, JR.
                                                 Executive Director
      

                                

Statement of Boeing Company, Arlington, Virginia

    The Boeing Company appreciates this opportunity to comment 
on the U.S. trade relationship with Vietnam and commends the 
Chairman for his leadership on this important issue. Boeing 
strongly supports U.S.-Vietnam trade relations and applauds the 
Congress and the Administration for their efforts to implement 
the policies necessary to further expand trade with Vietnam.
    The U.S.-Vietnam trade relationship is beneficial to both 
nations. Open trade with Vietnam provides a market for U.S. 
exports, creating high-paying jobs here at home, and gives the 
Vietnamese people an opportunity to experience the benefits of 
free enterprise. Commercial aviation is a key element of that 
relationship, increasing trade, tourism, and other types of 
commerce, promoting communication, and generating the foreign 
currency necessary for continued economic growth and 
development.
    The Boeing Company supports renewal of Vietnam's waiver 
under the Jackson-Vanik amendment to the Trade Act of 1974 and 
recommends the establishment of both a general trade agreement 
with Vietnam and an air transportation bilateral agreement to 
accelerate Vietnam's progress toward a vital free market 
economy.
    Vietnam has met the requirements of the Jackson-Vanik 
amendment that is designed to encourage a policy of free 
emigration in countries with non-market economies. Since the 
Administration normalized diplomatic relations with Hanoi in 
1995, Vietnam has moved aggressively to comply with the 
Resettlement Opportunity for Vietnamese Returneees agreement.
    The waiver of Jackson-Vanik gives American companies 
selling to Vietnam access to crucial US export promotion 
programs offered by the US Export Import Bank (EXIM) and the 
Overseas Private Investment Corporation (OPIC). These programs 
are vital to meeting the challenges of doing business in 
Vietnam's emerging market.
    Since the President lifted the trade embargo on Vietnam in 
1994, the country has made significant free market reforms and 
has experienced substantial economic growth. Foreign companies 
have joined forces with the Vietnamese to undertake a major 
rebuilding of the economy in almost every sector. The aviation 
sector is no exception.
    Vietnam Airlines has been working hard to make those 
changes necessary to compete in the increasingly competitive 
commercial aviation industry. Until six years ago, it operated 
a small fleet of older, Russian-made aircraft generally 
considered unreliable and uncomfortable by today's standards. 
Vietnam Airlines now has replaced much of this fleet with 
modern equipment, allowing the airline to greatly improve its 
level of service and better meet the demands of today's 
sophisticated traveler. The results have been dramatic.
    From 1992 to 1997, prior to the Asian financial crisis, 
Vietnam Airlines experienced annual traffic growth averaging 30 
percent per year. This compares to an average for the industry 
worldwide of five percent per year, and for Asia as a whole, of 
seven percent. The financial turmoil that engulfed Asia in late 
1997 and in 1998 did not have the same negative impact on 
Vietnam Airlines that it did on the airlines in neighboring 
countries. Some of these airlines suffered from double-digit 
percentage reductions in traffic, and significant erosion in 
profits. While Vietnam Airlines did lose profits, the carrier 
was able to hold on to a generally constant level of traffic 
during the depths of the crisis.
    As these statistics indicate, the potential market for 
aircraft sales in Vietnam over the next 10 to 15 years is 
significant. Boeing projects Vietnam Airlines could require 
three to five billion dollars worth of modern aircraft during 
this period. Such growth means that Vietnam Airlines could 
develop an operation comparable to the size of Thai 
International Airways, Cathay Pacific, or Singapore Airlines, 
each with 60 to 80 aircraft.
    Extension of the Jackson-Vanik waiver and a bilateral trade 
agreement with Vietnam are essential to the ability of The 
Boeing Company to compete for commercial aircraft sales in that 
country.
    In recent history, the U.S. trade embargo on Vietnam made 
it impossible for Boeing to compete for direct aircraft sales 
in Vietnam. As a result, our competitor was awarded a contract 
to provide a fleet of Airbus A320 aircraft to Vietnam Airlines.
    However, Vietnam Airlines operates three Boeing 767-300ER 
widebody aircraft leased from GE Capital Aviation Services, and 
Boeing is involved in a sales campaign for the 777 aircraft. 
Boeing will have to compete aggressively for this business, but 
cannot do so in the absence of a strong trade relationship with 
Vietnam.
    Boeing urges the Congress to support the waiver of Jackson-
Vanik for Vietnam and the development of a bilateral trade 
agreement with Vietnam. Increased trade between our two nations 
will create jobs and economic opportunity both in the United 
States and Vietnam.
      

                                

Statement of Caterpillar Inc.

    Caterpillar Inc. is pleased the United States continues to 
take steps to strengthen the trade relationship between Vietnam 
and the US by seeking renewal of Vietnam's waiver under the 
Jackson-Vanik amendment to the Trade Act of 1974. This action 
stands to benefit both countries.
    We are encouraged by the progress being made in 
consultations with Vietnam on a Bilateral Trade Agreement. 
Renewing the Jackson-Vanik waiver will further signal U.S. 
confidence that our two countries can work together on areas of 
mutual benefit towards conclusion of this Bilateral Trade 
Agreement and beyond.
    The Jackson-Vanik waiver promotes U.S. commercial interests 
in Vietnam by allowing support from the Export-Import Bank of 
the United States (Ex-Im) and The Overseas Private Investment 
Corporation (OPIC) to U.S. businesses there. Without support of 
US Export Credit Agencies, Caterpillar will be at a distinct 
disadvantage with our foreign competition with ready access to 
their own export credit agencies.
    Caterpillar currently has applications pending with Ex-Im 
and OPIC for projects that will improve the infrastructure of 
Vietnam and the quality of life of its people. We are hopeful 
that trade relations between the United States and Vietnam--
including export opportunities supporting US jobs--will grow 
significantly over the coming years as relations between our 
countries continue to improve.
    Caterpillar strongly urges Congressional support for the 
Jackson-Vanik waiver for Vietnam.
    Caterpillar Inc., headquartered in Peoria, Illinois, is the 
world's largest manufacturer of construction and mining 
equipment, diesel and natural gas engines and industrial gas 
turbines. Company sales and revenues set a record in 1998 of 
nearly $21 billion.
      

                                

Statement of Andre Sauvageot, General Electric Company, Hanoi, Vietnam

    I am Andre Sauvageot, residing in Hanoi as the Chief 
Representative for General Electric in Vietnam. I have held 
this position for over 6 years. As I did for your hearing last 
year on the initial waiver of the Jackson-Vanik Amendment, I am 
again submitting the following information to assist the 
Committee in its decision regarding the renewal of the Jackson-
Vanik waiver for Vietnam.

        I. Vietnam Experience Prior to Joining General Electric

    My involvement in Vietnam began in 1964 as a U.S. Army 
Captain assigned as a District Advisor in South Vietnam. This 
entailed participating in combat operations with small South 
Vietnamese units and afforded opportunities to learn about life 
and civil administration at the village level. I completed 8 
years of Vietnam service with varied assignments including US 
Liaison & Coordination Officer for the Military Assistance 
Command (MACV) in the Prime Minister's Office. My last 
assignment, ending in March 1973, was as the Interpreter for 
the Chief of the American Delegation to the Four-Party Joint 
Military Commission charged with implementing the Paris 
Agreement on ending the war.
    From 1976 to 1978 the Army assigned me to the US Department 
of Health, Education & Welfare as an Assistant Director to the 
Indochina Refugee Assistance Program to help with the 
resettlement of Vietnamese refugees in the United States. In 
1984, I retired as a Colonel from the Army after 27 years of 
service.
    From 1982 to as recently as 1993 I served as the 
interpreter for the highest level American delegations visiting 
Hanoi. The initial focus of these delegations was solely on the 
MIA/POW issue, but later they broadened to include some of 
Vietnam's humanitarian concerns. Until December 1992, I was 
employed by the U.S. Embassy in Bangkok as the Regional Advisor 
for the Comprehensive Plan of Action designed to encourage 
voluntary repatriation of Vietnamese ``boat people'' back to 
Vietnam. This involved constant visits to the camps in Hong 
Kong and Southeast Asia with follow-up visits to returnees in 
Vietnam. I enjoyed steadfast support from Vietnam's leadership 
and the freedom to travel freely in Vietnam at my own 
initiative throughout my mission.
    My long involvement in Vietnam has given me a profound 
respect for the Vietnamese. Their pragmatism, flexibility, 
courage and intelligence makes it a country which is very 
amenable to constructive engagement. I agree with Department of 
Defense experts working the MIA/POW issue full time that the 
Vietnamese have provided outstanding cooperation and that the 
cooperation has increased as the U.S.-Vietnam relationship 
expands. The same is true on a wide range of commercial and 
other issues of interest to both countries. Progress on all 
issues is positively correlated with improvements in the 
overall relationship based on the principle of mutual benefit.

                     II. Doing business in Vietnam

    Doing business in Vietnam is tough sledding. A country 
which has long been ravaged by war in its struggle for 
independence and national unity cannot be expected to move 
quickly from feudalism through Soviet-style state socialism to 
a market economy.
    The problems with an underdeveloped banking system, 
underdeveloped legal and physical infrastructure, lack of 
transparency and widespread corruption are serious and combine 
to make it difficult to do business. American companies have 
the additional handicap of arriving behind foreign competitors 
which were not constrained by the U.S. trade embargo against 
Vietnam.
    In addition, the lack of domestic capital and severely 
limited national budgets constrain the Vietnamese and their 
foreign business partners to seek off-shore-funding. Financing 
must often be in the form of government-to-government soft 
loans, as Vietnam's lack of a successful track record may 
preclude commercial financing. To be successful, companies must 
be prepared to make a long term commitment and maintain an in-
country presence.
    For the committed company with the right products or 
services, correct corporate policies and open minds to learn 
about Vietnam, the positives far outweigh the negatives.
     The leadership's commitment to economic reform, its 
commitment to diversification of Vietnam's international 
relationships, the national unity behind the leadership on both 
of these major policies, the strong work ethic, and a literate, 
intelligent, trainable workforce are durable, valuable and more 
significant that the difficulties which so often frustrate 
foreign companies doing business in Vietnam.
    The Vietnamese have forged a society in which 78 million 
people of some 54 different ethnic groups with a wide mix of 
various religions and a large number of people who subscribe to 
no religion all live peacefully together free of the religious 
and ethnic strife with which so many other countries are 
afflicted.
    These strengths are the ingredients by which Vietnam will 
effectively address its shortcomings. Vietnam will succeed by 
integrating with the global economy. The question is which 
companies from which countries will grow their businesses in 
Vietnam, in short will grow with the country and by their 
engagement help shape the kind of market economy that emerges 
in Vietnam.

                III. GE Businesses currently in Vietnam

    After former President Bush permitted American companies to 
establish representative offices in Vietnam, GE was among the 
first ten American companies to seize the opportunity, having 
obtained a license on June 18, 1993.
    Several of GE's 11 major businesses, each with its own 
separate headquarters in the United States, have already 
successfully entered Vietnam's market.

                       GE Medical Systems (GEMS)

    Medical Systems, a global business, headquartered in 
Milwaukee, Wisconsin was the first of GE's 11 major Businesses 
to enter the Vietnam market, because medical equipment was 
included among certain humanitarian items exempted from the 
Trade Embargo by former President Bush in April 1992. Since 
1993, GEMS has been selling ultrasound and x-ray equipment 
against stiff foreign competition from long established 
companies such as Siemens from Germany. GEMS has made a 
respectable beginning, including the sale of high-end Magnetic 
Resonance Imaging (MRI) equipment manufactured in Wisconsin.

                       GE Aircraft Engines (GEAE)

    GE Aircraft Engines, headquartered in Cincinnati, Ohio 
regards the Vietnam Airlines (VNA) as a strategic customer with 
significant growth potential. VNA airline has selected GE or GE 
joint venture engines with an aggregate value of some $162 
million to power its entire small fleet of Boeing and Airbus 
aircraft.

                  GE Capital Aviation Services (GECAS)

    One of the 29 major branches of GE Capital Services, 
headquartered in Stamford, Connecticut, GECAS has dry-leased 3 
new Boeing 767-300ER aircraft to the Vietnam Airlines (VNA) for 
a period of 5 years. Now, over 3 years into the lease, GECAS, 
the worlds largest aircraft lessor, is favorably impressed with 
the management and the integrity of VNA, a customer which has 
always paid its lease obligations on time, even after the 
currency crisis hit the Pacific nations.

                           GE Lighting (GEL)

    GE Lighting, headquartered in Cleveland, Ohio has gained a 
modest presence with annual sales running over $1 million.

                  GE Industrial Control Systems (GEIS)

    GE Industrial Systems, a global Business, headquartered in 
Salem, Virginia, is actively exploring a number of attractive 
opportunities from supplying equipment for the modernization of 
cement plants to crane control equipment for port facilities.

                    GE Transportation Systems (GETS)

    Headquartered in Erie, Pennsylvania, GETS manufactures 
locomotives as well as parts and components for its 
locomotives. In Vietnam, GETS has won two international bids 
(1996-97) to provide parts/components to the Vietnam Railways 
(VR). GETS is working on opportunities to sell new locomotives 
and to upgrade its old locomotives.

                         GE Power Systems (GEPS

    GE Power Systems, headquartered in Schenectady, New York, 
manufactures steam turbines and generators in New York and gas 
turbines in Greenville, South Carolina. During tough 
international bidding, GEPS won the following contracts in 
Vietnam:
    --first ever gas compressors for the White Tiger field to 
bring in gas from off-shore,
    --2 generators for Ham Thuan 300MW hydro plant (contract 
award February 1998), and
    --2 steam turbines and 2 hydrogen cooled generators for Pha 
Lai 2 600MW thermal, coal fired power plant.

                 IV. Importance of Jackson-Vanik Waiver

    We deeply appreciate the initial support of your sub-
committee and ultimately of the entire Congress last year for 
the first waiver of the Jackson-Vanik amendment. As a result 
General Electric is better positioned than ever to win the 
bidding opportunity which we presented last year, the Thac Ba 
Hydro upgrade project. In addition, GE is in a more competitive 
position to sell locomotives made in Pennsylvania and to bid on 
additional hydro projects.
    As we mentioned last year, Electricity of Vietnam (EVN) had 
decided to upgrade a 30-year old hydro power plant named Thac 
Ba. The project tender calls for ``supplier credit'' which 
means the contractor must present a competitive financing 
proposal. GE's competitors include ABB (Switzerland/Sweden) and 
Siemens from Germany.
    GE is extremely competitive from a technical standpoint 
because of its high quality, large number of reference plants 
and because GE, unlike ABB or Siemens, manufactures both the 
turbine and the generators, as well as the turbine and 
generator control equipment manufactured in Salem, Virginia.
    GE is the first American company in Vietnam to have given 
the U.S.-Eximbank a specific (Thac Ba hydro upgrade) project 
request. Eximbank had already issued GE its letter of interest 
at the time we submitted our testimony last year. However, at 
that time, Vietnam had not yet decided which agency would 
provide the sovereign guarantee or which organization would 
sign a framework agreement with Eximbank, a precondition to 
Exim's operations.
    Vietnam has now resolved the issue of how to provide Exim a 
sovereign guarantee for their loans and has designated the 
State Bank of Vietnam to sign the Framework Agreement.
    Meanwhile, EVN gave GE the green light to present our 
feasibility study for the upgrade of Thac Ba.
    Finally, Vietnam Railway is also exploring possible 
Eximbank funding for a new locomotive purchase.
    Renewal of the Jackson-Vanik waiver is critical to GE's 
ability to pursue the Thac Ba upgrade, new locomotive 
opportunities and other infrastructure projects.
    Winning Thac Ba would help position GE for further wins in 
Vietnam's growing hydro power market. It could be an important 
stepping stone to Son la, a giant 3,600MW hydro power plant.
    Failure to sustain the Jackson-Vanik waiver could also 
greatly damage GE's chances against foreign competition on 
projects for which ODA funding is available and for which 
Eximbank financing is neither available nor desired.
    For example, assume Vietnam's largest donor country, Japan, 
is funding a large project and GE happens to be competing with 
a Japanese company in this context. Even with ``untied'' aid, 
should both the GE and the Japanese company's proposal be 
roughly equivalent technically and economically, political 
considerations could become a factor in determining how Vietnam 
perceived its national interest. Stated differently, diminished 
U.S. involvement results in less U.S. leverage.

                             V. Conclusion

    Experience clearly indicates that as the U.S.-SRV 
relationship continues to improve on the basis of mutual 
respect and mutual benefit, progress will continue on all 
fronts. We will continue to work closely with the U.S. 
Government and we highly appreciate the active support for 
American business and American workers which we have received 
from Ambassador Peterson and his fine staff in Hanoi.
    We will also continue our active involvement with such 
organizations as the U.S.-Vietnam Trade Council and AMCHAAM.
    I believe that the most rigorous analysis suggests that 
there is no conflict in pursuit of US commercial objectives in 
Vietnam and our other national interests. In fact, they are 
positively correlated and mutually reinforcing.
      

                                

                               Liberty Flame Foundation    
                              Westminster, California 92684
                                                      June 11, 1999

Honorable Phillip M. Crane
Chairman, Subcommittee on Trade
Committee on Ways and Means
US House of Representatives
Longworth House Office Building
Washington DC, 20515

Ref.: Reasons to oppose Vietnam's unconditional Extension of Jackson-
        Vanik Waiver and Normal Trade Relation

    Dear Mr. Chairman and Distinguished Members of the Trade 
Subcommittee:

    I represent the interest of a group of Vietnamese American business 
executives who have been conducting business and charity work in 
Vietnam. Having lived and worked in Vietnam with extensive local 
contacts, I can objectively testify to the following reasons for not 
granting unconditional trade privileges to Vietnam's communist 
government:
    1. The Vietnamese Communist Party (VPC) has absolute power in 
Vietnam and has become absolutely corrupt. Most of the benefits from 
trade with the US will be looted by the VPC and its corrupt members for 
their own selfish gains, and for oppression of the people of Vietnam to 
perpetuate its rule. Specifically, international companies, investors 
and applicants for exit visas have all been subjected to difficulties 
and delays by many layers of VN government for political persecution 
and for extortion. In fact, investment in Vietnam is very risky that 
many investors have lost all their investments, some even lost their 
freedom, due to Vietnam's corrupt government and its arbitrary and 
inconsistent interpretation and enforcement of the laws. For American 
companies to unconditionally provide the corrupt VPC with more economic 
resources now, is to become a tool for oppression, and to betray the 
budding wishes for more freedom and democracy by the people of Vietnam. 
American companies will help lengthening, not shortening, Vietnam's 
vicious cycle of oppression, hunger, ignorance and hopelessness.
    2. With the implementation of 31/CP directive since 1998 that 
allows imprisonment of any political suspect for up to 2 years without 
charges, the VCP has become far more oppressive. The people of Vietnam 
is one of the most oppressed people in terms of religious and political 
freedom, as confirmed by UN' Special Religious Intolerance Envoy 
Abdelfattah Amor in his visit to Vietnam in Oct 1998. The VCP is still 
imprisoning 115 confirmed political prisoners, with hundreds more 
recently arrested, after civil disobedience and demonstrations in Thai 
Binh and Dong Nai .
    3. It is not good business policies for American companies to 
obviously abandon American democratic ideals and principles in pursuit 
of short-term profit by aligning with the totalitarian communist 
government in a highly oppressed and inequitable country like Vietnam. 
The stock holders of these companies would most likely prefer that 
their executives take their businesses to stable and less risky 
countries with a good democratic traditions, rather than assisting an 
incompetent, oppressive, corrupt and violent minority government to 
perpetuate its rule.
    4. American companies should not be duped by the ignorant 
Vietnamese communists with the prospects of short-term profit, and 
betray the sacrifices, pay for in sweat, blood and flesh by millions 
American boys and girls, who valiantly defended the cause of freedom 
and democracy in Vietnam.
    The noble and secured ways for American companies to conduct 
business in Vietnam is to leverage our business opportunities and 
financial resources to educate and demand the Vietnam Communist Party 
to commit to serious reforms in its political, economic and social 
systems, to bring about long-term peace and stability, and to allow the 
people of Vietnam to partake fairly and equitably in the benefits of 
our trade,.
    To achieve these goals, we suggest that the US government not to 
extend the Jackson-Vanik waiver, and to deny the Normal Trade Relation 
and any favorable trade concession to the government of Vietnam until 
it meets the following conditions:
    1. Vietnam must honor UN's International Covenants on Political and 
Civil Rights, in which it is a party, and grant immediate and 
unconditional release of all religious and political prisoners without 
confinement, harassment and surveillance.
    2. Vietnam must immediately grant all its citizens freedom of 
religion, expression (speech, press, internet), congregation, movement 
and political alliances.
    3. Vietnam must amend its present constitution to allow all 
individuals and organizations, besides the Communist Party, to compete 
openly and fairly in all social, economic, political and professional 
activities., with internationally-supervised elections.

            Respectfully submitted,
                                           Nguyen Pham Tran
                                                 Managing Associate
      

                                

Statement of Hon. John McCain, a U.S. Senator from the State of Arizona

    As the United States and Vietnam work to resolve the few 
remaining obstacles to the conclusion of a bilateral trade 
agreement, I am pleased to submit this statement in support of 
extending the Jackson-Vanik waiver for Vietnam. I hope this 
hearing serves the dual purpose of reviewing Vietnam's record 
on freedom of emigration, as advanced by the Jackson-Vanik 
waiver, and reminding Members of Congress of the broader 
momentum in U.S.-Vietnam relations, including trade ties and 
efforts to account for our missing servicemen.
    Although the Jackson-Vanik waiver may appear to be a minor, 
technical issue of little relevance to U.S.-Vietnam relations, 
it serves as an important tool for the advancement of American 
interests in Vietnam. Specifically, the President's decision to 
waive the Jackson-Vanik amendment last year has encouraged 
measurable Vietnamese cooperation in processing applications 
for emigration under the Orderly Departure Program, or ODP, and 
the Resettlement Opportunity for Vietnamese Returnees 
agreement, or ROVR.
    The Jackson-Vanik amendment exists to promote freedom of 
emigration from non-democratic countries. The law calls for a 
waiver if it would enhance opportunities to emigrate freely. 
The numbers indicate that opportunities for emigration from 
Vietnam have clearly increased since the President waived the 
Jackson-Vanik amendment in 1998.
    As of June 1, 1999, the Vietnamese Government had cleared 
for interview 19,975 individuals, or 96 percent of ROVR 
applicants. The Immigration and Naturalization Service has 
approved 15,833 ROVR applicants for admission to the United 
States as refugees. Last year, after the initial waiver was 
granted, Vietnam eliminated the requirement for ODP applicants, 
including Montagnards and former re-education camp detainees, 
to obtain exit permits prior to being interviewed by American 
officials.
    Critically, on the day the President announced his decision 
to extend the Jackson-Vanik waiver in 1998, the Vietnamese 
government announced it would allow U.S. officials to interview 
all Montagnard ODP cases. Previously, many of these individuals 
had been off-limits to American interviewers, raising concern 
among many of us that Vietnam was denying Montagnards 
eligibility for emigration under the ODP. Clearly, the 
Vietnamese understood that the Montagnard issue was important 
to the United States, and they responded by meeting our demand 
for access to this group of people. Since that decision, the 
Vietnamese Government has cleared for interview 220 
individuals, of which 118 have been approved by U.S. officials 
for resettlement in the United States.
    In short, Jackson-Vanik is working. Vietnamese cooperation 
on outstanding emigration applications has increased. Vietnam 
has made important progress on its commitments under the 
January 1997 ROVR agreement with the United States. The vast 
majority of remaining ROVR applicants have been cleared for 
interview by U.S. officials. Pre-interview exit permits are no 
longer required for ODP applicants. American officials are 
actively interviewing Montagnards who wish to emigrate under 
the terms of the ODP. The Administration expects to complete 
almost all ODP refugee interviews within a few months, bringing 
to an end a process that has allowed over half a million 
Vietnamese to emigrate to the United States since the 1980s.
    The Jackson-Vanik waiver has given momentum to this 
process. Revoking the waiver would likely stall this momentum, 
to the detriment of those who seek to emigrate.
    We should also note the significant effect of the Jackson-
Vanik waiver on U.S. businesses operating in Vietnam. The 
waiver has allowed the Overseas Private Investment Corporation 
(OPIC), the Export-Import Bank (EXIM), and the Department of 
Agriculture (USDA) to support American businesses in Hanoi, Ho 
Chi Minh City, and elsewhere. Competitors from other 
industrialized countries have long had the benefit of lending 
and insurance guarantees provided by their own governments. 
Without such governmental support, American businesses in 
Vietnam suffered.
    Withdrawing OPIC, EXIM, and USDA guarantees would hurt U.S. 
business in Vietnam and halt the progress on economic 
normalization that may soon lead to a bilateral trade agreement 
and Vietnam's accession to the World Trade Organization. It 
would reinforce the position of hard-liners in Hanoi who 
believe Vietnam's opening to the West has proceeded too 
rapidly. We should do all we can to encourage this opening by 
supporting the U.S. companies that bring trade and investment 
to Vietnam.
    We should also be prepared to approve a U.S.-Vietnamese 
bilateral trade agreement, which is in the final stages of 
negotiation. Having visited Vietnam regularly throughout this 
decade, I can attest to the changes in Vietnamese society that 
have resulted from the limited economic reforms adopted by the 
government. Such change in the direction of a mildly freer, 
more prosperous society should accelerate with the 
liberalization of external trade relations. Although it is a 
long-term project, I take seriously the proposition that the 
growth of the middle class and greater exposure to Americans as 
a result of deepening economic ties between our countries will 
render Vietnam more susceptible to the influence of our values.
    A number of outstanding differences continue to stand in 
the way of closer U.S.-Vietnamese relations. Human rights, 
including the freedom to speak, assemble, and worship, remain 
subject to the whims of political leaders in Hanoi. Political 
and economic reforms lag far behind American expectations. Our 
companies operating in Vietnam suffer from bureaucratic red 
tape and corruption.
    Ambassador Peterson and the embassy staff in Hanoi are 
working diligently to address these legitimate concerns. At the 
same time, the 33 Joint Field Activities conducted by the 
Department of Defense in the past six years, and the consequent 
repatriation of 266 sets of remains of American military 
personnel during that period, attest to the ongoing cooperation 
between Vietnamese and American officials on our efforts to 
account for our missing servicemen. I am confident that such 
progress will continue.
    Just as the naysayers who insisted that Vietnamese 
cooperation on POW/MIA issues would cease altogether when we 
normalized relations with Vietnam were proven wrong, so have 
those who insisted that Vietnam would cease cooperation on 
emigration issues once we waived Jackson-Vanik been proven 
wrong by the course of events since March 1998. Those of us 
with long experience dealing with the Vietnamese, including 
Senator Kerry, Ambassador Peterson, and U.S. military leaders 
responsible for our POW/MIA accounting, recognize that 
cooperation begets cooperation, and that the carrot is as 
effective as the stick in furthering our cause with the 
Vietnamese.
    It is important to stress that the Jackson-Vanik amendment 
relates narrowly to freedom of emigration. It does not relate 
to the many other issues involved in our bilateral relationship 
with Vietnam. The Jackson-Vanik waiver is a tool we can 
selectively use to encourage free emigration. The waiver has 
contributed to that objective. Using it as a blunt instrument 
to castigate the Vietnamese government for every issue of 
contention between our two countries will not advance America's 
interest in free emigration from Vietnam.
    Last year, I initiated a Dear Colleague letter to members 
of the House of Representatives signed by every Vietnam veteran 
in the Senate. There are those in Congress who remain opposed 
to the extension of Vietnam's Jackson-Vanik waiver. But they do 
not include any United States Senators who served in Vietnam 
and who, as a consequence, might be understandably skeptical of 
closer U.S.-Vietnamese relations. That unanimity of opinion 
reminds us that, whatever one may think of the character of the 
Vietnamese regime, such considerations should not obscure our 
clear humanitarian interest in promoting freedom of emigration 
from Vietnam. The Jackson-Vanik waiver serves that interest. 
Congress should support it.
      

                                

Statement of Richard Daly, Board Member, Minnesota League of POW/MIA 
Families, White Bear Lake, Minnesota

    The intelligence in possession of the U.S. government 
clearly shows that the Vietnamese withhold vital information 
regarding the fate of United States missing servicemen last 
known alive. This is a fact.
    It is also a fact that Ambassador Pete Peterson has refused 
to confront the Vietnamese regarding the fate of the missing 
men. Former Hanoi Bureau chief Bill Bell stated that even 
before he was ambassador, Peterson refused to ask the 
Vietnamese tough questions because it might ``embarrass'' the 
Vietnamese government.
    Clearly the Vietnamese reneged on their promise to provide 
all POW/MIA information when the U.S normalized relations. 
Promoting Vietnamese treachery is a disgrace, and the quick 
dollar will soon be lost to Vietnamese corruption. State 
Department documents show the Vietnamese admitted to Senator 
John Kerry that they hold a number of American citizens that 
they publicly deny all knowledge of. Perhaps Vietnam will 
kidnap family members of wealthy American businessmen, and 
perhaps when enough blackmail money is paid you will consider 
holding Vietnam to its word.
    Let us trade with Vietnam, open and honestly, but only 
AFTER the Vietnamese keep their word. Anything else only 
promotes dishonesty and corruption.

                                               Richard Daly
                                                       Board Member
      

                                

                     National League of Families of        
       American Prisoners and Missing in Southeast Asia    
                                  Washington, DC 20036-5504
                                                      June 16, 1999

The Honorable Phil Crane
Chairman, Subcommittee on Trade
Committee on Ways and Means
1100 Longworth House Office Building
Washington, DC 20515

    Dear Mr. Chairman:

    I deeply appreciate the Subcommittee's request to testify on the 
subject of U.S.-Vietnam Trade Relations and regret that our 30th Annual 
Meeting precludes my participation. From June 17-20th, the POW/MIA 
families and concerned veterans and other guests have come from across 
the country for official briefings on the status of efforts to account 
for America's POW/MIAs still missing from the Vietnam War.
    Having very recently returned from another trip to Vietnam, Laos 
and Cambodia, I can attest to the fact that there is much more to be 
done. The emphasis must continue to be placed on generating greater 
unilateral action by the Vietnamese Government to locate and return 
remains and provide relevant documents that could help account for 
scores of Americans. Unilateral Vietnamese actions are also required to 
help accounting for the 444 still missing in Laos and the 74 still 
unaccounted for in Cambodia. The vast majority--nearly 85% in Laos and 
90% in Cambodia--were lost in areas then under the control of 
Vietnamese forces. The US Government has repeatedly asked Vietnam for 
documents pertaining to losses in both countries, as have senior Lao 
and Cambodian officials, thus far to no avail. The leadership of 
Vietnam made many welcome commitments during our visit. If they decide 
to honor their pledges, all of which are defined in our enclosed Trip 
Report, then the League would have no objection to steps to improve 
bilateral economic relations. If they break their commitments, as has 
happened repeatedly over the years, then it would be impossible for the 
League to support further improvements. It is up to the Vietnamese 
leaders to keep their word, and the responsibility of the League and 
the US Government, both Congress and the Executive Branch, to monitor 
and measure the results.
    Since 1970, the League has maintained realistic positions and have 
no intention of looking backward at this point in our history. Although 
we strongly disagreed with the President's stated basis for the many 
steps taken to improve economic and political relations with Vietnam, 
we accept the reality of decisions that have already been made. 
However, in taking each step, the President asserted that accounting 
results would improve and that the families were his primary reason for 
advancing the normalization process.
    The many pledges that President Clinton has made to the families 
have repeatedly been broken, there is little leverage and few 
incentives that remain. Despite the hard work by many career officials, 
civilian and military, there is no question that in this 
administration, and rhetoric to the contrary, the accounting for 
missing Americans has not been a real priority. Responsiveness to the 
business community far outweighed the principle of standing behind 
those who serve. That is tragic, since it should not be a zero sum 
game, but a realistic assessment.
    Rather than focusing on the status of the Jackson-Vanik Amendment, 
tied most directly to issues related to freedom of immigration, the 
League would ask that careful scrutiny be applied to decisions upcoming 
on extending Normal Trade Relations, once a bilateral trade agreement 
is reached. US Ambassador to Vietnam Pete Peterson has publicly 
estimated that this agreement would be reached by the end of the year. 
Once that occurs, this administration will undoubtedly wish to move 
quickly to if their historical record is any indication. At that time, 
the League hopes that Congress will give serious consideration to the 
status of this issue, not evident in previous Subcommittee votes. I 
request that this letter and our Trip Report serve as the League's 
testimony for your hearing, to be included in the Congressional Record 
and distributed in accordance with Committee rules.

            Respectfully,
                                        Ann Mills Griffiths
                                                 Executive Director
      

                                

               Status of the POW/MIA Issue: June 7, 1999

    2,061 Americans are still missing and unaccounted for from 
the Vietnam War, though 468 were at sea/over water losses: 
Vietnam--1,534 (North, 554; South, 980); Laos--444 Cambodia--
74; Peoples Republic of China territorial waters--8. The League 
seeks the return of all US prisoners, the fullest possible 
accounting for those still missing and repatriation of all 
recoverable remains.
    The League's highest priority is resolving the live 
prisoner question. Official intelligence indicates that 
Americans known to have been alive in captivity in Vietnam, 
Laos and Cambodia were not returned at the end of the war. In 
the absence of evidence to the contrary, it must be assumed 
that these Americans may still be alive. As a matter of policy, 
the US Government does not rule out the possibility that 
American POWs could still be held.
    Unilateral return of remains by the government of the 
Socialist Republic of Vietnam (SRV) has been proven the most 
effective means of obtaining accountability. Extensive field 
activities have brought some progress through joint recovery or 
turnover in the field of remains fragments. From that process, 
155 Americans have thus far accounted for by the Clinton 
Administration, all as a result of joint field operations. 
Archival research in Vietnam has produced thousands of items, 
documents and photos, but the vast majority pertain to 
accounted-for Americans. A comprehensive wartime and post-war 
process existed in Vietnam to collect and retain information 
and remains. For this reason, unilateral SRV efforts to locate 
and return remains and provide records offer the most 
productive short term potential. The Defense Department's case-
by-case review and other evidence reveal that unilateral SRV 
efforts could bring many answers.
    Joint field activities in Laos are productive and, 
increasingly, the Lao Government has permitted greater 
flexibility while US teams are in-country. Agreements between 
the US and the Indochina governments now permit Vietnamese 
witnesses to participate in joint operations in Laos and 
Cambodia when necessary. POW/MIA research and field activities 
in Cambodia have received excellent support. Over 80% of US 
losses in Laos and 90% of those in Cambodia occurred in areas 
where Vietnamese forces operated during the war; however, 
Vietnam has not yet responded to numerous US requests for case-
specific records on US loss incidents in these countries. 
Records research and field operations are the most likely means 
of increasing the accounting for Americans missing in Laos and 
Cambodia.
    Despite US intelligence assessments and other evidence that 
hundreds of Americans can best be accounted for by unilateral 
Vietnamese efforts to locate and return remains and provide 
relevant documents and records, President Clinton lifted the 
trade embargo, established a US Embassy in Hanoi, normalized 
relations and posted a US Ambassador to Vietnam. He has 
consistently certified to Congress, without supporting 
evidence, that Vietnam is ``fully cooperating in good faith'' 
or similar such language to resolve this issue. The burden is 
squarely on the current administration to obtain increased 
accountability. The League supports steps by the US to respond 
to concrete results, not advancing political and economic 
concessions in the hope that Hanoi will respond.

                           POW/MIA Statistics

         Statistics are provided by the Defense POW/MIA Office

    Live Sightings: As of June 3, 1999, 1,902 first-hand live 
sighting reports in Indochina have been received since 1975; 
1,858 (97.69%) have been resolved. 1,300 (68.35%) were equated 
to Americans now accounted for (i.e. returned POWs, 
missionaries or civilians detained for violating Vietnamese 
codes); 45 (2.37%) correlated to wartime sightings of military 
personnel or pre-1975 sightings of civilians still unaccounted 
for; 513 (26.97%) were determined to be fabrications. 448 
(2.31%) unresolved first-hand reports are the focus of current 
analytical and collection efforts: 36 (1.89%) are reports of 
Americans sighted in a prisoner situation; 8 (.42%) are non-POW 
sightings. The years in which these 44 first hand sightings 
occurred is listed below:

----------------------------------------------------------------------------------------------------------------
              Year                Pre-76   76-80    81-85    86-90    91-92    93-94    95-96    97-99    Total
----------------------------------------------------------------------------------------------------------------
                                      27        8        0        2        0        1        1        5       44
----------------------------------------------------------------------------------------------------------------
Note: Statistics are provided by the Defense POW/MIA Office

    Accountability: At the end of the Vietnam War, there were 
2,583 unaccounted for American prisoners, missing in action or 
killed in action/body not recovered. As of June 17, 1999, 2,060 
Americans are still missing and unaccounted for, over 90% of 
whom were lost in Vietnam or in areas of Laos and Cambodia 
where Vietnamese forces operated during the war. A breakdown of 
the years during which the 523 Americans were accounted for 
follows:

------------------------------------------------------------------------

------------------------------------------------------------------------
1974-1975..........................  Post war years:.......          28
1976-1978..........................  US/SRV normalization            47
                                      negotiations:.
1979-1980..........................  US/SRV talks break               1
                                      down:.
1981-1984..........................  1st Reagan                      23
                                      Administration.
1985-1988..........................  2nd Reagan                     156
                                      Administration.
1989-1992..........................  Bush Administration...         113
1993-1996..........................  1st Clinton                    146
                                      Administration.
1997-..............................  2nd Clinton                      8
                                      Administration.
------------------------------------------------------------------------

    Unilateral Vietnamese government repatriations of remains 
with scientific evidence of storage have accounted for 164 of 
the 387 from Vietnam; all but 3 of the 127 Americans accounted 
for in Laos have been the result of joint excavations. The 
breakdown by country of the 523 Americans accounted for from 
the Vietnam War: Vietnam 386*, Laos 127*, China 2, Cambodia 7.
    *4 remains were recovered from indigenous personnel; 1 from 
North Vietnam and 3 from Laos; in addition, one recently 
identified was actually recovered in Vietnam before the end of 
the war.
      

                                

League Delegation to Southeast Asia

May 11-22, 1999

    A delegation of the National League of POW/MIA Families 
visited Thailand, Vietnam, Laos and Cambodia from May 11-22. In 
Thailand, the Delegation met with US diplomatic officials, 
Joint Task Force-Full Accounting (JTF-FA) and Defense 
Intelligence Agency (DIA) Stony Beach personnel. The visit to 
Vietnam, Laos and Cambodia reinforced to senior officials in 
each country the families' views regarding the status of 
efforts to achieve the fullest possible accounting for 
America's POW/MIAs from the Vietnam War. Representing all of 
the families were Chairman of the Board Jo Anne Shirley and 
Executive Director Ann Mills Griffiths. Richard T. Childress, 
National Security Council (NSC) Director of Asian Affairs from 
1981-89, during both Reagan terms, and a Vietnam veteran, 
agreed to the unanimous request of the League's Board of 
Directors to serve as adviser on this mission.
    In each country, the delegation was briefed by US Embassy, 
Joint Task Force-Full Accounting (JTF-FA) and Defense 
Intelligence Agency (DIA) personnel. Prior to departure, the 
Defense POW/MIA Office (DPMO), JTF-FA and the Central 
Identification Laboratory (CILHI) were very helpful in 
preparing updates on material that was utilized during the 
trip. The logistic support provided by all US Government 
organizations/agencies was invaluable, ensuring that the League 
Delegation's mission was carried out smoothly.

                               BACKGROUND

    This was the fourth League Delegation since the end of the 
Vietnam War in 1975. The first was in 1982, just after it was 
apparent that priority would be raised in the Reagan 
Administration. From 1983-1993, the League's Executive Director 
represented the POW/MIA families on numerous US Government 
delegations in which Childress also participated until 1989, 
including those led by former Presidential Emissary/Chairman of 
the Joint Chiefs of Staff General John Vessey, USA-Retired. A 
League Delegation in 1994 was comprised of former Chairman of 
the Board Sue Scott, Board member Colleen Shine and the 
Executive Director, who also participated in 1994 and 1995 
missions led by Presidential Emissary Hershel Gober, then, as 
now, the Deputy Secretary of Veterans Affairs.
    A League Delegation in May of 1997 included Board Chairman 
Jo Anne Shirley, Board member/returned POW LTC David Gray, Jr., 
USAF-Retired, and the Executive Director. At that time, it was 
the Board's view that the League should attempt to send a 
delegation every two years to conduct an on-the-scene 
assessment of efforts and to ensure that all governments 
involved understand the families' views. In January of this 
year, the Board made the final decision on the current mission, 
and, fortunately, the timing coincided with Childress' travel 
on business in the region. He graciously altered his schedule 
to hold over in Bangkok awaiting the League delegates' arrival 
before all embarked to Vietnam, Laos and Cambodia.

                           TIMING AND PURPOSE

    The League has had both policy and operational concerns for 
the past several years. Our concerns stem from the destruction 
of POW/MIA criteria in the ``roadmap'' on normalization of 
relations with Vietnam, the abolition of the POW/MIA 
Interagency Group, the consistently glowing remarks on the 
status of the issue from policy officials who are truly 
unfamiliar with the issue, the lack of integration of the issue 
into US foreign policy, the ``turf battles'' among US 
Government agencies and organizations with POW/MIA 
responsibilities, senior-level downgrading of accountability 
expectations, and the lack of new initiatives to move this 
issue toward resolution.
    This state of affairs has generated perceptions by 
Vietnamese and, to a lesser extent, Lao and Cambodian officials 
that the US Government and, by extension, the American public 
is satisfied that all that could possibly be done is either 
underway or completed. While the families, informed veterans, 
some in Congress, and many current and former officials know 
this is not true, the perception hampers implementation of what 
is stated as a highest priority.
    Since President Clinton has repeatedly certified to 
Congress that Vietnam is ``fully cooperating in good faith'' to 
resolve the issue, or similar such language, it was considered 
very important to convey to senior Vietnamese, Lao and 
Cambodian leaders the families' views on what we consider full 
cooperation, to reinforce the positive aspects of the 
government-to-government efforts, and provide our frank 
assessment of where improvements are needed. It was also timely 
to conduct an assessment due to the Clinton Administration's 
publication of a National Intelligence Estimate (NIE), the 
declassified summary which seriously downgraded, even 
dismissed, earlier intelligence assessments on which long-
standing accounting expectations have been based. The League 
Delegation also sought firsthand knowledge from participants in 
the joint accounting process, both US officials and those of 
Vietnam, Laos and Cambodia.
    The Clinton Administration is moving to reach a trade 
agreement with Vietnam and grant Normal Trade Relations, or 
NTR, (previously Most Favored Nation status) by the end of this 
year. Therefore, the Delegation looked closely at the level of 
Vietnamese cooperation, as well as that of Laos and Cambodia. 
Other priorities included seeking improvements in the 
accounting process--the US Government's approach to both joint 
activities and unilateral efforts by the governments of 
Vietnam, Laos and Cambodia--to ensure that all available assets 
and resources, including DIA's POW/MIA team, Stony Beach, are 
being fully utilized to expedite and increase accounting 
results.
    In the view of the League, veterans, former and current US 
officials, and key Members of Congress, cooperation in ``full 
faith'' requires renewed unilateral actions by Vietnam. The 
Delegation reinforced this position, as well as the continuing 
need for joint field operations, particularly in Laos. Joint 
field activities alone cannot achieve the fullest possible 
accounting; increased unilateral effort by Vietnam is required, 
including effort to locate and return identifiable remains. 
Without such effort, ``full faith'' cooperation by that 
government is not a sustainable conclusion.
    We believe we made progress on all of these issues, but 
ultimate success will be dependent upon effective follow-up by 
the US Government and a sincere effort by the governments of 
Vietnam, Laos and Cambodia to carry out the welcome commitments 
made to us, as outlined in this report. We found some very 
dedicated, hard-working military and civilian personnel in JTF-
FA, Stony Beach and on the US Embassy staffs who care deeply 
about their mission.
    We also found evidence of ``turf wars'' that are hampering 
the most effective pursuit of the issue and attitudes among 
some that simply reflect the current administration's policy of 
pursuing the issue without interfacing with other priorities. 
These problems are of concern, and the League is providing 
specific recommendations to our government. We believe the 
executive branch can solve them and that is our expectation. 
Such problems are unnecessary obstacles to a truly effective 
effort and waste some of the considerable resources dedicated 
to obtaining the fullest possible accounting.
    While this and other trips cost the League significant 
resources, we believe they are worthwhile, an attitude 
expressed to us by officials of all governments. By providing 
continuity of objective expectations and a critique by the 
families on a regular basis, we can bring new ideas and, 
hopefully, revitalization of government-to-government efforts 
which we support as the only possible means to receive answers.

                                THAILAND

    In Bangkok, final preparations were made for discussions in 
Hanoi, Vientiane and Phnom Penh. The Delegation met with the US 
Ambassador to Thailand, Richard Hechlinger, DIA's Stony Beach 
Chief COL K.C. Marshment, USA, and LTC Jeff Smith, USAF, JTF-FA 
Detachment 1 Commander. The support and assistance provided by 
JTF-FA and Stony Beach immediately prior to departure for Hanoi 
are deeply appreciated and were most helpful. Another 
significant contribution during the time in Bangkok was the 
gracious hospitality of Ambassador Hechlinger in making his 
official Guest House available for the League's use, saving the 
League funds otherwise necessary for the trip.

                                VIETNAM

    The first meeting was at the US Embassy with US Ambassador 
to Vietnam Douglas ``Pete'' Peterson, during which the 
Ambassador provided his views on bilateral interests in general 
as well as where he feels things currently stand on the issue. 
The League Delegation conveyed to the Ambassador the purpose 
and approach to be pursued while in Hanoi. This was followed by 
a lengthy, very interesting session at JTF-FA Detachment 2, 
commanded by LTC Matt Martin, USA. The level of knowledge and 
the depth of the briefing on current JTF operations was 
helpful, as was the direct interchange between all 
participants. The support of MSgt Ron Ward, a skilled 
Vietnamese linguist, was greatly appreciated, including an 
added requirement to make adjustments to an already full 
schedule.
    The Delegation would have gained useful insights from a 
proposed visit to the site of an ongoing underwater excavation, 
but time requirements precluded accepting the invitation. The 
need to first meet with appropriate senior officials and lay 
out the concerns and initiatives, then discuss in greater 
detail and provide suggestions for implementation to 
representatives of the Vietnam Office for Seeking Missing 
Persons (VNOSMP), allow time for policy-level Vietnamese 
consideration, and then a wrap-up meeting with VNOSMP, at which 
the League Delegation would hear the consensus response of the 
Vietnamese Government, precluded spending an entire day 
traveling to and observing a joint field operation.
    Meetings were held with three senior Vietnamese officials--
Vice Minister of Foreign Affairs Nguyen Dinh Bin, Vice Minister 
of National Defense LTG Tran Hanh, and Vice Minister of Public 
Security Services (prior Ministry of Interior) Nguyen Khanh 
Toan. Each discussion focused on the need to find solutions to 
problems that are impeding efforts to achieve the fullest 
possible accounting. The Delegation defined that objective, 
shared by all involved, as the man returned alive, or his 
identifiable remains or convincing evidence as to why neither 
is possible. It was clearly noted that archival records, while 
of intense interest to many in the US and elsewhere, become 
critical to the families only in the absence of the man alive, 
his identifiable remains or if such records provide leads that 
can determine fate or recover remains.
    The League noted that since the trade embargo was ended in 
1994 and bilateral relations were normalized in 1995, the 
expected increase in accounting results had not occurred. The 
League urged further expansion of unilateral efforts to locate 
remains, archives and sources of information, including on 
cases of Americans missing in Laos and Cambodia. (According to 
US officials, unilateral investigative efforts in Laos are 
bringing increasingly useful information.)
    Five specific areas were raised as warranting attention. 
These included the need for renewed unilateral efforts, 
provision of archives regarding incidents in Laos and Cambodia, 
expanded research to locate additional records on cases in 
Vietnam, improved use of assets and resources, and the need to 
expedite the step-by-step investigative process to facilitate 
more rapid results. Each Vice Minister was asked to support 
later, more detailed talks with VNOSMP members.
    The Delegation noted a growing sense of impatience and 
urgency on the part of family members and American veterans due 
to the passage of time and advancing ages of both family 
members and sources. The League expressed concern that 
opportunities are being missed, since despite increased 
military-to-military contacts between the two countries, 
dedicated Stony Beach assets have not been fully utilized on 
POW/MIA matters. Noting that US Government sensitivity and 
reluctance could stem from lack of knowledge regarding history 
and the origin of defining the issue as humanitarian, the 
League clarified that all US officials with POW/MIA 
responsibilities, including Stony Beach personnel, have only 
one agenda--the accounting for missing Americans--and expressed 
the hope that Vietnam would welcome use of all qualified 
personnel, including DIA's Stony Beach, who could help focus 
the effort to bring increased results.
    Finally, the Delegation expressed appreciation for some 
improvements in joint operations since the first excavation in 
1985, but noted concerns that the step-by-step approach on case 
resolution may be a reflection of process overtaking results. 
Following a well-received explanation of historical 
negotiations and initiatives by the League's adviser--what 
worked and what didn't work--there was clear understanding and 
acknowledgment by senior Vietnamese that more can and should be 
done. The League expressed confidence that Vietnam could 
unilaterally take significant steps to expedite answers.
    All of the Ministers stated their government's commitment 
to continue cooperating fully with the United States on a 
humanitarian basis, separate from other issues, and offered 
assurances that Vietnam is doing its best to provide support 
and assistance. They rejected any suggestion to the contrary, 
but noted that they could and would work harder and encouraged 
further dialogue with VNOSMP to discuss initiatives that could 
move the process forward.
    The Ministers also stated their understanding of the need 
to expedite results in view of the advancing years of both 
family members and potential sources. They added, however, the 
notion that the work is becoming harder since the ``easiest 
cases'' had been resolved, leaving both governments with the 
``most difficult cases'' still requiring attention. This was a 
recurring theme that the League is not yet convinced is 
supportable without greater unilateral Vietnamese initiative.
    Vice Foreign Minister Bin was very familiar with the status 
of the issue. He indicated that all visiting delegations--
congressional and veteran--have commended Vietnam's cooperation 
and assistance. He noted that although the Vietnamese people 
had suffered tremendous losses, they help with the accounting 
effort out of a spirit of cooperation and humanitarian concern. 
As anticipated, and reflecting some US Government public 
statements, Minister Bin noted that only 43 Last Known Alive 
(LKA) cases remain under investigation. However, as the League 
indicated in its updated material, relatively few have been 
accounted for through return of identifiable remains and only 
10 remains now at CILHI are believed to relate to Americans 
previously listed as LKA cases. Further, fate determinations, 
important as they are, do not resolve the accounting issue.
    Vice Minister Hanh (MND) was equally well versed and voiced 
many of the same points, as did Vice Minister Toan. Both 
characterized the decrease in remains repatriated as 
``realistic'' since the easy cases had long ago been solved, a 
consistent theme. Minister Hanh noted that there are increasing 
problems as the VNOSMP seeks cooperation of local citizens, 
citing the extent of effort made to investigate the Phou Pha 
Thi (Lima Site 85) incident and that a primary witness to that 
incident, now 75 years old, is unwilling to participate 
further. Despite these realities, Vice Minister Hanh welcomed 
the list of problem areas that the League believes should be 
central and pledged to work with the US to address them.
    The initial working session with the VNOSMP, chaired by Mr. 
Nguyen Ba Hung, Deputy Director of North American Affairs, 
focused in greater detail on the key areas raised to the Vice 
Ministers. After first explaining that the League's primary 
purpose was to seek solutions, not cast aspersions or place 
blame, greater detail was provided regarding the areas that 
need attention, and League suggestions on specific initiatives 
to be discussed.
    In exploring the area of archival research, the League 
pointed out examples: Politburo records, service level 
intelligence documents, and documents such as the Group 559 
Summary of incidents along the Ho Chi Minh Trail, that raise 
logical questions, rather than bring answers. Indicating our 
view that the archival effort is incomplete and requires 
further effort, the League suggested various approaches for 
consideration. It was apparent from the reaction of long-
standing VNOSMP members that official US explanations to the 
League and the public since 1992 have been inadequate in 
describing efforts that took place in the early 1990s; the US 
Government needs to ensure that the families are fully 
informed.
    The VNOSMP Chairman indicated that archival research was 
allowed precisely because the SRV understands that documents 
are crucial when remains are not available. A senior VNOSMP 
official provided details about the nature of efforts by the 
joint Archival Research Team (ART) from 1992-95, a thorough 
description that was helpful, informative and appreciated. Many 
of the details provided by the Vietnamese were unknown to the 
League Delegation, thus the families. The League has requested 
a full rundown on the ART effort from 1992-95. (Poor 
communication by the US Government can be directly attributed 
to the Clinton Administration's decision to terminate the POW/
MIA Interagency Group in which the League Executive Director 
participated as a full member from its formation in 1980 until 
terminated in 1993.)
    The League raised a serious concern that films turned over 
to German television producers for commercial purposes had not 
been fully reviewed by the US. The Vietnamese acknowledged the 
potential problem and said that these and all other films will 
now be jointly screened before release.
    On the subject of further efforts on archival research to 
help resolve incidents that occurred in areas of Laos and 
Cambodia where Vietnamese forces operated during the war, the 
League proposed consideration of four-party discussions between 
officials of Laos, Cambodia, Vietnam and the United States. 
Noting first that any such multilateral conference would 
require structure and an agenda agreed upon by all parties on 
an equal basis, the League suggested that the initial topic 
should be archival research and noted our intention to raise 
the concept during upcoming discussions in Laos and Cambodia. 
VNOSMP's reaction was positive, but their apparent first 
priority was to focus on resolving difficulties that arise in 
dealing with the border cases.
    The first session with VNOSMP ended by their noting that 
although a great deal of work had been done, as evidenced by 
the lengthy description of actions by the ART, Vietnam has 
continued archival research and turned over additional 
documents since the ART's work had ended. The VNOSMP Chairman 
pledged to continue the effort, both unilaterally and jointly, 
and to revitalize the previous ART effort, offering to 
coordinate a specific plan with JTF Detachment 2.
    VNOSMP also appealed for more US continuity by extending 
the tour of the JTF Detachment Commander from one to two years. 
Further, they stated that the current pace of Joint Field 
Activities (JFAs) interferes with unilateral efforts that they 
wish to accomplish, noting that the previous schedule of 30-day 
breaks between JFAs no longer applies. The VNOSMP suggested 
efforts need to be made to decrease unnecessary field work to 
allow more time for periods devoted exclusively to unilateral 
work. They specifically stated that they want to do more 
unilaterally and asked that this message to be brought back.
    At the wrap-up meeting the following day, the official 
Vietnamese Government position on the five points raised by the 
League was provided, initially in an oral presentation and 
formalized in writing, dated Hanoi, 14 May 1999, in a document 
entitled ``REGARDING THE 5 AREAS OF CONCERN AND PROPOSALS OF 
THE NATIONAL LEAGUE OF US MIA FAMILIES.''
    In addressing the five specific areas raised by the League, 
VNOSMP expressed appreciation for the suggestions that they 
view as a ``reflection of the concern and great responsibility 
of the League's leadership.'' VNOSMP went on to state that the 
suggestions would ``enable the VNOSMP and the US agency seeking 
missing Americans, our direct contact of which is the MIA 
office in Hanoi, to seriously research and examine the 
process'' of efforts to account for Americans still missing 
from the war. League areas of concern are provided below in 
bold type, followed by the official Vietnamese response and 
League comments.
    Unilateral repatriation of remains essentially halted in 
1990. The League wishes to explore ways to reenergize these 
efforts and has developed some ideas. We look forward to 
discussing them, to include the repatriation of remains and 
remains fragments, and soliciting Vietnamese ideas as well.
    While joint operations have improved in very positive ways 
since the first excavation in 1985, the League has concerns 
that the incremental, step by step approach in research is a 
reflection of process overtaking results. We are convinced that 
Vietnam can take significant steps unilaterally to identify 
site locations for more immediate excavation, bypassing some of 
the ponderous incremental investigative steps now being 
conducted bilaterally.
    SRV On Unilateral Vietnamese Efforts: ``VNOSMP completely 
agrees with the League's proposal that in the unilateral 
process, Vietnam's specialists will be proactive in developing 
investigation requirements provided by the US, with the 
objective of attaining the best results.'' The VNOSMP also 
pledged to ``increase unilateral activities such as 
investigations, recovery of remains which citizens voluntarily 
provide, site surveys, archival documents relating to US 
personnel missing from the war, searching for witnesses, etc. 
In this process, VNOSMP will consider as a priority the task of 
finding the fullest possible answers to discrepancy and last 
known alive cases; paying attention to the cases that the 
League is concerned about in the 'Blue Book Document' handed 
over to the VNOSMP in 1994, updated in the 'Black Book 
Document' handed over to the VNOSMP during the League 
Chairman's and Executive Director's visit to Vietnam from 12 to 
14 May 1999.''
    Comment: The League has long maintained that renewed and 
increased unilateral efforts by Vietnam are needed. A 
``proactive'' Vietnamese effort, if seriously implemented, 
would expedite concrete accounting results and bring greater 
efficiency to the joint field operations; however, as can be 
noted, there is still too much emphasis on leads provided by 
the US.
    SRV on Recovering and Repatriation of Remains--``The VNOSMP 
will continue to increase encouraging Vietnamese citizens to 
turn over missing American service member's remains, through 
veterans organizations and other societal organizations at the 
local area throughout the nation in order to collect 
information and remains associated with individual American 
service members missing from the war.''
    Comment: In the oral presentation, the Vietnamese 
acknowledged previous remains recovery and storage in various 
locations that were the most accessible and turned over 
unilaterally. Hopefully, this new commitment will bring forward 
those remains not yet repatriated. Since 1986, the Government 
of Vietnam has made occasional public announcements urging 
citizens to cooperate in searching for American remains and has 
published official directives through People's Army of Vietnam 
and Communist Party channels. This current commitment, in 
response to the League's suggestions, extends to a broader 
audience and provides a logical vehicle for expanded unilateral 
efforts that can bring forward increased accounting results. 
The Vietnamese also noted their efforts to block remains 
trading which they try to balance with encouraging the 
voluntary turnover of remains by citizens.
    89-90% of losses in Laos and Cambodia were in areas under 
PAVN control. The League has made requests to Vietnamese 
officials on numerous occasions to provide such records. 
Officials from Laos and Cambodia, as well as US officials, have 
made similar requests for many years with no response. The 
League has developed ideas concerning this problem which we 
look forward to discussing, and we are also eager to solicit 
Vietnam's solutions.
    On Trilateral Cooperation/Four-Party Conference--``The 
VNOSMP pledges to continue active cooperation with Laos and 
Cambodia in resolving the cases along the Vietnam-Laos border 
as well as the Vietnamese-Cambodian border; agree with the 
League's idea that holding a trilateral technical meeting 
between Vietnam, Laos and Cambodia with the participation of a 
US government representative is crucial to raising 
effectiveness and cooperation, since these cases remaining are 
the most difficult.''
    Comment: Whether ``technical'' or policy level, or a 
combination, a Four Party Conference to address specific 
concerns will, of necessity, require policy level endorsement 
by each government. (The concept for such a conference is 
discussed later in this report.) The first ``trilateral'' 
conference, hosted by Vietnam in 1995, did not include 
Cambodia. While some of the border cases are difficult, they 
are made more so by Vietnam's failure to date to provide 
relevant documents, despite requests from the US, Lao and 
Cambodian governments. Vietnamese concerns on border 
coordination do not address the archival gap raised by the 
League in the context of a Four Party Conference. Vietnam has 
identified some sources and made them available for interview, 
but not to the extent necessary to increase results that 
greater effort could produce.
    The archival research effort is incomplete and raises more 
questions than answers. The League has developed discussion 
topics and ideas that we look forward to exploring with 
Vietnamese officials.
    SRV on Archival Research: ``The VNOSMP will continue 
efforts to find files and documents associated with American 
personnel missing from the war, and if found will turn them 
over to the US government.''
    Comment: Recognizing that there are cases where remains 
will not be recoverable, the quality of cooperation on this 
important aspect of the accounting effort is crucial and needs 
improvement. Lao and Cambodian officials recognize that success 
in the accounting effort in their two countries depends in 
large measure upon obtaining relevant files and access to 
firsthand sources of information who served in the areas where 
incidents occurred. While some progress has been made in this 
area, the vast majority of files and documents thus far 
received pertain to returned POWs, not Americans still missing.
    Diplomatic relations has been restored and military to 
military contacts are developing. These are positive steps, but 
exchanges in the contact of resolving the POW/MIA issue have 
not been fully utilized. Much of the reluctance on the US side, 
mistakenly in the League's opinion, relates to misunderstanding 
the origin of defining this issue as humanitarian and not being 
aware of past history. The League has some ideas on this 
subject that we wish to discuss, and solicit Vietnamese ideas 
on this as well.
    SRV on Full Utilization of Resources: ``The component of US 
MIA teams operating in Vietnam which the US sends to Vietnam 
must have the aim and objective of searching for missing 
American service members only, absolutely no other work, and 
must follow every rule and law of Vietnam.''
    Comment: In their oral presentation, the Vietnamese stated 
that the integration of teams was no problem as long as team 
members only do ``MIA work,'' a welcome statement. This subject 
was raised due to some US Government reluctance to allow 
trained collectors in Stony Beach to participate on teams 
conducting in-country investigations. Since 1992, the members 
of DIA's Stony Beach team have rarely participated, thus 
squandering the experience, language and training to maximize 
time spent and the quality of field investigations and surveys.
    Vietnam's agreement (and later agreement by the Lao 
Government) to permit personnel sent by the US Government, so 
long as their mission is limited strictly to POW/MIA matters, 
clears the way for renewed Stony Beach involvement. The 
Cambodian Government has allowed the US to use whatever 
resources it deems appropriate to pursue answers on America's 
POW/MIAs and has cooperated closely with DIA's Stony Beach 
team. Hopefully, there will be no further excuses from the US 
Government for not using all available assets to achieve the 
fullest possible accounting.
    Assessment: Vietnam's specific commitments are welcome, as 
was the frank, open dialogue. Implementation and results will 
be the key to gauging their seriousness since countless 
promises have been made and broken in the past. Implementation 
of these pledges should be closely monitored by the US 
Government and Congress and will be closely watched by the 
League. Results must be reported accurately by all involved to 
the families and the American people. The League hopes to 
report later that the commitments are being carried out and 
greater results are forthcoming.
    The Four-Party Conference offers an opportunity to expand 
the accounting process into new areas of cooperation. To 
succeed, all parties must give careful consideration to 
structuring sessions so that they will be productive for the 
issue and useful in moving the accounting effort in a positive 
direction. This League initiative is intended to break the 
endless passing of papers which the Vietnamese also indicated 
has little utility. Properly structured, this initiative can 
result in real exchanges on potential solutions and information 
that increases accounting--the key measure of success for us.

                                  LAOS

    The League Delegation first met with US Ambassador to Laos 
Wendy Chamberlin to get an update on her views regarding the 
broader spectrum of US-Lao relations; she assessed the level of 
POW/MIA cooperation as increasingly responsive, helpful and 
productive. In preparation for subsequent discussions with 
senior Lao officials, the Delegation also met with and was 
briefed by LTC Bob Gahagin, USA, Commander of JTF-FA Detachment 
3, and other members of the JTF and US Embassy staff. These 
sessions, including extended time with JTF-FA Detachment 3 
personnel, were most helpful and appreciated, as was the 
hospitality of Ambassador Chamberlin in accommodating the 
League Delegation at her official residence, as she did in 
1997. The Ambassador also hosted a dinner in the League 
Delegation's honor, inviting Lao guests.
    The most senior meeting with the Lao Government was held 
with Deputy Prime Minister and Foreign Minister Somsavad 
Lengsavad. The League Delegation met with this key official for 
cordial and very constructive discussions. Ambassador 
Chamberlin, LTC Gahagin and JTF linguist/specialist Bill 
Gadoury accompanied the League representatives. Informal 
discussions were also held with H.E. Soubanh Srithirath, 
Minister to the President's Office (former Vice Minister of 
Foreign Affairs), who hosted a private luncheon.
    The same general points were raised in each official 
meeting, and the Delegation appreciated discussions with LTG Ai 
Soulignaseng, Vice Minister of National Defense (MND) and COL 
Sisophon Bangonesengdet (known to the League since 1982), MND 
Director of the Foreign Relations Department. Detailed talks 
were held with Mr. Amphone Phiphacphommachanh, Acting Director 
General, Department of European and American Affairs, Ministry 
of Foreign Affairs (MFA) and the Lao ADHOC (POW/MIA) Committee. 
Mr. Amphone also graciously hosted a dinner for the League 
Delegation.
    The League expressed appreciation to Deputy Prime Minister 
Somsavad for the significant progress achieved through 
bilateral cooperation over the years since the first post-war 
League delegation in 1982. Improvements in the joint field 
operations, initiated in 1985, were recognized, as was the 
increased flexibility and positive attitude now evident on the 
part of Lao officials. Noting the continuing need for the 
process to be studied and improved, the League suggested that 
the Lao Government should also continue seeking ways to 
expedite results.
    Several specific areas were then addressed, including the 
increase in Lao unilateral investigations, cited as a very 
positive step on which many future efforts depend. Noting that 
such efforts are key to identifying relevant archival 
materials, obtaining information from current and former Lao 
officials with personal knowledge of U.S. losses, and 
conducting advance preparation for joint field operations, the 
League requested an increase of 2-3 people to the Lao team. Now 
numbering only 10 Lao officials, the League suggested that it 
is extremely difficult for so few to handle all unilateral Lao 
efforts and expressed the hope that the request would receive 
serious consideration.
    Noting that since the Delegation's arrival in Vientiane a 
Lao citizen had brought remains to the US Embassy and turned 
them in, the Delegation expressed appreciation for the Lao 
Government's assistance in encouraging such humanitarian 
actions. A request was made for further announcements to be 
made on a regular basis, using channels of communication at 
every level.
    Another area of concern raised by the League is the need 
for Lao language specialists that are often difficult for the 
US Government to identify and hire. Recognizing that there had 
been sensitivity in the past to using such personnel, the 
League expressed the view that due to the passage of years and 
long-standing US Government support of continued improvements 
in bilateral relations, such sensitivities should no longer 
pose any obstacle. The League urged understanding of this 
problem by the Lao Government and requested acceptance of 
ethnic Lao-Americans to ensure that positions can be filled 
with the most qualified personnel. It was pointed out that 
assistance by such linguists is critical not only to accomplish 
successful joint investigations and excavations, but also to 
facilitate the medical treatment of Lao citizens that is 
conducted during each joint field activity.
    Raising the need to maximize effectiveness during joint 
field operations, the League also requested utilization of all 
resources, including those with language and collection 
qualifications, and consideration of expanding the total number 
of US officials from 40 to 50 during the months when conditions 
are best. In this context, and recognizing the limited 
resources of the Lao Government, the expansion in number was 
encouraged due to the backlog of excavations now pending, with 
the passage of time decreasing the likelihood of answers.
    Noting that the League Delegation had just come from 
meetings with senior officials in Hanoi, the key Vietnamese 
commitments that relate to Laos were explained, including 
Vietnam's agreement to the proposed Four Party Conference to 
deal with specific concerns, such as resolution of the border 
cases. Also noted was the fact that the League's only interest 
is in documents that relate to the POW/MIA issue, both policy 
concerning handling of POWs and remains, and information that 
could help resolve individual cases. Lao views on the concept 
of the Four Party Conference were also requested. LTG Ay 
indicated that the Ministry of Defense had held meetings and 
seminars to explore ways to help in the accounting effort and 
that this is a continuous process. He noted that the terrain in 
Vietnam is easier to deal with than in Laos. On documents, LTG 
Ay said they need them from Vietnam and hope to obtain more.
    Deputy Prime Minister Somsavat provided assurance of the 
Lao Government's continuing commitment to do its best to 
resolve the issue, noting that such cooperation is not linked 
to any other issues. The Minister seemed pleased that the Lao 
unilateral team was viewed as productive by the League and the 
US Government, a view with which he agreed, and pledged to 
intensify such efforts. (In a later working session, the Lao 
indicated that they have begun oral history interviews at the 
local level, described as a ``bottom-up'' approach.) Somsavad 
agreed to consider additional personnel, but added that there 
is a limit to the number of Foreign Ministry personnel and that 
existing requirements were already heavy, with too few people 
to handle them. In response, the League suggested assigning 
additional military personnel for this purpose, a suggestion 
Minister Somsavad agreed to consider.
    The Minister was pleased to see progress from official 
efforts to encourage Lao citizens to cooperate by providing 
information and remains, and agreed to make further such 
announcements on a regular basis, using established channels 
throughout the country. He discussed the concept of a meeting 
of officials from various levels that he would convene and 
allow US Government representatives to lay out their concerns 
and ideas--a welcome initiative which needs follow-up by the US 
Government.
    Minister Somsavad qualified his acceptance of skilled 
language specialists by stating that such officials should 
focus solely on POW/MIA and adhere to Lao law and customs, but 
agreed that the Lao Government was willing to determine 
suitability with the US. The request to expand the US team 
beyond the 40 per joint field operation was rejected, noting 
that the joint field teams have now increased efficiency, even 
completing operations ahead of schedule, thus there appeared to 
be no need for any expansion at this time.
    The Minister endorsed the concept of the Four Party 
Conference, noting the Lao Government's previous offer to serve 
as host. Concerning archival research and documents, the 
Minister acknowledged that Lao records are incomplete, but 
indicated that the Lao ADHOC (POW/MIA) Committee could focus on 
further archival research in phase two of its efforts, once its 
reviews of wartime film at national and provincial levels have 
concluded. Minister Somsavad also stated that Vietnamese 
records should be relevant and useful, indicating that prior 
Lao Government requests had gone unanswered, but would be 
renewed.
    Assessment: The strategy for discussions with the Lao 
Government posed entirely different challenges from those faced 
in Vietnam. The decision-making process in Laos on POW/MIA 
matters is now focused on His Excellency Somsavad Lengsavad, 
Deputy Prime Minister and Minister of Foreign Affairs, thus 
discussions with him came as the final, wrap-up meeting. The 
exchanges at every level were cordial, straightforward and 
sensitive to the need of the families for answers as rapidly as 
possible. Minister Somsavad was open to League proposals and 
had the authority to respond, with no requirement for further 
consultations.
    The League Delegation was pleased with the initiative to 
host a Lao officials meeting and with positive responses on the 
concept for the Four Party Conference, expanding the Lao 
unilateral team, and willingness to accept ethnic Lao American 
team members so long as they focus solely on POW/MIA matters 
and are sensitive to their surroundings. US Government follow-
up is needed to get additional personnel assigned to Lao 
unilateral efforts, to operationalize the Lao officials 
meeting, and to structure the Four Party Conference. In view of 
existing requirements and anticipated increases, the Lao need 
to be more flexible on the number of US personnel allowed in-
country for joint field operations. As is always the case, the 
League will be closely monitoring Lao and US Government 
implementation.

                                CAMBODIA

    Though there are only 74 Americans still missing and 
unaccounted for in Cambodia, this devastated country, by all 
known assessments, including the League's, ``fully cooperates 
in good faith'' with the US on efforts to account for missing 
Americans. Since inception of the cooperative process in 1992, 
Cambodian officials have consistently provided outstanding 
cooperation, conducting unilateral actions to assist and 
support joint field operations in every way requested by the 
United States.
    Background: Prime Minister Hun Sen, then serving as the 
Cambodian Foreign Minister, agreed to the League's 1984 request 
to accept the case files of all Americans then missing and 
unaccounted for in Cambodia, pledging to do what he could on a 
humanitarian basis. (This occurred long before there was 
recognition of Cambodia, then still occupied by Vietnam, much 
less government-to-government cooperation in the field.) Since 
that time, JTF-FA and CILHI have conducted site excavations 
whenever and wherever a location was confirmed, often under 
very difficult circumstances.
    There has also been close cooperation with DIA's Stony 
Beach Team in conducting investigations and archival research, 
unless interrupted by US Government sensitivity. The tragic 
plight of the Cambodian people under the Khmer Rouge regime 
from 1975-78, as well as political turbulence since that time, 
has complicated efforts to account for Americans still missing 
in that country, as has the fact that 90% of the losses in 
Cambodia occurred in Vietnamese-controlled areas. Despite these 
obstacles, the Cambodian Government has made available senior 
historians and other officials, including a very active POW/MIA 
Committee, to pursue whatever leads and avenues have been 
suggested by the US.
    The League appreciates the hospitality afforded by US 
Charge d'Affaires Carol Rodley in hosting a reception for the 
League Delegation at the Ambassador's Residence (Ambassador Ken 
Quinn was out of the country), as well as the support and 
information provided by US Defense Attache COL Bill McMillan, 
USA, COL K.C. Marshment, USA, Stony Beach Team Chief, and LTC 
Jeff Smith, USAF, JTF-FA, and other members of the US Embassy 
staff in Phnom Penh. The brief visit to Cambodia was filled 
with important and useful meetings, resulting in positive 
responses and firm commitments.
    Immediately after arrival at the airport in Phnom Penh, the 
League Delegation went directly to meet with Prime Minister Hun 
Sen at his residence, accompanied by Charge d'Affaires Carol 
Rodley and other US officials. The League Delegation first 
expressed sincere appreciation for the outstanding support and 
cooperation since inception of bilateral cooperation, despite 
the multiple tragedies and loss of loved ones that the 
Cambodian people have suffered.
    The League recognized some of the difficulties found in 
working to account for Americans missing in Cambodia, 
especially the fact that 90% of the US losses occurred in areas 
then under Vietnamese control. Noting the importance of 
trilateral cooperation on these border cases, the Prime 
Minister was again urged to raise the need for archival 
documents and witnesses during future contacts with his 
counterpart, Vietnamese Prime Minister Pham Van Khai.
    In the context of pursuing information and leads on 
individual cases, the League presented a partial list of 
Vietnamese officials who had served in Cambodia and would 
likely be known to current and former Cambodian officials, 
requesting that unilateral Cambodian efforts be made to locate 
them for interviews. (The list was a duplicate of that provided 
to senior Vietnamese officials in the hope that the two 
governments would cooperate in locating these individuals.)
    Referring to the Prime Minister's previous letter in answer 
to the League's January request, the Delegation expressed 
appreciation for his pledge to seek information from former 
Khmer Rouge officials. Noting that unilateral Cambodian 
interviews are more likely to succeed in screening such 
individuals for relevant information, the League suggested that 
follow-up interviews by the US could then occur, as needed. A 
request was made that these efforts proceed as quickly as 
possible in view of the advancing age of sources and family 
members who long for answers.
    Recognizing the need for trilateral and multilateral 
cooperation, particularly with archival research, the League 
proposed the concept of the Four Party Conference and requested 
the Prime Minister's views, noting that the subject had also 
been raised in Hanoi and Vientiane.
    Finally, the League expressed regret over the lack of a 
more active US Government POW/MIA effort in Cambodia over the 
last two years, noting the rationale for decreased activity as 
being a reflection of political and safety concerns by some, 
not decreased interest. The League expressed optimism that an 
active program would now resume and gratitude that H.E. Chey 
Saphon was still eager to participate, noting his long-standing 
relationships with Vietnamese and Lao historians as especially 
helpful.
    Prime Minister Hun Sen first briefed some present (who did 
not know) on the history of cooperation between the League and 
Cambodia, stating his commitment to continue doing whatever is 
needed to assist and that he considers cooperation on this 
issue as a responsibility. He noted that the Cambodian people 
have suffered and lost so many family members that they 
understand and want to help on a humanitarian basis. He also 
expressed sensitivity to the hardship of uncertainty, 
mentioning that he had written a song about the subject of 
missing loved ones.
    On the subject of trilateral cooperation, the Prime 
Minister stated that after 1970, the border areas were mostly 
under Vietnamese control. He stated that Vietnam also would 
have information on cases in Laos, thus the importance of 
trilateral cooperation, adding that during that time forces 
were traveling back and forth along the border. He noted that 
within the week, he would be meeting with the Vietnamese Prime 
Minister and would use that opportunity, as he had before, to 
personally raise the need for Vietnam's assistance on archival 
records and ask him to urge the Vietnamese people to cooperate.
    In that same context, Prime Minister Hun Sen stated his 
strong support for the Four Party Conference, indicating that 
Cambodia would host the first such meeting, after consulting 
with Vietnam and Laos. He noted that trilateral meetings had 
been held in the past, but not yet the four parties all 
together. The Prime Minister stated his intention to assign his 
son (1999 graduate of West Point Military Academy) to the 
Cambodian POW/MIA Committee. He expressed his hope that his son 
might be able to participate in organizing the Four Party 
Conference during the summer months before returning to New 
York to continue his education, pursuing a graduate degree in 
economics.
    The Prime Minister agreed with the need for getting access 
to former Khmer Rouge officials, noting that some may have 
information and pledged to take advantage of opportunities to 
obtain answers. He indicated that in the case of highly visible 
Khmer Rouge, such as Duch and Ta Mok, their attorneys would 
need to be present for interviews, but expressed hope that the 
humanitarian mission would allow them to be questioned about US 
MIAs. He pledged that they would make every effort to locate 
sources of information and expressed appreciation for the list 
that the League had provided.
    The Prime Minister also stated that LTG Pol Saroeun, head 
of the POW/MIA Committee, having persuaded KR defections from 
Pailin, has responsibility for the mission and the ability to 
get information from the Khmer Rouge immediately as Deputy 
Commander in Chief of the Armed Forces and Chairman of the 
Joint Staff. He added LTG Saroeun also is tasked with reforming 
the Cambodian military forces, can write orders for them, and 
is publicly well known and admired by the Cambodian people.
    Comment: The Prime Minister was cordial, expansive and 
responded positively to all suggestions and requests. The 
importance of gaining Vietnam's cooperation was a theme that 
Prime Minister Hun Sen reinforced in several instances. The 
League responded that he and other Cambodian officials likely 
have unique influence with the Vietnamese leadership that 
neither the League nor the US Government possesses. In dealing 
with Vietnam and Laos, implementation of the commitments of all 
governments involved, including the US, must be closely watched 
to ensure follow-through and to measure results. In Cambodia, 
commitments are honored and implemented unless the US 
Government does not follow through, as has been the case during 
the long delay. Hopefully, that situation is now resolved, 
implementation can and will occur without further impediment, 
and progress will result.
    The same key points were raised with HRH Prince Norodom 
Ranariddh, President of the National Assembly, who also has a 
well-established history of support for the League's efforts. 
In addition to expressing appreciation for his personal support 
and that of the Cambodian government, the League suggested 
introduction of a Joint Resolution of the National Assembly and 
the Senate offering full bipartisan support for obtaining the 
fullest possible accounting for missing US personnel.
    Prince Ranariddh immediately agreed to introduce the 
resolution and was confident that there would be no problem 
with passage in either the National Assembly or the Senate, 
stating his intention to call His Excellency (H.E.) Chea Sim, 
President of the Senate. He stated his plan to visit Hanoi the 
next week for meetings with the entire leadership, during which 
he would raise the need for their full cooperation on the cases 
of Americans still unaccounted for in Cambodia.
    Comment: As in the past, His Highness was most cordial and 
responsive. The discussions made clear that Cambodia's 
cooperation on POW/MIAs spans the breadth of all parties in the 
newly formed coalition government, assurance that was welcome 
to the League Delegation, though anticipated.
    H.E. Chea Sim, President of the Senate, was attentive to 
the League's concerns, as in prior meetings. He expressed 
appreciation for the League's recognition of Cambodia's efforts 
to assist and agreed to work with Prince Ranariddh to ensure 
that a Joint Resolution is passed in the Senate. He stated his 
full confidence in LTG Pol Saroeun and Chey Saphon, historian, 
to implement the Four Party Conference, for which he also 
stated full support. (Since returning from the trip, H.E. Chea 
Sim has already sent a letter to the League stating his strong 
support for our ``noble mission'' and readiness of the Royal 
Cambodian Government to cooperate closely, plus ``undertake 
further steps to address the concerns of POW/MIA families.''
    Their Excellencies Sar Kheng and You Hockry, Co-Ministers 
of Interior, were gracious in time and attention during the 
League Delegation's presentation that covered the same key 
points. (The two ministers had met with League Delegations in 
the past.) Minister Sar Kheng stated that Cambodia would 
continue to cooperate fully, that there were no internal 
obstacles since the issue is viewed as humanitarian, and that 
implementation has enabled the two countries to build trust. 
Since the Ministers indicated that they also plan an imminent 
trip to Hanoi, the League Delegation asked them to raise the 
need for Vietnam's cooperation with their counterpart, 
Vietnamese Minister of Public Security Le Minh Huong, a request 
which was met with a positive response.
    The League hosted a working lunch with LTG Pol Saroeun, 
H.E. Sieng Lapresse, Major General Phoung Siphan, BG Kim Chan 
Nee and other members of the Cambodian POW/MIA Committee. 
Senior members of the POW/MIA Committee were present at most of 
the meetings with the Cambodian Ministers; therefore, informal 
discussions over lunch were most helpful. (Since the League 
Delegation returned, LTG Saroeun has already initiated contact 
to propose hosting the first session of the Four Party 
Conference.)
    The final meeting in Cambodia was with H.E. Chey Saphon, 
the designated historian of the Royal Cambodian Government who 
has worked closely with DIA's Stony Beach over the last few 
years. The League Delegation expressed appreciation for his 
personal dedication to obtaining answers for the families and 
for his hospitality in welcoming us to his personal residence. 
The Delegation indicated to Chey Saphon full confidence that 
his assistance is a key element of trilateral and four-party 
cooperation and expressed gratitude for his willingness to 
exert efforts on the difficult task of locating relevant 
archives and sources of information.
    Noting with sadness the loss of his colleague, Lao 
historian Sisana Sisane, the League indicated that such 
longstanding relationships with officials in Vietnam and Laos 
are potentially very useful, but time is short since all are 
aging.
    Mr. Chey Saphon indicated he is eager to continue his work 
with US officials and that he has already begun a renewed 
effort. He stated that he had worked closely with counterpart 
historians in Laos and Vietnam and was impressed with the scope 
of Vietnamese Government archives. He recognized the problem 
with passage of time and the need to move as quickly as 
possible. Referring to the aging of sources, League Adviser 
Richard Childress remarked to Chey Saphon, ``Each time an old 
man dies, a library burns,'' a sentiment with which Chey Saphon 
agreed.
    Assessment: The seriousness of the Royal Cambodian 
Government and its POW/MIA Committee, including H.E. Chey 
Saphon, stands as an example of full cooperation, yet there is 
much more that can be done and, in the League Delegation's 
view, will be pursued by responsible Cambodian officials. Undue 
caution on the US side was equally evident, especially in light 
of the humanitarian nature of the issue as recognized by 
Congress and others. The Delegation believes, however, that 
adjustments are being made to better utilize all assets and 
resources, following establishment of the new Royal Cambodian 
Government. These are welcome changes that will continue to be 
closely watched by the League, and further delays for less than 
valid reasons will be strongly opposed. Now that the political 
situation has stabilized, there should be no further excuses 
for failing to permit qualified US personnel to visit Cambodia 
whenever the need arises.
      

                                

                                       Sacramento, CA 95831
                                                      June 17, 1999

Honorable Phillip Crane, Chairman
Committee on Ways and Means
Subcommittee on Trade
United States House of Representatives
1104 Longworth House Office Bldg.
Washington, DC 20515

    Dear Honorable Crane,

    As a Vietnamese-American, I am writing this letter to urge you to 
support the waiving of the Jackson Vanik (J-V) requirement for Vietnam, 
and to encourage better U.S.-Vietnam trade relation for the following 
economic and political reasons.
    Economically, free trade would benefit all the countries involved. 
Specifically I believe strongly that waiving the J-V requirement for 
Vietnam would:
    (1) Encourage free trade between the U.S. and Vietnam,
    (2) Nurture a free market system in Vietnam, and
    (3) Improve economic conditions and standards of living of the 
people of U.S. and Vietnam.
    Politically, waiving the J-V requirement would:
    (1) Reinforce the image of the U.S. as a champion of free trade and 
free market system.
    (2) Provide free flow of information to Vietnam, and
    (3) Encourage needed political changes, democracy, and human rights 
improvement in Vietnam.
    I believe that many Vietnamese-Americans also share my view. In a 
recent Los Angeles Times survey of 861 Vietnamese Americans living in 
Southern California*, 69% of the respondents believed that lifting the 
trade embargo against Vietnam would have a positive effect on economic 
conditions for most of the people living in Vietnam. Only 6% believed 
that it would have negative effect. In addition, 49% believed that 
lifting the embargo would encourage democracy and human rights in 
Vietnam. Only 13% believed that it would discourage human rights.
    Waiving the J-V requirement for Vietnam would be in the best 
interest of the people of the U.S. and Vietnam, and would be in 
compliance with the spirit of the J-V requirement. I urge you to 
support this waiving.

            Respectfully,
                                                 Dan Nguyen

*``Southland Vietnamese Support Renewed Ties,'' D. Carvajal, T. Le, and 
L. Dizon, Los Angeles Times, June 12, 1994.
      

                                

Statement of Bruce R. Harder, Director, National Security and Foreign 
Affairs, Veterans of Foreign Wars of the United States

    Mr. Chairman and Members of the Subcommittee:
    The Veterans of Foreign Wars of the United States is 
pleased to be able to present a written statement for the 
record.
    This statement is the written testimony of Bruce R. Harder, 
Director, National Security and Foreign Affairs of the Veterans 
of Foreign Wars of the United States. We understand that the 
purpose of today's hearing is to evaluate overall U.S. trade 
relations with Vietnam and to consider President's renewal of 
Vietnam's waiver under the Jackson-Vanik Amendment to the Trade 
Act of 1974.
    My testimony today is limited to presenting the VFW 
leadership's views on the impact of the President's renewal of 
Vietnam's waiver under the Jackson-Vanik Amendment to the Trade 
Act of 1974 on the Prisoner of War (POW) and Missing in Action 
(MIA) issue as a result of the Vietnam War.
    The POW/MIA issue has been, and remains a priority issue 
with the Veterans of Foreign Wars of the United States. VFW 
Resolution Number 431, ``Americans Who Are Prisoners of War or 
Missing in Action,'' provides the VFW's policy on the POW/MIA 
issue. Our policy is broken down into two simple goals. The 
VFW's first goal is to reach the fullest possible accounting of 
Americans missing from all our nation's past wars. Our second 
goal is to urge the President of the United States of America 
and every member of the Congress to speak out on every occasion 
to expedite the return of those U.S. servicemen who are still 
unaccounted for from all our nation's past wars. To the VFW, 
full accounting means the return of either a live American 
serviceman or his identified remains to this country and his 
family for proper military burial with full honors.
    With 2,060 (1,534 in Vietnam) Americans still missing from 
the Vietnam War, we still have a long way to go before the 
accounting process is complete. The VFW supports the fullest 
possible accounting effort for those Americans who did not 
return home from the war.
    The VFW believes that it plays an important role in staying 
engaged with the U.S. government and other organizations on the 
POW/MIA issue. We closely review the government's program, 
policy, and activities for accounting for Americans who remain 
``unaccounted-for'' from all of our nation's past wars. As one 
of the largest and most respected veteran's organizations, we 
believe it is our responsibility to closely monitor activities 
and developments in the POW/MIA area and to take an active role 
when it is appropriate.
    I am responsible for keeping our National POW/MIA 
Committee, our Department POW/MIA Chairmen, and our national 
leaders informed on the POW/MIA issue. We accomplish our goals 
by staying in frequent contact with the Defense Prisoner of 
War/Missing Personnel Office (DPMO), and other veteran and 
family organizations on the issue. In addition, I closely 
monitor the news media and stay in regular contact with State 
Department representatives on issues related to POW/MIA 
accounting.
    The VFW has been making trips to Vietnam since July 1991. 
On our first trip VFW officials accompanied Congressman Lane 
Evans of Illinois and representatives of other Veterans Service 
Organizations to visit Hanoi, Hue City, and Ho Chi Minh City. 
Since that first visit, the VFW has made regular annual visits 
back to Southeast Asia. Last year, VFW representatives visited 
Vietnam on three separate occasions and Laos on two occasions. 
Our mission on every trip to Southeast Asia has been the same. 
We urge both U.S. Government and foreign government officials 
and their veteran's organizations to diligently work toward 
resolving the cases of Americans missing from the war in 
Southeast Asia. The VFW sends national officers to Southeast 
Asia each year to help remind all involved that the mission is 
not yet completed. We will not rest until the mission is 
accomplished and our missing comrades are accounted for. We 
will not forget those who were left behind. Our goal is to 
bring home every missing American warrior.
    Most recently, in December 1998, three of our national 
officers traveled to Southeast Asia to demonstrate our 
continuing commitment to the ``fullest possible accounting'' 
process for Missing Americans from the war. We went there to 
express our views and listen to key U.S. and foreign government 
officials and foreign veterans' organizations. Also, we went to 
visit the Joint Task Force-Full Accounting Detachment 
Headquarters in Hanoi, Vietnam and Vientiane, Laos to receive 
update briefings, collect information, meet key personnel, and 
discuss progress on POW/MIA accounting directly with them. As 
in the past, we found the Americans deployed under the command 
and control of Joint Task Force-Full Accounting to be highly 
motivated, dedicated, and focused on the mission.
    Our trips to Vietnam have occurred both before and after 
the trade embargo was lifted and diplomatic relations were 
established. Since the establishment of diplomatic relations 
between the United States and Vietnam, we have not seen any 
decrease in the effort to account for our missing men on the 
part of either the U.S. or Vietnam. On two visits to both 
Vietnam and Laos last year, we saw no evidence that current 
U.S. government policies on trade were having a negative effect 
on the MIA accounting process.
    We believe that current U.S. trade policies towards Vietnam 
have resulted in both gradual improvements in U.S.-Vietnamese 
relations in general and proportional improvements in 
Vietnamese cooperation in efforts to account for missing 
Americans from the war. A few examples of better overall U.S.-
Vietnamese cooperation are taken from the VFW Commander-in-
Chief's report of our most recent visit to Southeast Asia in 
December 1998.
    The following conclusions from Mr. Pouliot's trip report 
are offered as a result our discussions, meetings, and 
observations during the subject visit:
    ``In Vietnam, On the issue of unaccounted for Americans 
from the War in Southeast Asia, my conclusion is that the 
Vietnamese government appears to be cooperating 'in good faith' 
with the U.S. government in working to resolve the issue. 
Evidence that this is in fact happening is as follows:
    a. The Vietnamese government assists U.S. MIA activities 
with their own unilateral programs such as POW/MIA information 
distribution and unilateral investigations.
    b. The Vietnamese have made significant improvement in 
terms of both quantity and quality of their Unilateral 
Investigations over past years. U.S. analysts are now reviewing 
reports of the 14 unilateral investigations that were delivered 
to JTF-FA at Dalat in November 1998.
    c. The Vietnamese Office for Seeking Missing Personnel 
(VNOSMP) regularly receives information from Vietnamese 
citizens about missing Americans and passes it on to JTF-FA 
Detachment 2.
    d. VNOSMP is cooperating and working closely with DPMO to 
provide information to help complete the DPMO ``Remains 
Study.'' In November 1998, Mr. Bob Jones, DASD DPMO, requested 
VNOSMP assistance in answering additional questions that cut 
across several SRV government ministries. This includes 
requests for lists of American remains and documents that 
tasked civil and military authorities to inspect and confirm 
the location of American graves. Also, he has asked for a copy 
of a central government directive that dealt searching for, 
verifying and recovering the graves and personal effects of 
American pilots. Copies of documentary photos taken by SRV 
technicians of recovered remains were also requested. The SRV 
officials have said they remain committed to assisting DPMO in 
the completion of this study.
    e. VNOSMP obtains access for JTF-FA research teams.
    f. The Vietnamese have established an MIA office in Ho Chi 
Minh City and have established a joint document center in 
Hanoi.
    g. SRV Officials have agreed to focus their efforts on the 
43 last known alive cases. Early in 1999, U.S. and Vietnamese 
officials have agreed to participate in working level meetings 
on LKA cases.
    h. According to DPMO, Trilateral Operations (U.S./Vietnam/
Laos) have been successful. Vietnamese documents and witnesses 
are one of the best potential sources for resolving many cases 
of missing Americans in Laos and Cambodia. The Vietnamese have 
agreed to continue cooperative Tri-lateral efforts, especially 
with Laos.
    i. The Oral History Program and document turnover have been 
relevant for case investigation and resolution. In November 
1998, the Vietnamese turnover two new documents related to U.S. 
aircraft losses to U.S. analysts at Dalat. According to Mr. 
Jones, the Vietnamese officials promised continued cooperation 
in the search for additional documents, and the Vietnamese said 
they have issued a directive asking the Vietnamese people to 
bring forward any information they have on U.S. MIAs.
    Also, in Vietnam (SRV), leads and excavation sites will 
probably begin to thin out in 2002. Given the current number of 
planned investigations and excavations, JTF-FA operations in 
SRV will continue on a steady pace until at least FY2001. Cases 
remaining unresolved at that point will be extremely difficult 
to resolve because of the lack of information, terrain, and 
other factors. Their resolution may have to wait until new 
leads are uncovered in the future.''
    Some additional examples of progress on the POW/MIA issue 
is listed below according to the four criteria used by the 
Administration to measure Vietnamese cooperation.
    The first criteria are the efforts by Vietnam to recover 
and repatriate American remains. Since 1973, 523 Americans have 
been accounted for in Southeast Asia. Of that total, 387 were 
accounted--for from Vietnam. Also, since 1988, 54 Joint Field 
Activities (JFAs) have been conducted in the SRV (33 since 
1993). Five JFAs were conducted in SRV last year (1998). 
Typically, each JFA in SRV involves about 100 U.S. personnel 
working with Vietnamese counterparts doing investigations and 
excavation operations. Between December 1, 1998 and April 30, 
1999, Joint task Force-Full Accounting (JTF-FA) conducted 3 
Joint Field Activities (JFAs) in Vietnam. The past three JFAs 
resulted in the repatriation of 6 sets of remains. Over this 
period the Central Identification Lab Hawaii (CILHI) has 
identified 9 individuals representing 8 different cases. Since 
1993, 266 sets of remains have been repatriated. Since 1993, 
117 identifications in SRV.
    In addition, the SRV has been responsive to U.S. requests 
to conduct case-specific unilateral investigations. These 
investigations include witness interviews and archival 
research. Each year the SRV reserves two periods during which 
Vietnamese unilateral teams conduct investigations and then 
report their findings to U.S. officials. Vietnamese unilateral 
investigation teams have provided reports on 38 different 
cases. The total number of unilateral reports since 1993 is 
162. Vietnam's unilateral efforts have supported the U.S. 
``Remains Study'' that evaluates the SRV's official efforts to 
recover American remains. The SRV responses provided to U.S. 
questions reflect extensive research and investigative 
activity. In one instance, the SRV's investigative results lead 
directly to the identification of U.S. remains.
    The VNOSMP pledged to continue cooperation with the U.S. 
government to execute joint and unilateral operations designed 
to resolve the cases of missing Americans from the war to the 
fullest extent possible.
    In November 1998, Mr. Robert L. Jones, DASD DPMO, requested 
an SRV Foreign Ministry review of the ``deferred'' and ``no 
further pursuit'' category of unaccounted-for cases. The idea 
was to determine if the Vietnamese possessed additional 
information pertaining to these cases. Vietnamese Vice Foreign 
Minister Bin promised a formal response to Mr. Jones by the end 
of March 1999, and the response was delivered to DPMO on time. 
Analysts at JTF-FA and DPMO are now reviewing and analyzing the 
Vietnamese response.
    The second criteria are the continued resolution of ``last 
known alive'' (LKA) priority discrepancy cases. Of the 196 
persons associated with ``last known alive'' cases (individuals 
who survived their loss incidents, but did not return alive and 
remain unaccounted-for) in Vietnam. Fate has been determined 
for all but 43 of these individuals. Determination of the fate 
for individuals on this list last occurred in May 1998 when the 
fate of five individuals was determined.
    Of the 153 ``last known alive'' cases whose fate has been 
determined, DoD has resolved the cases or identified the 
remains of 37 formerly unaccounted-for Americans who were 
originally on the LKA list. Fourteen of these identifications 
were completed in the last five years. These are the most 
difficult cases to solve.
    The special remains list is a representative sampling of 
cases for which the U.S. government has evidence that the SRV 
government, at one time, possessed remains of American 
servicemen that were still unaccounted for in 1993 when the was 
prepared and given to the SRV. The U.S. government has resolved 
special remains cases involving 19 individuals. This reduces 
the original list of 98 individuals on this list to the present 
list of 79 individuals.
    The third criteria are Vietnamese assistance in 
implementing the trilateral investigations with Laos. Since 
1994 when the agreement for these investigations was signed, a 
total of 31 Vietnamese witnesses have participated in 
operations in Laos. In March 1999, a Laotian witness 
participated in an investigation in Cambodia. As of April 1999, 
Vietnam identified more than 40 witnesses for participation in 
future operations in Laos. Eight witnesses were identified 
since December 1, 1998.
    The fourth criteria are accelerated Vietnamese efforts to 
provide all POW/MIA related documents. Since 1994, when 
Vietnamese unilateral search teams were created, the Vietnamese 
Office for Seeking Missing Personnel (VNOSMP) has provided 14 
separate turnovers totaling more than 300 documents that 
consist of 500-600 untranslated pages. Recently, VNOSMP 
provided 12 documents in two separate turnovers. These were 
related to the U.S. study of Vietnam's collection and 
repatriation of U.S. remains or `` Remains Study.'' In 
addition, over 260 oral histories have been conducted not 
including the hundreds completed during JFA operations. 
Finally, over 28,000 archival items were reviewed and 
photographed since January 1993 by joint research teams.
    Since we did not observe a decrease in the POW/MIA 
accounting and cooperation effort with the Vietnamese after the 
lifting of the trade embargo, establishment of diplomatic 
relations, and past waiver of the Jackson-Vanik Amendment, it 
suggests that this year's waiver of the Jackson-Vanik Amendment 
restrictions will not result in any decrease in cooperation 
between our countries on the POW/MIA issue. The Vietnamese know 
that the POW/MIA accounting is the single most important issue 
governing the relationship between our two countries. Based 
upon our observations and conversations with JTF-Full 
Accounting personnel and other U.S. government officials during 
our visit to Vietnam in December 1998, it is my opinion that 
current trade relations with Vietnam may have helped rather 
than hindered the accounting process for missing Americans. 
Also, if improving U.S.-Vietnamese trade relations and 
normalizing our relationship with Vietnam helps us reach our 
goal of the ``fullest possible accounting'' of missing 
Americans, then it makes sense to do so.
    Finally, I'd like to point out that the VFW has had a POW/
MIA initiative for the last several years. Briefly, we 
encourage our members to come forward with information and 
documentation about Vietnamese casualties from the war. Keeping 
the information anonymous, we then present the information to 
the Vietnamese veterans' organization when we visit Vietnam. We 
have presented information about their losses to their veterans 
on four different occasions. We believe this initiative has 
helped improve relations with the Vietnamese people, and shows 
American sincerity in attempting to resolve this issue. 
Feedback from Joint Task Force-Full Accounting personnel 
permanently stationed in Hanoi, indicates that this initiative 
others like it, have resulted in improved cooperation between 
U.S. personnel and Vietnamese counterparts. Also, we have asked 
the Vietnamese veterans for help in resolving some of the most 
difficult cases of our missing in action.
    In conclusion, the VFW believes that progress has been made 
on POW/MIA accounting in Vietnam, Laos, and Cambodia since the 
establishment of Joint Task Force-Full Accounting in January 
1992. Over the past decade years, we have developed an 
effective and cooperative relationship with Vietnam on the POW/
MIA issue. Since 1992, this partnership with Vietnam has 
produced reasonable results in the accounting process, but more 
work still remains. Twenty years ago the relationship between 
our countries was not very good and as a result, the POW/MIA 
accounting process was slow and less productive. Our visits to 
Southeast Asia, our meetings and discussions with both the 
Department of Defense and Department of State officials here in 
Washington, and our constant review of monthly POW/MIA 
progress, lead us to the conclusion that we should continue the 
policy of engagement with Vietnam. We believe that current 
relationship between the U.S. and Vietnam is helping the POW/
MIA accounting process.
    Finally, our primary goal is to achieve the fullest 
possible accounting of Americans missing from the war in 
Southeast Asia as well as all Americans missing from all our 
nation's wars and conflicts. We think the normalization of 
trade relations between the United States and Vietnam helps to 
accomplish this goal. Our view is that the current effort with 
Vietnam, Laos and Cambodia is producing positive results. 
Certainly, we are not satisfied that it has taken so long to 
reach this point. The current effort should have begun the 
moment the guns feel silent. We will continue to remain 
vigilant and press our government and those foreign governments 
to reach the fullest possible accounting as soon as possible. 
But, no matter how long it takes, the VFW will continue to 
strive to reach our goal--the fullest accounting for every 
missing American warrior.
    Mr. Chairman and Members of the Subcommittee, thank you for 
this opportunity to present the views of the Veterans of 
Foreign Wars of the United States on the issue of U.S.-Vietnam 
Trade Relations.
      

                                

Statement of Tanette Nguyen McCarty, Vietnamese-American Voters' 
Coalition, Long Beach, California

    Mr. Chairman:
    My name is Tanette Nguyen McCarty. I am an econometrician 
with the New York State Division of the Budget. My father, 
Professor Nguyen Ngoc Huy, was a professor of law and political 
science in South Vietnam, the leader of a prominent political 
party, the Tan Dai Viet, and a member of the South Vietnamese 
delegation to the Paris Peace Talks. He and his friends shared 
a common goal: to bring freedom and democracy to Vietnam. His 
work is being continued in the United States by the Vietnamese-
American Voters Coalition. I am here to speak for the Coalition 
and to oppose a second waiver of the Jackson-Vanik amendment 
for Vietnam.
    Last year at this time, the Vietnamese-American Voters 
Coalition expressed its opposition to the waiver of the 
Jackson-Vanik amendment for Vietnam. Our opposition was based 
on the view that the waiver would hurt the cause of freedom in 
Vietnam.
    Despite our opposition, the waiver was approved. But now, a 
year later, events appear to bear out our original concerns. 
Despite the granting of the waiver, the human rights situation 
is no better than it was. On the contrary, it has gotten worse.
    The communist regime is still imprisoning hundreds of 
religious and political dissidents, such as Professor Nguyen 
Dinh Huy, journalist Nguyen Ngoc Tan; the Catholic priests, 
Rev. Mai Duc Chuong and Rev. Pham Minh Tri; the United Buddhist 
Church of Vietnam monks, (Venerable) Thich Thien Minh and 
(Venerable) Thich Hue Quang, and the Hoa Hao Buddhist leader, 
Le Van Son.
    The regime has also intensified the atmosphere of 
repression in Vietnamese society. Dr. Nguyen Thanh Giang, a 
geologist and well known political dissident in Hanoi, was 
arrested and only released last month because of intense 
international pressure on the Vietnamese government. In the 
meantime, direct threats have been made against other Hanoi 
dissidents, including Hoang Minh Chinh, Hoang Tien, Vu Nuy 
Cuong, Nguyen Kien Giang and Hoang Huu Nhan.
    The decree on administrative detention (31/CP) that 
authorizes village level Peoples' Committees and public 
security officials to detain individuals without trial for from 
six months to two years remains in force and it inspires fear 
throughout the country because it is applied to those persons 
deemed to have violated laws on national security but whose 
offense ``is not serious enough to be prosecuted criminally.''
    The continuing repression in Vietnam exacts a heavy toll on 
the Vietnamese people. Revenue from foreign trade and even 
humanitarian aid, such as relief for the victims of Typhoon 
Linda provided by the International Red Cross, have been stolen 
by corrupt officials and corruption is the underlying reason 
why despite several years of bumper rice crops in the Mekong 
Delta, the standard of living of the people living there has 
not changed.
    The U.S. State Department, in its report on human rights in 
Vietnam in 1998 said that the government's human rights record 
remained poor and that the regime continued to repress basic 
political and religious freedoms.
    In the debate over the waiver of the Jackson-Vanik 
amendment for Vietnam last year, one of the most substantial 
arguments in favor of the waiver was that Vietnam no longer 
required exit permits as a pre-condition for access to 
interviews under the U.S. Resettlement Opportunity for 
Vietnamese Returnees Program (ROVR.) In fact, Vietnam did not 
eliminate the necessity of an exit permit but only delayed it 
until after the interview. The reality, as viewed from inside 
Vietnam, is that the emigration situation has not improved.
    In light of these conditions, we urge that the proposed 
waiver of the Jackson-Vanik amendment for Vietnam be denied, 
until the Vietnamese government satisfies at least three 
important conditions. The Vietnamese government should:
    1. Immediately and unconditionally release all religious 
and political prisoners and allow them to assume an active role 
in the life of the country without discrimination, harrassment 
or surveillance;
    2. Immediately grant freedom of religion, expression, 
assembly, movement; and
    3. Amend the constitution to allow all individuals and 
political parties to compete equally in all popular elections.
    Freedom and respect for human rights constitute the core of 
our nation. As the most powerful democracy in the world, we 
must do our best to encourage the same principle in other 
nations that we live by ourselves. My father, who left Vietnam, 
the day before the communists took over, escaped the fate of 
many who spent years wasting away in so called ``reeducation 
camps.'' But he never forgot those who were left behind. We 
must not forget them either.
    There are many persons who argue that the waiver of the 
Jackson-Vanik amendment and the eventual extension of most 
favored nation status to Vietnam will promote the 
liberalization of Vietnamese society. The experience of the 
last year--as well as all our knowledge of the nature of 
communist societies--suggests that exactly the opposite is the 
case. It is only the insistence on the fulfillment of strict 
conditions in return for concessions that is able to promote 
change.
    I therefore urge you to reject an extension of the waiver 
of the Jackson-Vanik amendment for Vietnam. I make this request 
in the names of the many brave American soldiers who died in 
Vietnam, in my father's name, and in the name of all the 
political prisoners in Vietnam who cannot speak for themselves.
    Thank you.
      

                                

Vietnamese Nationalist Community of Austin and Vicinity    
                                      Austin, TX 78708-1574
                                                      June 11, 1999

The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
1104 Longworth House Office Building
Washington DC 20515

    Dear Mr. Chairman:

    We represent the Vietnamese community of Austin, Texas and its 
neighboring areas. In lieu of a personal appearance before the House 
Ways and Means Subcommittee on Trade regarding this year's Jackson-
Vanik waiver for the R'S Vietnam granting Normal Trade Relations, 
formerly known as the Most Favoured Nation Status, we are writing you 
to express our opinions as well as the opinions of those living within 
our communities.
    Based on our own recent personal experiences and information from 
members of our communities, in which we represent, we would like to 
express the following thoughts and facts:
    1. 17th June in Vietnamese history marks the day in which a 
National Vietnamese Hero Nguyen Thai Hoc and many other Vietnamese 
nationals were executed for their belief and adherence to the ideals of 
an independent nation governed by its citizens, a nation of the people 
and for the people.
    2. The Vietnamese Communist Party (VCP) has relaxed its grips 
somewhat but still maintains firm and total control of all aspects of 
life in Vietnam. Its government process is closed to all, and 
accountable to no one, except a few members of the party's top 
politburo. This absolute power has allowed the VCP to corrupt Vietnam 
absolutely. The VCP has always made international businesses support 
and contribute to its absolute power. Do we allow any members of our 
political system to get away with such corruption and abuse of power?
    3. The Vietnamese Communist Party and its members at all levels 
have been systematically abusing their authority and power to extort 
and exploit the people of Vietnam and all business entities to 
illicitly profit its members, and to ultimately perpetuate its rule. 
Specifically, international companies, investors and applicants for 
exit visas, have all been subjected to difficulties and unnecessary 
delays by VN government officials for political persecution and for 
extracting large bribes. ``In October 1997, journalist Nguyen Hoang 
Linh, the editor of a business newspaper, was arrested, charged and 
convicted for publishing articles detailing alleged corruption among 
customs officials'' (US Department of State, Vietnam Country Report on 
Human Rights Practices for 1998). Many international business 
executives have lost all their investments in Vietnam, and even their 
freedom, due to Vietnam's corrupt government and judicial systems and 
arbitrary interpretation and enforcement of the laws. Reuters has 
reported that 120 companies and 19 banks have sold their assets and 
left Vietnam in the first two months of 1999 due to lack of profits.
    4. The Vietnamese Ambassador Le Van Bang was presented with 
questions at a Symposium of ASEAN Ambassadors held on 9 April, 1999 at 
the University of Texas at Austin. Present at this Symposium were 
several Vietnamese groups representing the community. Although the 
official government position states that the economy is booming, the 
GDP per capita is approximately $300 (this is less than a roundtrip 
airplane ticket from Austin, Texas to San Jose, California). One must 
ask the question, who benefits from the booming economy? The average 
citizen or specific members of the government? Furthermore, Ambassador 
Bang stated that the economy grew at a rate of 6% last year. This 
official growth rate conflicts with reports from sources well regarded 
as the IMF, Reuters and the Wall Street Journal. The Wall Street 
Journal indicates that the actual growth rate for Vietnam is 3%, a 
clear difference of 3%. If this were a poll where a 2% or 
3% didn't really make a difference, this discrepancy would be 
tolerated. However, this is not a poll that allows for a margin of 
error. This is actual figures by which one ascertains the true value of 
any business enterprise. Clearly, Mr. Alan Greenspan cannot get away 
with such an erroneous statement of fact, why should the Vietnamese 
government represented by its Ambassador be allowed to make such a 
false statement? As other member nations of ASEAN continue to reform 
their political systems to be more open and democratic, to remove as 
many barriers and economic regulations in response to the economic 
crisis that occurred last year, Vietnam is tightening it's political 
system and increasing regulations in its economic policy. Do we truly 
want a trade partner that creates an environment where it economically 
benefits one party, and it is not the US?
    5. The government of Vietnam has been blatantly denied its people 
their basic human rights and freedom of religion, expression and 
politics. They have been imprisoning and torturing hundreds of 
religious and political leaders who peacefully demanded their basic 
rights. Vietnam's severe oppression of religious freedom was clearly 
confirmed by the United Nation's Special Rapporteur on Religious 
Intolerance Abdelfattah Amor's report on his visit to Vietnam in 
October 1999, published in February 1999. Even the UN's envoy was 
prevented from visiting senior representatives of the non-government 
sanctioned Unified Buddhist Church of Vietnam. Lack of accomodation and 
disrespect to a request made by an envoy of the international 
community, who is also representing the US, should be a concern, 
particularly in a matter that is not as explosive as the concealing of 
the development of biological weapons or is Vietnam truly concealing 
something? We would like to suggest that Vietnam is concealing its 
continued dehumanization of the human person by not respecting the 
basic fundamental rights of all human beings, the rights of expression, 
the right of self-determination.
    6. Since 1998, the political oppression by the VN government has 
become worse. The VN government has implemented its 31/CP directives 
that allows imprisonment of any critics, dissidents or suspects for up 
to 2 years in inhumane detention centers without legal charges.
    7. Since the Communist Party has unlimited and unaccountable power, 
revenue and profit from foreign trades, and even humanitarian aids, 
have been widely known to be liberally skimmed off by the Communist 
Party and many layers of its members for their personal gains. Trade 
with the US will benefit only the Communist Party and its members, who 
will use the proceeds to further control, manipulate, oppress and 
impoverish the people of Vietnam, in effect lengthening the cycle of 
injustice, oppression, poverty and hopelessness. US trading privileges 
for Vietnam will therefore further deepen the inequity, injustice, 
oppression and impoverishment of the people of Vietnam.
    To encourage the Vietnamese Communist government to increase the 
speed and intensify its political and economic reforms toward a more 
just, fair, and equitable system for the people of Vietnam, we urge the 
US government not to grant special trading privileges to the government 
of Vietnam until it meets the following conditions:
    1. Vietnam must honor the United Nation's International Covenants 
on Political and Civil Rights, in which it is a party and signatory, 
and grant immediate and unconditional release of all religious and 
political prisoners without confinement, harassment and surveillance.
    2. Vietnam must immediately grant all its citizens freedom of 
religion, expression (speech, press, Internet), congregation, movement 
and political alliances.
    3. Vietnam must amend its constitution to allow all individuals and 
political parties, besides the Communist Party members, to compete 
openly and fairly in all social, economic, political and professional 
activities, with internationally supervised elections.
    We are not advocating that ties to Vietnam be ceased nor censured. 
However, we are advocating a measure of constraint. Although exports to 
Vietnam is not as great as that to other nations and thus, we can 
easily waive this issue aside and state that it's only a little bit of 
money that we are concerning ourselves with, we, as a country, still 
have to stand up for the principle. The principle here is the right of 
human beings to determine their own destiny in a democratic society. 
Why do we continue to broadcast Radio Free Asia when the broadcast is 
being jammed by the Communist government of Vietnam? If it were not for 
the ideals of democracy, freedom of religion, freedom of expression, 
everything the United States of America is founded upon, then there is 
no purpose. We have broadcasts continuing for years in the direction of 
Cuba. Why? Because we believe that our ideals of a free, democratic 
nation is worth it. Should it not also be worth it to us as a nation to 
continue to encourage these ideals in other nations? We send our men 
and women to be peace keepers in Kosovo as part of an international 
peace keeping force. Why do we do this? Again, it is because we believe 
in the respect and dignity of the human person to strive towards 
freedom of expression, freedom of determination in a democratic 
society. Should we not be consistent with our national agenda and make 
a difference in this matter of the RS Vietnam? We urge the members of 
this most esteemed and honoured group to not grant Vietnam Normal Trade 
Relations nor any other special trading privileges.
    We thank the distinguished members of the House Ways and Means 
Subcommittee on Trade for considering our perspective and position.
                                          Mr. Khanh K. Chau
                                                          President
                                       Mr. Hung Quoc Nguyen
                                          Public Relations Director
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