Against a backdrop of the expanding and deepening of U.S.-Vietnam relations, in late June, Vietnamese Prime Minister Nguyen Tan Dung traveled to Washington, DC, to meet with President Bush. Since 2005, the United States and Vietnam have held annual visits between President Bush and either the Vietnamese President (the official head of state) or the Prime Minister (the head of government). The White House appears to be using these top-level meetings to try to encourage economic and political reforms inside Vietnam. Dung also became the highest level Vietnamese official since the Vietnam War to visit the Pentagon, where he met with Secretary of Defense Robert Gates. Dung's trip was notable for the number and range of agreements the two governments came to, as well as the new steps they took to deepen their level of engagement. Major developments included: the announcement of a formal "Security Dialogue" on political-military issues, a process that the United States has with four other Southeast Asian countries; the launch of bilateral investment treaty (BIT) negotiations; the Bush Administration's announcement that it would begin the process of exploring whether to add Vietnam to the Generalized System of Payments (GSP) program, which extends duty-free treatment to certain products that are imported from designated developing countries; an agreement in principle to introduce a Peace Corps program in Vietnam; the launch of a "high-level" bilateral Education Task Force; the announcement of new initiatives on adoptions, nuclear safety, aviation, climate change, food safety, and other issues. In another high-level visit, Deputy Secretary of State John Negroponte traveled to Vietnam from September 11-14, 2008. It was his first trip to Vietnam since the signing of the Paris Peace Accords in 1973 that ended direct U.S. military actions in Indochina. Obtaining GSP status from the United States has become a major objective for Vietnam. The week before Dung's visit, the Bush Administration announced it would begin a review of whether Vietnam meets the eligibility criteria for designation as a beneficiary country under the GSP program. The primary purpose of the program, which the United States and other industrial countries initiated in the 1970s, is to promote economic growth and development in developing countries by stimulating their exports. S. 3678 , the Senate version of the Vietnam Human Rights Act, would prohibit Vietnam's entry into the GSP program unless Vietnam's labor rights regime is certified as making improvements in certain areas, particularly the right of association. In March 2008, United States and Vietnamese trade officials held their second meeting under the bilateral Trade and Investment Framework Agreement (TIFA) that was signed in June 2007. In the first TIFA meeting, in December 2007, the two sides reportedly discussed Vietnam's compliance with its WTO commitments in distribution and other service sectors, as well as other issues. The U.S. urged Vietnam to improve enforcement of intellectual property protection, a perennial point of friction. These diplomatic initiatives have occurred against a backdrop of rapidly expanding bilateral trade and investment flows. In the year after Vietnam joined the World Trade Organization (WTO) in January 2007, U.S.-Vietnam trade rose more than 30%, to over $12.3 billion. For the first eight months of 2008, year-on-year trade was up by 30%. U.S. firms continue to be among the largest sources of foreign direct investment in Vietnam, as symbolized by Intel Corp's $1 million manufacturing plant, due to open in 2010. Many Vietnamese are concerned about reports that the United States will renew its "import monitoring program" for certain clothing and textiles from Vietnam which allows the Commerce Department to self-initiate antidumping investigations when warranted. The current program is scheduled to expire with the end of the Bush Administration. The U.S. imported about $4.3 billion in clothing items from Vietnam in 2007. Vietnamese officials also are concerned that the implementation of certain provisions of the Food, Conservation, and Energy Act of 2008 ( P.L. 110-246 ), passed in June 2008, may reduce Vietnamese fish farmers' catfish exports to the United States. Among other items, the law will effectively transfer catfish inspection from the Food and Drug Administration to the U.S. Department of Agriculture, which currently is drafting regulations to implement the provision. These regulations conceivably could require a formal USDA determination that Vietnamese safety standards are equivalent to U.S. standards, before such catfish could be imported into the United States, which might at least temporarily disrupt such shipments. Catfish exports account for about one-quarter of the exports by Vietnam's aquatic industry, an important sector in Vietnam. In 2007, Vietnamese fish farmers exported approximately 21,200 MT of catfish (worth about $67.6 million) to the United States, up from 14,800 MT ($35.3 million) in 2005. Since late 2007, Vietnam's economy has been buffeted by economic difficulties that have increased social strife and raised concerns about the country's economic stability. In 2007 and the first half of 2008, the country experienced soaring inflation and acute, downward pressure on the country's currency, the dong. The problems caused by inflation were particularly onerous, as the prices of some food items rose by over 50%, leading workers in a number of factories to go on strike demanding higher wages. Although the increase in the inflation rate has halted and perhaps reversed, the year-on-year rise in prices is still over 20% (it was 26.7% in October). Some economists have said Vietnam's still-developing institutional and financial infrastructure has contributed to or even caused many of the problems. Vietnam's growing trade and budget deficits continue to cause concern, including among credit agencies, which in 2008 have downgraded the outlook on Vietnam's sovereign rating from stable to negative. Although restrictions on international financial transactions have limited Vietnam's direct exposure to the global financial and credit crises, the secondary effects have created new pressures on Vietnam, which is heavily dependent on trade and foreign direct investment inflows. Some selected figures illustrate Vietnam's vulnerability to the global slowdown and collapse in commodity prices: exports are equivalent to 80% of GDP; about 60% of Vietnamese exports go to the United States, the European Union, and Japan; and oil revenue accounts for 30% of the government's revenue. For 2008, GDP growth is expected to be just over 6%. Many forecasters expect growth to be even lower in 2009, perhaps in the 4%-6% level. Nominal GDP growth of 7% is a key threshold in the minds of many Vietnamese policymakers for creating the jobs necessary for the VCP and the government to maintain social stability. To spur economic growth, the Vietnamese government took a number of steps in the fall and winter of 2008, including announcing a $6 billion stimulus package, lowering some corporate tax rates, cutting interest rates, and allowing the dong to depreciate against the U.S. dollar. In March 2008, Vietnam, the world's second-largest exporter of rice, imposed restrictions on rice exports in order to lower prices in its domestic market. The U.S. Secretary of Agriculture criticized this move by Vietnam and other commodity exporters, saying they were exacerbating the global rise in food prices. In June, Vietnam relaxed the export restrictions. In October 2008, the United States and Vietnam held their first Security Dialogue on Political, Security, and Defense Issues. At the Hanoi meeting, the Vietnamese military reportedly asked the United States to supply spare parts for its American-made Huey helicopters that are leftovers from the Vietnam War. The two governments also discussed integrating Vietnamese soldiers into United Nations peacekeeping operations, and American military help with disaster relief in Vietnam. The Bush Administration's FY2009 budget request included a request for $500,000 in foreign military financing (FMF) for Vietnam, the first time Hanoi would be included in this program. Over the past several months, some Vietnam watchers have seen signs that Prime Minister Dung and other reform-minded leaders are losing ground in the ongoing battles they reputedly have with more conservative minded officials. The reformers are generally thought to have been ascendant since 2000, when a prolonged logjam over the future of economic reform was broken in favor of a new consensus to deepen Vietnam's integration with the global economy and to push through a new series of market-oriented economic reforms. Additionally, the ascendancy of the reformers has coincided with Hanoi's moves to upgrade relations with the United States, its increased willingness to discuss human rights disagreements, its loosening of restrictions on the Vietnamese press, and its more aggressive drive to root out corruption, which the Vietnamese Communist Party (VCP) sees as one of the greatest threats to its legitimacy. Among the indicators that the conservatives may be pushing back: the arrest and sentencing of Thanh Nien journalist Nguyen Viet Chien for "abusing" his position by reporting on corruption at high levels in the government; a decision by the 160-person VCP Central Committee in May 2008 to give greater authority over the economy to the 14-member Politburo (presumably diminishing the prime minister's role); and an escalating land dispute between the Catholic archdiocese of Hanoi and the Hanoi People's Committee (Hanoi's communist party organ), in which the Hanoi authorities have broken up sit-ins by Catholics protesting the city's plans to redevelop land that the church was forced to turn over to the government decades ago. Much of the Western speculation has pitted the reportedly growth-oriented Dung against the more conservative VCP General Secretary, Nong Duc Manh, who may place a higher priority on social and political stability. Vietnam's human rights record continues to be a persistent thorn in the side of the relationship. Vietnam is a one-party, authoritarian state ruled by the Vietnamese Communist Party (VCP).