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Order Code RL33316 U.S.-Vietnam Relations: Background and Issues for Congress Updated October 31, 2008 Mark E. Manyin Specialist in Asian Affairs Foreign Affairs, Defense, and Trade Division U.S.-Vietnam Relations: Background and Issues for Congress Summary After communist North Vietnam’s victory over U.S.-backed South Vietnam in 1975, U.S.-Vietnam relations remained essentially frozen until the mid-1990s. Since then, bilateral ties have expanded remarkably, to the point where the relationship has been virtually normalized. Indeed, since 2002, overlapping strategic and economic interests have compelled the United States and Vietnam to improve relations across a wide spectrum of issues. Congress played a significant role in the normalization process and continues to influence the state of bilateral relations. Voices favoring improved relations have included those reflecting U.S. business interests in Vietnam’s reforming economy and U.S. strategic interests in expanding cooperation with a populous country — Vietnam has over 85 million people — that has an ambivalent relationship with China. Others argue that improvements in bilateral relations should be conditioned upon Vietnam’s authoritarian government improving its record on human rights. The population of over 1 million Vietnamese Americans, as well as legacies of the Vietnam War, also drive continued U.S. interest. Economic ties are the most mature aspect of the bilateral relationship. The United States is Vietnam’s largest export market. The final step toward full economic normalization was accomplished in December 2006, when Congress passed and President Bush signed H.R. 6111 (P.L. 109-432), extending permanent normal trade relations (PNTR) status to Vietnam. For years, the United States has supported Vietnam’s market-oriented economic reforms, which many credit with Vietnam’s extraordinary economic performance; from 1987-2007, annual gross domestic product (GDP) growth has averaged over 7%. Since the early 1990s, poverty levels have been halved, to less than 30%. In 2008, the two countries launched bilateral investment treaty (BIT) talks and the Bush Administration announced that it would explore 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. Since 2002, the United States and Vietnam have expanded political and security ties, symbolized by reciprocal summits that have been held annually since 2005. Vietnam is one of the largest recipients of U.S. assistance in East Asia; estimated U.S. aid in FY2008 surpassed $100 million, much of it for health-related activities. In September 2007, the House passed the Vietnam Human Rights Act, H.R. 3096, which would freeze some non-humanitarian U.S. assistance programs at existing levels if Vietnam does not improve its human rights situation. Since 2006, arrests of dissidents and other developments have increased concerns about human rights. Vietnamese leaders have sought to upgrade relations with the United States due in part to worries about China’s expanding influence in Southeast Asia and the desire for continued U.S. support for their economic reforms. Many argue, however, that there is little evidence that Hanoi seeks to balance Beijing’s rising power. Also, some Vietnamese remain suspicious that the United States’ long-term goal is to end the Vietnamese communist party’s monopoly on power through a “peaceful evolution” strategy. Contents Major Developments in 2008 .........................................1 June 2008 Summit .........................................1 GSP and Other Bilateral Economic Developments................2 Expanding Security Ties ....................................3 Human Rights Developments ................................3 Economic Difficulties in Vietnam .............................3 Renewed Sino-Vietnamese Tensions over South China Sea Claims...4 Vietnam’s Security Council Membership .......................5 Introduction ......................................................5 U.S.-Vietnam Relations, 1975-2000 ...................................7 Policy Initiatives During the Carter Administration ...................7 Developments During the Reagan and Bush Administrations............7 Developments During the Clinton Administration ....................9 U.S.-Vietnam Relations, 2000-2008 ..................................10 Reciprocal Summits ...........................................10 June 2005 ...............................................10 November 2006 ..........................................11 June 2007 ...............................................11 Economic Ties...............................................11 PNTR/WTO Membership ..................................12 U.S.-Vietnam Trade Flows .................................12 Imports of Vietnamese Clothing .............................14 Intellectual Property Rights (IPR)............................14 U.S. Bilateral Economic Assistance to Vietnam .....................15 Human Rights and Religious Freedom ............................16 A Wave of Arrests of Vietnamese Dissidents...................17 Religious Freedom........................................17 The Vietnam Human Rights Acts ............................18 Political and Security Ties ......................................19 Military-to-Military Ties Expand .............................19 Agent Orange............................................20 Human Trafficking........................................22 Vietnam War Resettlement Programs .........................23 POW/MIA Issues.............................................23 Vietnam’s Situation...............................................23 Economic Developments.......................................24 Political Trends ..............................................25 The National Assembly....................................25 The Tenth Party Congress ..................................26 Foreign Policy ...............................................27 Sino-Vietnam Relations....................................27 Refugees in Cambodia .....................................28 Legislation in the 110th Congress.....................................28 List of Figures Figure 1. Map of Vietnam..........................................31 List of Tables Table 1. U.S.-Vietnam Merchandise Trade ............................13 U.S.-Vietnam Relations: Background and Issues for Congress Major Developments in 20081 June 2008 Summit. 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:2 ! 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 1 Information for this report not otherwise sourced came from a variety of news articles, scholarly publications, government materials, and interviews by the author. 2 Sources Include: “Joint Statement Between The United States of America and The Socialist Republic of Vietnam,” June 25, 2008; “President Bush Meets with Prime Minister Dung of Vietnam,” White House Press Secretary, June 24, 2008; “Fact Sheet: The United States and Vietnam: Expanding Relations,” State Department Fact Sheet, June 24, 2008. CRS-2 signing of the Paris Peace Accords in 1973 that ended direct U.S. military actions in Indochina. GSP and Other Bilateral Economic Developments. 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 Generalized System of Preferences (GSP) program. The program extends duty- free treatment to certain products that are imported from designated developing countries. 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 these countries by stimulating their exports.3 S. 3678, the Senate

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