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Washington Indochina Update

 

May 2006

 

in this issue

 

 

US and Vietnam Complete 13th and Final WTO Round

Bill Gates Visits Vietnam

Cambodia Survives Abolition of Textile Quotas But Outlook for US Trade Bill Grim

Peace Corps To Inaugurate First-Ever Program in Cambodia

Hearing on Vietnam Agent Orange Suit Delayed in US Court

 

 

 

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The Fund for Reconciliation and Development builds bridges between the United States and Vietnam, Laos, Cambodia and Cuba. Our non-partisan programs have sought since 1985 to heal the wounds of war by fostering mutual understanding and respect and by addressing lessons and legacies of conflict. We encourage and facilitate cooperation in education, trade, people-to-people exchanges, and humanitarian and development assistance, working in partnership with foundations, other not-for-profit organizations, business, academic institutions and governments.

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Washington Conferences
June 19-22


FRD is organizing linked but separate conferences on legacies and lessons of the process of US normalization with Cambodia, Laos and Viet Nam. Participants are urged to arrange personal meetings with Congressional staff to address PNTR and Agent Orange issues.

An invitation flyer, draft agenda and registration form can be found by clicking on our web site ,
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 Links of interest

 

Down to the wire: the final round of US-Vietnam WTO negotiations end successfully but time is tight for the US Congress to grant Permanent Normal Trade Relations, which will enable Vietnam to enter the WTO this year. However, business groups; NGO’s; diplomats from both countries; and Congress itself are moving rapidly toward the PNTR debate and vote. Meanwhile, legislative relief in the form of trade preferences for Cambodia, Laos and other Asian-Pacific LDC’s looks increasingly unlikely as this Congress heads into the homestretch. Cambodia and the United States reach a watershed when they agree to launch a Peace Corps program in 2007. On another front, the plaintiffs’ appeal in the lawsuit on behalf of Vietnamese victims of Agent Orange appears bogged down in the courts, with no hearing likely until late in the year.

--Catharin Dalpino, Washington Representative

 

 

 

 

 

·  US and Vietnam Complete 12th and Final WTO Round

 

The May 14 announcement that the United States and Vietnam had reached agreement in principle on outstanding trade issues related to Vietnam’s entry into the World Trade Organization, marked the finish of Hanoi’s series of bilateral negotiations on WTO accession. Vietnam began bilateral rounds in 1995, and talks with the United States were the last to be completed.. The highlights of the final round, conducted in Washington May 9-13, were Vietnam’s agreement to lower tariffs on US industrial and farm products and to remove non-tariff barriers to US services. Vietnam has also agreed to abolish subsidies for its export garment industry. The two countries expect to sign an agreement in June. This will most likely be accomplished when incoming US Trade Representative Susan Schwab visits Hanoi that month for an APEC trade ministers’ meeting.

Vietnam must be given PNTR status because it is subject to the Jackson-Vanik Amendment in US trade law, which places tariffs and other restrictions on imports from some communist and former communist countries. By granting PNTR, Congress will essentially be terminating Vietnam’s Jackson-Vanik status. Pressure is mounting on Congress to pass PNTR before the August recess, since Vietnam will request WTO entry in the second half of this year. Strictly speaking, Vietnam’s accession to the WTO does not depend upon PNTR; rather, without PNTR the US would be denied access to Vietnamese markets comparable to other WTO members once Vietnam has joined the WTO. However, such a scenario would deliver a major economic blow to Vietnam, and so both Vietnamese and US policymakers view PNTR as necessary for Hanoi’s entry into the WTO.

Although Congress will not formally consider PNTR for Vietnam until an agreement is signed, a significant amount of groundwork is already underway. In mid- April Speaker of the US House of Representatives Dennis Hastert led a Congressional delegation to Vietnam and informally signaled his support for PNTR. Senator Max Baucus, the ranking member on the Senate Finance Committee, has also stated his support for PNTR in a statement released almost simultaneously with the US Trade Representative’s announcement of the conclusion of talks on May 14.

Despite these early and encouraging statements, PNTR is not automatically assured. In April the House Subcommittee on International Human Rights, chaired by Congressman Chris Smith, held hearings on human rights in Vietnam, which was tacitly understood to be a warning that Vietnam’s Congressional critics may attempt to place conditions on a PNTR bill. As well, on May 3 the US Commission on International Religious Freedom called for renewal of Vietnam’s designation as a Country of Particular Concern on religious freedom issues.

The non-governmental community is also preparing for the PNTR debate. A US-Vietnam WTO Coalition, shepherded by the US-ASEAN Business Council has been established. For information, click here.

In addition, FRD is circulating a petition to Congress urging PNTR passage.

 

View the PNTR petition

 

 

·  Bill Gates Visits Vietnam

 

In April Microsoft Chairman Bill Gates made a two-day visit to Vietnam, with a two-pronged agenda: to assess the country’s potential as an outsourcing center for information technology, and to urge officials to increase their efforts to stem software piracy. Gates met with Prime Minister Phan Van Khai and other high-ranking government officials, and spoke at the Hanoi University of Technology. His visit underscored the potential of Vietnam’s IT sector, which the government estimates is growing at a rate of 30% per year. With its labor force increasing by 1 million people per year, Vietnam hopes one day to rival India as an IT outsourcing center.

 

 

 

 

·  Cambodia Survives Abolition of Textile Quotas But Outlook for US Trade Bill Grim

 

Statistics released by the International Monetary Fund indicate that Cambodia’s GDP for 2005 was 12%, a gain over 2004. Since Cambodia’s economic growth is still heavily dependent on its garment exports, this suggests that the damage to the Cambodian textile industry anticipated when quotas were abolished for WTO members in January 2005 is less than had been expected. There are several reasons for this: Cambodia’s relatively low labor costs and relatively high labor standards, as well as US and European Union restrictions placed on Chinese textiles.

However, this optimistic trend is likely to slow this year as competition for low-priced textiles increases and oil prices rise. Moreover, the outlook for continued economic stability in Cambodia, as well as in Laos and other Asian-Pacific least-developed countries, is dimmer as the Trade Act of 2005 – which would lower tariffs for Asian-Pacific LDC’s similar to benefits granted to their economic counterparts in Africa, the Caribbean and Central America – seems to be in stalemate in Congress. If the Act is not passed by the end of the year it will lapse and would need to be revived by a new Congress in 2007.

 

 

 

 

·  Peace Corps To Inaugurate First-Ever Program in Cambodia

 

On March 29 Peace Corps Director Gaddhi Vasquez and Meng Eang Nay, Deputy Chief of Mission for the Cambodian Embassy in Washington, announced that Peace Corps would establish its first program in Cambodia in early 2007. The first volunteers are likely to focus on English teaching and health education. Prior to their arrival, Peace Corps will establish an office in Phnom Penh and begin training staff.

Discussions on a possible Peace Corps program are also in progress with Vietnam, and US observers believe a program in that country, as well as in Indonesia, could be launched in 2007.

 

 

 

 

·  Hearing on Vietnam Agent Orange Suit Delayed in US Court

 

For the third time, the Second US Court of Appeals has set a new time frame for a hearing on the appeal of the lawsuit brought by the Vietnam Association for Victims of Agent Orange (VAVA) and other plaintiffs against Dow, Monsanto and other American manufacturers of the defoliants and herbicides used during the Vietnam war. The new parameter for a hearing is between August 5 and December 5 of this year, but no definite date as been set. Lawyers familiar with the Federal Court system note that delays of civil appeals hearings for procedural reasons are not unusual.

Despite the lagging judicial process, awareness of the impact of Agent Orange in Vietnam has been growing in recent months. In March FRD co- sponsored the first international conference on the social, economic and psychological impact of Agent Orange, held in Hanoi. The conference was coordinated by the Center for Gender, Family and Environment in Development, a Vietnamese research organization. (
Click here for proceedings of the conference.)

Proceedings from a subsequent VAVA conference of persons from several countries who believe they are suffering from the effects of Agent Orange will also be available on the FRD website.

US Secretary for Veterans Affairs Jim Nicholson was questioned vigorously by the international press on the US policy toward Vietnamese Agent Orange victims when he visited Vietnam in April.

FRD has launched an on-line petition to President Bush urging he announce two practical steps to address this sensitive bilateral issue during his November visit to Vietnam.

 

View new Agent Orange petition.

 

 

 

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