WASHINGTON
UPDATE #14
FEBRUARY-MARCH
2003
Bilateral Relations
Administration Reaches
Watershed on NTR for Laos
On
February 24 US Trade Representative Robert Zoellick and Secretary of State
Colin Powell sent an official request to Congress for support of Normal Trade
Relations (NTR) for Laos, and for bringing into force the Bilateral Trade
Agreement negotiated in 1997. In order
for the administration to bring the Agreement into force, Congress must grant
NTR
to Laos. The request was made in a
letter to Representative William Thomas, Chairman of the House Ways and Means
Committee; Representative Charles Rangel, ranking member of Ways and Means;
Senator Charles Grassley, Chairman of the Senate Finance Committee; and Senator
Max Baucus, ranking member of Finance.
The
letter points out that Laos is the only Indochinese country with which the US
has maintained unbroken ties in the aftermath of the Vietnam war but that it is
the only remaining one of the three which lacks NTR status. USTR Zoellick and Secretary Powell praise
Laos for its cooperation in accounting for POW/MIA's, counter-narcotics and
counter-terrorism
in the wake of September 11, 2001. They also point out that granting NTR for
Laos is integral to the President's Enterprise for ASEAN Initiative, which
seeks to build a network of bilateral free trade agreements with Southeast
Asian nations.
It
is not clear at this time exactly how Congress will act on the administration's
request. Variables in a possible action
plan include whether or not granting NTR will be done through stand-alone
legislation or will be attached to another bill, and whether hearings will be
held or views will be considered through a more informal period of public
consultation.
As
momentum has built in the administration to bring the request for NTR to
Congress, opponents of NTR for Laos have become more vocal. On the same day the
Zoellick/Powell letter went to Congress, NTR opponents sent a letter to
Undersecretary of State Paul Dobrianksy and Assistant Secretary of State for
Human Rights Lorne Craner, requesting that human rights and democracy
conditions be placed on Laos before NTR is granted. The letter was circulated as a public statement, but its actual
impact on the administration is likely to be minimal, since the State
Department position is represented by its highest ranking official, Secretary
Powell.
In
statements by NTR opponents, three main arguments are offered. The first is that granting NTR to Laos will
not democratize it or elevate human rights to the level of a Western
democracy. This argument has an element
of a straw man debate, since the administration has not claimed that granting
NTR to Laos would accomplish either of these things. In addition, there is no clear evidence that changes in trade relations
have
had a direct positive or negative effect on democratization and the permanent
protection of human rights in any country.
The
Zoellick/Powell letter does acknowledge some concerns about human rights in
Laos, and maintains that granting NTR will help foster a more cooperative
bilateral relationship which will give the US more opportunity to encourage
improvements in rights. In public
presentations in the US last month, US Ambassador to Laos Douglas Hartwick
predicted that the increased trade that will come with NTR will encourage
gradual
improvement
in rule of law and human rights in areas related to trade, such as commercial
and environmental law. These gains have
been observed in China since it expanded trade with the West.
A
second argument cited against NTR is that it would cause reductions in revenue
that the US economy could ill afford.
In 2002, the total two-way trade between Laos and the United States was
$8 million, an amount Ambassador Hartwick likened to "less than the value
of a handful of one-minute television Super Bowl commercials." Although two-way trade between the US and
Laos could very well double in the early years after NTR is granted, that
growth is likely to have no appreciable impact on US trade levels, much less on
the US economy as a whole. This is
evident from the very scale of the US share of international trade. In the
month of December 2002 alone, for example, US exports exceeded $82 billion and
imports were valued at more than $125 billion.
Lastly,
NTR opponents charge that granting NTR would reduce all of US policy toward
Laos to trade. To the contrary,
Ambassador Hartwick's January presentations list a growing set of policy areas
beyond trade: economic assistance for small business enterprise; anti-narcotics
cooperation; programs to stem trafficking in persons; human rights; religious
freedom; POW/MIA recovery; improved treatment of minorities;
and
counter-terrorism.
In the wake of anti-Thai riots in Phnom Penh, the State Department issued a statement urging all parties to seek a new basis for stability, and it cautioned the government not to use the recent episode of violence as a means to suppress political opposition. State will soon dispatch Deputy Assistant Secretary Matt Daley, the Department’s highest-ranking official dealing only with Southeast Asia, to Cambodia to assess the situation. Of particular concern is whether stability can be regained to ensure that the ASEAN Regional Forum (ARF), scheduled for June, will go forward. As this year’s ASEAN chair, Phnom Penh will host the meeting. In recent years, ARF has been the meeting ground for US officials and their North Korean counterparts and this year’s forum has obvious significance, in view of the current crisis on the Korean peninsula.
In
the meantime, Cambodia has invited Thailand to join an ASEAN group set up to
mediate US-North Korean relations. With
Phnom Penh as the chair, the ad hoc consortium would be comprised of two ASEAN
and two non-ASEAN members. The group
has China’s support. If successful,
this venture could help heal the rift between Cambodia and Thailand over the
violence in Phnom Penh, and strengthen Cambodia’s role as a regional partner.
The
conventional wisdom in some quarters in Washington has been to blame Prime
Minister Hun Sen for the anti-Thai rioting (and for virtually every other flaw
in Cambodian society). However, Hun Sen
had benefited most from the growing international credibility of his government
manifested by stability, economic growth and the very successful ASEAN summit
in November. In the run-up to national
elections next July, Hun Sen’s opposition seems more likely to gain from
renewed conflict and world image problems.
While
some were suspicious of opposition leader Sam Rainsy’s hand in the riots, given
his history with anti Hun Sen student activists and violent street
demonstrations, the abrupt removal of Phnom Penh’s mayor suggests other
interpretations. The Mayor, Chea
Sophara, is a member of the Cambodian Peoples Party but was being promoted in
the Rainsy-linked e-mail news service Khmer Intelligence as the focus of a
potential effort inside the CPP to oust Hun Sen before the election. Government spokesman Khieu
Kanharith told AFP: "The government changed the position of a few
officials after Thai intelligence accused some high-ranking Cambodian
government officials of being behind the riots against the Thai embassy and
Thai businesses."
The
initial cause of popular anger was a false newspaper report that a popular Thai
actress had claimed Angkor Wat was really Thai. According to the Phnom Penh
Post the immediate stimulus of violence at the Thai embassy was apparently
the broadcast by a local radio station that the Cambodian embassy in Thailand
had been burned and the Cambodian Ambassador killed. Although the radio station is known for its anti-Hun Sen position,
possible motivations for instigating the violence, as well as its triggers are
difficult to identify with certainty.
The
conference committee report for the 2003 Omnibus Appropriations bill chastises
an American non-governmental organization, the National Endowment for Democracy
(NED), for indirectly supporting a partisan approach to democracy
promotion. The NED provides core
funding from its Congressional appropriation to the International Republican
Institute (IRI), which has recently drawn attention for its partisan support of
Cambodian opposition leader Sam Rainsy, including attempts to persuade
FUNCINPEC officials to defect to Rainsy’s party. IRI’s position is endorsed by Senate Appropriations chairman
Mitch McConnell, who has publicly called for “regime change” in Cambodia and
criticized the State Department for what he considers a soft line on Prime
Minister Hun Sen. The report cautions against “any perception that funds are
used to directly support a particular party or candidate, or to support the
removal of elected leaders through unconstitutional means…” The bill and report
are available at www.house/gov/rules/omni1.pdf.
H.E.
Le Van Bang, Vice Minister in the Vietnam’s Ministry of Foreign Affairs, is now
also serving as chairman of the government’s Committee on Foreign
Non-Governmental Organizations. Bang earned wide respect for his diplomatic
work over the past decade. He served as
Ambassador to the United Nations,1993-1995; as chief of Vietnam’s liaison
office in the United States,1995-1997; and as the first ambassador to the U.S.
after normalization, 1997-2001.
International NGO officials working in Vietnam note that Bang’s
appointment as committee chair is a positive signal that the government is
taking NGO’s more seriously, and have remarked on his enthusiasm for the
position. In round figures,
international NGO assistance to Vietnam last year totalled $85 million.
In
early February the White House released its annual list of countries considered
the most problematic for drug production and trafficking. Included among this year’s “majors” were Vietnam
and Laos, along with Thailand, Burma and India. However, Presidential Determination 2003-14 noted that a
country’s presence on the list is not necessarily an adverse reflection of its
government’s counter-narcotics efforts or level of cooperation with the United
States. Instead, countries are placed
on the list due to a combination of broad geographic, commercial and economic
factors which encourage drug flows, however assiduous the government’s attempts
to counter them.
In
the 2003 drug policy process, neither Vietnam nor Laos were “certified” as
having failed demonstrably in the previous 12 months to adhere to their
obligations under international counter-narcotics agreements. Rather, the State Department’s most recent
Narcotics Control Report (for 2001) identified improvements in both
countries. For Vietnam, the report
cited enhanced law enforcement, ratification of a comprehensive
counter-narcotics law, and implementation of public awareness campaigns. For Laos, the report praised tough new
measures for the elimination of opium production with the aim of eradicating
cultivation by 2006. The report
identified methamphetamine use by youth in both countries as a growing problem,
a trend which is reaching crisis proportions in neighboring Thailand.
Commerce Makes Preliminary Vietnamese
Catfish Ruling
On January 28 the Department of Commerce announced a preliminary determination that imports of frozen catfish from Vietnam were dumped on the US market. The Department maintained that ten Vietnamese companies were dumping catfish at below market prices at margins ranging from 37 to 61 percent. Although high, these margins were much lower than those claimed by the Catfish Farmers of America, which held that they were as high as 190 percent. The group has lobbied hard for tariffs, alleging that imports have cut the price of catfish in half in the United States over the past two years.
A
final determination is expected from Commerce in June. In the interval, Vietnam is required to
place funds into escrow against the tariffs retroactively imposed. If the final ruling is negative (i.e. does
not find dumping), these monies will be returned. The imposition of permanent tariffs requires a final
determination from the Commerce Department that dumping has occurred, and a
ruling from the US International Trade Commission that Vietnamese catfish
imports have injured or threatened the corresponding US industry.
Paired
with the January determination was a ruling by the Commerce Department last November,
that Vietnam’s economy is not yet a market economy. The Department contends that the Vietnamese government intervenes
in the country’s price system, artificially forcing prices down.
Vietnam
strongly criticized the determination as an exercise in protectionism and
insisted it is contrary to the Vietnam-US Bilateral Trade Agreement. Some Washington-based economists disagree
with the Commerce view of the Vietnamese economy. They point out that prices have been progressively liberalized in
Vietnam since the inception of doi moi
in the mid-1980’s; moreover, the number of private companies have increased by
nearly 200 percent in the past decade.
Viet Vu, a United Nations economist, warned that the preliminary catfish
ruling was tantamount to “attacking the private sector that the United States
wants to develop in Vietnam.”
Some
Congressional figures have criticized the Commerce ruling as well. In a letter to Commerce Secretary Don Evans,
Senators Diane Feinstein (D-California) and John McCain (R-Arizona) voiced
opposition to the determination. The
success of Vietnam’s catfish exports, they maintained, is due not to illegal
trade practices but to the quality of the fish and the relatively low cost of
production.
US-Vietnam Textile Talks
Begin, While Multi-nationals Weigh In
Talks between Vietnam and the United States have begun on textiles to determine whether Vietnam will be subject to quotas on exports to the United States. American producers are urging the imposition of quotas. However, a group of multi-nationals have petitioned the administration to refrain from using them. In a letter to USTR Robert Zoellick a prominent group of major corporations – including Nike, Regent, K-Mart and Sears Roebuck – have accused the administration of rushing to impose quotas. They outline Vietnam’s importance as a source, “in light of the continuing uncertain economy, shifting security conditions and the upcoming termination of the international quota system.” Moreover, they see Vietnamese textile and garment imports into the US as providing an important counter-balance to Chinese dominance in this sector. In 2002
Vietnamese textile and garment exports increased 31.6% over the previous year and totalled $2.7 billion. The American share of this was $900 million, up 16 times over the 2001 levels. Under the threat of possible quotas, Vietnamese businesses have attempted to maximize orders from foreign sources, particularly the US, in the first six months of this year. The talks will be spread out over three rounds, in two to three-month intervals.
South
Vietnam Flag Bill Dies in Virginia, Reborn in California
This
winter a revealing clash played out among elements of the Vietnamese-American
community, businessmen, and the US and Vietnamese governments over a proposed
Virginia state bill to require the pre-1975 flag of South Vietnam, rather than
the present Vietnamese flag, be flown at state functions, including school
events. Sponsored by state delegate
Robert D. Hull (D-Fairfax), the bill passed in the Virginia House on January
31, the 35th anniversary of the Tet offensive in the Vietnam
war. Hull maintained that his
legislation represented the wishes of the 29,000 Vietnamese-Americans in his
district, whom he said “come from communities that were in South Vietnam.” Hull’s careful demographic description was
an attempt to blur any distinction between first-generation
Vietnamese-Americans and those who were born in the United States.
Reaction
to the bill came quickly from several quarters. Vietnam’s Ministry of Foreign Affairs protested the legislation,
causing Secretary of State Colin Powell to assure Foreign Minister Nguyen Dy
Nien in a letter that the State Department opposed the move on the grounds that
any attempt to alter recognition of the current flag was unconstitutional. The Department also conveyed this position
to William J. Howell (R-Stafford), Virginia House Speaker, and to Senate
Majority Leader Walter Stosch (R-Henrico).
In the meantime, the Virginia Chamber of Commerce released a statement
of strong opposition to the bill, expressing fear that it would deny Virginia
businesses entrée to Vietnamese markets, and that Vietnamese trade could be
diverted from Virginia ports to neighboring Baltimore or Charleston. US veterans groups and representatives of
international non-governmental organizations with programs in Vietnam also
released statements in opposition to the legislation. The NGO group warned that recognition of the South Vietnamese
flag “…would focus on the past, instead of the future, where this nation of 80
million citizens – nearly half of them born after the war ended – is moving
confidently ahead.”
In
the Virginia Senate, the bill was rapidly sentenced to death by committee
assignment. The Senate Rules Committee
sent House Bill 2829 to a subcommittee with a single member, Thomas K. Norment
(R-James City), who has announced that the subcommittee will not meet before
the General Assembly adjourns. Hull
proposed an amendment to make flying the flag of South Vietnam optional rather
than mandatory, but that too was quickly turned away in the Senate.
This
incident can be viewed in a continuum of efforts by some lobbies in the
Vietnamese-American community which oppose the present government in Vietnam
and seek to reverse the outcome of the Vietnam war. In June 2002 Virginia Governor Mark Warner (D) declared June 19
Vietnamese American Freedom Fighter Day, and cast the South Vietnamese flag as
an “eternal symbol of hope and love of freedom.” A more far-reaching, if far-fetched, attempt has played out in
Congress over the Vietnam Human Rights Act.
The proposed bill would have required any humanitarian, educational or
business organizing working in Vietnam to submit an annual report on human
rights progress in the country or lose federal support. Vietnam’s normal trade status with the US
would have been predicated on human rights progress as reflected in these
reports. The bill has thus far been
blocked in the Senate by John Kerry (D-Massachusetts) and John McCain
(R-Arizona).
Such
disputes uncover ruptures in the American political fabric and in some segments
of American society. Overall, the
national political level – in both Congress and the administration – supports
an ongoing and forward-looking relationship with the present government of
Vietnam and broader Vietnamese society.
To be sure, this consensus was hard-fought in the 1980’s and
1990’s. Not surprisingly, given the
grassroots nature of American politics, the local political level is less united
on policy toward Vietnam, particularly where there are communities of
Vietnamese-Americans. However, both the
Vietnam Human Rights Act and the Virginia flag issue demonstrate that this
turbulence at the local level can create national issues and ultimately affect
relations between the United States and Vietnam. In addition, these episodes reveal growing political daylight
within the Vietnamese-American community itself. Some analysts believe that they are attempts by older generations
to assert leadership over those born in the US. Younger generation spokespersons emphasize that their parents’
experiences are reflected in their political positions, but that, in the words
of one activist quoted in the Washington
Post, “they should also teach us how to move on…”
However, this issue has resonance in more than one
locality in the Vietnamese- American community. No sooner had the Virginia bill been effectively quashed when a
similar resolution was passed in the city of Westminster in Orange County,
California. Resolution 3750 calls for
the South Vietnam flag to be displayed at Westminster public institutions, schools
attended by Vietnamese-American students, and public functions
of the Vietnamese-American community. It also recommends introducing a
similar resolution for consideration by the California
state assembly. The Vietnam-USA Society in Hanoi has issued a strong statement saying
the resolution “does harm to efforts
being made by the two peoples for friendship and cooperation between our
countries” and requesting American friends work for its repeal.
Landmark Landmine Project
Launched in Vietnam
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