- The Washington Times - Friday, November 17, 2000

Among the principal purposes of President Clinton's visit to Vietnam is the celebration of the bilateral trade agreement. Signed on July 13 and still waiting for approval by the U.S. Congress, the trade agreement has been greeted with more enthusiasm and from a wider variety of quarters than any other event in the history of Vietnamese diplomacy.

Retired Col. Pham Que Duong, the former editor-in-chief of the Military History Review who resigned his membership in the Communist Party in early 1999, spoke for many reformers when he called the agreement "the turning point in the normalization of relations between the United States and Vietnam, a day for which the Vietnamese people have been waiting so long." The agreement has also given new hope to Vietnam's dwindling community of foreign investors, who believe it will force an end to pervasive corruption and over-regulation and thus pave the way for the development of a genuine private sector.

The Vietnamese Communist Party, however, has a different plan. It took the relatively pragmatic leaders of the Politburo more than a year to persuade the majority of their colleagues that it was safe to sign the agreement. The opposition was based in part on generalized fear and hatred of the "American imperialists," and in part on the suspicion that the agreement might operate exactly as the reformers hope it will. Since the establishment of diplomatic relations in 1995, many Politburo members have lived in fear that the Vietnamese people will seize the first opportunity to join with the Americans to take away the party's power and obliterate the socialist regime.

In order to address these fears, the statement by Premier Phan Van Khai announcing the agreement emphasized its preambular reassurance that it "is based on principles of respect for each other's independence and sovereignty, non-interference in internal affairs, equality and mutual benefit." These slogans, inserted over what must have been the strong reluctance of the American negotiators, are old communist code phrases frequently used by the Vietnamese leadership to remind the United States that close economic and diplomatic relations should not be linked in any way to an expectation of progress toward democracy, freedom of expression, religious liberty, or other human rights.

In addition to this symbolic victory, the Vietnamese negotiators secured a number of important practical concessions from the United States. While the agreement contemplates that the U.S. market will be opened to Vietnamese imports within the next few months by the granting of Most Favored Nation status, parallel Vietnamese concessions will not be required to take place for six to eight years. Even at the end of this lengthy timetable, there is no requirement that Vietnam allow the development of an indigenous private sector. In the year 2008 or so, foreign enterprises will be allowed to compete; but they will be competing mostly with state-owned monopolies.

Vietnam has a total of 5,280 state-owned enterprises, including 17 major enterprises belonging to the central government. Altogether they employ more than 1 million people, and in 1999 they exported $3.7 billion to the outside world. A plan developed by the Ministry of Commerce calls for these enterprises to enter the U.S. market immediately with six kinds of products: garments, shoes and leather goods, ceramics, coffee, seafood, and processed foods. The ministry estimates that within the first two years after the trade agreement takes effect, sales of textiles and garments alone to the United States will reach $1 billion, increasing to $1.5 billion by the year 2005.

Exports in the five other categories could bring another $1 billion each year. Other exports, such as fresh vegetables, fruits and nuts, tea, cinnamon, and pepper, will add to the total.

Mr. Vu Khoan added that the agreement will not only provide Vietnam with access to the great U.S. market, but also help to attract more investment and fundamental technology. It is this aspect of the economic relationship that has caused controversy and debate within the leadership over the last five years. Indeed, the Strategic Institute of the Ministry of Defense has recommended that all enterprises involving foreign investment should be strictly confined to specified geographic areas. This recommendation is already partly in force: the 1,150 enterprises with foreign investment are located primarily in 67 industrial zones, three special zones for export enterprises, and one (just outside of Hanoi) reserved for high-tech industries. The Strategic Institute considers each of these zones a fortress of capitalism to be encircled and subjected to tight government control.

Another part of the government's plan is to make foreign private enterprises behave more like Vietnamese state-owned businesses. The target for the end of this year is the formation within each foreign-invested enterprise of both a labor union and a communist cell. The party cell would exercise de facto control over the activities of the union and would also intervene regularly to influence management decisions. This power structure would be roughly parallel to that of state enterprises.

Ironically, this facet of the government's new trade policy may also provide a prima facie defense against charges by foreign labor leaders and human rights advocates that Vietnamese workers are grossly exploited. In the recent U.S. House of Representatives debate over annual extension of the Jackson-Vanik waiver for Vietnam, a defender of the extension (Rep. Earl Blumenauer) proudly noted that there have been dozens of strikes already this year in Vietnam. He did not mention, and probably did not know, that the recent dramatic increase in the number of strikes has taken place almost entirely in foreign-invested enterprises rather than in state-owned businesses and appears to have resulted not from a series of independent decisions by the workers themselves but from a central government plan to weaken its foreign competitors.

The Politburo, in other words, has put a uniquely communist gloss on the capitalist notion that enterprises must either compete or die. If they succeed, they will replicate the martial arts stratagem in which the losing fighter, unable to save his own life, devotes his last few moments to making sure his opponent dies too.



Le Van Tien was a prisoner of conscience in Vietnam. He now lives in Alexandria.

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