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July 21, 2006
Is America Ready To Win The Economic War In Viet Nam?

Being a native to and growing up in the Los Angeles area, the plight of the Vietnamese has always had some resonance with me. I can recall when thousands of “boat people” made their harrowing escape from their native country, survived barely-seaworthy craft, and endured modern pirates intent on stealing what little they had in order to finally arrive in the United States. Still sick with guilt over our abandonment of our allies in the south, we took them in, and many of them migrated to Orange County, close to where I lived at the time. I went to school with one young girl who took a French class despite her fluency in the language -- in order to learn English, a move that still impresses me to this day.

The Vietnamese settled in an area of Garden Grove and Westminster known as Little Saigon, and for a while it existed mainly as a slum, as the new immigrants started with almost no resources at all. Many decried their presence as an economic drag and expected urban blight in the middle of what had been a pleasant suburb. However, the Vietnamese showed the same cleverness that our classmate exhibited, and within a few years, the immigrant population built an impressive community in Little Saigon. The Vietnamese who came to America showed a love of freedom, both political and economic, and their entrepreneurial instincts eventually generated an economic dynamo for Orange County.

Now those left behind have begun to show the same instincts as the tough-minded survivors who fled their country in the mid-1970s. Viet Nam has begun a transformation to a market-based economy, one that we could help accelerate with trade normalization. Dana R. Dillon and Daniella Markheim make the case for American support for full WTO status for Viet Nam, as well as the Permanent Normal Trading Relations status that will allow American investment to benefit both countries:

As a member of the WTO, the United States is generally obligated to provide reciprocal, unconditioned most-favored-nation (MFN) treatment to all other WTO members. The U.S., then, must either vote to extend PNTR to Vietnam or must invoke the non-application provision of Article XIII of the WTO Agreement. The non-application provision allows for member countries to exclude other members from MFN benefits at the risk of reciprocal treatment. If the U.S. opts to invoke non-application, Vietnam would have the right to deny the U.S. equal treatment under the WTO agreement. The U.S. would be left on the sidelines to watch other countries reap the benefits of the hard work done to execute a strong agreement for Vietnam’s accession. Vietnam is one of the fastest growing economies in Southeast Asia, and the U.S. is Vietnam’s largest investor, as well as a major trading partner. The cost of exclusion would be significant to both countries.

Last month, the New York Times reported on American efforts to expand trade with the more relaxed government of Viet Nam. Dennis Hastert traveled to meet trade officials, who want the United States to act as a counter to Chinese influence. They want economic independence from Beijing, and the Vietnamese see the United States as a natural trade partner for that goal.

The time appears right for us to open free trade with Viet Nam. Recent economic reforms have pushed per-capita income up 400% over the past six years. While government monopolies still control large industry and infrastructure, small and medium sized business have erupted since the adoption of free-market reforms. Entrepreneurs have started fast-food chains based on the McDonald’s franchise model.

We have recognized China as the potentially most troublesome opponent in the coming century, both economically and militarily. The US needs strong relationships in Asia to counter Chinese hegemony in the region. PNTR makes sense for both Viet Nam and the United States.

Dillon and Markheim have much more on this topic; be sure to read their entire analysis.

UPDATE: Fixed a missing word, thanks to CQ reader Jim F.

UPDATE II: Bruce Kesler disagrees:

How can I ask you to think about the Vietnamese people when U.S. interests are absorbed by the crises in the Middle East, the nuclear threats from Iran and North Korea, or in big power diplomacy with Russia and China?

Simple answer: If our principles and efforts in those crises mean anything, some consistency is required, particularly where they can do some tangible, near-term good, and if our pledges to Iraqis or Israelis mean anything, they must be demonstrated to the people of our prior war.

The United States holds the key to Vietnam’s much desired entry into the World Trade Organization, and must first insist on concrete and verifiable compliance by Vietnam in meeting its so far hollow human rights pledges.

Instead, across political party lines, U.S. commercial interests are more committed to their potential profits foregoing this leverage regardless of the human price, and with strong Bush administration support have lobbied so far successfully for Congress to approve Permanent Normal Trade Relations for Vietnam to enter the WTO. President Bush is planned to visit Vietnam next November, and aside from the theory this would leverage relations with China, would welcome a peaceful coexistence demonstration with this former enemy.

Bruce, as usual, backs his argument with plenty of specifics. What are your thoughts -- does engagement help improve human-rights concerns, or do they hinder them?

Sphere It Digg! View blog reactions
Posted by Ed Morrissey at July 21, 2006 10:58 AM

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