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| Prepared by: | Carin Zissis |
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Industrialization is fueling an economic boom in Vietnam. (AP/Richard Vogel)
More than three decades after the fall of the U.S. backed South Vietnamese government in Saigon, the Socialist Republic of Vietnam is experiencing an economic boom, and is poised to become the 150th member of the World Trade Organization (WTO). Last year China was the only Asian country to surpass Vietnam in terms of GDP growth (NYT). This new Backgrounder takes a look at Vietnam’s startling economic expansion.
The success of Vietnam’s economy owes much to a 1986 shift from post-Vietnam War collectivization policies to a set of liberal economic reforms known as Doi Moi. Normalized relations between the United States and Vietnam in the 1990s added momentum; the two countries have seen a massive increase in trade since the U.S. embargo was lifted in 1994, from $220 million to $6.4 billion a decade later. The U.S. Census Bureau tracks the increasing exchange between the two countries, and the United States is Vietnam ’s biggest importer. Washington is also Vietnam’s largest investor, with U.S firms, including Intel, Nike, and Canon, pouring in funds to build manufacturing plants (BusinessWeek). President Bush will pay a visit to Vietnam when it hosts the Asia-Pacific Economic Cooperation Leaders' Meeting in November.
But all is not well in U.S.-Vietnam relations. The biggest hurdle to Vietnam’s full accession to the WTO is approval by Congress of a U.S.-Vietnam bilateral trade agreement—the last of twenty-eight separate accords which Hanoi had to negotiate to grain membership in the trade body. The two countries signed a related market access agreement in May 2005, but the overall deal requires U.S. congressional approval because of Vietnam’s status as a communist state under a 1974 trade act. A congressional vote allowing Vietnam to gain Permanent Normal Trade Relations (PNTR) status is expected in November, but so far such action has been held up by disagreement over Vietnamese textile imports and human rights issues. This Congressional Research Service (CRS) report discusses barriers to Vietnam’s PNTR Status (PDF), and how they affect the country’s WTO accession bid.
As another CRS report explains, normalized relations between Washington and Hanoi have faced obstacles because of complaints about Vietnam’s human rights record (PDF), as well as its failure to account for U.S. POW/MIAs.The detention of an American citizen in Vietnam (AP) has Senator Mel Martinez (R-FL) threatening to block approval of Vietnam’s PNTR status. Montagnards, an ethnic minority living in Vietnam’s central highlands, face political detention and torture for their religious beliefs, according to Human Rights Watch. Scott Johnson, an advisor to a Montagnard rights group, writes in the Washington Times that Hanoi’s plan to release a few dissidents is “a lure…cast out to the United States” in advance of the PNTR vote to quiet concerns about human rights abuses.
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