TEXT: SENATOR BOB SMITH ON VIETNAM JACKSON-VANIK WAIVER
(Waiver does not meet Jackson-Vanik requirements)

Washington - Senator Bob Smith encouraged members of the Subcommittee on International Trade to support Senate Joint Resolution 47, also known as the Smith-Helms bill, in a July 7 hearing.

Senate Joint Resolution 47, Smith said, would disapprove the President's first annual waiver of Jackson-Vanik freedom of emigration requirements for Vietnam in order for U.S. trade credits to be extended for business deals with Vietnam.

Smith's testimony focused on freedom of emigration, POW/MIA accounting, and investment in Vietnam.

"I am concerned that the President's recent waiver of freedom of emigration requirements for Vietnam in order for U.S. taxpayer guarantees and credits to go towards projects in Vietnam does not 'assure the continued dedication of the United States to fundamental human rights,' which is the opening sentence in the 1974 Jackson-Vanik law," Smith said.

"Why not instead make clear to Vietnam that it needs to pass and strengthen its laws to guarantee the right of freedom of emigration to its people?" Smith asked.

According to Smith, little if any progress has been made in the search for unaccounted for American service personnel from the Vietnam War. "Vietnam has still not opened their Central-Committee level documents on POWs to the United States, and they have not been fully forthcoming," he said.

Finally, Smith discouraged investment in Vietnam. "Vietnam is a corrupt, bureaucratic communist-run nation whose potential will never be realized, as Senator Bob Kerrey noted in 1994, until the government there provides basic political freedoms to its people," Smith said.

"I believe American businesses should invest in struggling democracies in Asia. We don't need to encourage them to invest in communist dictatorships where basic human rights are still being denied," Smith continued.

Following is the text of Smith's remarks, as prepared for delivery:

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Statement of Senator Bob Smith
Finance Committee, Subcommittee on International Trade
Hearing on S.J. Res. 47, Disapproving Waiver of Jackson-Vanik
Freedom of Emigration Requirements for Vietnam

July 7, 1998

Mr. Chairman, as you know, Senate Joint Resolution 47 is a resolution disapproving the President's first annual waiver of Jackson-Vanik freedom of emigration requirements for Vietnam in order for U.S. trade credits to be extended for business deals with Vietnam. The Trade Act of 1974 provides Congress specific "fast-track" authority to disapprove Presidential waivers when the situation warrants such action in the judgement of the Congress. That is what S.J. Res. 47 does. It reverses the President's June 3rd waiver.

Congressional intent, and indeed, the position of this Finance Committee in 1974, was crystal clear -- communist countries that did not permit free emigration to their people would not be eligible for U.S. trade credits and investment guarantees. The Trade Act of 1974, specifically Section 403, also made clear that POW/MIA cooperation was to be a factor in whether to grant these trade benefits.

These are the two matters that are the focus of my statement here this morning -- mainly freedom of emigration, but also POW/MIA accounting. I also think this Committee needs to look at the reality of the current investment situation in Vietnam. This is hardly the time to be putting more American tax dollars at risk in this country.

I want to thank my colleagues, Senator Grassley and Senator Roth, for agreeing to my request that a hearing be held on this matter before my Joint Resolution, cosponsored with Senator Helms, is reported to the full Senate.

Anytime we consider legislation that deals in any way with freedom for the Vietnamese people, I think it goes without saying that we will find widespread support in the Congress for at least having a hearing to put our concerns formally on the record. In view of the Trade Act of 1974, and its Jackson-Vanik provision now being applied to Vietnam for the first time on an annual basis, this is certainly the right time and the right place to have this hearing, and so again, I am personally grateful to you and the other Members of the Finance Committee.

I also want to thank my good friend, the distinguished Chairman of the Foreign Relations Committee, Senator Jesse Helms, for supporting my resolution. I did a little research on the Jackson-Vanik law, and I found that the Chairman of the Finance Committee, Senator Roth, is probably the only person from this Committee still serving in the Senate that might remember Senator Helms' personal involvement with the amendment by Senator Jackson to the Trade Act of 1974. Both Senator Roth and Senator Helms were two of the original twelve cosponsors of this law when it was first introduced in the Fall of 1972.

And it was Senator Helms, along with Senator Thurmond, who succeeded in ensuring on the Senate floor that the legislative history and application of this historic amendment went beyond the much-discussed problem of Jewish emigration from the Soviet Union in the early 1970's to include all men and women seeking to emigrate from Communist regimes. Senator Helms, in his time-honored and respected style, disclaimed credit for himself at the time, and instead stated on the Senate floor that his efforts "rose above the ideological concerns and differing philosophies to unite all men of good will who abhor discrimination and oppression." For over 25 years in the Congress, Senator Helms has been a stalwart supporter of the universal human right to freedom, which includes the right to freely emigrate.

I might add, as our President himself did during his visit to China last week, that these rights were first recognized by our Founding Fathers in our Declaration of Independence over 220 years ago, and they were again recognized as fundamental human rights in the United Nations Declaration and Charter over 50 years ago. Again, I want to pay tribute to Senator Helms for his support for these basic principles which have defined the values we hold dearly as Americans.

As I noted, Senator Roth was also a strong supporter of Senator Jackson's amendment stating his belief on the Senate floor in 1974 that "...our economic leverage can and should be used for this humanitarian purpose." In fact, it was Senator Roth, at the time, who advocated an even stronger role for the United States Congress in extending and denying trade privileges for Communist nations based on their freedom of emigration performance. So I know Senator Roth understands the seriousness with which this Committee needs to evaluate Vietnam's record on freedom of emigration, in view of the recent waiver, just as this same Committee was closely monitoring the Soviet Union's performance in 1974 on the Jewish emigration matter. I thank him for his support over the years for the principle which underlies my own resolution now before you this morning.

Mr. Chairman, besides yourself, there is one other member on your subcommittee who has long been personally involved and concerned with our policy toward Vietnam, and that is Senator Bob Kerrey. Like you, he served with us on the Senate Select Committee on POW/MIA Affairs, and like me, he is a Vietnam veteran, but he sacrificed much more than I ever had to do, and earned the Congressional Medal of Honor. We've not always agreed on our country's Vietnam policy, and we're from opposite sides of the aisle, but I mention Senator Bob Kerrey's name this morning for one reason. The last time this body had to consider our trade relationship with Vietnam was four and a half years ago in January, 1994.

We were debating whether to lift the U.S. trade embargo on Vietnam. Senator Bob Kerrey, and my fellow panelists this morning, Senators Kerry and McCain, supported lifting the embargo and they prevailed with that vote. Senator Dole, this full Committee's Chairman-Senator Roth, this Subcommittee's Chairman-Senator Grassley, along with myself and others voted against lifting that trade embargo. We also supported a separate measure which would have required the President to first certify that Vietnam had unilaterally provided relevant data on POW/MIA cases. Our position on that measure failed by nine votes, and on a side note, it's interesting to me that some of the concerns we expressed then in 1994 still apply today in terms of what Vietnam has yet to do to come clean, so to speak, on the POW/MIA issue.

But even though Senator Bob Kerrey and I disagreed on that vote in January, 1994, I was personally truly moved during that debate by his comments on the floor of the Senate, which in my judgement, should set a bipartisan tone for this hearing today. I would like to take a moment and quote back a paragraph of what Senator Bob Kerrey had stated because it was quite powerful. He said:

"My hope is, along with our concern for the men that we left behind, prisoners and missing in action in Vietnam, along with our concern for our own, I hope that we will now begin to talk about the freedom of the Vietnamese people as well. One of the concerns that I have had with this action (to lift the embargo), which, as I said, I believe is appropriate now, is that it is being done as a consequence mostly of economic pressure; in other words, I have people who are concerned about losing oil leases in the North China Sea. I have people who have concerns about losing contracts for supply planes in Vietnam. I have people who have concerns about losing business in Vietnam.

"I believe it would be a terrible mistake and a real tragedy and a denial of any purpose whatsoever of the war in Vietnam if when we come back into Vietnam all we care about and all we talk about is making money. At our best, and Lord knows we were not always at our best, at our best in this war, we fought for the freedom of the Vietnamese people. For gosh sakes, we ought to be able to come back into Vietnam, heads hold high, proud, and say that we still care about the freedom of the Vietnamese people"

"... it is legitimate for us to say to the (Vietnamese) government leaders: if you want prosperity in your country, if economic prosperity is your concern, then do not simply come to the United States and other Western developed nations and say you want investments. Follow your own people ... it is their political freedom that is essential if you want to develop your country. We have to be saying that now with confidence, with pride, with real belief. We should say to the Vietnamese people who will hear us that we care about their freedom, that we believe this war had purpose at its beat..."

Senator Grassley, I am concerned that the President's recent waiver of freedom of emigration requirements for Vietnam in order for U.S. taxpayer guarantees and credits to go towards projects in Vietnam does not "assure the continued dedication of the United States to fundamental human rights" which is the opening sentence in the 1974 Jackson-Vanik law.

It is interesting to note that when the Senate Finance Committee reported the Trade Act of 1974 to the full Senate, on a 17-0 vote, including Senator Roth's vote as well, it did not even contain waiver authority. It stipulated, pure and simple, that Communist countries that denied their citizens the right or opportunity to emigrate, or imposed more than nominal charges on emigration, would be denied credit or investment guarantees from the United States.

The waiver was subsequently added in Senator Jackson's modified amendment on the floor, at the urging of Secretary of State Kissinger, who cited the detente situation with the Soviet Union, and the fact that we were "in the nuclear age" with that nation as Dr. Kissinger put it when he testified before this same Committee in 1974, and requested waiver authority for the President for that reason.

The challenge for this subcommittee, and the Congress as a whole over the next month, will be to sort out the facts from the fiction, and the results from the rhetoric. Is Vietnam still restricting the rights of large numbers of its citizens to freely emigrate, or isn't it? And what has Vietnam done since the President's initial waiver this past March -- a four month period -- to convince you that the waiver has indeed "substantially promoted" the objectives of freedom of emigration in the Jackson-Vanik law, as required in the language of that law if the waiver option is to be used?

Frankly, Mr. Chairman, I am concerned that there wasn't much consultation with your subcommittee and other relevant committees on this matter by the State Department, even though the President's National Security Advisor pledged to consult with Congress last December, and only to move forward if those consultations went well.

You can't just accept the emigration numbers at face value that my colleagues who oppose me will throw out here which they received from the State Department -- the same State Department that reports in its most recent Human Rights paper on Vietnam that the Communist government there still "frequently constrains its citizens' access to exit permits."

My point is that you have to look a little deeper at these figures and at the information from the Refugee Assistance groups who know these people trying to emigrate and trying to obtain permission from Vietnamese authorities. They know their families in the United States waiting for their loved ones to join them. Some of them have died still in Communist prison camps these last few years, even though they were eligible to emigrate on our State Department lists.

These are not just statistics or cases, these are real human beings, many of whom fought for us during the Vietnam War, and are being persecuted as a result of this prior affiliation with our country. I urge my colleagues on this subcommittee to listen to the testimony you will hear from Dr. Thang, who represents Boat People, S.O.S. and other concerned groups. He works these cases day in and day out trying to help eligible people still in Vietnam who are being harassed and forced to pay bribes.

Mr. Chairman, I believe that both the facts and the results with respect to emigration in Vietnam make a strong case for holding off on approving this first annual waiver of Jackson-Vanik for Vietnam. Why not instead make clear to Vietnam that it needs to pass and strengthen its laws to guarantee the right of freedom of emigration to its people? When did the State Department last make such a request to Vietnamese authorities? I hope you will ask Assistant Secretary Roth.

Even President Bush held off submitting the U.S.-Soviet trade agreement to Congress in 1990 until their parliament had passed and implemented a law guaranteeing freedom of emigration. Why can't we ask this President to take a similar approach? If Vietnam passed and implemented a freedom of emigration law, then the President would not need to issue the waiver; he could instead simply certify that Vietnam allows it's people to freely emigrate. If he did that, then he is still allowed to extend U.S. trade credits for projects in Vietnam. But most importantly, he would be much more in line with Congressional intent under the Trade Act of 1974.

I want to also say a few words about the business climate in Vietnam since I noted that when my colleagues, Senators Kerry and McCain, provided testimony on the House side to the companion measure for my bill, they said "Vietnam is a potentially significant market for American services and goods...," and that we should be "supporting the U.S. companies that bring trade and investment to Vietnam."

As my colleagues may recall, when we debated whether to lift the trade embargo on Vietnam in 1994, we were told Vietnam was the next Asian tiger in the international business world. Four and a half years later, the recent headlines are revealing. Last week's Wall Street Journal headline was "Vietnam Pullout: This Time, Investors Pack Up Gear, Stymied by Bureaucracy, Lack of Reforms." And most of these are U.S. companies, Mr. Chairman. It's also been reported that tourism is down, hotel construction projects have been canceled, and during the first five months of 1998, 154 permits for foreign investment in Saigon were withdrawn, totaling 959 million dollars.

And I would note that this downward trend started before the recent regional economic crisis in Southeast Asia, and I doubt anyone from the business community would dispute me on this. I saw that our Ambassador to Vietnam, Pete Peterson, also testified on the House side recently that "U.S. businesses are not optimistic about the near-term prospects for increased activity in Vietnam."

Even the International Monetary Fund (IMF) reportedly canceled the last installments of its $530 million loan to Vietnam last year and canceled future lending because Vietnam has failed to take concrete steps to reform its system. Why is all this happening, Mr. Chairman? It's because Vietnam is a corrupt, bureaucratic communist-run nation whose potential will never be realized, as Senator Bob Kerrey noted in 1994, until the government there provides basic political freedoms to its people. Even Vietnam's new Communist Party chief, General Phieu, more of a hardliner than his predecessor by all credible reports, recently reaffirmed that the communist political regime was suitable for the Vietnamese people and would never be replaced with capitalism.

In view of this reality, this is hardly the time for the American taxpayer, through the Ex-Im Bank and OPIC, to be asked to subsidize business deals with bureaucrats in Hanoi that would not otherwise happen. Vietnam has not even taken demonstrable steps to implement the copyright agreement signed by Secretary Albright in Hanoi over a year ago.

I believe American businesses should invest in struggling democracies in Asia. We don't need to encourage them to invest in communist dictatorships where basic human rights are still being denied.

But if the Congress lets this June 3rd Jackson-Vanik waiver stand, that is exactly what's going to happen. In fact, it's been happening since March of this year, when the President made the initial waiver for Vietnam. I would suggest we put those programs for Vietnam on hold for a while before American tax payers get stuck with the tab when more American business deals in Vietnam end up falling through.

Finally, Mr. Chairman, I want to say a few words about Hanoi's efforts to fully disclose relevant information about our unaccounted for POWs and MIAs from the war. Many of you may not recall this, but in the Trade Act of 1974, the very next section following freedom of emigration as a condition for trade credits, is a section with a similar condition on trade credits for countries based on their cooperation on the POW/MIA issue.

As you know, I co-chaired the Senate Select Committee on POW/MIA Affairs and wrote the legislation that established that Committee. I worked closely with you, Mr. Chairman, and my colleagues, Senators Bob Kerrey, John Kerry, John McCain, and Jesse Helms, among others. I know all of us are sensitive to this issue, and we've wrestled with the facts and tried to separate out the emotions. Last December, when Jackson-Vanik first surfaced as an issue for Vietnam, Senator McCain stated to the Washington Post that, "as usual, we'll have a fight. Vietnam will always be an emotional issue. Any issue involved with it will always turn out to be very emotional," he said. I'm still trying to separate out the emotions, and stick to the facts, Mr. Chairman, because I think everyone agrees that facts should drive our drive our policy toward Vietnam, not emotions.

To those who say that for 20 years, we didn't engage Vietnam on the POW/MIA issue and that they gave us nothing even when we held firm, the facts show this is simply not true. While I have criticized both Republican and Democrat Administrations for their handling of this issue, I at least recognize that President Reagan engaged Vietnam on the POW/MIA issue, and used both carrots and sticks, not just carrots, and his carrots consisted of humanitarian aid, not economic aid. He appointed a Special Emissary to Hanoi, General Vessey, and during both Reagan Administrations, we saw Vietnam return nearly 200 sets of remains which were identified, many of which were found to have been stored in a warehouse since the war. So to say Vietnam gave us nothing during that period is simply not true.

With regard to the 2,087 Americans still unaccounted for from the war, I noted that Senator Kerry stated two and a half weeks ago on June 18, 1998, that as of that day, "fate has been determined for all but 43 last known alive discrepancy cases... in other words, all but 43 POW/MIA families now know what happened to their loved ones, and that is progress by any measure," he said. I found that interesting, Mr. Chairman, because on August 4, 1992, nearly six years ago, Senator Kerry, as Chairman of our Select Committee, stated that "the number 43 is simply the universe of people about whom there remain valid questions, whether because they were once listed as having been taken prisoner or because they were otherwise known or thought to have survived their incident." So, in six years, we've gone from 43 to 43. I don't see how that represents "progress by any measure."

Senator Kerry and I have differed over the universe of numbers for many years now, and I don't think we're going to resolve it here, but I would urge you, Mr. Chairman, to simply look at the data from the Department of Defense on the breakdown of POW/MIA and so-called KIA/BNR cases by service and country, and then determine for yourself how much progress has really been made. I'd be happy to provide that data for the record.

Getting aside from the confusion we get about POW/MIA statistics, I think it's more relevant, Mr. Chairman, to look at the concerns you yourself raised on the Senate floor during the trade embargo debate in January, 1994 -- again, that was the last time the Senate was put on record on trade issues with Vietnam -- 4 1/2 year ago. At that time, you said:

"Why would we lift the embargo now before we get Vietnam's central-committee level documents which contain in essence Vietnam's wartime national secrets on U.S. prisoner activity and information thereto? This information would tell us what happened to our prisoners and to our missing... Furthermore, if we move ahead with lifting the embargo, without full disclosure by Vietnam, we will be rewarding Vietnam, while ignoring their human rights abuses... Our Secretary of State has been talking to the Chinese about improving their record if they want this body to keep most-favored nation status going. Why that concern about China? Why not the concern about human rights in Vietnam? I do not know."

I do not know, either, Mr. Chairman. But I'll tell you what I do know. First, as I mentioned earlier, waiving Jackson-Vanik does not signal Vietnam that we're seriously concerned about their restrictions on basic freedoms for their people, like freedom of speech, freedom of assembly, freedom to emigrate, and freedom to worship. For goodness sake, I am told the Vietnamese Government even expelled nuns from Mother Teresa's order a few months ago, the only country ever to have done so.

Second, concerning the POW/MIA concerns you expressed in 1994, Mr. Chairman, Vietnam has still not opened their Central-Committee level documents on POWs to the United States, and they have not been fully forthcoming. Most of the progress that has been made has been due to the investigative work done by our Joint Task Force in Vietnam as opposed to unilateral disclosures by the central Government in Hanoi.

Senator Kerry claims we have a "full-time archive process in Hanoi" and passing my bill is somehow going to "threaten shutting down" our people working in those archives, even though Ambassador Peterson testified Vietnam would continue to cooperate even if Congress did rescind the waiver. However, I am told we no longer have any full-time presence in the archives in Hanoi, and we certainly don't have full-time access to central level Community Party records on the POW/MIA issue.

Moreover, much of the Joint Task Force investigative work has focused on recovering the remains of our troops who we know died during the war, as opposed to making substantial progress on cases of unaccounted for American personnel listed as prisoner or missing in action when the war ended in 1973.

Since the waiver of Jackson-Vanik, by law, deals solely with emigration, I was prepared not to dwell on the POW/MIA aspects until I received a letter from the President this past February telling me that his waiver of Jackson-Vanik waiver was somehow also going to build on the momentum of POW/MIA accounting. One week after I received that letter, he certified to Congress that Vietnam was "fully cooperating in full faith" on the POW/MIA issue, leading me to really wonder what incentive Hanoi now had to pick up its momentum on POW/MIA accounting. If everything is fine, why is there a need to build on momentum in POW/MIA accounting?

This is no small issue, Mr. Chairman, and I would encourage your Members to obtain a copy of the classified National Intelligence Estimate on the Vietnam POW/MIA issue which has recently been completed. While I do have some very serious concerns about that Estimate, there are, nonetheless, some interesting points that are worth your reading.

In conclusion, I want to emphasize that the debate on passing S.J. Res. 47 is not about turning back the clock or choosing isolationism over engagement with Vietnam. Frankly, those arguments simply do not have merit because we have engagement with Vietnam, and that fact won't change if we pass S.J. Res. 47.

Nothing in my resolution requires us to recall our Ambassador, scale back our diplomatic relations, or reimpose the trade embargo. We've already taken those steps forward in the normalization process. My bill doesn't change that one iota. My resolution is about looking toward the future, and using both carrots and sticks in our negotiating policy with Vietnam, not just carrots alone.

While I'm not one to often quote our President, I was struck by something he said last week in China about societies going forward into the 21st century. He said, "the forces of history have brought us to a new age of human possibility, but our dreams can only be recognized by nations whose citizens are both responsible and free... if you are so afraid of personal freedom that you limit people's freedom too much, then you pay, I believe, an even greater price in a world where the whole economy is based on ideas and information and exchange and debate, and children everywhere dreaming dreams and feeling they can live their dreams out."

Mr. Chairman, Senate Joint Resolution 47 puts moral principles over dwindling profits in Vietnam, not the other way around, and it will send the strongest possible message to Hanoi that we do care about people being able to live out their dreams.

This resolution is supported by several key Members from the House on both sides of the aisle, and it has widespread support from all major Vietnamese-American organizations, Refugee Assistance organizations, POW/MIA family groups, and many former POWs and national veterans organizations, including our nation's largest, The American Legion. With your permission, I would like to enter their statements into the record, and I would note that many of the leaders of these organizations are in the audience today.

I urge your Committee to study this matter as thoroughly as possible, because the facts and Congressional intent under the 1974 Trade Act are on our side. In that regard, let me close by reading a conclusion issued by the Senate Finance Committee on November 26, 1974 in its Report on the Trade Act:

"The Committee recognizes that segments of the private sector wish the U.S. Government to provide credits and investment guarantees, and other conditions before private capital investments are ventured. The Committee believes that it is equally reasonable to establish conditions on all basic human rights, including the right to emigrate, before extending broad concessions to communist countries."

Mr. Chairman, Congress has a constitutional role to play with respect to this waiver. Congress gave this authority to the President nearly twenty give years ago, and it reserved its right to rescind that authority for any particular country when Congress determines the use of the waiver is inappropriate. Now is not the time to allow this waiver authority to be applied to Vietnam; it's not the time to extend these additional trade benefits for Vietnam's consumption. I hope you can report the Smith-Helms bill favorably, and I thank you again for holding this hearing.

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