*EPF307 01/22/2003
Text: Envoy Sees Long-Term Growth in U.S.-Vietnam Relations
(Says trade deal has already greatly increased bilateral commerce) (3420)

The United States and Vietnam have seen an impressive growth in two-way trade, and the long-term outlook for relations between the two countries is "almost entirely positive," according to the U.S. Ambassador to Vietnam Raymond Burghardt.

In a January 21 speech to the Asia Society in Washington, D.C., America's top diplomat in Vietnam noted that in the first 10 months of 2002 Vietnam's exports to the United States grew by 109 percent from $863 million to $1,800 million.

Although there are issues where the two countries disagree, Burghardt said the longer-term trends in the relationship "are almost entirely positive."

Burghardt said he expects to see a "dramatic expansion in personal freedoms," in Vietnam along with a "diminishing of the role of state control over the economy."

He noted the United States is "moving beyond bilateral issues to talk about strategic issues in Asia and the world" with Hanoi and that he expects to see Vietnam develop its legal system and integrate its policies more fully with the region and the community of nations, including a "responsible contributions to the international campaign against terrorism."

Burghardt said the growth in trade between the two countries is likely to continue, and noted that the current expansion of trade took place while Vietnam's exports to the rest of the world either declined or remained stagnant.

The two one-time foes "don't have much of a military-to-military relationship, for obvious historical reasons," he said, but the United States and Vietnam cooperate on range of activities that range from demining programs to medical research.

And there are still issues left over from the Vietnam War, he noted. "We have to recognize that progress in America's bilateral relations with any country requires action on the issues of direct concern to the American people," Burghardt said. "In the case of Vietnam, the principal advocacy groups have focused on a full accounting for missing servicemen; bringing to America people who have historical or family ties to our country; perceived abuses of human or religious rights; and, in more recent years, fair and open markets for American business."

Although the United States has "some differences on human rights" with the communist nation that "impede the development of an even better bilateral relationship," Burghardt said the United States recognizes that the Hanoi regime "has largely abandoned its previous approach of uniformly insisting that these are 'internal affairs'" in which other nations, including the United States, have no right to intervene.

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

(begin text)

The Asia Society, Washington D.C. Chapter
January 21, 2003

Speech presented by
Raymond F. Burghardt, Ambassador
Embassy of the United States of America
Hanoi, Vietnam

Thank you for this opportunity to meet again with members of the Asia Society and to share some of my views about U.S. relations with Vietnam. I've been back in Vietnam now for a little more than one year and this is a good occasion to give a summary of the state of our bilateral relationships. I'm especially pleased to speak with you today in light of the upcoming 13th Annual Asian Corporate Conference that will take place in Hanoi in early March; I hope some of you will be able to attend.

Vietnamese officials often say that, with the entry-into-force of the Bilateral Trade Agreement (BTA), U.S.-Vietnamese relations are now "fully normalized." The word "fully" could be disputed, since some aspects of our relationship are still quite immature, such as our law enforcement, counter-narcotics cooperation, and military-to-military relations. But it would be correct to say that U.S. relations are now at their deepest and broadest levels ever with the Socialist Republic of Vietnam. The growth in the size of the U.S. mission alone is good indicator of that -- from a handful of officials primarily working on the search for the fullest possible accounting of missing-in-action a decade ago, to the opening of a tiny liaison office a year or two later, then the establishment of a formal Embassy with a small staff in 1995, we have now grown to a Mission in Hanoi and Ho Chi Minh City of nearly 100 official Americans and nearly 400 Vietnamese staff. We have representatives from the Departments of State, Commerce, Health and Human Services, Agriculture, and Defense, as well as from USAID, DEA, and INS and our Marine detachment.

Meetings at the leadership level are another indication of the state of a relationship. We now see regular exchanges -- although, frankly, not at the same frequency as with the world's major powers -- at a normal level for a mid-sized country that is not a treaty ally. For example, Foreign Minister Nien visited Washington and New York last September. We welcome the possibility of Minister of Defense Tra traveling to the U.S. within the next year, and we hope that at least one Deputy Prime Minister and the Foreign Minister will also visit. Last year, the Embassy hosted a number of large Congressional and private sector trade delegations and we look forward to hosting even more this year. The Asia Society Corporate Conference in March will also greatly help push the relationship forward - this event will bring a number of well respected and high level folks from both the private sector and government from the U.S. and other regional partners.

The economic news about our relationship is generally very good. According to U.S. trade figures, if we look at the first ten months of 2002 compared with the first ten months of 2001, we see that Vietnam's exports to the United States increased by an amazing 109% -- from $ 863 million to $ 1.8 billion. We fully expect that trend to continue. This is during a period when Vietnam's exports to the rest of the world decreased or remained stagnant. U.S. exports to Vietnam also increased, by 32.5% -- from $ 366 million in the first ten months of 2001 to $485 million over the same period in 2002. Those figures are still pretty low compared to Thailand or Malaysia, but they are growing fast. Clearly, freer trade benefits both countries. As Vietnam continues to implement more provisions of the BTA, this will be an even more attractive market for U.S. trade and investment.

The economic picture is good, but not perfect. As we reach the one-year mark of the BTA entry-into-force, Vietnam is making a good effort on implementation despite some serious challenges. There has been increased interest in Vietnam by U.S. firms, but some investors are still cautious, waiting to see how Vietnam implements its commitments under the BTA. In particular, they are concerned about Vietnam fulfilling its commitments in the critical areas of transparency, investment, and protection of intellectual property rights that were due upon entry-into-force of the BTA. These areas are important not only to successful implementation of the BTA, but also to improve Vietnam's investment climate, advance Vietnam's global economic integration, and pave the way for accession to the WTO.

Vietnam committed to, but has yet to implement, a number of important transparency provisions, most notably providing an opportunity for public comment on draft laws and making public and publishing all laws, regulations, and administrative procedures before they are enacted so that enterprises and government agencies can plan accordingly. Some laws related to foreign investment still need to be revised. On the positive side, the revised Foreign Investment Law was a very important step. Now, the challenge is to ensure that it is applied consistently at the national, provincial, and local levels. Perhaps most importantly, Vietnam still needs effectively to enforce intellectual property rights laws. Strong intellectual property rights enforcement that both punishes the pirates and discourages additional intellectual property theft will enable Vietnamese entrepreneurs and foreign companies to invest and sell products without fear of losing the intellectual property they spent time and money developing. These changes are critical not only to successful implementation of the BTA, but also to Vietnam's bid fully to integrate its economy into the world market and accede to the WTO.

The task of implementing the BTA is a daunting one and we realize that. That's why the U.S. is doing something very unusual - we are actively helping Vietnam undertake its Bilateral Trade Agreement responsibilities and pave the way for eventual World Trade Organization accession, which the U.S. supports. We have a number of vehicles for working with the Vietnamese government. First and foremost is my staff at the U.S. Mission in Vietnam and numerous U.S. government agencies here in Washington that provide training, expertise, and hands-on strategic planning to the Vietnamese government both in Vietnam and in the U.S. We are also working more and more with the private sector in joint programs aimed at both increasing the capacity of Vietnamese organizations and introducing U.S. firms to Vietnam.

Our aid program is also playing a major role to provide technical assistance on BTA implementation via several programs, most notably our "STAR" project, or "Support for Trade Acceleration," which provides technical assistance worth about $8 million over three years, as well as a number of targeted programs with the U.S. Vietnam Trade Council. The main goal is to revise or in many cases create relevant legal and regulatory provisions that ensure fair access, fair protection, and full transparency. This in itself would have been a mind-boggling concept just a few years ago: U.S. lawyers and legal experts coming to Vietnam to help draft Vietnamese legislation on transparency, investment, trade liberalization, and intellectual property rights. Now, it has become routine. My Mission, our STAR project, and USVTC work closely with over 20 Vietnamese government entities. We've come a long way.

Our traditional educational exchanges also have an innovative edge and are tailored to integrate Vietnam into the worldwide free-market economy. For example, the Vietnam Fulbright Program is the USG's largest program dollar-wise in the world with a $5 million annual budget. It supports the Fulbright Economics Teaching Program in Ho Chi Minh City run by Harvard's Kennedy School of Government. The Program is unique in that it trains Vietnamese in Vietnam with a one-year core residential mid-career program geared to promote economic reform and improve the quality of economics education. Our regular Fulbright scholarship program also contributes to Vietnam's capacity to work within the capitalist system with scholarships for MBAs and MAs in Economics, Public Policy, etc. Another innovative program, The Vietnam Education Foundation, will begin activities this year with a $5 million annual budget until 2016 dedicated to building Vietnam's capacity in the fields of Science, Technology, Math, and Medicine. The Vietnam Education Foundation is the first time that the USG has actually tried to build another country's capacity in the sciences. If you add the funding from the Vietnam Education Foundation to the Fulbright Program, the USG is spending more on education in Vietnam than in any other country in the world. Finally, through the State Department's International Visitor program, the Embassy sends 20 young Vietnamese leaders each year to the U.S. for exposure to our society and institutions.

While our assistance has moved into these trade facilitation areas, we're committed to continuing our long-standing programs related to a full accounting for servicemen missing in action, helping people with disabilities, demining, and other humanitarian and development activities. In recent years, we've become the single biggest bilateral donor on HIV/AIDS-related assistance, a top concern for both governments. Few US Embassies have a Health Attache, or an office of the Centers for Disease Control, but we do in Hanoi. And I could inundate you with more details and stories about other successful US efforts and projects here involving trade promotion, educational and cultural exchanges, agricultural and environmental programs, and medical research, among others.

Let's talk for a moment about the new areas -- where we are not yet fully normalized. We don't have much of a military-to-military relationship, for obvious historical reasons. More is going on than you may realize, including an active exchange visit and training program, as well as some of the medical research and demining programs I referred to a moment ago. A Vietnamese armed forces medical delegation was visiting Tripler Hospital when I was in Honolulu last September, and on a visit there in May 2002, I talked with PAVN colonels attending a course on the Asia Pacific Center for Security Studies. But the fact is that our contacts are rather limited, and Vietnam has been cautious about expanding the scope and level of our cooperation until very recently. This is one place in the world where the U.S. Navy still doesn't conduct ship visits, because we haven't come to a meeting of the minds about the terms under which these could take place. Talks continue, however, and I am optimistic that we will see a U.S. Naval vessel in Haiphong harbor or Saigon Port well before I end my tour in Vietnam. Vietnam also doesn't take part in any international or regional peacekeeping efforts, something we would like to see happen as Vietnam begins its campaign for a seat on the UN Security Council by the end of the decade.

In the area of law enforcement cooperation or information sharing, we also do not have the level of cooperation that is routine with so many other countries of the world. We were pleased when the Government of Vietnam agreed to the opening of our Drug Enforcement Administration office in Hanoi, but we have yet to see much in the way of successful cooperative drug busts. The habits of secrecy die hard in the Vietnamese system; if something has not been explicitly cleared to share with foreigners, in effect, it's a state secret. This makes good police work hard. Last June, however, we held our first-ever bilateral law enforcement conference, with representatives from a wide range of US law enforcement agencies and their Vietnamese counterparts, which was a breakthrough. Prospects are now better for more normal and mutually beneficial cooperation. But we're not there yet. At the same time, the U.S. is limited in what it can provide in terms of bilateral assistance on law enforcement training -- including top priorities like intellectual property rights protection -- in the absence of a counter-narcotics agreement. We've been "negotiating" one for at least five years. Meanwhile, we fund regional and international programs -- such as the International Law Enforcement Academy in Bangkok and the UNDCP -- to contribute to the professionalism of our Vietnamese law enforcement counterparts.

As we look to the future, we have to recognize that progress in America's bilateral relations with any country requires action on the issues of direct concern to the American people. These include issues that reflect our fundamental values as a nation. As everyone in this room understands much better than people do in Vietnam, groups in the United States are organized to lobby the executive branch on their deep concerns about specific foreign policy issues. The President leads the direction of our foreign policy, but he and all of us who work for him must take account of the concerns of the American people. In the case of Vietnam, the principal advocacy groups have focused on a full accounting for missing servicemen; bringing to America people who have historical or family ties to our country; perceived abuses of human or religious rights; and, in more recent years, fair and open markets for American business. Human rights is an issue of active, well-focused concern to organizations such as Human Rights Watch and many Vietnamese-American groups. But it is also an issue that deeply and genuinely concerns the American people as a whole. This is not some sinister plot of "peaceful evolution." It is simply a manifestation of our history and our character. Our values, our views on this subject, will probably always be different from those of the Vietnamese Communist Party. Nor do we even see the freedoms spelled out in Vietnam's own Constitution applied across the board within the country. Freedom of opinion and speech, freedom of the press, the right to be informed, and the right to assemble, to form associations and to hold demonstrations, freedom of belief and of religion, the inviolability of the person, presumption of innocence, etc. -- all these are guaranteed in the Constitution, but "in accordance with the provisions of the law." The kicker is that anything that "undermines national solidarity" -- such as criticism of the Party or its leaders, or suggestions of the desirability for a multi-party system -- is not covered by freedom of speech.

I would suggest also that some human rights issues are relevant to economic development. Recently, there have been reports of efforts by the Vietnamese to block internet sites and to closely monitor internet cafes. Last October, the Vietnamese government issued new restrictions on the internet that seek to monitor, control, and censor normal, everyday, international, educational, diplomatic, and business-related information tools such as web sites, e-commerce sites, newsletters, brochures, press releases, etc., by requiring them to undergo a lengthy and uncertain approval process. While it remains to be seen how strictly these restrictions will be implemented, it is clear that they only serve to disadvantage the competitiveness of Vietnamese domestic firms in the global digital economy and go against the world trend to expand, rather than restrict access to information and the digital global economy. In the global economy we have today, success -- being a serious participant -- requires transparency, openness, and easy access to information. The more developed an economy becomes, the more investors will want that kind of open flow of information. These points were expressed very clearly by Intel CEO Craig R. Barrett during his recent visit to Hanoi.

The Embassy's annual Religious Freedom and Human Rights Reports cite examples of violations of important freedoms. The 2002 report will be sent to Congress in February 2003. You can read these on the State Department's websites -- even in Vietnamese, if you want.

So we have some differences on human rights, and these differences impede the development of an even better bilateral relationship. But we also recognize that Vietnam has largely abandoned its previous approach of uniformly insisting that these are "internal affairs" in which the U.S. and other countries have no right to intervene. We now have an annual official dialogue during which we discuss our differences and offer candid assessments. We held this year's dialogue in November in Washington. We for the first time were able to include representatives from the Ministries of Public Security and Justice as well as Foreign Affairs folks. On the religious front, last year Vietnam welcomed a delegation from the U.S. Commission for International Religious Freedom in February and the U.S. Ambassador-at-Large for Religious Freedom in August. This would have been unthinkable not so long ago. Vietnam also joined the UN Commission on Human Rights in 2001 and is already canvassing for support for re-election to another three-year term.

I'm neither a Pollyanna nor a Cassandra about the bilateral relationship. We will continue to have our differences, but we will work to find solutions, and we will do so with mutual respect. We will have new disputes, but we will work through or around them. The bottom line for me is that the longer-term trends are almost entirely positive: dramatic expansion in personal freedoms, diminishing of the role of state control over the economy, development of a legal system and norms, growing integration into the regional and international communities, and even Vietnam's responsible contributions to the international campaign against terrorism. In our interaction with Vietnam, we are moving beyond bilateral issues to talk about strategic issues in Asia and the world. Or, to put it succinctly, we have risen above the level of catfish. All of us here today have roles to play in encouraging these positive trends and developments. Private companies, NGO's, and universities are as important as governments in developing international ties in the 21st Century.

I look forward to seeing some of you in Hanoi and thank you for your attention.

(end text)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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