The United States and Vietnam 15 years ago laid out a roadmap for the normalization of relations between our two countries. In May, they signed a bilateral market access agreement clearing the way for Vietnam to join the 150-plus member World Trade Organization (WTO) later this year. Today we near the end of the long road of reconciliation. However, one last step remains — for the U.S. Congress to grant Vietnam Permanent Normal Trade Relations, or PNTR.
A 2001 bilateral trade agreement required Vietnam to make wide-ranging changes to its economy, reduce tariffs, open its services sector and provide protections to U.S. investments. Since then U.S. exports to Vietnam have increased 320 percent and two-way trade has risen by almost 400 percent to nearly $8 billion last year.
Why does this matter? Vietnam is now one of the most promising and commercially significant emerging markets in the world and is well along on a program of liberalization that has yielded impressive economic results. State-owned companies no longer dominate and the private sector has grown dramatically. In the past four years, Vietnam’s gross domestic product has more than doubled, and the country has cut its poverty rate in half in only 13 years.
To join the WTO, Vietnam has agreed to reduce tariffs to 15 percent or less on over 90 percent of U.S. exports of manufactured goods and nearly three-quarters of U.S. agricultural exports. In the services sector, Vietnam will provide greater access to U.S. companies in key areas including financial services, telecommunications, distribution and energy services.
These commitments are remarkable, but they are meaningless for American companies unless Congress acts quickly to grant PNTR to Vietnam. Failure to grant PNTR will shut U.S. firms out of the benefits of Vietnam’s WTO market; the benefits would then go to competitors including China and the European Union.
Some U.S. groups say Vietnam does not have a good human-rights record. If further benefits are granted to Vietnam, they say, a repressive government will be rewarded. Vietnam’s human-rights record is certainly not perfect. Yet whatever Vietnam’s record, it is today much improved: Communist Party members can and do leave the party (some noisily) and remain in Vietnam, and ordinary citizens can talk publicly of political and economic “plurality.”
There is also the claim that Vietnam exploits low-cost labor. The truth is quite different. Vietnam is moving to strengthen its labor unions and increase the rights of workers. It has welcomed international labor groups to help it improve the labor situation.
The case for PNTR is both economic and strategic. Vietnam is a net exporter of both energy and food — a claim few developing countries can make. It is rapidly integrating into the world economy. Its per capita income is rising rapidly. The Vietnamese are hardworking, place enormous emphasis on education and self-improvement and welcome foreigners, including Americans.
There is a long modern history in America of dealing with Vietnam in a firm but constructive, bipartisan way. Americans can be proud that their country’s long history of embracing former enemies has helped propel Vietnam into the world community. It is in both countries’ interests that the last step in the normalization of relations between the U.S. and Vietnam — approval of PNTR — be taken now.
Sesto Vecchi of Russin & Vecchi has practiced law in Vietnam for many years and acts for American companies that export to or do business in Vietnam.