Statement of the Honorable John F. Kerry, U.S.S., Massachusetts

Testimony Before the Subcommittee on Trade
of the House Committee on Ways and Means

Hearing on United States-Vietnam Trade Relations

June 17, 1999

Mr. Chairman, it is an honor for me to testify again this year before the Subcommittee on the President's decision to renew the waiver of the Jackson-Vanik amendment for Vietnam. As you know, I supported the President's decision last year to renew the waiver, and I support his decision this year to extend the renewal. I continue to believe that our national interests are promoted by waiving the amendment and that overturning the waiver would have serious negative consequences for our bilateral relations with Vietnam and our larger interests in Southeast Asia.

The United States continues to have important and varied interests in Vietnam and in the region. First is the overriding humanitarian interest in continuing the process of obtaining the fullest possible accounting of American servicemen missing from the war.

Second, we have an interest in promoting freedom of emigration -- an area in which the government of Vietnam has made substantial process particularly over the last year.

Third, we have an ongoing interest in promoting human rights and democratic freedoms around the world, including in Vietnam where the composition of the population -- over 60 percent of Vietnam's population are under 25 years of age -- and the process of economic development hold the promise of political liberalization over time.

As the twelfth largest country in the world with a population of 78 million, Vietnam is a potentially significant market for American goods and services. It is in our interest to help Vietnam develop that market by continuing the course of economic reform that it began in the late 1980s.

Vietnam is an integral part of Southeast Asia -- a region where political stability has been sporadic at best. The region is still recovering from the impact of the Asian financial crisis, and although the situation in Cambodia has improved over the last year, Cambodia and Burma continue to be potential flash points. Our interests in promoting stability in this often volatile region dictate that we have an active presence and effective working relationships with all of the countries including Vietnam.

We also have overriding strategic and political interests in counter balancing China's position and growing influence in Southeast Asia. Over the last few years China has been aggressively courting the countries of Southeast Asia even those, such as Vietnam, which were historical enemies. China has mended fences with Cambodia's Prime Minister Hun Sen. China has been the number one supplier of arms to the military junta in Rangoon and has continuously worked to develop Burma as an outlet for Chinese goods from land-locked Yunnan province. Although Vietnam has been invaded by China many times, Beijing has made a concerted effort to improve relations with Hanoi. A trip to the border provides a first hand picture of the budding trade relationship between China and Vietnam.

Last, but certainly not least, as I emphasized in my testimony last year, we have an interest, a responsibility, and a national need to heal the wounds of a nation and put the past behind us once and for all. The step by step process of normalizing our relations with Vietnam is a means of healing those wounds.

The real question is how we promote these interests most effectively? Those who oppose the Jackson-Vanik waiver want to turn the clock back to the policy that we had in place for some 20 years after the war -- a policy of denial. But Mr. Chairman, as I indicated in my testimony last year, that policy was a complete failure and the history of the POW/MIA issue clearly demonstrates this point.

For years after the war, we tried to promote our primary interest in Vietnam -- to resolve the cases of American servicemen still missing from the war -- by denying Vietnam the benefits of trade and diplomatic relations. The policy produced few positive results. Progress on the POW/MIA issue came only when we began to engage the Vietnamese and to recognize that the Vietnamese needed and wanted a relationship with the United States. This recognition was implicit in the Bush Administration's roadmap which set out a step by step process for normalization of relations between the United States and Vietnam.

We have made enormous progress in the process of POW/MIA accounting as a result of the cooperation that we have received, and continue to receive, from the Vietnamese. In the last six years American and Vietnamese personnel have conducted 33 joint field activities (JFAs) in Vietnam to recover and repatriate remains. 266 sets of remains have been repatriated and 117 remains have been identified. In addition to working jointly with the United States on remains recovery, the government of Vietnam since 1993 has provided reports on their unilateral investigations of 162 cases.

When I became Chairman of the Senate Select Committee on POW/MIA Affairs in 1991, 196 individuals were on the list of "discrepancy" or "last known alive" cases. These were cases in which individuals survived their loss incidents but they remain unaccounted for because they did not return alive and their fate was uncertain. These are the most difficult and heartbreaking cases. We have now determined the fate for all but 43 of the 196 on this list. This means, Mr. Chairman, that their families and friends finally know what happened to them.

Since agreement was reached in December 1994 on joint U.S.-Vietnamese-Lao trilateral investigations in Laos, 31 Vietnamese witnesses have participated in operations in Laos; the government has identified another 40 to participate in future investigations, eight of these identified since the beginning of December 1998. These witnesses have proved crucial to our accounting efforts in Laos. For example, information provided by Vietnamese witnesses resulted in the recovery and repatriation of remains associated with two cases in 1996: one involving eight Americans and another involving four. In the last year a Vietnamese witness has also participated in an investigation in Cambodia.

One of the critical questions at the core of the accounting process is what documents or information does Vietnam or its citizens possess that could provide answers. When we started this process several years ago, we had little access to information. That has changed dramatically. We have a full time archive in Hanoi where Americans and Vietnamese work side by side to resolve remaining questions. Thousands of artifacts, documents and photographs have been turned over by Vietnamese officials for review. Over 28,000 archival documents have been reviewed and photographed by joint research teams. We have conducted over 260 oral history interviews in addition to those conducted during the joint field activities. In response to an American request, Vietnam in 1994 created unilateral document search teams. Since that time they have provided documents in 14 separate turnovers totaling 300 documents of some 500-600 untranslated pages. Most recently the Vietnamese provided 12 documents in two separate turnovers in support of our study of Vietnam's collection and repatriation of American remains. These teams have undertaken research not only in archives in Hanoi but also in archives in more than 19 provinces in the country.

Mr. Chairman, last year those who opposed the waiver of the Jackson-Vanik amendment suggested that progress on POW/MIA accounting would decrease. That simply has not been the case. Cooperation has continued, and we have made further progress on this issue. Joint field activities continued. More remains were repatriated. The Vietnamese continued to conduct unilateral investigations and document searches and to cooperate in the trilateral investigations. Leads that might help to resolve the outstanding discrepancy cases continued to be investigated by Vietnamese and American teams.

During my tenure as Chairman of the Senate Select Committee, I spent countless hours and made numerous trips to Vietnam in an effort to develop and improve cooperation on the POW/MIA issue. I am convinced that we made progress on this issue because of engagement and cooperation, not isolation or containment. And I am equally convinced that the best way to promote our broad range of interests in Vietnam continues to be to engage the Vietnamese and to follow our present policy of step by step normalization of bilateral relations with Vietnam.

The waiver of the Jackson-Vanik amendment is a modest but important step in the continued normalization of our relations with Vietnam. It simply enables the Export-Import Bank and OPIC to operate in Vietnam -- a step that is for the benefit of American companies and by extension the American economy. It is important to note that this waiver does not extend most-favored-nation tariff treatment, or as it is now called NTR (normal trade relations), to Vietnam. That step will come only when the United States and Vietnam have completed negotiations on a bilateral trade agreement.

Those who oppose the Jackson-Vanik waiver argue that we are moving too fast, that Vietnam's performance in the areas of emigration, human rights, and some would even say POW/MIA is unsatisfactory, and that our policy of engagement has yielded few tangible results. I disagree and I think the record backs me up.

The use of carrots or incentives creatively has been at the core of our policy toward Vietnam since the President, with the overwhelming express support of the Senate, lifted the unilateral U.S. trade embargo in 1994. There is no question that the waiver of the Jackson-Vanik amendment has served as an incentive for continued progress on emigration -- the one and sole issue on which the extension of MFN, US governmental credits and credit insurance is dependent under the provisions of the amendment.

In the last year Vietnam has made substantial and consistent progress in fulfilling its commitments under the ROVR agreement, which provides for resettlement in the United States of eligible Vietnamese who had returned to Vietnam from refugee camps in the region. Processing of eligible cases accelerated dramatically in 1998 to the point that the program is almost at completion. Last year at this time the government of Vietnam had cleared about 78 percent of ROVR applicants for interview. As of the beginning of this month, 19,975, or 96 percent, had been cleared. INS has approved 15,833 of these for admission to the U.S. as refugees, most of whom have already left for the United States.

Last May Vietnam had taken no action on 1353 ROVR cases; as of this June, that number was reduced to 79. Similarly the number of cases denied clearance by the Vietnamese government has fallen from 776 last May to 422 this June. Most of these were cases in which addresses for the applicant were incorrect or the eligible individuals failed to attend a clearance interview. Once we provided the Vietnamese government with updated information, many of these cases were resolved. In fact, the main obstacle to ROVR processing at this point is not lack of cooperation by the government but rather failure of some cleared applicants to appear at our ODP (Overseas Departure Program) office for the INS interview.

Similarly the waiver has encouraged increased Vietnamese cooperation on the Orderly Departure Program (ODP) under which over 500,000 Vietnamese have emigrated as refugees or immigrants to the U.S. since the 1980s. As a result the Administration expects that it will complete processing of nearly all ODP caseloads, including ROVR, by the end of this fiscal year. The Vietnamese Government has made a commitment to achieve this goal for all U.S. refugee programs including ROVR and Montagnard cases. Since the waiver was extended last year, Vietnamese cooperation on the Montagnard cases has accelerated. 220 individuals have been cleared for interview; of these INS has approved 118 for resettlement in the United States. In 1996 our government suspended the ODP program for former U.S. government employees in Vietnam. The Vietnamese government has agreed to our recent request to resume that program. Finally, I would note that continued Vietnamese cooperation has enabled us to make progress on the so-called "HO" program for former re-education camp detainees.

Clearly Vietnam has made substantial and measurable progress in the area of emigration. Frankly, its record in the area of human rights is not as impressive. Vietnam continues to be a one-party state that tolerates no organized political opposition and denies or curtails many basic freedoms, such as freedom of the press or speech.

Human rights is and must continue to be on our bilateral agenda with Vietnam. The United States and Vietnam have established a regular, bilateral human rights dialogue in which general issues as well as specific cases are raised. The seventh session of that dialogue is about to be scheduled. I know that Ambassador Peterson repeatedly raises human rights issues with the highest levels of the Vietnamese government, and that Secretary Albright raised these issues with the Deputy Prime Minister when he was in Washington in December. I consistently raise human rights issues during my trips to Vietnam. These entreaties and the gradual improvement in our relations has had some positive results. In the last year some 24 prisoners of conscience were released in two amnesties. In addition liberalization continues to take place slowly by degrees.

There is no question that Vietnam is changing as it exposure to and interaction with other countries increases. Vietnamese enjoy more personal liberty than they ever had before; they own shops, have economic mobility, and speak to foreigners in most cases without fear. They have more access to information and foreign media and although the newspapers are "state papers," they are increasingly outspoken about corruption and governmental inefficiency. Vietnamese now have access to the Internet, although with some limitations. Vietnamese generally are free to practice their religion; in fact, participation in religious activities increased in the last year, even for some groups such as Buddhists and Catholics that have been the targets of government repression. On the labor front, there is no question that Vietnam's labor law and practice fall short of international standards. But the fact that last year, 60 organized strikes including strikes against state-owned enterprises were allowed to take place is a positive step. The Vietnamese government is now drafting legislation on freedom of association.

Some argue that the only way to change Vietnam's human rights record is to deny them the benefits of trade, force OPIC and EXIMBANK to close their doors, and freeze our relationship here and now. As one who has made more than a dozen trips to Vietnam over the last nine years and who has witnessed how this country has changed in such a short time period, I honestly believe that they are wrong. If we want to promote human rights and political change in Vietnam, we need to expand our contacts, not contract them, through all the tools at our disposal -- trade, aid, exchange programs, participation in ASEAN and other regional and international institutions. And we need to maintain the ability to discuss this issue at the highest levels of government. Vietnamese leaders know full well the importance that we place on human rights and that progress on this issue will be part of the context in which our relations develop.

Let me turn briefly to the economic relationship. Clearly Vietnam wants to normalize economic relations with the United States and to join the WTO. Without undertaking serious economic reforms, Vietnam can achieve neither. Over the past year I have had numerous conversations with high level Vietnamese leaders about the importance of undertaking these reforms, which are necessary for the development of Vietnam's economy and the conclusion of a bilateral trade agreement with us. Not surprisingly there is some reticence about taking such politically sensitive steps. Nevertheless, I believe that the Vietnamese leaders now understand that they have no choice if they want to modernize their economy. This is reflected in the fact that the negotiations for a US-Vietnam trade agreement have increased in pace and improved in substance.

If these negotiations are brought to a successful conclusion, Vietnam will be obligated to undertake major changes in its trade and investment regimes that will greatly benefit American companies by increasing their access to the Vietnamese market. The Jackson-Vanik waiver, which enables Eximbank and OPIC to continue operations in Vietnam, serves as an important incentive for Vietnam to take these steps and to stay on the economic reform course. If we remove that incentive, we run the risk of setting that process back as well as the ongoing negotiations for a bilateral trade agreement.

I know that the Subcommittee will hear testimony this morning from some who argue that Vietnam has not cooperated fully on the POW/MIA issue. Obviously I disagree, but let me repeat two important points that I made when I testified before the Subcommittee last year. First, during my many trips to Vietnam I have met with the American teams -- teams composed of our military personnel -- who work on this issue daily with the Vietnamese. Every one of these teams has indicated to me that Vietnamese cooperation has been outstanding. Second, to those who argue that Vietnam is withholding documents or even remains, I say if that is so, the only way you are going to find out is to continue the process and the policy we now have in place.

Mr. Chairman, I believe the record over the last few years clearly proves that our step by step approach to normalizing relations with Vietnam is working and is consonant with the many interests we have in that country and the region. Reversing that policy by disapproving the President's extension of the waiver will reduce our influence and threaten future progress on POW/MIA, emigration, human rights, economic reform and trade, and other interests I have not discussed, such as stemming the flow of illegal drugs. In short, it would do irreparable harm to our relationship and our interests not only in Vietnam but also in the region.

The decision to treat Vietnam as a country, rather than a war, was made when we normalized diplomatic relations in 1995. We cannot and should not turn the clock back now. The President made the right decision when he decided to extend the waiver for another year. Congress should let that decision stand.