When Punishment Boomerangs : Trade embargo now hurts U.S. business more than it hurts Vietnam

American businesses, large and small, are testing the limits of how far they can pursue business opportunities in Vietnam without breaking U.S. law forbidding trade with the Southeast Asian country. They can discuss a deal or sign a vague letter of intent; but because French, Japanese, Taiwanese, Australian and other foreign business interests are unfettered by any trade ban, U.S. businesses typically can’t compete.

The Bush Administration repeatedly has turned a deaf ear to pleas from American business to lift the 17-year-old trade embargo against Vietnam. The Vietnamese want to do business with Americans and buy U.S. goods, as recently reported by Times staff writer Karl Schoenberger.

In dealing with Vietnam, the Bush Administration has insisted that Hanoi fulfill certain conditions before diplomatic--and eventually business--relations are normal- ized. One of those is greater cooperation from Hanoi on the issue of POW/MIAs from the Vietnam War.

A U.S. trading ban against Cambodia was lifted after a peace settlement was signed in Paris last October--an agreement that Vietnam helped to make possible. U.S.-Vietnamese relations have since warmed. In April, Washington allowed direct telecommunication links, exports of goods that meet humanitarian needs such as food and clothing, and transfer of funds to support charitable organizations in Vietnam.

Meanwhile, Vietnam is attracting foreign investors because of market-oriented economic reforms and the passage of a foreign investment law considered to be one of the most liberal in the developing world.

Hanoi’s economic pragmatism regrettably has not been accompanied by a less repressive communist regime. But much has changed since 1975, when the last helicopter left the roof of the U.S. Embassy in Saigon. Today, the United States stands alone in its trade ban against Vietnam.

The concerns raised by the Administration are not without merit. But all things considered, the United States ought to carefully and seriously weigh lifting an embargo that punishes U.S. business more than the Viet- namese government.