Time to Dismantle a Trade Weapon That’s Backfiring : U.S. firms are paying dearly for Washington’s embargo against Vietnam

The long, bitter standoff between the United States and Vietnam may finally be coming to an end. Hanoi appears to be acting to get in the good graces of Washington. Normalization of diplomatic relations between the two nations appears close unless some in Washington stall the process by insisting that Vietnam embrace Western-style democracy as a precondition. That would lengthen the 17-year-long U.S. trade embargo, originally designed to punish Hanoi in the aftermath of the Vietnam War.

Now, instead of being merely retribution against an old enemy, the U.S. policy serves to put American companies at a big disadvantage in the international rush to do business with a market-driven Vietnam.

It clearly is in Washington’s interest to lift the economic sanctions. A prosperous Vietnam would attract more foreign visitors, and new ideas. Also, market-driven economies have transformed many an Asian country into a thriving nation with a middle class pushing for some form of democratization, as in Taiwan, South Korea and Singapore.

Of course, Vietnam has a long way to go before duplicating those Asian success stories. Hanoi’s regime remains rigidly communist in ideology and authoritarian in practice, but hard realities have forced it into a new mode of cooperation with the outside world.

Having lost the economic and political support of its old patron, the Soviet Union, Hanoi must now fend for itself. So it is hungry for foreign investment and trade.

Vietnam’s major market reforms have attracted companies and business people from around the world. Japan resumed economic relations with Vietnam last week. Noticeably absent are the Americans, held back from doing business by the U.S. embargo. U.S. firms have been asking the State Department to eliminate the trade barrier or at least modify it.

The State Department promised in 1991 to begin normalizing relations with Vietnam if it pulled its troops out of Cambodia and cooperated in resolving the emotionally charged issue of Americans missing in Indochina.

Hanoi has helped bring a peace accord to Cambodia, although now the murderous Khmer Rouge, the largest of the guerrilla groups, is refusing to disarm and is threatening to pull out of the free elections scheduled for next year.

Also, in facing up to a long overdue moral obligation, Vietnam has opened its war archives to the United States; as a result, at least some families of U.S. servicemen missing since the Vietnam War will soon know the fate of their loved ones.

The Bush Administration called this development a “major breakthrough,” and it responded to Hanoi’s action by extending a small package of humanitarian assistance for victims of recent flooding in Vietnam and military veterans who are disabled as a result of the war.

Some in Washington--including Vietnam veteran Sen. Bob Kerrey (D-Neb.), former Navy Secretary James H. Webb and a number of Vietnamese-Americans--believe that there must be another condition for normalizing relations. Hanoi, they say, ought to be made to agree to open the way for democracy.

Vietnam certainly should move toward an open and free society, but imposing a new condition now would complicate the normalization process. And the United States, which has ties with nations such as China and Saudi Arabia, cannot argue that it is a stranger to maintaining diplomatic and trade links with repressive nations.

In the Cold War, the fight against communism was the driving force in U.S. foreign policy. Today, international competitiveness is becoming the centerpiece of foreign relations. The United States must be able to compete unfettered around the world. It stands alone in its rigid trade embargo against Vietnam. A less repressive, more progressive government is in Vietnam’s interests, but to hold diplomatic and trade ties hostage to our Western notions of democracy would waste opportunities for greater economic leverage with the Vietnamese. Only a new dialogue will free Washington and Hanoi from the grip of an old, painful war.