Reopening Haiphong to World’s Business : Trade: Memories of war still linger, but residents are looking ahead to the opening of an export processing zone.

This major northern port city was at the crossroads of the Vietnam War more than 20 years ago, a funnel for arms and ammunition to fight the Americans and a frequent target of U.S. warplanes.

Today, with talk of lifting or easing the 19-year-old U.S. trade embargo, Vietnam’s third-largest city is hoping American businesses will join other foreign companies in investing in a new concept--an export processing zone.

The zone would allow any country to bring in raw materials and produce goods, then export them to another country tax free. After one year, the companies must pay an income tax.

It was in May, 1972, that President Richard M. Nixon ordered the mining of Haiphong Harbor in retaliation for North Vietnam’s Easter offensive against South Vietnam, a U.S. ally.

Less than a year later, in January, 1973, the United States and North Vietnam signed the Paris peace agreement and all American forces were withdrawn.

The war went on for two more years before South Vietnam fell to the North on April 30, 1975. The United States evacuated its embassy and imposed the trade embargo.

“The slogan is, ‘Forget the past,’ ” said Hoang Van Dinh, director of Haiphong’s foreign affairs office. “If they come here as commercial ships, they’re welcome. If they come here as warships, we’ll fire.”

The men who fought the Americans then are still around today, in retirement, enjoying their grandchildren who, unlike them, have peace to look forward to instead of war.

Their brown uniforms are as faded as the war. They are like the old soldier of the British war ballad who never dies but only fades away, trotted out for official occasions and to meet the press. They hesitate to bash America these days, instead saying the past should be forgotten.

“I think it is a mistake when the U.S. attacked Vietnam, but a mistake of the government,” said retired Lt. Gen. Dang Kinh, 72. He commanded the troops in Haiphong in 1972 during the large-scale American attacks.

“We can ignore the mistake, leave it behind,” said Kinh, wearing a chest full of medals from wars against the Japanese, French and Americans. “We think we should forget the past and we wish it could never return.”

“It was a difficult war,” said Dinh, the foreign affairs director. “But also now it is a difficult peace.”

This second time around, it is not the U.S. bombers or the mines that have hurt Haiphong. Instead, nature and the sea have taken their toll on the port. It has fallen upon hard times, even though the city is thriving under a free market economy. Haiphong has grown from a wartime population of nearly 1 million to 1.6 million.

As part of the Paris peace agreement, the United States agreed to send in Navy minesweepers to clear Haiphong Harbor. In July, 1973, the port was declared open to ocean traffic, but it has never reached its capacity of 6 million tons per year. During the war, it was handling about 2 million tons or less and last year reached a high of 4 million tons.

Sand and mud from the mountains upstream of the Cam River have made the harbor too shallow to handle ships over 10,000 tons.

The Japanese government has given Vietnam a $170-million long-term, low-interest loan for a two-year project to dredge the harbor and upgrade the port facilities, including the purchase of bigger cranes and the enlargement of warehouses.

Haiphong has reclaimed nearly 25,000 acres of land from the sea. Many Vietnamese have been resettled there. About a third of the land has been set aside for the new export processing zone and the first three factories are expected to be built there this year. These include two shoe factories and a garment factory backed by investors from Taiwan and Hong Kong.

Dinh said more than 20 businesses from Taiwan, Hong Kong, South Korea, Japan, France, Russia and Australia have invested in joint ventures with the Vietnamese in Haiphong. He said some Americans had made unofficial visits. “The Americans come too late,” he said.