Stalled Trade Bill Blow For Hanoi

Sydney Morning Herald

Wednesday November 15, 2006

Connie Levett Herald Correspondent in Hanoi and agencies

IN A setback for Vietnam's economic ambitions, the US Congress has refused to authorise a bill to permanently normalise trade relations with its old foe.

The White House and the Vietnamese Government were caught out by the House of Representatives decision, which was supposed to be the calling card of the President, George Bush, when he arrives in Hanoi this week for the the Asia-Pacific Economic Co-operation summit.

The US chief trade negotiator, Susan Schwab, reportedly flew to Vietnam on Monday before the vote, for what were supposed to be celebratory meetings with her Vietnamese counterparts.

The bill may still be passed but it is an embarrassing reverse.

The bill to give "permanent normal trade relations" status to Vietnam failed to win the two-thirds support it needed to pass the House. The vote came on the first day of the lame-duck session in which the outgoing House, still controlled by a Republican majority, met to pass crucial bills by the end of this year.

The vote showed that Democrats remain opposed to trade agreements. Republicans supported the bill by a two-to-one margin, but Democrats were evenly divided for and against the measure. It may be resubmitted to the Senate later this week.

The Vietnamese Government has touted to its people the "permanent normal trade relations" change, along with the country's imminent entry to the World Trade Organisation, as a sign they have arrived in the free-market world.

The Deputy Minister for Foreign Affairs, Le Van Bang, had called the trade bill "the engine for the next step in advancing US-Vietnamese trade relations".

A Vietnamese-American activist, Thuong Nguyen Foshee, was deported by Vietnam on humanitarian grounds on Monday, despite a conviction for terrorism, in a bid to ensure the House would approve the trade bill.

"There may be some damage," said a Vietnamese economic analyst yesterday. "But we already have a bilateral trade agreement, so it will only affect some parts [of the economy]."

The surprise result followed an announcement by the US State Department that it had dropped Vietnam from its list of nations that severely violate religious freedom, citing an improvement in its tolerance for religious expression.

The US normalised trade relations with Vietnam in 1995.

© 2006 Sydney Morning Herald

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