Saturday, August 3, 2013

Vietnam and America - all Aboard?

IT TOOK until 1995, a full two decades after those iconic American helicopters beat a hasty retreat from the roof of an official residence during the fall (or liberation) of Saigon, for Vietnam and America to normalise their diplomatic relations. Since then building up their relationship has been a “painstaking process”, in the words of John Kerry, the head of America’s state department and a veteran of the war’s losing side

Yet America now views its former foe as a strategic ally in the wider region. And for Vietnam, America is a crucial market for its agricultural and apparel exports, and a diplomatic counterpoint to a rising China. Bilateral trade between the two countries is now worth nearly $25 billion per year, with the bulk of the goods going to America. Vietnam has been included in the negotiations for the Trans-Pacific Partnership (TPP), a free-trade agreement that should ultimately include a dozen or more countries between Asia, Australia and the Americas.

The road to Vietnam’s potential entry into the TPP, however, is paved with potential obstacles. Vietnam fears the deal would hurt its textiles industry and hinder its state-owned companies with unwanted reforms. And because in recent years American officials have insisted on seeing evidence of political reform before they allow any deepening of economic co-operation with Vietnam, it might look awkward for Barack Obama if Vietnam were to sign the TPP at the same time that it is cracking down on its dissidents.

And the political repression is intensifying. Convictions of dissidents in the first half of 2013, for such crimes as “conducting propaganda against the state” and “attempting to overthrow the government”, outnumber equivalent convictions for all of 2012, according to Human Rights Watch, an advocacy group. Hanoi is holding Le Quoc Quan, a well-known human-rights lawyer, on charges of tax evasion. A recent law imposed additional controls on anyone who uses the internet, which has become a popular medium for criticising the government. And in late July Nguyen Van Hai, a jailed blogger whose case Barack Obama once mentioned in a speech, entered the fifth week of a hunger strike in protest against his poor treatment.

It all looked like an inauspicious backdrop on July 25th as the president, Truong Tan Sang, made what was only the second visit to the White House by a Vietnamese head of state since the two countries normalised their relations. The timing of Mr Obama’s invitation might seem almost perverse. But in the larger picture, America is turning to Vietnam as a key partner in its “pivot” to Asia. For other reasons too Mr Obama is eager to conclude the TPP, the economic “cornerstone” of his administration’s economic policy for the whole Asia-Pacific region.

So in Washington Messrs Obama and Sang announced a vaguely defined “comprehensive partnership” and signalled their intention to sign the TPP by the end of the year. Both presidents called for a peaceful resolution to disputes around the South China Sea, and Mr Obama added, without elaborating, that he and Mr Sang had discussed both “progress” and “challenges” in Vietnam’s human-rights record. Given that Mr Obama’s invitation had kindled hopes of potential breakthroughs on TPP or the strategic partnership, Ian Storey of the Institute of South-East Asian Studies in Singapore judges it a bit of a damp squib. The leaders seem to have left unsaid whether America will consider lifting its ban on arms sales to Vietnam; how the two sides plan to address Vietnam’s quibbles with the TPP; and plenty of other issues too.

Just how much Vietnam would benefit from the TPP, if it does join, will be unclear until the agreement’s finer points are settled. Yet because Vietnam is the TPP’s least-developed prospective member state, the improved access to overseas markets could bring considerable gains. Edmund Malesky of Duke University in America adds that the deal’s binding governance regulations would help accelerate Vietnam’s ongoing land-reform process, while also reducing the dominance of state-owned enterprises (SOEs).

Vietnam’s approval is still in doubt. A central sticking point is a clause that would require its textiles industry, which exports $7.6 billion worth of garments to America per year, to cease importing raw materials from China and other non-TPP members. That could lead to layoffs and worse. And powerful interests are wary of those provisions that might clip the wings of the SOEs. The often corrupt and woefully inefficient mainstays of Vietnam’s lacklustre economy do, after all, have friends in high places.

The government also would probably need to release a few high-profile political prisoners in the coming months to demonstrate that it hears America’s complaints about its human-rights record (or at least that it is not deaf to them). A likely parolee would be Mr Quan, the human-rights lawyer, whose trial was scheduled for July 9th but then abruptly cancelled—presumably to smooth the way for Mr Sang’s appearance in Washington.

Releasing a few dissidents to ease along a trade deal does not a policy shift make, as Vietnam’s persistent critics will note. Bringing Vietnam into the TPP could anger a vocal contingent in America’s Congress which represents Vietnamese-American constituencies and remains suspicious of the Communist regime’s motives. They might be joined by trade unions and labour advocates who object to the conditions in Vietnamese factories. Mr Obama evidently thinks it better serves America’s strategic and economic goals to woo Mr Sang than to wag a finger. That doesn’t mean it will be easy. Banyan, The Economist (Picture credit: Hubert Van Es via Wikimedia Commons)


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