Vietnam Deja Vu

The war is 25 years in the past, but American businessmen say Vietnam is still a battlefield, thanks to leaders who keep curbs on trade. A quarter of a century on, they feel it's time to bury the past and get on with business.

By Ron Gluckman /Hanoi, Ho Chi Minh, and in between

Dťjŗ vu. THAT'S THE FEELING among American businessmen in Vietnam, not only over surroundings that seem well known to anyone raised on the music and movies of the Vietnam War or the nostalgia baby boomers feel, even now, 25 years after its end.

Itís the frustrations of doing business in Vietnam that often make them feel they are endlessly going over the same old ground.

Thatís how it felt when members of the American Chamber of Commerce greeted Defense Secretary William Cohen, who came on a historic three-day visit in mid-March (2000). The last defense secretary to come to Vietnam fled before the fall of Saigon and the gripping U.S. Embassy rooftop evacuation.

That was on April 30, 1975. The embassy closed, diplomatic ties were cut and two decades of embargo ensued. Until fairly recently, there was no official American representation in a country that now claims 600 members in a robust, enthusiastic and highly vocal American Chamber of Commerce.

Members met with Cohen in former Saigon, now known as Ho Chi Minh City. They chatted about stability in the region, and relations with China in a week when Taiwanese elections again raised the specter of a Cross-Straits war. They talked about Cohenís tour of Vietnamese battlefields, where millions of U.S. dollars are still being spent searching for soldiersí remains.

But when the talk turned to trade, Cohen wisely sidestepped the issue. "Thatís out of my ballpark is what he said," Chamber members told MSNBC, after the closed-door meeting. And Cohen was right. Trade certainly has nothing to do with defense.

Yet days after the defense secretaryís departure, on-again, off-again trade talks that have stymied investment here for years, were suddenly back on.

"It seems tied to Cohenís visit," said one U.S. businessman. "It may seem weird, but a visit of a high-level official can be a catalyst even for trade talks he doesnít talk about. Donít try to figure out why. Thatís how things go in Vietnam."

American Ambassador Douglas Peterson confirmed that the U.S. Embassy had received "our first communication from the Vietnamese in months. It is a good signal," he said. "We had been waiting for something from them for six months."

The Vietnamese sent a letter requesting clarification on some points of the Bilateral Trade Agreement, which had been on hold since last summer. America has deals with every nation it has diplomatic relations with ó except Vietnam.

Three years of exhaustive negotiations produced a pact that American officials described as the most comprehensive trade deal it had ever negotiated with a foreign country. The signing was set for last summer. It never happened.

"It just seemed to disappear," said one dejected local American entrepreneur. "Weíve worked for years, invested all our money in Vietnam, and now the deal is dead," he said. "Itís tragic."

Itís a recurring theme on the front lines of trade in this communist country. "For all itís beauty, Vietnam can be a mighty formidable place to do business," said an American based in Vietnam for four years. "Iíd thought Iíd seen everything out here. But this nonsense over the trade deal really takes the cake."

It was supposed to be the icing on the cake. But last winter, word came that the Vietnamese werenít happy with the terms on the table. Nobody ever said why, and analysts are baffled. "The whole thing was a good deal for Vietnam, itís almost one-sided in their favor," said an European diplomat in Hanoi.

"There is a pervasive misconception, however, on the Vietnamese side that somehow the trade agreement would not be good for Vietnam," said American attorney Fred Burke, head of Baker & McKenzieís Vietnam offices and a former chamber president.

Few can understand Vietnamís about-face on a deal that does seem to be in its best interests. Trade between the old adversaries, which started after the embargo was lifted in 1995, remains minuscule by U.S. standards ó a total of $800 million last year. In 1997, the total was a bit higher, but represented a mere .0004 percent of U.S. imports. 

Yet the United States is the eighth-largest trading partner of this impoverished nation of 80 million people.

Under the trade agreement, Vietnam would gain access to the vast American market under terms previously-known as Most Favored Nation. Tariffs would drop, in some cases by 40 percent to 80 percent.

One businessman ships tiles to California, paying duties of more than 56 percent. "With the BTA, it would drop to 6 percent," he said. "I could ship tiles from Vietnam and beat those from Mexico by a bundle." The World Bank estimates that Vietnamese exports to America should quickly triple.

"Actually, I think this is a very conservative prediction," Ambassador Peterson said. "It is likely to be much more than that."

No wonder Americans are mystified over why the deal unraveled at the final hour.
"The Vietnamese got cold feet," said an American official, admitting bafflement as to the reasons. \

Rumors run rampant in Vietnam. A shadowy old veteran on the ruling Politburo allegedly pulled the plug. Vietnamese officials rethought the former enemyís motives and wanted new concessions. Or they didnít want to upstage Chinaís negotiations for entry to the World Trade Organization. 

Whatever, "it was a real disappointment for the U.S. business community," said Walter Blocker, a trader in Ho Chi Minh City. "We all worked so hard for it."

No wonder Americans feel dťjŗ vu as they battle over business. Itís been that way since they started coming here in the mid-1990s, battling bitter memories of the past, losing deals during the long embargo to competitors from countries that didnít restrict trade with Americaís old enemy, and, finally, convincing congressmen and the general public in America that doing business with this communist regime was actually the best way to speed up reforms.

"The Vietnamese governmentís about-face has been a major set back," said Burke. Most U.S. companies, not to mention Asian and European ones, expected Vietnam to get improved trading terms in the United States before now. Without it, their businesses are suffering or dying, and proposed new investment is not materializing.

"They were betting on the jobs that would have been created, the foreign exchange that would have been generated, and the improvements to the legal system that would have resulted," said Burke. "For the time being, at least, it looks like those who bet on Vietnam doing what seemed to be in its own best interests have lost."

Or, as one U.S. observer close to the negotiations said, "They never seem to miss an opportunity to miss an opportunity."

Thatís why the letter to the embassy sent new hope through the American business community. Compaq dominates the computer market, along with Dell and IBM. Ford, Nike and Proctor and Gamble are all here in force. U.S. businessman Walter Blocker is director of Consumer Products for Gannon, which represents Maybelline, Mars/M&M Candy, Cross Pen and Rubbermaid.

In many ways, heís typical of many long-term Vietnam businessmen. He was only 27 when he arrived from Kentucky in 1995, and was filled with excitement for a land that had figured greatly in his history.

Kentucky sent more soldiers to Vietnam than any other state, except Alabama. "In 1994 and í95, Vietnam was the fastest-rowing economy in the world. There were 70 million consumers here that had an appetite for U.S. products," he said.

"Back in 1995, people would ask, ĎWhy do you think you can do business in Vietnam?í and I would always say that I knew about as much as anyone else here since it was so new. The reality was, none of us knew much, and business here proved to be infinitely more complicated than anyone dreamed."

Thatís the refrain across Vietnam, where many are praying that Cohenís visit will pave a path to renewed trade talks. "For the Vietnamese, it was a face-saving way of reinitiating contact," said one. Others fear it may be another false start. "There is little chance now that this deal will be finalized in an election year," notes one. "We just feel like Vietnam blew it, and weíre off the radar now."

Yet others take heart at improving U.S.-Vietnamese ties. Ambassador Peterson noted that Cohenís visit stimulated talk about shared weather forecasting, search-and-rescue work, demining, "all things Vietnam needs."

"Itís too soon to say what will happen in the future," he said. "But weíre already seeing a mutual benefit. The Vietnamese reacted positively to Secretary Cohenís visit. They were impressed by his candor and grasp of the issues."

Time will tell, of course, but his silence on the trade issue may have been just the message the Vietnamese wanted to hear.

Ron Gluckman is an American reporter who is based in Hong Kong, but who roams around Asia for a number of publications, such as MSNBC, which ran this piece around the 25th anniversary of the end of the Vietnam War, in Spring 2000. 

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