Vietnam: Us Trade Agreement Stalled


Ton-That Quynh-Du

The official signing of the US-Vietnam trade agreement, regarded as most important for the trade between the two nations and for Vietnam's integration into the world economy, has unexpectedly been delayed.

The trade pact, which took years to hammer out and was approved in principle by both countries in July, was widely expected to be formally signed on 13 September by Bill Clinton and Phan Van Khai at the APEC summit in Auckland. But the Vietnamese decided at the last minute that they were not ready to proceed.

The reasons causing the Vietnamese to hesitate were not immediately clear, but shortly afterwards the Vietnamese government announced that it would need to reach a consensus on integrating the country with the world economy. On 8 October, Nhan Dan, The People's Daily, announced that ' ...Prime Minister Phan Van Khai and Deputy Prime Minister Nguyen Manh Cam emphasised the need for consensus in opinion on some issues related to the process of economic integration.' The official Vietnam News Agency also quoted Khai as saying that while economic integration was important, it must not be at the expense of national independence and sovereignty.

Clearly there are disagreements amongst members of the Politburo on the merits of joining the world economy, which go to the core of the merits of the directions set by Doi Moi policy in 1986.

These disagreements may have been fuelled by fears that too close a connection to the world economy may bring an dependency that would threaten the nation's sovereignty - a fear underscored by the collapse of several Asian economies, by anxiety that to expose the economy to foreign competition may cause further social unrest (unemployment is already at high levels), or by concern to protect the Party's support base.

To address these questions, the Central Committee will begin to meet on 2 November to deliberate the merits of joining the world economy. It is the first time that the core arguments underpinning the Doi Moi policy have been debated.

Out of this meeting, which will be lengthy and the details of which are kept secret, we will learn if there is to be a winding back of economic reform program or not.

Three things are worth commenting on:

1. If the conservatives win the day and economic reforms are held back then we will see a repeat of what happened in 1990 when the political collapse of Eastern Europe frightened the Vientamese Communist Party's leadership into stomping on any notion of political reform. The difference is that this time an economic collapse may trigger a retreat from further economic reform.

2. If the reformists win the day, Vietname will need a leader, or a group of leaders, committed to reform and capable of carrying the political clout needed to weather its implementation. Since Nguyen Van Linh, such a figure has been absent.

3. Whatever the outcome, the fiction that economic reforms can be kept entirely separate from political reform can be laid to rest. After all, it is in dealing with a trade agreement that ramifications of a political nature have been brought to the surface in such an acute manner.

WATCHPOINT: Will Vietnam's commitment to economic openness and reform outlast the 20th century?


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