Ease the Cold War With Hanoi

Despite its welcome switch of policy on Cambodia, Washington is maintaining a hard line with Vietnam on bilateral trade. Too bad. The Bush Administration insists on sticking to a policy that punishes both U.S. business and the Vietnamese people. No doubt unanswered questions about the very emotional MIA issue have had something to do with the Administration’s unchanging policy.

Earlier this month, President Bush signed an executive order extending the long-standing embargo against Vietnam for another year. American business has persistently pleaded with Washington to remove the 15-year-old economic sanctions, which were intended to punish Vietnam after the war. Today, most U.S. allies such as France, Britain and Japan have quietly resumed economic ties. U.S. business interests, meanwhile, watch anxiously and hungrily from the sidelines.

Hanoi is eager to stimulate trade and foreign investment. Despite a series of market-oriented economic reforms, it is short of cash and revenue because aid from the Soviet Union is half of what it used to be. Hanoi, in arrears on more than $100 million due to the International Monetary Fund, desperately needs money to repay the debt so it can get new loans.

Washington is seeking continued cooperation from Hanoi to help a United Nations peace effort in Cambodia. Hanoi has not been standing in the way of that goal. A softening of the tough U.S. trade stance would have signaled an appreciation of Hanoi’s efforts and encouraged more of the same.

The IMF board is scheduled next month to review Vietnam’s economic programs. Hanoi is seeking help from IMF member governments for financial aid to help pay off $136 million in overdue loans. France is willing to head such a support group, which would include Sweden and Australia. But Washington sits on the sidelines, nursing old wounds while doing nothing to heal them.

It should at least soften its lobbying efforts against Hanoi at the IMF. If we can’t trade and can’t give them money, we ought to help Hanoi out of debt.

Washington’s Cold War toward Hanoi hurts business; it has outlived its usefulness.