U.S. may keep doors
open to Vietnam trade
Legislation - Sen. Gordon Smith, R-Ore., proposes giving Hanoi permanent
may curb U.S. reliance on China
- From the Oregonian,
Monday, June 26,
2006 - By JEFF KOSSEFF
WASHINGTON -- Since Congress
permanently expanded trade with China six years ago, Chinese imports
into the United States have more than doubled. Now many members of
Congress fear that the United States has grown too
reliant on China. So they're looking to increase trade with Vietnam.
Sen. Gordon Smith, R-Ore., introduced a bill this month to grant Vietnam
permanent normal trade-relations status, which would allow its entry
into the World Trade Organization and a reduction in tariffs. That could
increase U.S. trade with Vietnam.
"I believe there is a national interest in not having all of our eggs in
the China basket," Smith said.
Many trade expansion plans are stalled in Congress. Opponents point to a
variety of problems with recent trade deals, including job losses in the
United States, human rights violations and weak environmental standards
"A lot of the organizations that haven't liked the direction of our
trade policy aren't happy with this trade proposal, given that you don't
have workers' rights and environmental protections in effect there,"
said Larry Weiss, executive director of the Citizens Trade Campaign, a
coalition whose members include unions, consumer groups and
environmentalists. But unlike other trade legislation, Smith's Vietnam
bill has bipartisan support. He sponsored the legislation with Sen. Max
Baucus, the ranking Democrat on the Finance Committee, which oversees
trade. And Rep. Earl Blumenauer and Darlene Hooley, both Democrats from
Oregon, co-sponsored a companion bill in the House.
"I think it's absolutely critical to help heal the wounds left over from
Vietnam," said Blumenauer, who visited Vietnam in 2000 with
then-President Clinton. "It is an opportunity to have a strategic
counterweight against the Chinese. We're making extraordinary progress
with the country of Vietnam."
The bill has a wide array of U.S. business supporters, ranging from
manufacturers to farmers who see the Vietnam as a new market for U.S.
Currently, the United States must renew Vietnam's normal trade-relations
status each year. In 2005, the United States reported $6.6 billion in
imports from Vietnam, representing about one-third of 1 percent of all
imports into the United States.
Smith's bill would make the trade status permanent. "The reason we like
it is it is just going to give us an incredible amount of certainty
about our ability to do business in Vietnam," said Brad Figel, a
Washington, D.C., lobbyist for Nike. About 25 percent of Nike's footwear
is manufactured in Vietnam.
But such permanent status also could reduce U.S. influence over human
rights abuses in Vietnam, said Thea Lee, policy director for the
"We'd be losing some flexibility with respect to the tools we can use,"
Smith sees his bill as an opportunity to improve conditions for the
"Having them subject to international norms, WTO rules, doesn't lessen
our leverage," said Smith, who led a congressional delegation to Vietnam
last year. "It enhances it."
Unions also worry that the trade expansion could cause further job
losses in the United States and increase the already large trade deficit
-- the gap between the amount that the U.S. imports and exports.
The U.S. trade deficit with China rose from $83.8 billion in 2000 to
$201.5 billion in 2005.
"If you look at the China debate, people said this has to be a good
thing for the U.S.," Lee said.
Trade experts say Smith's bill would provide U.S. companies with an
alternative source of goods. They note that costs in China have risen as
trade has grown.
"As economic development rises throughout that region after 30 years of
opening of the economy, the middle class is growing, wages are growing,
and it is not the low-cost area that it once was," said Christopher
Runckel, president of Runckel & Associates, a Portland consulting firm
that helps clients do business in Asia. "Vietnam is substantially less
expensive for labor."
But the costs of shipping from Vietnam are much greater than from China,
Besides the cost considerations, Runckel said, relying mostly on one
nation carries risks.
"Nobody wants to be dependent on only one supplier or one area, in case
of a natural disaster, a hurricane, an earthquake, a political
situation, or even in case of a trade dispute," he said.
Smith said Oregon farmers stand to benefit greatly from having the
opportunity to sell to Vietnam.
"Obviously with Nike, there's lots of trade already," Smith said, "but
in terms of opening up a market of 83 million people to products Oregon
produces, it's a tremendous plus."
Jeff Kosseff: 503-294-7605;