U.S. firms in Vietnam welcome Jackson-Vanik waiver
HANOI - Members of the American business community in Vietnam on Wednesday welcomed U.S. President Bill Clinton's decision to waive a Cold War law that
restricted trade with the communist country.
``There's no doubt that this is one of the last remaining obstacles that remain to full
normalisation,'' said Greig Craft, managing director of Craft Corp, which is developing a $300 million iron project in northern Vietnam.
Clinton on Tuesday waived the Jackson-Vanik amendment for Vietnam and opened the way for the U.S. government to give trade and investment funding to firms working in Vietnam.
The amendment had been designed to pressure communist countries to allow their citizens to emigrate or travel abroad freely by depriving them of the benefits of U.S. trade.
Both the U.S. Export-Import Bank (EXIM) and the Overseas Private Investment Corp (OPIC) are now free to begin operations in Vietnam.
The decision also removes a key hurdle to Vietnam being awarded preferential trade terms through Most Favoured Nation status, although the two countries will have to first agree on a comprehensive trade pact.
``We're ecstatic (about the waiver) because this will enable us to pursue OPIC financing,'' said Craft, adding that his steel project would apply for OPIC funding worth $150 million.
Norris Hickerson, chairman of the American Chamber of Commerce in Hanoi and country manager for Digital Equipment Corp, said the waiver was a great step forward and would allow American business in Vietnam to be more competitive, but he urged caution.
``Jackson-Vanik can and probably will be challenged by Congress when it comes up in June,'' he said.
``Debate is likely to be hot but I believe the waiver will stand. It will be endorsed but I do believe there will be considerable debate,'' he added.
Bradley LaLonde, head of Citibank in Vietnam, said the long awaited waiver would provide a boost to relations as well as trade and investment with the United States.
``It's another source of financing for Vietnam. It might enhance confidence in the Vietnam market to encourage more American investment in Vietnam,'' he said.
Vietnam declined to comment on Wednesday, saying it had yet to be officially notified of the waiver by the White House.
Washington in 1994 lifted a trade embargo against Hanoi that had been in place since the Vietnam War. Diplomatic normalisation followed a year later.
The two countries exchanged ambassadors in May 1997 but full economic normalisation was still lacking.
In December, the Clinton administration said that it had opened talks with Congress about waiving Jackson-Vanik, saying that Vietnam had made progress on liberalising its emigration policies.
The first wave of U.S. companies to return to Vietnam have experienced mixed fortunes. Chrysler Corp pulled out from a $192 million auto project in 1996 saying the market was unlikely to be profitable.
More recently consumer goods giant Procter & gamble Co pulled itself back from the brink of bankruptcy when, with heavyweight backing from the U.S. ambassador, it managed to secure a compromise deal with its Vietnamese partner to save its ailing joint venture.
Official Vietnamese statistics show that by last month American companies in Vietnam had pledged a total of $1.2 billion in 68 projects.
Andy Soloman - REUTERS News Service - March 11, 1998.
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