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Insider : Are We Losing in Vietnam Again? Some Americans Think So : Japanese and Australian firms are already doing business with Hanoi, which they see as a potentially lucrative market. U.S. companies want a piece of the action but Washington has a trade embargo in place.


WASHINGTON — When American banker Steven K. Baker visited Hanoi not long ago, he found to his dismay that the Vietnamese capital was "crawling with Japanese and Australians" and other foreign business executives.

"Our good friends and competitors are getting in on the ground floor," mourned Baker, who is based in Hong Kong. "Virtually any major businessman would say to you that in the next 10 years, we'll make a hell of a lot more money in Vietnam than we will in China."

And so, last week Baker flew to Washington to lobby for lifting the longstanding U.S. trade embargo against Vietnam--a ban that has frozen U.S. business activity there since the end of the war 15 years ago. He has done this before, and he will probably have to do it again.

Dressed impeccably in a dark blue suit--and flanked by an aide and a paid lobbyist--Baker made the rounds of top officials, stopping at the White House, the State Department, the Treasury Department, the Commerce Department and Capitol Hill, politely pleading at each location for a speedy end to the U.S. embargo. "We (American businesses) are falling behind every day," he observed.

On Sept. 29, Secretary of State James A. Baker III (no relation to the banker) broke new ground in the gradual thaw in relations between Washington and Hanoi when he met at the United Nations with Vietnamese Foreign Minister Nguyen Co Thach. It was the highest-level meeting between the two governments since 1973.

But seeing Thach is as far as the Bush Administration is willing to go, at least for now.

The United States is not ready yet to establish diplomatic relations with Vietnam. And the trade embargo remains in effect. In fact, it was just renewed on Sept. 14, this time with Treasury Department regulations that bar Americans from spending more than $100 a day in Vietnam. (That's less than the cost of a room at the new "floating hotel" in Ho Chi Minh City, Baker complains.)

Administration officials want more help from Hanoi on a number of issues, particularly in bringing peace to Cambodia, before they take any major steps toward normalization of ties with Vietnam.

How long will that take? In particular, when will the trade embargo be lifted? That's what Steven Baker and other American business executives who hope to invest in Vietnam are trying to figure out.

Baker is an executive for one of America's largest banks. He agreed to be interviewed only on condition that his firm not be identified. He was sent to Washington to lobby on behalf of a coalition of six American companies, all of which are doing business in Asia and want the American trade embargo against Vietnam lifted as quickly as possible.

"Vietnam looks like a market where we can make some money," Baker says. He ticks off a series of industries that might find profits and happiness in Vietnam.

"Oil is No. 1," he begins. The world's leading oil companies want to explore the South China Sea off Vietnam's long coastline. The country may have minerals, and Baker says Vietnam's low-cost labor could open up opportunities for what he calls "the rag trade" of garments and textiles.

Finally, there is tourism. Baker believes that many U.S. veterans may want to return to the country where they once fought.

"Right now (in Asia), we have Phuket and Bali," says the banker. "There are beautiful beaches and potential resorts in Vietnam."

Karl D. Jackson isn't planning on vacationing on the beaches of Vietnam any time soon. Jackson, a UC Berkeley professor, now serves as the point man for Indochina on President Bush's National Security Council.

Among this generation's "best and the brightest," Jackson has emerged as the amiable hawk, a hard-liner who earnestly and devoutly believes that the United States shouldn't give up too much too soon to Vietnam and should make certain it gets an Indochina settlement that will last.

When Steven Baker paid a call on Jackson last week, the NSC staffer told him that lifting of the U.S. trade embargo should wait not only until after Hanoi accounts for Americans missing in action in the Vietnam War and after a peace settlement is signed in Cambodia, but also until after Cambodia holds "free and fair elections" and the losers accept the results. According to Baker, Jackson told him this whole process might pave the way for the Bush Administration to consider lifting the trade embargo with Vietnam sometime around 1992.

Baker wasn't happy with what he heard. A Cambodian peace settlement could be signed in Paris before the end of this year, but elections probably won't be held for many months after that. And, Baker notes, "Living in Asia, one is hard-pressed to find many countries that have free and fair elections by someone's definition in Washington."

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