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Vietnam Trade Pact Fails in US House Vote

President Bush suffered an unexpected setback late Monday when the Republican-controlled House of Representatives failed to approve legislation to establish permanent normal trade relations with Vietnam. The development came as the president prepares to travel to Asia where he will attend the economic cooperation summit in Hanoi.

Although the Vietnam trade legislation received the support of 228 members of the House, versus 168 opposed, it failed to achieve the two-thirds majority required under House rules for bills that are considered "non-controversial".

This means that Republicans, who still control the House until Democrats take over the majority in January, would have to reschedule the legislation for consideration using regular rules requiring only a simple majority.

The final vote showed 66 Republicans joining 94 Democrats and one Independent in opposing the bill, while 90 Democrats joined 138 Republicans in supporting it.

Granting Vietnam normal trade relations has been near the top of the president's trade agenda for some time, but has been held up by congressional concerns about Vietnam's human rights record and provisions regarding Vietnam's textile exports.

The United States and Vietnam engaged in extended negotiations over the accord, which would normalize trade ties more than a decade after the two countries established diplomatic relations in 1995. Vietnam and the U.S. signed a bilateral trade agreement in 2001.

Vietnam is relying on the agreement to open the door for it to be take full advantage of benefits of eventual membership in the World Trade Organization, expected by the end of the year.

As the House considered the Vietnam trade bill, California Republican Congressman Bill Thomas explained why the legislation had to be altered.

"Vietnam will be a major player in the textile industry," he said. "The concern we have is in balancing the concerns of those who are in the retail side and those who are in the production side."

Thomas asserts the amended legislation goes a long way toward addressing concerns voiced by the U.S. textile industry and lawmakers from key producing states.

Supporters point to the sharp increase in two-way U.S.-Vietnam trade which reached about $8 billion in 2005, and advantages of opening Vietnam's market to U.S. manufactured goods and agricultural commodities.

But Democrats said the legislation fails to provide safeguard mechanisms to protect the U.S. textile market from exports "surges", or dumping, by Vietnam.

"This is a major oversight," said Congressman Jim McDermott, a Democrat from Washington state. "Non-market economies do not respond to normal market signals of supply and demand and thereby they often create surplus of supply that can lead to import surges in the U.S. market."

Dennis Kucinich, an Ohio Democrat, argues the agreement could contribute to the loss of jobs in the U.S.

"As Chinese manufacturers move south to Vietnam in search of even cheaper labor, more and more exports will come from Vietnam to the United States, and more and more jobs in the U.S. will disappear," he said.

Although the has wide support in Congress, debate provided opportunity for lawmakers to renew concerns about Vietnam's human rights record.

"The Vietnam record on religious freedom and human rights continues to be an impediment to a full flowering of the partnership with the U.S. It decreases the legitimacy of the Vietnamese government in the eyes of their government and people around the world," said Earl Blumenauer, an Oregon Democrat.

However, most believe that normalizing trade with Vietnam will have side effects that will bring about changes that will lead to human rights liberalization and reform.

"Permanent normal trade relations will promote additional domestic reforms in Vietnam," said Jim Kolbe, an Arizona Republican who chaired the House Foreign Operations Subcommittee. "By increasing transparency in that country's trade practices, this bill will contribute to greater transparency in all areas of [Vietnam's] government."

Failure of the Vietnam bill to pass in the House came as a shock to most observers watching the progress of the trade bill, which had been expected to win easy approval.

Republican congressional leaders had said they wanted to get the legislation through the House as well as the Senate in time for President Bush to sign it, before he leaves for the Asia Pacific Economic Cooperation (APEC) summit in Hanoi.