Wartime ghosts haunt Vietnamese-U.S. relations

By Carol Clark
CNN Interactive

The Hilton International group opened a luxury hotel in Hanoi in February 1999. The building is just a stone's throw from the site of the notorious prison dubbed the "Hanoi Hilton" by American prisoners of war who were held there.

(CNN) -- Lan Nguyen was born in Hanoi in 1974, one year before the Communist victory ended the Vietnam War. She grew up listening to her parents' stories about bombing raids on the city by U.S. warplanes.

"They told me how scary it was," Lan said. "There were times when they didn't know if they would live until the next day."

The only Americans her parents encountered were prisoners of war who were tied to a bridge linking Hanoi to another province to try to protect it from bombing.

Today Lan, 26, is committed to another bridge -- one linking Vietnam and the United States.

She is studying for a master's degree in finance at the Fisher Graduate School of International Business in Monterey, California, and her goal is to return to Hanoi and work for a U.S. company.

"Most Vietnamese companies are state-run and they don't work very well," Lan said. "I'm more comfortable with American corporate culture. You can talk to the boss about what you think. You can give suggestions rather than just follow what they tell you."

Lan is one of the movers and shakers in the dynamic post-war generation of Vietnam -- where more than half of the population was born after 1975. Their parents and grandparents lived much of their lives in a state of war. For these young Vietnamese, though, war is only stories and photographs -- part of history.

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They have inherited the tenacity and drive that helped Vietnam defeat bigger and more powerful enemies. But they view non-Vietnamese as traders, not invaders. They want to take their rightful place in the global economy, and they see the United States as the key.

'Everybody understands the importance of America'

"Nowadays, we're in a different world," said Dung Pham, who was born in 1971, in a village about 100 miles north of Hanoi. "We're living in a global world -- if you're not a member of it, you will die."

As an English-language interpreter for the government in Hanoi, Dung assisted in early negotiations for a trade agreement with the United States that is still pending after four years of talks.

"Everybody understands the importance of America," said Dung, who is now working on his master's in finance at the Johns Hopkins School of Advanced International Studies in Washington.

Dung comes from a family of rice farmers and was the only child of 10 who was able to complete high school.

"I was lucky," he said. "I hope the U.S. and Vietnam will reach a trade agreement soon so more opportunities can come. I want my family and my society to have a better chance to become successful."

The trade agreement is one of the most comprehensive ever for the United States. It would give Vietnam the status of Normal Trade Relations (formerly Most Favored Nation status) and, by cutting tariffs, open the largest consumer market in the world to the country's exports. It would also pave the way for U.S. firms to make further inroads into the tightly controlled Vietnamese market.

In the first year of the trade pact Vietnam's annual exports to the United States would nearly double, to $800 million, according to the World Bank. Within four years 70 percent of Vietnam's exports could be heading for the United States, the World Bank projects.

Dung Pham, who was born in 1971 in a village north of Hanoi, takes in the capitalist sights at Times Square in New York. He is working on his master's in finance at Johns Hopkins School of Advanced International Studies in Washington.

'They fought so hard'

The agreement would also force the Vietnamese government to loosen its grip on the country -- a move the old guard fears.

"One the one hand, they want to embrace so many aspects of the American idea, but at the same time they want to control, call all the shots with a one-party government," said one U.S. executive with a business in Vietnam.

Suspicion is also a factor in the reluctance of the aging Vietnamese leadership to commit to the deal, the executive added. "They feel like any situation where a foreigner comes out smiling means that Vietnam got a bad deal. There's a lack of trust, based on a war-like mentality, and a lack of knowledge about business."

"They fought so hard. The problem is the war is over," said Douglas "Pete" Peterson, America's first ambassador to the Republic of Vietnam, who is also a veteran of the war. "They are looking at economics as a battleground. But combat is different -- there are fatalities involved. The trade agreement is a win-win situation."

Hanoi and Washington have each initialed the trade pact, but the Vietnamese Politburo has asked for some changes before formally signing it. Washington is standing firm, offering only to clarify, not negotiate.

Meanwhile, total international investment in Vietnam plummeted by 42 percent last year.

The trade stalemate is the latest hurdle in U.S.-Vietnam relations. It is a relationship that, on both sides, has often been ruled by myths and deep emotions.

Years of isolation

In the years immediately following the end of the war, anger and bitterness clouded the issue of war reparations. Vietnam complained the promised funds never arrived and Washington countered that conditions for receiving the money were never met.

Washington not only imposed a trade embargo on Vietnam, it also prohibited travel to and investment in the country. And in the years immediately following the war it blocked Vietnam's entry into the United Nations, which took place in 1977.

After decades of fighting against foreign intervention the country entered a xenophobic period, cut off from the outside world, as the Communist leadership sought to eradicate all traces of capitalism from the newly formed Socialist Republic of Vietnam.

"It was one of the most difficult times for Vietnam," Lan said.

Her parents, both teachers, had to work second jobs to survive. Lan and her older sister also worked at home after school, stitching clothes for a textile company. Food was scarce and of poor quality.

Poverty was not something to escape. It was as natural as the weather to Lan and her young friends. "We just thought communists were poor," she said. "We were proud to be poor. If someone said, 'My family is poor," you would say, 'My family is poorer.'"

When she reached high school, however, information began trickling in about another way of life. "We started hearing rumors about America, that it was a very rich country, very different from what it was like in Vietnam," she said. "Our books said that America was all bad and the rumors said it was all good. We were very curious. Everybody wanted to go there, to know what it was really like."

The United States did not lift its trade embargo on Vietnam until 1994

U.S. investment still small

While Vietnam took steps to begin opening its economy with a restructuring plan in the late 1980s, Washington maintained its trade embargo until 1994 and did not establish diplomatic relations until 1995.

U.S. businesses were eager to try to tap into Vietnam's motivated workforce and huge consumer market with the end of the embargo. The Vietnamese were also eager to own American goods.

"American products are very desirable to people in Vietnam because they couldn't have them before," Lan said. "Now, if you can get them, you feel so proud. Usually American products are more expensive than Japanese or Korean products so you feel more prestigious having them."

Currently more than 300 U.S. firms are registered to do business in Vietnam, including major companies such as Nike, General Electric, Coke and Citibank. But the total investment value they represent is only about $1.4 billion.

The slow pace of reforms and the lack of a trade agreement have stifled hopes of many U.S. companies with plans to expand in the country.

"I have to admit that Vietnam is a tough place to do business, but I've worked in a lot of places that are tough to do business, and Vietnam is my favorite of all of them," said Bradley Lalonde, who was the country manager for Citibank in Vietnam from 1994 to 1999.

"The attitudes of the people are great," he said. "They're so hard working. There's a general liking for American goods and services and the way we do business. In meetings, I never got the idea that they were against an open market. They're really quite liberal and flexible. So why aren't things moving faster? It's a real paradox."

MIA issue dominates diplomacy

As Vietnam struggles to recover from decades of war and to modernize its economy, Washington has repeatedly stated that its No. 1 mission in establishing closer ties with the country is to account for the 2,000 U.S. servicemen still listed as missing from the war. About 1,500 are believed to have died on Vietnamese soil.

William Cohen reiterated this priority in March when he became the first U.S. secretary of defense to visit Hanoi.

To underscore the point, Cohen traveled about 20 miles southwest of the city to a site where U.S. and Vietnamese workers were digging for the remains of a missing U.S. flier -- one of many such cooperative excavations that are part of a multi-million dollar effort to recover bone fragments or other clues to the fate of the missing servicemen.

"The Vietnamese are stunned by this," said James Reckner, a Vietnam veteran and director of the Vietnam Center at Texas Tech University.

"The priorities seem skewed for some. Maybe we should concentrate more on improving the lot of the Vietnamese people, but that doesn't play well back home. You have to be seen to be supporting the families of the MIAs. Anything else would be a political firestorm, whether you're Republican or Democrat."

An estimated 300,000 Vietnamese are missing from the war, Reckner pointed out. "Is their pain any less than ours?"

A trade deal with the United States is a necessary step in Vietnam's quest to catch up with some of Asia's faster-growing economies, according to many analysts

Vietnam veterans lead reconciliation

Despite the U.S. government's official stance, veterans from both the private and public sectors have worked to help Vietnam. Through individual efforts and organizations such as the Vietnam Veterans of America, they have assisted in recovering remains of missing North Vietnamese soldiers, built orphanages and raised money to support them, and donated schoolbooks, among many other projects.

"I see veterans virtually every day here," Ambassador Peterson said from Hanoi. "They want to come back and do something constructive."

Peterson embodies the contradictions in the relationship between the two countries. As a U.S. Air Force fighter pilot, he was shot down over North Vietnam in 1966 and spent more than six years as a prisoner in the infamous "Hanoi Hilton."

When he made his first trip back to Vietnam in 1991, it was as a U.S. Congressman on a mission to step up efforts to account for missing GIs. His mission expanded to a great deal more when he became the U.S. ambassador to Hanoi in 1997.

"My initial drive was to act as a bridge of reconciliation between the two countries," he said. "I think we've been reasonably successful. The relationship has really grown. The biggest challenge now is just to keep us moving forward."

Peterson's former POW status makes him a powerful symbol to both sides. He is said to be the only person in Southeast Asia whose calls are returned the same day by both President Clinton and Vietnamese Prime Minister Phan Van Khai.

Peterson has chatted with the two rice farmers who captured him after his plane went down and held long meetings with political and military leaders who oversaw his confinement and torture. His view of the country has changed since his prison days.

"There were many things I didn't know about Vietnam," Peterson said. "Being incarcerated, you don't really look out the window too much. We were like blind men."

It wasn't just the POWs who were unable to see the big picture during the war.

"Both sides have had a wrong impression of what the other was and what their intentions were," Peterson said. "People made assumptions. I'm becoming much more close to saying the war could have been avoided totally if we'd had more down to earth communication. We could have exhausted more effort on the diplomatic side. Everything I do now is to make up for it."