U.S. Assistance to Vietnam

CRS Report for Congress
U.S. Assistance to Vietnam
Updated June 17, 2005
Mark E. Manyin
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

U.S. Assistance to Vietnam
Summary
U.S.-Vietnam diplomatic and economic relations were non-existent for more
than fifteen years following communist North Vietnam’s victory in 1975 over U.S.
ally South Vietnam. Normalization of relations, particularly in the economic sphere,
between the United States and unified Vietnam began in earnest in the 1990s. As the
normalization process has proceeded, the U.S. has eliminated most of the Cold War-
era restrictions on U.S. aid to Vietnam, and U.S. assistance has increased markedly
from around $1 million when assistance was resumed in 1991 to nearly $50 million
in FY2004.
In recent years, many Members of Congress have become interested in linking
U.S. aid to the human rights situation in Vietnam. One initiative in the 108^th
Congress, H.R. 1587, proposed capping existing non-humanitarian U.S. assistance
programs to the Vietnamese government at FY2004 levels if the President did not
certify that Vietnam is making “substantial progress” in human rights, including
religious freedom. In the near term, the substantive impact of H.R. 1587 on U.S. aid
would likely have been negligible because at present, no U.S. non-humanitarian
assistance is given directly to the government of Vietnam. Thus, if it had been
enacted, the bill’s principal impact would likely have been symbolic. Proponents of
the measure argued that it would pressure the Vietnamese government to improve the
country’s human rights situation. Critics argued that the bill could chill the warming
of bilateral political and security ties that has been taking place slowly over the past
several months. On July 19, 2004, the House passed H.R. 1587. Attempts to include
stripped-down versions of the measure in the Consolidated Appropriations Act, 2005
(H.R. 4818) did not succeed.
U.S. bilateral assistance programs are likely to come under additional scrutiny
in the future. At some point in the coming year or two, Congress is expected to
consider granting permanent normal trade relations (PNTR) status to Vietnam as part
of Vietnam’s bid to join the World Trade Organization (WTO). Hanoi has set a goal
of attaining WTO membership by the end of 2005.
This report quantifies and briefly describes U.S. assistance programs to
Vietnam. It includes an appendix detailing funding levels for U.S. aid programs.
The report will be updated periodically.

Contents
Overview of the U.S. Aid Program in Vietnam...........................1
Vietnam and the Millennium Challenge Account.....................3
U.S. Aid to Vietnam in Comparative Perspective.....................3
Future Areas for Possible Expansion...............................4
IMET (International Military Education and Training).............4
Peace Corps..............................................5
Agent Orange.............................................5
Recent Attempts to Restrict Aid..................................5
The Vietnam Human Rights Act (H.R. 1587)....................6
A Review of the U.S.-Vietnam Normalization Process and the Restoration of
U.S. Aid to Vietnam............................................6
Cold War Restrictions on Aid....................................7
The Normalization Process since the Early 1990s.....................8
Appendix .......................................................10
List of Tables
Table 1. Overview of U.S. Assistance to Vietnam........................2
Table 2. Detailed Breakdown of U.S. Assistance Programs to Vietnam,
FY2000-FY2005 .............................................10

U.S. Assistance to Vietnam
In recent years, many Members of Congress have become interested in linking^th
U.S. aid to the human rights situation in Vietnam. One initiative in the 108
Congress, the Vietnam Human Rights Act (H.R. 1587), would have tied increases in
some non-humanitarian aid to the Vietnamese government’s performance with
respect to human rights. Congressional consideration of H.R. 1587 prompted
increased scrutiny over the composition of U.S. assistance programs to Vietnam. The
bill was passed by the House in July 2004 but received no floor action in the Senate.
Attempts to include stripped-down versions of H.R. 1587 in the Consolidated
Appropriations Act, 2005 (H.R. 4818) did not succeed.
Overview of the U.S. Aid Program in Vietnam
U.S.-Vietnam diplomatic and economic relations were non-existent for more
than fifteen years following communist North Vietnam’s victory in 1975 over U.S.
ally South Vietnam. During that time, the United States maintained restrictions on
foreign assistance to unified Vietnam. Normalization of relations — particularly in
the economic sphere — began hesitantly in the early 1990s, progressed incrementally
through the mid- and late 1990s, and then accelerated markedly following the signing
of a Bilateral Trade Agreement (BTA) in 2000.¹ One measure of the pace of the
normalization of bilateral economic relations is the increase in trade flows, which
rose from about $200 million in 1994 to over $1 billion in 2000, to nearly $4.5
billion in 2003. The United States is now Vietnam’s largest trading partner.
The resumption of U.S. aid to Vietnam has closely tracked the normalization of
bilateral relations. U.S. assistance began as a trickle in 1991, when around $1 million
was spent for prosthetics for Vietnamese war victims, and increased to nearly $50
million in fiscal year (FY) 2004 covering a broad range of programs. Moreover, the
level of assistance has more than doubled since FY2000. (See Table 1) For FY2005
through the end of April 2005, nearly $55 million in assistance had been spent.
A note about terminology: Assistance programs discussed in this report include
traditional foreign aid programs and activities funded outside the foreign policy budget,
specifically HIV-AIDS programs run by the U.S. Centers for Disease Control and
Prevention (CDC) and labor cooperation programs run by the U.S. Department of Labor.
Educational exchanges such as the Fulbright program, which provide benefits to both the
United States and Vietnam, are not considered as foreign aid.

¹ For more on U.S.-Vietnam relations, see CRS Issue Brief IB98033, The Vietnam-U.S.
Normalization Process.

By far the two largest components of the U.S. bilateral aid program are food
assistance and health-related assistance, which together comprised about 60% of the
nearly $200 million in aid the United States has provided to Vietnam since U.S.
assistance began to increase substantially in FY1999. Spending on HIV/AIDS
treatment and prevention in Vietnam has risen, especially since President Bush’s
June 2004 designation of Vietnam as a “focus country” eligible to receive increased
funding to combat HIV-AIDS under PEPFAR. The United States provided $10
million in PEPFAR funds in FY2004, and over $27 million for FY2005 through the
end of April.
Since mid-December 2004, Vietnam has reported over 30 cases, at least 14 of
them fatal, of the H5 avian influenza (also known as the “bird flu”), raising concerns
that the disease is re-emerging after an outbreak in early 2004 spread across Asia.
The wartime and tsunami supplemental, H.R. 1268, which was passed by the House
on May 5 and the Senate on May 10, 2005, includes $25 million to help combat the
disease, of which the U.S. embassy in Hanoi expects approximately $4 million to be
used in Vietnam, a figure not captured in tables 1 or 2.
Table 1. Overview of U.S. Assistance to Vietnam
($ millions)
FY05
FY00FY01FY02FY03FY04Est.TotalFY00-04(as of

5/05)

GRAND TOTAL21.1832.6227.2141.9648.45171.4155.04
Counternarcotics 0.10 0.00 0.00 0.27 0.55 0.93 0.01
Demi ning 4.60 2.90 4.12 2.53 2.16 16.31 2.85
Disaster Assistance1.641.680.000.981.015.314.05 (a)
Economic Growth and1.252.995.455.602.9618.255.77
Market Reforms
Envi ronment 0.92 0.85 0.96 1.04 1.35 5.12 0.69
Food Assistance6.109.184.6719.9120.1059.978.00
Health-Related 6.19 10.62 10.40 9.56 20.22 56.98 33.06
Programs
HIV-AIDS Total1.996.605.746.7917.3938.5127.71
Women’s Rights Lawn.a.n.a.n.a.n.a.n.a.n.a.0.09
Human Trafficking — 0.230.570.24 — 1.030.47
IMET — — — — — 0.000.05
Labor Cooperation 0.384.171.041.830.107.510.00
^Sources^:^C^o^m^pⁱ^l^e^{d i}ⁿ^O^c^t^{ober 2004 an}^{d May}^{2005 by}^C^R^S^f^r^om^U^S^A^I^D^,^S^t^at^e^D^e^part^m^eⁿ^t^,^U^S^D^A^,
^C^D^C^,^an^{d L}^a^{bor D}^e^part^m^eⁿ^t^dat^a^.
^a.^Fig^u^r^e^d^o^e^{s n}^o^{t in}^clu^d^{e th}^{e ap}^p^r^o^x^im^ately^$⁴^m^illioⁿ^th^{e U.S. em}^b^a^ssyⁱⁿ^Han^oⁱ^ex^p^ects^to^sp^en^d
^oⁿ^th^{e av}^ianⁱⁿ^f^l^u^eⁿ^z^aⁱⁿ^Vietn^a^m^f^o^llo^wⁱⁿ^g^th^{e p}^a^ssag^eⁱⁿ^May^o^f^th^{e w}^a^r^tim^{e an}^d^tsuⁿ^a^mⁱ
^s^u^pplem^en^{tal, H.R}^.^{1268, w}^h^ichⁱⁿ^clu^d^es^{$25 m}^illion^{to h}^e^{lp com}^b^{at th}^{e av}^ianⁱⁿ^f^l^u^eⁿ^za.
^{b. F}^uⁿ^dⁱⁿ^g^am^ouⁿ^t^appropri^a^t^e^{d by}^C^oⁿ^g^r^es^s^,^bu^tⁿ^o^t^y^e^t^s^p^en^t^.

Other sizeable assistance items include demining activities and programs
assisting Vietnam’s economic reform efforts. This latter group of programs has been
designed to help the Vietnamese government implement the economic liberalization
reforms it committed to in the 2000 U.S.-Vietnam Bilateral Trade Agreement and
will likely be required to undertake as part of its desire to join the World Trade
Organization (WTO).² Hanoi has set a goal of attaining WTO membership by the
end of 2005. The U.S. also funds educational exchanges with Vietnam, principally
the Vietnam Fulbright program, which receives more funding (typically $4 million
annually) than any other Fulbright program in the world. These programs are not
included in Table 1 because they are not funded through the foreign policy budget
and confer benefits to both the U.S. and Vietnam. Additionally, the United States
administers the Vietnam Education Foundation, which was established by Congress
in 2000 to provide $5 million annually for scholarships and educational exchanges.³
Funds for the foundation are recycled from the Vietnamese government’s repayments
of the wartime debts South Vietnam owed the United States. Total annual funding
for educational exchanges, including the Fulbright and Vietnam Education
Foundation programs, has been in the $9-$11 million range since FY2003.
Vietnam and the Millennium Challenge Account
In May 2004, Vietnam was not selected as one of the first 16 countries eligible
for the Millennium Challenge Account (MCA). Vietnam was deemed ineligible,
despite meeting the technical requirements for MCA eligibility, because it scored
very low on some of the indicators used to measure political freedom. Vietnam again
was included in the list of candidate countries for FY2005, from which eligible
countries will be selected in late 2004.⁴ In September 2004, Vietnam again received
low scores on the indicators of political and civil liberties maintained used by the
Millennium Challenge Corporation to determine eligibility for the MCA.⁵
U.S. Aid to Vietnam in Comparative Perspective
The estimated $53 million the United States provided Vietnam in FY2004
places it among Vietnam’s top five aid donors, but far below the amount pledged for
calendar year 2004 by Japan ($870 million), the World Bank ($621 million), and the
Asian Development Bank ($197 million).⁶

² For more on the BTA, see CRS Report RL30416, The Vietnam-U.S. Bilateral Trade
Agreement, by Mark Manyin.
³ The Vietnam Education Foundation Act (S. 3241 and H.R. 5581) was incorporated into
the Consolidated Appropriations Act, 2001 (P.L. 106-554).
⁴ For more on the MCA, see CRS Report RL32427, Millennium Challenge Account:
Implementation of a New U.S. Foreign Aid Initiative, by Larry Nowels.
⁵ Freedom House, Freedom in the World 2004: The Annual Survey of Political Rights and
Civil Liberties (Lanham, MD: Rowman & Littlefield Publishers, Inc., 2004).
⁶ September 27, 2004 e-mail from Pham Thi Le Dung, Development Program Specialist,
USAID/Vietnam Office.

Relative to other countries in Southeast Asia, Vietnam receives far less than
Indonesia and the Philippines, front-line states in the war on terrorism that received
an estimated $150 million and $110 million in FY2004, respectively. Assistance to
Vietnam is roughly on a par with the next two largest Southeast Asian recipients of
U.S. aid, Cambodia ($50 million) and East Timor ($30 million).⁷ Relative to the rest
of the world, Southeast Asia is not a target for large U.S. aid programs, in part
because many countries in the region have “graduated” from economic aid.
Future Areas for Possible Expansion
If U.S.-Vietnam relations continue to deepen, particularly in the political and
military spheres, it is possible to foresee a continued expansion of the U.S. aid
program in Vietnam. Possible areas for new or expanded programs include
strengthening the rule of law (particularly judicial capacity building),
counternarcotics, anti-corruption, education management, and the preservation of
cultural and historical sites. On top of these items, two new programs currently are
being considered for Vietnam:
IMET (International Military Education and Training). Vietnam and the
United States gradually have been expanding their embryonic security ties, which
have lagged far behind the economic aspect of the relationship. Some in the United
States see Vietnamese and U.S. security interests as mutually reinforcing, particularly
with regard to China, and hope to develop military-to-military relations. These
efforts culminated in November 2003, when Vietnamese Defense Minister Pham Van
Tra visited Washington. Later that month, the guided missile frigate USS
Vandergrift and its 200 crew members made a four-day call at the port of Saigon.
Both events were firsts since the end of the Vietnam War and were followed up by
additional visits in 2004. One option for expanding military-to-military relations
would be establishing a bilateral IMET program. Since FY2002, the Bush
Administration has requested funds for Expanded International Military Education
and Training (E-IMET) courses to enhance English language proficiency among⁸
Vietnamese military officers. The program is designed to “facilitate [the officers’]
attendance at conferences and confidence building meetings hosted by Pacific
Command Headquarters.” No funds have been disbursed, however, because Vietnam
and the United States have not yet signed an IMET agreement. Funding for IMET
programs would be affected by the restrictions in the proposed Vietnam Human
Rights Act.
In an interview with the Washington Post days before departing for his June 21,

2005 summit with President Bush, Vietnamese Prime Minister Pham Van Khai said

⁷ Department of State/Congressional Budget Justifications, Foreign Operations,
FY2004/2005 (“All Spigots” Tables). Note that sanctions proscribe many forms of aid to
Cambodia.
⁸ $50,000 was requested in FY2005 for two students. $100,000 was requested in both
FY2004 and FY2003 to train four students. $50,000 was requested in FY2002 to train two
students. See the State Department’s Congressional Budget Justification for Foreign
Operations, various fiscal years.

that during his trip to Washington, the United States and Vietnam would announce
the launch of a bilateral IMET program.⁹
Peace Corps. The Vietnamese government in early 2004 invited the U.S.
Peace Corps to Vietnam to begin discussion of opening a country program. Over 20
countries, including Cambodia, have made similar invitations. The Peace Corps has
welcomed the invitation and in the near future intends to conduct a country
assessment. Generally, if a country assessment team makes a positive report, it takes
12 to 18 months for a program to be established. New programs typically cost on the
order of $1 million-$2 million annually. In its report (S.Rept. 108-346)
accompanying the FY2005 Foreign Operations bill (S. 2812), the Senate
Appropriations Committee expressed its support for opening a new program in¹⁰
Vietnam. The Vietnam Human Rights Act’s restrictions would not have directly
affected the Peace Corps.
Agent Orange. Prime Minister Pham Van Khai indicated that one of his mid-
level priorities during his trip to the United States in June 2005 is obtaining U.S.
assistance for Agent Orange victims.¹¹ During President Bill Clinton’s five-day trip
to Vietnam in 2000, the United States agreed to set up a joint research study on the
effects of dioxin/Agent Orange. Over three million Vietnamese suffering from the
alleged effects of Agent Orange were part of a class action suit filed in U.S. Federal
District Court in Brooklyn against the chemical companies that manufactured the
defoliant. The case was dismissed in March 2005, in a ruling that was widely
publicized in Vietnam. In April 2005, the Bush Administration discontinued funding
of a grant to conduct research in Vietnam on the possible relationship between Agent
Orange and birth defects. The justification for the decision was that the Vietnamese
Ministry of Health had not given its approval for the study.
Recent Attempts to Restrict Aid
In recent years, Congress has devoted considerable attention to Vietnam’s
human rights record. Vietnam is a one-party, authoritarian state. Since at least the
late 1990s, the ruling Vietnamese Communist Party (VCP) appears to have followed
a strategy of relaxing most restrictions on most forms of personal and religious
expression while selectively repressing individuals and organizations that it deems
a threat to the party’s monopoly on political power. Most prominently, the
government has cracked down harshly on protests against various government
policies by certain ethnic minority groups, particularly the Montagnards in the
country’s Central Highlands and the Hmong in the Northwest Highlands. The
government also has stepped up repression of so-called cyber dissidents who have
criticized the government over the Internet. On September 15, 2004, the State
Department, under the International Religious Freedom Act (P.L. 105-292), for the
first time designated Vietnam as a “country of particular concern,” principally

⁹ “Transcript: Interview with Phan Van Khai,” washingtonpost.com, accessed June 16, 2005.
¹⁰ S.Rept. 108-346 accompanying S. 2812, the FY2005 Foreign Operations bill.
¹¹ “Transcript: Interview with Phan Van Khai,” washingtonpost.com, accessed June 16,

2005.

because of reports of worsening harassment of certain groups of ethnic minority
Protestants and Buddhists. By law, within 90 days (extendable for another 90-day
period), the President must decide on a course of action, including sanctions, with
regard to Vietnam’s religious rights situation. The President extended the review
period, meaning that a decision must be made by mid-March 2005.
The Vietnam Human Rights Act (H.R. 1587). In large measure due to
Vietnam’s crackdowns in the Central Highlands, attempts were made in the 107^th and^th
108 Congresses to link U.S. aid to the human rights situation in Vietnam. The most
prominent example, the Vietnam Human Rights Act (H.R. 1587 in the 108^th
Congress, H.R. 2833 in the 107th), proposed capping existing non-humanitarian U.S.
assistance programs to the Vietnamese government (at FY2004 levels in H.R. 1587)
if the President does not certify that Vietnam is making “substantial progress” in
human rights, including religious freedom. H.R. 1587 also would have authorized
funds to promote democracy in Vietnam and to overcome the jamming of Radio Free
Asia. On July 19, 2004, by a vote of 323-45, the House passed H.R. 1587.
Proponents of the measure argued that it would pressure the Vietnamese government
to improve the country’s human rights situation. Attempts to include stripped-down
versions of H.R. 1587 in the Consolidated Appropriations Act, 2005 (H.R. 4818) did
not succeed.
If enacted, the immediate substantive impact of H.R. 1587 on U.S. assistance
would likely have been negligible because the bill applied only to non-humanitarian
aid that is provided to the Vietnamese government. At present, no U.S. non-
humanitarian assistance is given directly to the government of Vietnam, and only
$50,000 of such assistance is contemplated for the future, for Expanded International
Military Education and Training (E-IMET) English language courses for Vietnamese
military officers. Also, the bill would have granted the President a national interest
waiver that would have allowed him to exempt any programs that are deemed to
promote the goals of the act and/or to be in the national interests of the United States.
Furthermore, most of the certification and reporting requirements in H.R. 1587 are
already mandated — albeit in a more general fashion — by provisions of other laws,
such as the International Religious Freedom Act. Thus, if it had been enacted, the
principal impact would likely have been symbolic. Critics argued that the bill could
chill the warming of bilateral political and security ties that has been taking place
slowly over the past several months. In practical terms, H.R. 1587 would have acted
as an obstacle to initiating new military-to-military assistance cooperation, such as
IMET. The Vietnamese government strongly condemned the bill as an interference
in its internal affairs.
A Review of the U.S.-Vietnam Normalization
Process and the Restoration of U.S. Aid to Vietnam
Congress played a key role in both the cessation of aid to Vietnam in the 1970s,
and its restoration in the 1990s.

Cold War Restrictions on Aid
For much of the Cold War, aid to North Vietnam and most other communist
countries was prohibited.¹² The United States provided significant military and
economic assistance to its ally, South Vietnam, particularly after the U.S. became
overtly involved in inter-Vietnamese hostilities in 1965. In 1973, following the
conclusion of a Paris Peace Agreement that brought an end to U.S. military
involvement in Vietnam, Congress began cutting Nixon Administration requests for
military and economic assistance to South Vietnam. President Richard Nixon’s
pledge to provide reconstruction aid to North Vietnam also proved unpopular in
Congress, particularly after the collapse of the North-South cease-fire negotiated in
Paris.¹³
After the victory of communist North Vietnam over South Vietnam in April
1975, the United States ended virtually all bilateral economic interchange, including
foreign assistance, with unified Vietnam.¹⁴ The restrictions included a halt to
bilateral humanitarian aid, opposition to financial aid from international financial
institutions (such as the World Bank), a ban on U.S. travel to Vietnam, and an
embargo on bilateral trade. President Gerald Ford linked the provision of economic
assistance to Hanoi’s cooperation in returning and accounting for POWs and MIAs.¹⁵
In the FY1977 foreign aid appropriations bill Congress prohibited the use of any
funds to provide assistance to Vietnam, a provision that was repeated annually until
its removal in 1994.¹⁶
In the early months of his administration, President Jimmy Carter (1977-1981)
and the communist regime in Hanoi attempted to negotiate the outlines of a
normalization agreement that would include U.S. assistance. The negotiations
stalled, however, when the Vietnamese responded that they would neither agree to
establish relations nor furnish information on U.S. POW/MIAs until the United

¹² Aid was prohibited under section 620(f) of the Foreign Assistance Act of 1961, among
other statutes.
¹³ New York Times, June 12, 1973. Vietnamese officials claimed that President Richard
Nixon secretly had promised North Vietnamese Prime Minister Pham Van Dong $4.7 billion
in economic assistance as part of the Paris Peace Agreement, signed in January 1973, which
led to the withdrawal of U.S. troops from South Vietnam. New York Times, February 2,

1973; Nayan Chanda, Brother Enemy (New York: Harcourt Brace Jovanovich, 1986), p.

143.

¹⁴ Prohibitions on assistance to Vietnam were included in P.L. 94-41, a continuing
appropriations resolution signed into law by President Gerald Ford in the summer of 1975.
¹⁵ For more on the POW/MIA issue, see CRS Issue Brief IB92101, POWs and MIAs: Status
and Accounting Issues, by Robert Goldich.
¹⁶ The original prohibition was included in the Foreign Assistance and Related Programs
Appropriations Act for FY1977 (P.L. 94-441). See CRS Report 92-631F, Economic
Sanctions Imposed by the United States against Specific Countries: 1979 through 1992,
available from the author (7-7653). The provision was dropped in the Foreign Operations
Appropriations Act, 1995 (P.L. 103-306). See CRS Report 95-820, Vietnam: Procedural
and Jurisdictional Questions Regarding Normalization of U.S. Diplomatic and Economic
Relations, 1995, available from the author (7-7653).

States pledged to provide several billion dollars in postwar reconstruction aid.
Simultaneously, Congress objected to Carter’s moves by reinforcing existing
prohibitions on aid to Vietnam.¹⁷ Normalization efforts ultimately were thwarted in
1978 by Vietnam’s decision to align with the Soviet Union, its invasion of
Cambodia, and its expulsion of nearly half a million ethnic Chinese who then became
refugees in Southeast Asia.
The Normalization Process since the Early 1990s
Washington and Hanoi gradually began to normalize relations in the early
1990s, following Vietnam’s withdrawal from Cambodia and improvements in
Hanoi’s cooperation on the issue of American prisoners of war (POWs) and
missing-in-action (MIA) personnel in Vietnam.¹⁸ Economic assistance was resumed
in 1991, when the administration of George H.W. Bush announced plans to send $1.3
million to fit disabled Vietnamese with artificial limbs.¹⁹ The announcement came
days after Washington and Hanoi agreed to open an office in Vietnam to resolve
outstanding MIA cases. In subsequent years, annual aid flows were generally small
and limited to disaster assistance and humanitarian programs — such as prosthetics
and aid to orphans — to ameliorate the effects of the war.
Coinciding with these developments, in 1991 and 1992 the Senate Select
Committee on POW/MIA affairs — chaired by John Kerry and vice-chaired by Bob
Smith — conducted what many consider the most extensive independent
investigation of the POW/MIA issue undertaken. In early 1993, the committee issued
its report, which concluded that there was “no compelling evidence” that POWs were
alive after the U.S. withdrawal from Vietnam, and that although there was no
“conspiracy” in Washington to cover up live POWs, the U.S. government had
seriously neglected and mismanaged the issue, particularly in the 1970s. The
committee’s televised hearings played a major role in defusing much of the passion
that had surrounded the POW issue.
The U.S. aid program in Vietnam expanded gradually through the 1990s, in step
with the acceleration of the normalization process. In 1993, President Bill Clinton
announced that the United States would no longer oppose international financial
institution aid to Vietnam. The following year, President Clinton ordered an end to
the U.S. trade embargo on Vietnam, a move that followed shortly after a vote in the
Senate urging the embargo to be lifted.²⁰ Ambassadors were exchanged in 1997. In

¹⁷ The major acts containing the prohibitions on aid were P.L. 95-88 (the International
Development and Food Assistance Act) and P.L. 95-105 (the Foreign Relations
Authorization Act).
¹⁸ For a more detailed account of the history of U.S.-Vietnam normalization, see CRS Issue
Brief IB98033, The Vietnam-U.S. Normalization Process, by Mark Manyin.
¹⁹ Title II of the FY1991 Foreign Operations bill (P.L. 101-513) provided these funds,
notwithstanding other legal provisions, including the ban on bilateral aid to Vietnam.
²⁰ The January 1994 vote in the Senate was attached to authorizing legislation (H.R. 2333).
Although the language was controversial in the House, H.R. 2333 passed Congress and was
(continued...)

1998, President Clinton granted Vietnam its first waiver from the requirements of the
so-called Jackson-Vanik Amendment (contained in the Trade Act of 1974, Title IV,
section 402), which prohibit the President from normalizing commercial relations
with selected socialist and formerly socialist countries if they do not meet certain
requirements regarding freedom of emigration. A congressional resolution
disapproving the waiver was defeated, as have such resolutions disapproving the
presidential waivers issued every year since.
All of these steps provoked considerable controversy in Congress, though
opposition to normalization decreased incrementally throughout the 1990s.
Following the signing of the BTA in 2000, Congress overwhelmingly approved the
agreement, which paved the way for the two countries to extend normal trade
relations (NTR) status on a nonpermanent basis to one another. The signing of the
BTA marked the end to legal restrictions on virtually all commercial transactions
and most forms of economic assistance to Vietnam. Also in 2000, the Clinton
Administration, in an undated unpublished determination, on national interest
grounds, exempted Vietnam from the prohibition on most forms of assistance to
communist countries contained in section 620(f) of the Foreign Assistance Act of

1961.²¹

Vietnam and the United States gradually have been expanding their political and
security ties, although these have lagged far behind the economic aspect of the
relationship. In 2003 and 2004, however, Vietnam’s leadership appears to have
decided to expand their country’s ties to the United States, as indicated by the
aforementioned military-to-military meetings and ship visits. It is still unclear how
far, how fast, and in what form any new security relationship will develop.

²⁰ (...continued)
signed into law (P.L. 103-236).
²¹ The relevant prohibition is contained in Section 620(f) of the Foreign Assistance Act of
1961, which authorizes such aid programs as development assistance, the economic support
fund, and the international military education and training (IMET) program.

CRS-10
Appendix
Table 2. Detailed Breakdown of U.S. Assistance Programs to Vietnam, FY2000-FY2005
($ millions)
Total FY2005
Program/Funding AgencyFY2000FY2001FY2002FY2003FY2004EstimateFY2000-(as of May

2004‘05)

TAL 21.18 32.62 27.20 41.95 48.45 171.41 55.04
ⁱ^{ki/CRS-RL32636} 2.65 8.01 7.45 8.74 4.96 31.80 6.52
^g/w 0.1 0.00 0.00 0.27 0.55 0.93 0.01
^s^.or
^le^akraining (State)0.10 — — — 0.280.38 —
^://wikielopment Project (USAID) — — — 0.270.270.55 —
^h^ttp
4.6 2.9 4.12 2.53 2.16 16.31 2.85
St a t e ) 4.15 1.65 4.00 2.53 2.16 14.49 2.85
Equipment Transfer1.75 — 1.50 — — 3.25n.a.
Demining Survey 1.40 — 1.00 — — 2.40n.a.
Export Control and Border Security (EXBS) — — — 0.100.080.18n.a.
Humanitarian Demining (HD)1.001.651.502.432.088.66n.a.
ining Management Software — 0.70 — — — 0.70n.a.

CRS-11
Total FY2005
Program/Funding AgencyFY2000FY2001FY2002FY2003FY2004EstimateFY2000-(as of May

2004‘05)

0.450.100.12 — — 0.67n.a.

I database of ordnance deployed in V.War — 0.45 — — — 0.45n.a.
1.64 1.68 0.00 0.98 1.01 5.31 4.05
Storm Warning System (USAID) — 0.96n.a.0.480.481.920.02
ⁱ^{ki/CRS-RL32636} Flood Warning System (USAID)0.94 — n.a.0.250.251.44 —
^g/wergency Disaster Assistance - Floods (USAID)0.700.47n.a.0.250.251.67 —
^s^.or
^le^akian Flu In-Kind Assistance (USAID) — — — — 0.030.030.03(a)
^://wikirban Disaster Mitigation Program (USAID) — 0.25n.a.n.a.n.a.0.254.00
^h^ttp
rowth and Market Reforms1.252.995.455.62.9618.255.77
0.92 0.85 0.96 1.04 1.35 5.12 0.69
Asia Environmental Partnership (USAID)0.640.850.5611.094.140.52
sia & Pacific Environmental Initiative (State) — — 0.40 — 0.170.570.17

0.28 — — 0.040.080.41n.a.

CRS-12
Total FY2005
Program/Funding AgencyFY2000FY2001FY2002FY2003FY2004EstimateFY2000-(as of May

2004‘05)

6.1 9.18 4.67 19.91 20.1 59.97 8.00
M T) 25,000 43,300 17,300 88,400 67700 241700

6.109.183.68 — 6.9425.91n.a.

MT 25,000 43,300 16,800 3500 88600
— — — 4.79 — 4.79n.a.
ⁱ^{ki/CRS-RL32636} 18,400 18400
^g/wress (USDA) — — 0.9915.1213.1629.27n.a.
^s^.or
^le^akMT 500 70,000 64200 134700
^://wiki
^h^ttpr ograms 6.19 10.62 10.4 9.56 20.22 56.98 33.06
V-AIDS Total1.996.65.746.7917.3938.5127.71
PEPFAR Total — — — — 10.0010.0027.70
HIV/AIDS (USAID - CSH)1.502.252.004.004.5014.25n.a.
Global AIDS Program (CDC) 0.204.352.392.792.8612.59n.a.
Tech Assistance Collaboration with USAID & VN Nat’l

0.03 — — — 0.040.070.01

USAID/CDC)

CRS-13
Total FY2005
Program/Funding AgencyFY2000FY2001FY2002FY2003FY2004EstimateFY2000-(as of May

2004‘05)

HIV/AIDS (NIH)0.260.000.00 — — 0.26n.a.
HIV/AIDS (DOL) — — 1.35 — — 1.35n.a.
War Victims (USAID)2.061.391.131.760.236.57n.a.
isplaced Children & Orphans (USAID)1.921.282.240.511.317.250.70
ulnerable Children (USAID) — — 0.500.281.302.080.50
ⁱ^{ki/CRS-RL32636}ictims of War (USAID)0.75
^g/wChild Health (USAID) — — 0.50n.a.n.a.0.50n.a.
^s^.or
^le^akafe Vietnam initiative (USAID) — 0.25 — — n.a.0.25n.a.
^://wikient Orange Study (CDC) — 0.85 — — — 0.85 —
^h^ttpjury/Disability Prevention Program (CDC) — 0.040.05 — — 0.08 —
formation Technology Assistance (CDC)0.020.010.02 — — 0.05 —
CID Infectious Disease Surveillance, Monitoring & 0.200.200.220.22 — 0.84 —
H Program3.40
0.09
en’s Rights Law & Democracy0.09

CRS-14
Total FY2005
Program/Funding AgencyFY2000FY2001FY2002FY2003FY2004EstimateFY2000-(as of May

2004‘05)

ficking — 0.230.570.24 — 1.030.47
— — — — — 00.05 (b)
ⁱ^{ki/CRS-RL32636} 0.38 4.17 1.04 1.83 0.1 7.51 0.00
^g/wnsurance (Labor Dept) — 0.760.740.50 — 2.00n.a.
^s^.or
^le^akployment Service Centers (Labor Dept)0.380.400.300.85 — 1.93n.a.
^://wikiect (Labor Dept) — 1.667 — — — 1.67n.a.
^h^ttpement Development Program (Factory
mprovement) (Labor Dept) — 0.19 — — — 0.19n.a.
ith Disabilities (Labor Dept) — 0.65 — — — 0.65n.a.
— 0.50 — — — 0.50n.a.
orporate Social Responsibility Project (SA8000) — n.a.n.a.0.38 — 0.38n.a.
ent)
NIOSH program w/WHO to reduce needle — — — 0.10.10.20n.a.

ury

CRS-15
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^u^r^{e d}^o^e^{s n}^o^{t in}^clu^d^{e th}^{e ap}^p^r^o^x^im^ately^$⁴^m^illioⁿ^th^{e U.S. em}^b^a^ssyⁱⁿ^Han^oⁱ^ex^p^ects^to^sp^en^d^oⁿ^th^e^av^ianⁱⁿ^f^l^u^eⁿ^zaⁱⁿ^V^ietn^am^f^o^llo^wⁱⁿ^g^ty^{e p}^a^ssag^eⁱⁿ^May^o^f^th^e^w^a^r^tim^e
^an^{d ts}^uⁿ^a^mⁱ^s^u^pplem^en^{tal, H.R}^.^{1268, w}^h^ichⁱⁿ^clu^d^es^{$25 m}^illion^{to h}^e^{lp com}^b^{at th}^{e av}^ianⁱⁿ^f^l^u^eⁿ^za.
^uⁿ^dⁱⁿ^g^am^ouⁿ^t^appropri^a^t^e^{d by}^C^oⁿ^g^r^es^s^,^bu^tⁿ^o^t^y^e^t^s^p^en^t^.
ms:
^!CDC = Centers for Disease Control and Prevention
^!CSH = USAID’s Child Survival & Health Fund
ⁱ^{ki/CRS-RL32636}^!DoD = Department of Defense^!IMET = International Military Education and Training
^g/w
^s^.or^!NIH = National Institutes of Health
^le^ak^!NADR = Non-proliferation, Demining, Anti-Terrorism & Related Programs
^!NCID = National Center for Infectious Disease
^://wiki^!NIOSH = National Institute for Occupational Safety & Health
^h^ttp^!PEPFAR = President’s Emergency Plan for HIV/AIDS Relief
^!USAID = United States Agency for International Development
^!USDA = United States Department of Agriculture