After communist North Vietnam?s victory over U.S.-backed South Vietnam in 1975, U.S.-
Vietnam relations remained essentially frozen until the mid-1990s. Since then, bilateral ties have
expanded to the point where the relationship has been virtually normalized. Indeed, since 2002,
overlapping strategic and economic interests have compelled the United States and Vietnam to
improve relations across a wide spectrum of issues. Congress played a significant role in the
normalization process and continues to influence the state of bilateral relations.
In the United States, voices favoring improved relations have included those reflecting U.S.
business interests in Vietnam?s reforming economy and U.S. strategic interests in expanding
cooperation with a populous country?Vietnam has over 85 million people?that has an
ambivalent relationship with China. Others argue that improvements in bilateral relations should
be conditioned upon Vietnam?s authoritarian government improving its record on human rights.
The population of over 1 million Vietnamese-Americans, as well as legacies of the Vietnam War,
also drive continued U.S. interest.
Vietnamese leaders have sought to upgrade relations with the United States in part due to the
desire for continued access to the U.S. market and to worries about China?s expanding influence
in Southeast Asia. That said, Sino-Vietnam relations are Vietnam?s most important bilateral
relationship and Vietnamese leaders must tiptoe carefully along the tightrope between
Washington and Beijing, such that improved relations with one capital not be perceived as a
threat to the other. Also, some Vietnamese remain suspicious that the United States? long-term
goal is to end the Vietnamese Communist Party?s (VCP) monopoly on power through a ?peaceful
evolution? strategy.
Economic ties are the most mature aspect of the U.S.-Vietnam bilateral relationship. The United
States is Vietnam?s largest export market. Bilateral trade surpassed $14 billion in 2008 and has
been growing by double-digits every year since the United States extended ?normal trade
relations? (NTR) treatment to Vietnam in 2001. Increased bilateral trade also has been fostered by
Vietnam?s market-oriented reforms and the resulting growth in its foreign-invested and privately
owned sectors. From 1987-2007, Vietnam?s annual gross domestic product (GDP) growth
averaged over 7%. Since late 2007, Vietnam?s economy has been buffeted by economic
difficulties that have lowered growth rates and increased social strife. Vietnam is one of the
largest recipients of U.S. assistance in East Asia; estimated U.S. aid in FY2008 surpassed $100
million, much of it for health-related activities. In 2008, the two countries launched bilateral
investment treaty (BIT) talks and the Bush Administration announced that it would explore
whether to add Vietnam to the Generalized System of Payments (GSP) program, which extends
duty-free treatment to certain products that are imported from designated developing countries.
For years, human rights have been the biggest thorn in the side of the relationship. Vietnam is a
one-party, authoritarian state ruled by the VCP, which appears to be following a strategy of
permitting most forms of personal and religious expression while selectively repressing
individuals and organizations that it deems a threat to the party?s monopoly on power. Since early
2007, a number of arrests of dissidents and other developments have led some to conclude that
Vietnam?s human rights situation is worsening.