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Mr. Sang Comes to Washington

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Mr. Sang Comes to Washington

Vietnamese President Truong Tan Sang — a powerful senior member of the ruling Politburo, where the major governmental decisions are hammered out for the Central Committee of the ruling Communist Party — will meet with U.S. President Barack Obama in the White House on July 25. One way or the other, Thursday’s meeting for the two heads of state will be important. It comes at a time of increased tensions that have been holding back closer strategic and economic ties between the two former war enemies.

Sang and Obama have an opportunity to forge a deeper (mutually respectful) bilateral relationship. But it is not at all clear whether either leader has the vision or the necessary political instincts to seize it.  The two heads of state may just try to put out an attractive spin, hoping to gloss over important differences on the core issues that presently divide Washington and Hanoi. The two most difficult of those: Vietnamese human-rights practices that insult accepted international legal norms (as seen from Washington’s perspective), and insulting rich-country economic pressures (Hanoi’s view).

The White House has listed “human rights” as the first of three topics that will be on the agenda when the two leaders meet on Thursday. “Climate change” is the second named priority, followed by the Trans-Pacific Partnership trade talks involving the United States, Vietnam and ten other Asia-Pacific countries.

But the real agenda is broader, involving fundamental decisions that need to be made by both countries on whether to deepen their strategic and security cooperation. The sharp-eyed David Brown, a special correspondent for the Asia Sentinel, has written that President Sang and the Politburo appeared to have been “shaken” when Sang visited Beijing in June. Apparently in his private talks with top Chinese leaders, including President Xi Jinping, the Vietnamese president came away with nice words, but little of substance. Because of the “evidently jolting encounter with China’s leaders,” Brown wrote, a “hurried” visit to Washington was then arranged. In Washington, the Politburo wants Sang to find out whether President Obama — a politician who, in some Asian eyes, has acquired a certain reputation for offering mostly happy talk in his dealings with his foreign peers — will be any more helpful.

Neither government was divulging further details of what Sang and Obama will have to chat about on Thursday. A White House spokesman refused even to say in what room of the White House Presidents Obama and Sang would be talking, much less identify who else might be in that room.

A close look at each of the three specific items on the Sang-Obama agenda suggests that for each president, any truly “frank” diplomatic exchanges would pose awkward questions, not to say outright mutual embarrassments.

For Sang, the most awkward question would be to explain to Obama what benefit Vietnamese leaders think they really gain by holding hostage more than 160 political prisoners. These are Vietnamese citizens who have committed no “crimes” — other than to peaceably voice their complaints that their government is seen as becoming increasingly corrupt and unaccountable.  And Obama might ask about a July 15 Hanoi decree that is aimed at prohibiting speech that goes “against the state of the socialist republic of Vietnam,” or any criticism that the party fears could “jeopardize national security,” Radio Free Asia has reported. The targets are popular internet icons like Google and Facebook.

Of course, it’s always tricky business for Americans to express reasonable opinions on human rights without sounding arrogant and self-righteous to always-sensitive Vietnamese leaders. Press too hard, and too publicly, and the commies could just arrest more innocent bloggers to stick it to the Americans. Press too quietly, and the authorities in Hanoi could just keep on doing whatever they please. Nobody’s ever really figured out the most appropriate diplomatic language.

[And if Obama’s tone on human rights offends Sang, the Vietnamese president might bring up the subject of dioxin. Sang might ask if the U.S. leader feels a sense of shame over the fact that a spokesman for the U.S. Embassy in Hanoi has recently denied to McClatchy reporter Drew Brown that many Vietnamese citizens today are still suffering from the tragic effects of dioxin sprayed by the U.S. Air Force on Vietnam during the shooting war.]

For Obama, perhaps the most embarrassing thing is that his White House — for purely domestic parochial reasons involving his political ties with U.S. organized labor and the globally uncompetitive U.S. textile lobby — has been stridently making demands of the Vietnamese in the TPP trade talks that the Politburo would be foolish to accept. Obama’s rather crude economic pressures, in fact, have been playing into the hands of those in Hanoi who increasingly question the value of closer commercial and strategic ties with the United States.

Beyond the mutual embarrassment potential, it turns out that what the White House wants to talk about regarding climate change illustrates — most likely, unwittingly for both Sang and Obama — just how complicated deepening the bilateral economic relationship has become.

Power Politics

On climate change, it could be that all Obama wants to do is burnish his “green” credentials by giving President Sang a nice lecture on the importance of nations’ working together to combat global warming.

But there’s something else important going on between Washington and Hanoi that illustrates how the politics of climate change have interjected themselves into the bilateral relationship. It’s not certain that the White House staff — which seems to be spread pretty thin these days — has briefed Obama on the implications of a decision last week by the U.S. Export-Import Bank to deny U.S. export financing to build a 1,200-megawatt coal-fired power plant in Vietnam’s Thai Binh province. But for sure, President Sang wouldn’t need a special briefing to understand fully the implications of the American act. This is because the Ex-Im decision goes directly to the heart of how political power is exercised in today’s Vietnam — and touches sensitive nerves in the Politburo.

Greenpeace, Friends of the Earth and other environmental groups complained in a July 17 letter to Obama that “this dirty coal plant will emit unacceptable air pollution that will worsen climate disruption and poison local communities.” Obama’s climate action plan, they (rightly) noted, is against U.S. financing of overseas coal projects, on grounds they increase greenhouse gas emissions.

The green lobbyists portrayed the Obama climate-action policies correctly. Ex-Im’s guidelines basically discourage financing for high carbon density overseas projects like coal plants. These days, Ex-Im is more interested in participating in viable renewable-energy projects. Anyway, after conducting an environmental “due diligence” examination, the U.S. export-financing agency found that the Thai Binh plans failed to pass muster. Because of that, the bank did not examine the other details of the project: financing, credit-worthiness, and so forth.

Most of the above was reported by U.S. wire services — but the best part of the story has gone unreported: precisely who wanted U.S. export financing for the Thai Binh coal-power plant?

Ex-Im doesn’t put such details on the public record before projects are approved.  But a little digging reveals that the Ex-Im financing was sought to help one of Vietnam’s giant state-owned enterprises, PetroVietnam Power Corporation, which refers to itself as PV Power. PV Power is a subsidiary of the Vietnam National Oil and Gas Group, which goes by its acronym, PVN. According to a 2011 Vietnamese news report, PV Power’s Thai Binh 2 Thermo Power Plant is a $1.6 billion project. The main players are Korean and Japanese construction firms.

On August 3, 2012 the Charlotte, Va.-based Babcock & Wilcox Co. announced that a Beijing-based subsidiary — Babcock & Wilcox Beijing Co. Ltd. — had won a $300 million Thai Binh-related contract from South Korea’s Daelim Industrial Co. Ltd.  Babcock & Wilcox said that it would do the engineering work in Beijing for two coal-fired boilers for the Thai Binh project, and would also participate in the manufacturing.

While a Babcock & Wilcox spokesman was unable to respond to questions asking about Thai Binh before this article went to press, it seems logical that PetroVietnam and the Korean company could have sought financing from the U.S. Ex-Im Bank to buy U.S.-manufactured equipment. How many American jobs would have been supported with the financing is not on the public record. (Nor is it clear what role coal plays — or perhaps should play — in addressing the energy needs of a developing country like Vietnam.)

The involvement of PetroVietnam, for those who know how what might be called the Vietnamese “political economy” works, suggests that the story’s ramifications go way beyond a normal fight over money and jobs with just one construction project.

State-owned corporations control perhaps a third of the Vietnamese economy. Inefficient, secretive and widely considered corrupt, SOE’s are also cash cows for senior members of the Communist Party. They report to the Prime Minister’s office, and are thus an important source of political patronage. (Imagine if President Obama would appoint the top echelons of a third of the Fortune 500, the likes of Boeing, General Electric, Microsoft, Google, Exxon, and so on.)

In the Trans-Pacific Partnership trade talks, the Americans are demanding that the Vietnamese enact transparency reforms, and also that steps be taken to bring SOEs more market-oriented. It’s asking a lot, considering that the same government corporations have been making a lot of senior party officials — including at the Politburo level — very rich. The Politburo has been wrestling for most of the past decade over what to do about all this.

PetroVietnam  has become controversial in Vietnam. Last October a report by Thanh Nien Daily, a Vietnamese newspaper, noted that PetroVietnam had been cricitized by economist Le Dang Doanh on grounds it “needs to disclose its finances and profit numbers.”

The Thanh Nien report added that the giant government corporation had denied accusations made publicly by National Assembly members that it had been using its taxpayers’ money to engage in real estate speculation. Then the Vietnamese newspaper asked why PV Power and other wholly-owned subsidiaries of PVN have their own real estate companies. The newspaper even ran a photo of the Nam Dan Plaza in Hanoi, described as “a new luxury department store project developed by PV Power.” (From the view of SOE executives, speculating in real estate ought to be more commercially attractive than power, because the government forces them to set electricity rates too low for Vietnamese consumers to be commercially viable.)

This week, Vietnamese officials who will be travelling with President Sang will be pressing their case with their Ex-Im counterparts. It is unlikely they will succeed. The U.S. officials might wonder whether PetroVietnam officials might just take any profits obtained from low-cost U.S. Ex-Im financing to speculate in even more dicey property deals.

A delicate mix

The Obama administration has turned up the pressure on Vietnam’s human rights practices. The price of Vietnam’s admission to the TPP, and of forging a genuine strategic relationship with Washington, will be explicitly linked to “demonstrable” progress on human rights, as U.S. Ambassador to Vietnam David Shear put it on June 1 to a Vietnamese-American audience in Orange County, California. The ambassador’s context was unambiguous: “I have been telling senior Vietnamese officials since my arrival in Vietnam in August of 2011, that if the Vietnamese people want a Trans-Pacific Partnership, if they want stronger cooperation in regional diplomacy leading to a strategic partnership, then we need to see demonstrable progress on human rights in Vietnam.”

Traditionally, it has not been official U.S. policy to make such an explicit link with human rights in any commercial negotiation. Shear’s remarks — which he declines to comment further upon — were initially dismissed as unserious by some veteran trade observers who cautioned that they should not be taken literally. Shear was just telling his California audience what it wanted to hear, according to this interpretation. Vietnamese-Americans and their representatives in the U.S. Congress have been critical of Shear, on grounds he has not done enough to improve Vietnamese human-rights practices.

Still, Shear is a senior, well-regarded American diplomat with considerable experience in Asia — he’s served in Japan, China, and Malaysia, and speaks Japanese and Mandarin. Nor does Shear have a reputation for loose talk. In his June 1 Orange County appearance, the ambassador spoke slowly and deliberately, conveying the impression that he was reciting officially authorized talking points. Also, Shear’s reference to how lack of human-rights progress has been the biggest obstacle to closer U.S.-Vietnamese strategic ties was fully consistent with official U.S. foreign policy as expressed often by senior State Department officials. The official State Department position is that U.S.-Vietnam strategic ties will not improve until there is “demonstrable, sustained improvement in the human rights situation.”

U.S. Trade Representative Michael Froman has declined to engage in any diplomatic walk-back that would put distance between U.S. trade policy and Shear’s remarks in Orange County. So it appears that the White House is comfortable with the notion that the Vietnamese should take Amb. Shear’s words at face value.

Enter the U.S. trade police

From the Vietnamese perspective, what Obama is asking them to do on “human rights” in the TPP trade talks appears, well, insulting.

Obama’s trade negotiators have been insisting in the TPP that the Vietnamese agree to the U.S. labor lobby’s demands that they permit independent union organizing — which U.S. officials insist must be enforceable. Such could be considered “human rights” progress, in American eyes.

Before it signs onto this idea, the Politburo might consider how similar arrangements have worked out for other countries that have struck recent trade deals with the Americans.

In the U.S.-Colombia bilateral trade agreement, that Latin country has been required to set up an “action plan” on labor that contains measurable “milestones” and a “robust enforcement regime,” with American officials playing their roles as the enforcers. The way this works practice in Washington, the American officials pay close attention to AFL-CIO labor activists, who never seem to be satisfied that foreigners are doing enough to live up to American standards.

On April 11, 2013, the Office of the U.S. Trade Representative and the Labor Department touted how they had pressed Guatemala to submit to “a robust enforcement plan to resolve concerns” that had been raised in a labor complaint by the United States in the preferential trade agreement involving the U.S. and the Latin country. The American officials congratulated themselves for making Guatemala come up with an 18-point plan to satisfy Washington’s demands. The plan “includes concrete actions with specific time frames that Guatemala will implement within six months to improve labor law enforcement.”

This is the first labor case that the U.S. has brought in any of its preferential trade deals — but the Vietnamese would have good reason to suspect that the American labor police have plans for them.

U.S. double standard

Enter the outright embarrassing part of the story for Obama. The reason the Vietnamese find the TPP talks attractive is the possibility of gaining additional access to protected U.S. clothing- and footwear markets — protected by high tariffs that hover in the 16-18 percent range, but for some lines, twice that. The Obama trade negotiators have been demanding essentially that the price of any tariff cuts  for shoes and apparel be that the Vietnamese agree to purchase their fabric from U.S. suppliers.

The idea is hardly attractive to Hanoi.

First, as I reported in “Imperial Preferences” in this space on Sept. 11, 2012, one of the main reasons that Napoleon III sent the French navy to take the port of Saigon in 1859 was to force the Vietnamese to open their markets to exports of French textiles. Economists would agree that current American pressure in the TPP is just a modern-day version of French colonialism.

Secondly, the so-called “yarn forward” rules of origin don’t work. Only about 17 percent of U.S. imports of clothing from Mexico and other Latin American countries that have been forced by U.S. trade negotiators to accept the cumbersome rules actually get duty-free treatment. The importers prefer to pay the duties, rather than jump through the bureaucratic hoops, bear the costly paperwork burden, and such.

And last, think of how President Sang — under fire from Washington because of the Vietnamese government’s many interventions in its economy —  could turn the tables on Obama. Sang might ask: Is it right for the U.S. government to pressure such major American corporations like the iconic Levi, Strauss & Co. and Gap, to agree to buy their (heavy) denim from U.S. suppliers and ship it all the way across the Pacific to Vietnam? Is it right for the White House to pressure Hanesbrands, which has its underwear plants and supply chains in nearby Asian countries like Thailand and China, to buy its cotton instead from the continental United States, and ship that cotton across the ocean? How about Patagonia, which makes down vests in Vietnam from high-tech Japanese materials? Why would the U.S. government want to disrupt the global operations of other respected private-sector corporations: Nike, Adidas, Macy’s, Nordstrom, and so many others?

Obama would, of course, be hard-pressed to respond with credible economic answers to such questions. But the White House has repeatedly insisted that Vietnam swallow the “yarn forward” rules of origin for textiles, and also the high tariffs on footwear.

From a Vietnamese perspective, Obama’s TPP negotiating strategy is reminiscent of how Presidents Lyndon Johnson and Richard Nixon once based American policies during the Vietnam war upon the premise that, with enough pressure from the rich superpower, this small Southeast Asian nation would ultimately bend to America’s will. But unless the Vietnamese get meaningful additional U.S. market access they are seeking in the TPP, it is difficult to think of good reasons why they should cave.

Prospects for closer U.S.-Vietnamese relations?

The final uncertainties involve just what the Vietnamese really want from their relations with Washington.

“There’s a delicate game going on” presently in the Politburo, explains scholar Carlyle Thayer of the Australian Defence Force Academy. Hardly for the first time in its long history, Vietnam is striving to balance it’s always-contentious relations with China, the Southeast Asian country’s closest neighbor, and at the same time with the United States. “Some in Hanoi want better ties with the U.S., while another group would sabotage those ties,” observes Thayer.

It’s the latter group that currently appears to have the upper hand, according to Thayer and other experienced Vietnam watchers interviewed for this article. That would help explain why Vietnam has arrested more than 40 peaceable bloggers this year, more political prisoners than all of 2012 — perhaps a deliberate hostile signal to the U.S. State Department and the White House.

To be sure, with any issue involving Vietnam there are so many nuances that nothing is ever what it seems to be. Sang’s three-day visit to China that began on June 19 could be interpreted as a sign that closer Vietnamese-Chinese ties were being considered. Even if it’s true that Chinese intransigence marred those meetings, Beijing could recover (by being less aggressive in claiming waters in the South China Sea that are clearly Vietnamese, for instance).

But how to interpret a visit that Vietnam’s deputy defense minister, Sen. Lieut. Gen. Do Ba Ty, made to the Pentagon on June 20, while Sang was in China? The Vietnamese general met with Chairman of the U.S. Joint Chiefs of Staff Martin Dempsey. Gen. Ty’s was the first such visit by a Vietnamese chief of staff to the United States, a Dempsey spokesman observed. The senior Vietnamese military delegation also notably included Lt. Gen. Pham Ngoc Hung, the deputy chief of the general intelligence department. Something’s afoot.

The only reasonably clear conclusion at this point in time is that the traditional Vietnamese foreign-policy balancing act will continue. And because the issues and differences that divide Vietnam, China, and the United States are so difficult to resolve neatly, the situation will continue to remain messier than it should.

 

 

 

 

 

How (Not) to Become a U.S. Ambassador

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There are two paths that aspiring American ambassadors traditionally take to persuade the president of the United States to nominate them for that honor. First, there is the classic, merit-based path where senior U.S. foreign service officers with distinguished diplomatic backgrounds are quietly-and-carefully vetted in the higher echelons of the State Department. Those who survive the scrutiny by their peers have their names forwarded to the White House to get the formal — usually routine — presidential approval. The second route, the political one, is (sometimes scandalously) reserved for famous personalities, presidential cronies, and major contributors of campaign cash who buy their ambassadorships. But now comes the U.S. consul general in Ho Chi Minh City, a Vietnamese-American foreign service officer named An Le, with a novel third way: an oh-so-Asian way.

Le wants to become the next U.S. ambassador to Vietnam. Toward that end, the consul general has been working behind the scenes since at least last July with a network of Vietnamese-American allies, some of whom have political and business connections in both Washington and Hanoi. Although Le has urged his supporters to try to drum up congressional support, the main target of the lobbying campaign is the man who would make the nomination: President Barack Obama.

Toward that end, Le and his allies have demonstrated a certain Asian-style chutzpah. One of Le’s key supporters in the Vietnamese-American community is David Duong, an Obama contributor from the San Francisco Bay area. Duong has given more than $150,000 to Obama and the Democratic Party since 2008, according to the Center for Responsive Politics. According to e-mails exchanged between Le and Duong that this reporter has seen, Duong related that he had approached Obama directly to press Le’s ambassadorial qualifications at a Democratic Party fundraising event held in California earlier this month.

Obama was in northern California raising money on April 3 and 4, the White House has reported. Businessman Duong informed Le in one e-mail that he had presented the president a letter, along with a list of people who have lent their names in support of Le’s candidacy, at one fundraiser held on the evening of April 3.

The list of Le’s supporters— reprinted in the public interest at the bottom of this article — has more than 70 names on it. The first name stands out: former Obama chief of staff Rahm Emanuel, who is now mayor of Chicago. On April 4, Duong informed Le in an e-mail that he had pressed Obama a second time.  “I had brunch with president and 27 other people this morning and did talk about you and letter delivered to him last night.”

Duong indicated to the consul general that he had received a friendly response from Obama: “We need to work and have a couple congress members and or us senators to recommend you. This will assure you will be in.”

The e-mails reveal that as he has sought to advance what Le has repeatedly referred to as his “candidacy,” the consul general has not been merely a passive observer. Le has participated in drafting and editing various letters of support and introduction. Before California business Duong presented the letter to Obama on April 3, Le advised his ally to correct a typo. Upon being informed by Duong that the letter had been delivered to Obama, Le expressed his gratitude in another e-mail. Writing on his iPad, the consul general related how “I appreciate” the efforts of such good “friends in advancing my candidacy.”

Duong and Le did not respond to several e-mails asking for comment. Nor was an effort to obtain comment from the White House successful. A call to Emanuel’s press office prompted a suggestion that this reporter request a response from the mayor in an e-mail — which was then not answered.

Duong, who came to America penniless after the communists won the Vietnam War, is the classic American immigrant success story: an entrepreneur whose waste-management company, California Waste Solutions, now has multi-million dollar contracts with government entities in both the United States and in Vietnam (the latter through a subsidiary corporation in Vietnam that has developed a $400 million solid waste landfill in Ho Chi Minh City, according to the corporation’s website and Vietnamese press clips.)

Apart from his business activities, Duong was appointed in 2010 by Obama to serve on the Vietnam Education Foundation, which receives U.S. government funding to give scholarships to provide higher education to Vietnamese students.  The Vietnamese-American entrepreneur had been recommended to the White House by Rep. Barbara Lee, a California Democrat and another recipient of Duong’s political contributions. Duong has praised the “full support” that he has received for his charitable work from the higher levels of the Vietnamese government, including Prime Minister Nguyen Tan Dung.

Duong is not the only Vietnamese exile in Le’s network of supporters who has cultivated ties with the current Vietnamese government that he fled from as a child.  Another key supporter appears to be Bui Duy Tam, a medical doctor who has helped introduce the consul general to Vietnamese-American friends in northern California.

Dr. Tam is another immigrant’s success story. An octogenarian, he is well-known in the Vietnamese-American community for his charitable medical works in his homeland, including a campaign to help Vietnam fight liver disease. Deputy Prime Minister Tuong Vinh Trong visited Dr. Tam at the doctor’s home in San Francisco in 2010. “The Deputy PM highlighted the great contributions made by Mr. Tam to the Vietnamese community in the US and to the homeland,” reported Hanoi’s official Voice of Vietnam, which broadcasts in Vietnamese and 11 other languages. “Mr. Tam said he was deeply moved.”

On July 28, 2012, Consul General Le sent Dr. Tam a private e-mail sent on a personal Hotmail account (presumably to avoid federal restrictions like those in the Hatch Act that bar government employees using official U.S. government computers and time to engage in political activities).  “Thank you for your generous draft letter of introduction,” the consul general told the doctor. “Please allow me a few days to review and prepare a re-draft letter, as this is a very sensitive matter,” Le cautioned.

A few weeks after their exchange of e-mails, Le spent time in California on leave. Much of the official downtime in the state was to be spent advancing the consul general’s “candidacy as the next ambassador to Vietnam,” as he put it in one e-mail.

The disclosure of that candidacy is likely to be controversial in the Vietnamese-American community. Many Vietnamese-Americans who fled from communist rule have come to accept the normalization of diplomatic and commercial ties with Hanoi. But while there are naturally differing views on politics, there remain bright red lines for Vietnamese exiles who will always love their homeland, while also having become patriotic American citizens. One of those bright lines —perhaps the clearest — involves the fact that it remains a crime for Vietnamese citizens to assemble peacefully to advocate the democratic right to vote. Vietnamese citizens have been jailed for expressing such beliefs.

I asked Dr. Tam and David Duong if they believed that advocating democracy should be legally barred in their home country. Neither man responded. The fact that such prominent exiles are willing to avert their eyes and keep their mouths shut on core human-rights issues — perhaps because to do otherwise could be inconvenient for maintaining their current dealings with the Vietnamese communist-run government — will be considered offensive by many. And back in the homeland, one can imagine the reaction when this news is brought to the attention of Vietnamese citizens who are presently languishing in prison because they have been brave enough to advocate the right to vote.

The only member of Le’s network of supporters who responded to a request to comment for this article was Truong Ngoc Phuong, who is the executive director of the Harrisburg, Pa.-based International Service Center. The center was established in 1976 to assist Vietnamese refugees who fled from the communist takeover in the preceding year. It now helps others in need as well, including victims of the Hurricane Katrina disaster in Louisiana.

Truong declined to be interviewed on his work with Le regarding the hoped-for ambassadorship (and also further declined to express an opinion on the current Vietnamese government’s anti-democracy laws). Still, the Pennsylvania social worker was willing to explain his support for Le’s candidacy in general terms.

“We are only a small group of community and business representatives who happened to be aware of the wonderful deeds Mr. An Le was able to accomplish as the consul General in Ho Chi Minh City for the past three years,” Truong told me in an e-mail. “Out of admiration for Mr. An Le, and out of respect for the current U.S. Ambassador to Vietnam, David Shear, we decided to organized a discreet campaign to mobilize additional support for Mr. An Le’s candidacy.” (The consul general was copied on the e-mail.)

In another communication that Truong has sent to potential supporters of the consul general, he reasons that Le is the Vietnamese equivalent to Gary Locke, who is now U.S. ambassador to China. Locke is a former governor of  Washington state and a former U.S. commerce secretary. “The appointment of Gary Locke as U.S. Ambassador to China provides a precedent worth replicating,” Truong writes. “Ambassador Locke’s exemplary service owes much to his identity as a Chinese-American. His qualifications have enabled him to find areas of productive alignment between the two cultures and countries.”

It is highly unusual — perhaps unprecedented —  for an active member of the U.S. foreign service to run what is essentially a clandestine political pressure campaign aimed securing a White House nomination for an ambassadorship to an important country.

A quick look at the background on what ambassador wannabes usually do illustrates just how unusual.

The first two paths to an ambassadorship are the usual ones. The current U.S. ambassador to Vietnam, David Shear, comes from the elite ranks of the U.S. foreign service. Shear earned a masters degree from the prestigious John Hopkins School of Advanced International Service, is fluent in Japanese and Chinese, and was a deputy assistant secretary of state for Asia before he was vetted by the State Department and tapped for Hanoi in 2011. That traditional route accounts for about two-thirds of all U.S. ambassadorships. Previous U.S. ambassadors to Vietnam have all come from the elite ranks: foreign service officers with broad national-security experience such as Michael Michalak, Michael Marine and Raymond Burghardt.

The first U.S. ambassador to Vietnam, Douglas “Pete” Peterson, who served from 1997 – 2001, was a political appointment. But Peterson was considered an excellent choice. He was a respected former member of the U.S. congress and a former prisoner of war during the Vietnam war.

As for the political path in general, think of Caroline Kennedy, who is reported soon to replace U.S. ambassador to Japan John Roos, a Silicon Valley lawyer who earned his diplomatic stripes by “bundling” more than $500,000 for the Obama 2008 presidential race. Did Roos buy his ambassadorship? Of course. But thanks to the U.S. system of campaign financing, the bribery laws never come into play as long as there are winks-and-nods when the deal goes down, and not quid pro quos — which there “never” are.

To be sure, thoughtful circles in the U.S. foreign policy establishment rightly cringe at such political appointments. After all, ambassadorships — or any government positions — should never be for sale. Perhaps the surprising thing is that the system often produces good results, as some of the presidential cronies turn out to be skilled diplomats who represent their country admirably. Pamela Harriman, who was dispatched to Paris by Bill Clinton, comes immediately to mind. So does former child movie star Shirley Temple Black, who served admirably as U.S. ambassador to both Ghana and Czechoslovakia in the 1970s and ‘80s. And when the politically connected ambassador happens to be a little light, every U.S. embassy seems to have a top-notch deputy chief of mission to ensure that important American diplomatic interests do not suffer. Like career ambassadors, DCMs come from the elite ranks of the foreign service and can be counted upon to manage the real diplomatic affairs.

Le doesn’t come from such elite ranks. He is a former civilian in the U.S. Navy who, after 15 years of service, joined the foreign service in 1991. Le’s official State Department resume that is posted on the consulate’s website says, confusingly, that he was “born and raised” in Vietnam, which is subsequently contradicted with the assertion that he is “a native of Virginia.” A search of the available public record suggests that Le was indeed born somewhere in Vietnam, although exactly when and where, and when he left his homeland, remains unclear.

Le earned a masters degree from George Washington University in engineering administration in 1978, according to his resume. Le has been a senior member of the U.S. foreign service since 2001. But his State Department service seems to have been focused on the managerial side of diplomacy, involving issues such as buildings and administration, not deep involvement in national-security affairs.

An was the honored recipient in 2006 of the State Department’s top management award, the Luther I. Replogle Award for Management Improvement. However praiseworthy that award — and it is indeed a significant honor — such accomplishments suggest that his lack of experience in high-level diplomacy might not even qualify him to become a deputy chief of mission in the U.S. embassy in Hanoi, much less an ambassador.

Le’s immediate predecessor as consul general in Ho Chi Minh City, Kenneth Fairfax, is now the U.S. ambassador to Kazakhstan. But Fairfax has been one of the stars of the foreign service, whose previous service in sensitive positions included a high-level stint on the National Security Council staff, where he dealt with nuclear weapons issues. These days, diplomats based in the U.S. embassy in Hanoi handle sensitive matters of diplomacy, while the consulate in Ho Chi Minh City headed by An Le tends to be seen as a visa-processing center.

An educated guess would be that Consul General Le will not get the ambassadorship that he is seeking. Imagine the reaction from the U.S. foreign service if Le were to succeed in getting the White House nomination by making a political end run around the normal State Department vetting process, including a direct approach to the president — and at a fundraising event.

***

Note to readers: Below is the list of “Friends & Supporters of Consul General An T. Le in Ho Chi Minh City” that was apparently presented by California businessman David Duong to President Obama at a Democratic Party fundraiser during the president’s April 3-4, 2013 appearances in the San Francisco Bay area. The letter that the consul general approved, according to his e-mail correspondence that this reporter has seen, is un-edited. (The reference to (F) after the names of some of the endorsers — such as former U.S. Ambassador to France Craig Stapleton, himself a former political appointee — apparently refers to the “former” position. Le served in the U.S. embassy in Paris during Stapleton’s tenure.)

 

LIST OF ENDORSERS OF MR. AN LE’S CANDIDACY

Title First Name Last N. Position Business/Organization City St. Zip
T.H. Rahm Emanuel Mayor City of Chicago Chicago IL

60602
Mr. David Duong President California Waste Solutions Oakland CA

94607
Mr. Pedro (Sonny) Ada President Ada’s Trust and Investment, Inc. Hagatna GU

96932
Mrs. Jennifer M.A. Ada Ambass-at-Large Governor of Guam’s Trade Mission to VN Hagatna GU

96932
Mrs. Stephanie Au Behavioral Cons. Spencer, Shenk, Capers & Associates Irvine CA

92618
Mr. Charles R. Bailey Representative (F) Ford Foundation/Vietnam Chestnut Ridge NY

10977
Mr. Mark Baldyga President/Owner Baldyga Group, LLC Tumon GU

96913
Mr. David C. Ball Owner DesignBalls Studio Grapevine TX

76051
Mr. Greg J. Baroni President/CEO Attain, LLC Vienna VA

22182
Mr. Elvin Y. Chiang Senior Advisor Ernst & Young, LLP Tamuning GU

96913
Dr. Hung Manh Chu Professor/Dean West Chester University West Chester PA

19382
Ms. Sandy Dang Principal 11plus Philanthropic Consulting, LLC Washington DC

20015
Mr. Huy Do Chair/President Strategic Alliance VN Ventures Internl. Brisbane CA

94005
Mr. Duc Do Editor Thoi Luan Newspaper Westminster CA

92684
Mr. Thien-Chuong Duong,Esq Patent Attorney AD Intellectual Property Consulting Palo Alto CA

94306
Dr. Huan Giap,M.D Director Scripps Proton Therapy Center San Diego CA

92121
Mrs. Lourdes Leon Guerrero President/CEO Bank of Guam Hagatna GU

96910
Mr. Loc Hoang IT Director University of Maryland College Park MD

20742
Mrs. Diane Hsiung Prog. Associate American University Washington DC

20016
Ms. Kim-Yen Huynh Founder/President Asian-American Business Women Assn. Huntington Beach CA

92647
Dr. Johannes Kratz Physician Massachusetts General Hospital Boston MA 02115
Mr. Larry Trung La President Meiwah Group Washington DC

20036
Mrs. Jennifer L. Lawless Professor American University Washington DC

20008
Dr. Tommy Le, PE Vice Chair County Board of Electrical Examiners Silver Spring MD

20906
Mr. Anh-Tuan, P.E Le Managing Cons. Green Orange Fountain Valley CA

92708
Mr. Marc Levin Managing Partner Levin Capital Management Chicago IL

60611
Mr. David Lublin Professor American University Washington DC

20016
Dr. David Mai, M.D President MediZen Advanced Imaging, Inc. Fountain Valley CA

92708
Mr. Nolan Metzger Financ. Advisor Oppenheimer Houston TX

77022
T.H. Constance A. Morella Congressman (F) U.S. House of Representatives Bethesda MD

20817
Mr. Steve A. Nagel Council Member City of Fountain Valley Fountain Valley CA

92708
Dr. Chau Thanh Nguyen M.D. Private Practice San Jose CA

95116
Ms. Diem H. Helen Nguyen Mrktg Executive Caesars Entertainment Corporation Las Vegas NE

89109
Dr. Chau Nguyen Physician Chau Nguyen Osthreopathic Center Westminster CA

92683
Ms. Ginna Claire Nguyen Design./Professor Ginna Claire Studio & Pasadena College Pasadena CA

91105
Mr. John Wynn Nguyen President Imperial Investment & Development Inc. Milpitas CA

95035
Dr. Duc Tien Nguyen Vice-President International Liver Foundation for Vietnam West Covina CA

91790
Dr. Thuan Hoa Nguyen Physician Kaiser Permanente Silver Spring MD

20902

 

Ms. Hoa Nguyen Tec. Bus.Analyst METRO/Public Transportation Houston TX

77002
Dr. Ai Nguyen Owner Pain Clinic of Westminster Santa Ana CA

92706
Ms. Ai Van Nguyen Singer Performing Artist Cupertino CA

95014
Mr. Chris Nguyen Co-Chair Stanford U. Vietnamese Student Assn. Arcadia CA

91007
Mr. Dzuong Ky Nguyen Professor Stanford University Stanford CA

94305
Ms. Anna Nguyen Chief Fin.Officer Strategic Intl. Medical Business Alliance Rancho St. Fe CA

92067
Dr. Thu-Huong Nguyen-Vo Professor University of California at Los Angeles Los Angeles CA

90095
Mr. Dean Nguyen President USA Home Realty Falls Church VA

22042
Dr. Ngai Nguyen Medical Doctor Viet Heritage Foundation San Jose CA

95112
Ms. Hong Thuy Nguyen Author/Board Vietnam Literary & Artistic Association Annandale VA

22003
Dr. Quan H. Nguyen President (F) Vietnamese Physicians Assn. of South CA Fountain Valley CA

92708
Mrs. Kim D. Nguyen Vice-President Wells Fargo Bank San Francisco CA

94105
Mr. David O’Brien Vice President University of Guam Mangilao GU

96923
Ms. Allyson Perleoni Grad. Assistant Women & Politics Institute Washington DC

20008
Dr. Christina Pham Clinical Fellow Harvard Medical School, Cambridge H.A Cambridge MA 02139
Ms. Geneva Pham Manager Management Sciences for Health Washington DC

20036
Mr Son Michael Pham Principal U.S – Asia Gateway Bellevue WA

98009
Mr. Trong Pham President Washington Vietnamese-American C of C Seattle WA

98111
Mrs. Susan W. Preator Exec. Chairman Imagine Learning, Inc. Provo UT

84604
Mrs. Thanh-Lo Sananikone ManagingDirector TAF International, Inc. Honolulu HI

96816
T.H. Craig Stapleton Ambassador (F) Stapleton Management Greenwich CT

06830
Mr. Steve Stewart Chairman Gulf Winds International Houston TX

77061
Ms. Cheryl Sturm Vice President R. Crusoe & Son Chicago IL

60661
Mr. Steven Taylor Asso.Professor American University Washington DC

20910
Dr. Michelle Thai Medical Doctor St. Jude Medical Center Westminster CA

92683
Ms. Diem Lan Ton Nu Senior Vice Pres Children’s Hospital, Los Angeles Los Angeles CA

91007
Mr. Brian Ton, Esq. President Satori Law Group, Inc. Fountain Valley CA

92708
Mr. Nhan Tran Managing Partner Advent Pacific Technologies, LLC. Tamuning GU

96913
Dr. Thanh Nga Tran Physician Massachusetts General Hospital Boston MA

02114
Ms. Jenny Truong President/CEO Apollo Manufacturing Services San Diego CA

92121
Dr. Joseph M. Vo, PsyD President International Epic Solutions, Inc. Riverside CA

92506
Mr. Loc Van Vu Exec. Director Immigrant Resettlement & Cultural Center San Jose CA

95112
Mrs. Rosine T. Vu Branch Chief (F) National Security Agency Silver Spring MD

20902
Ms. Linda Vuong Attorney International Service Center Denver CO

80219
Ms. Quyen Vuong Exec. Director International Children Assistance Network Milpitas CA

95035
Ms. Diep Vuong President Pacific Links Foundation Santa Clara CA

95054
Mrs. Margaret A. Weekes Associate Dean School of Public Affairs (American Univ.) Washington DC

20016
Ms. Jackie Bong Wright President/CEO Vietnamese-American Voters Association Dulles VA

20189
Mr. Antoine Yoshinaka Assis.Professor American University Washington DC

20016
Mrs. Gamze Zeytinci Dean School of Arts&Sciences (American U.) Rockville MD

20852

 

Half Pivot

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Let’s cast a gimlet eye on President Barack Obama’s “pivot” toward Asia.

Viewed from important Asian capital cities — Tokyo and Bangkok, Manila and Hanoi, Dacca and Phnom Penh, also Jakarta —the pivot is looking more like a half-pivot. The first half involves U.S. security ties to Asia. The Pacific Command — with its U.S. Seventh Fleet, the Fifth Air Force, and its Special Operations Forces — has been keeping the Pacific, well, pacific, for more than a half-century. In that sense, there is nothing especially new to the Obama pivot, except perhaps the spin. But give the White House credit for supporting officials in the State Department and the Pentagon, as they have been tending to America’s traditional diplomatic and security relationships.

But the same White House has failed to connect U.S. trade policies to the political-military part of the pivot. A search for a coherent U.S. trade policy for the region turns up a series of unconnected ad hoc policies. To the extent there is a common thread, it involves Washington’s familiar double standard. The White House demands that U.S. trading partners summon the political will to open their markets to American exports. But when the foreigners ask for enhanced access to U.S. markets, a tone-deaf Washington barely listens. While this is certainly not a game that Obama invented, it’s fair to say that on his watch, U.S. trading partners are no longer much interested in dancing to the superpower’s tune.

That’s sure not the way the White House wants its Asian policies to be perceived. In a speech to the Asia Society delivered in New York on March 11, Obama’s national security adviser, Tom Donilon, asserted that the pivot — which he preferred to call a “rebalancing” — has been fostering enhanced U.S. security and economic ties with Asia. The next day in Washington, Obama reiterated his administration’s claims that the Trans-Pacific Partnership trade negotiations — the centerpiece of his trade policies in Asia — involves defining new “high standards” that will modernize international trade and “generate billions of dollars in trade and millions of jobs” in the 21st Century.

But as our mini-tour of key Asian capitals helps illuminate, the U.S. rhetoric appears at variance with economic facts on the ground. Already, the consequences of shortsighted U.S. trade policies that provide incentives for Asian trading partners to leave Uncle Sam on the sidelines are showing up.

Thailand, for instance, is a longtime U.S. security ally. But the White House has not worked seriously to welcome the Thais into the Trans-Pacific Partnership preferential trade negotiations. As presently constituted, a successful TPP would divert trade flows away from important Asian countries like Thailand.

When Obama met with Prime Minister Yingluck Shinawatra in Bangkok on Nov. 18, 2012, Yingluck’s declared interest in joining the TPP talks wasn’t even on the agenda, the Thai leader told reporters in Bangkok. In a Nov. 19 joint press release with Yingluck, Obama said that “we’ll work together as Thailand begins to lay the groundwork for joining high-standard trade agreements, such as the Trans-Pacific Partnership.” Translation from the diplomatic politesse: it ain’t gonna happen anytime soon.

Meanwhile, Thailand’s business community is divided on the wisdom of strengthening trade ties with America anyway. The Thais already have cut their own preferential trade accords with China and New Zealand, and are also working to liberalize regional trade within Asean.

In the absence of meaningful TPP talks with the Americans, Yingluck has now decided instead to negotiate another Thai trade deal with the more reliable European Union. So have the Japanese.

Japanese Prime Minister Shinzo Abe is pressing a reluctant Obama White House to stop blocking his country’s entry into the TPP negotiations. Meanwhile, Abe is also talking to the Chinese and South Koreans about creating a three-way Seoul-Beijing-Tokyo trade axis.

Next stop: Tokyo.

The “chicken tariff” does Tokyo

On the security front, the good news is that U.S.-Japanese ties remain solid. And the importance of the U.S.-Japanese security alliance should never be underestimated. There is no more important military alliance for either country. The U.S.-Japan alliance has been marked with new energy on the Obama watch, thanks to mutual concerns over contentious Chinese-Japanese maritime disputes over islets in the East China Sea that, while uninhabited, are rich in fish and potentially so for oil and gas. Give the Obama White House credit for understanding the importance.

But for more than two years, Obama and his top international economic policy aide, Mike Froman — the man who has been doing the most to set U.S. trade policies — have been cool to Japanese participation in the TPP.  One would think the White House would have been eager to welcome Japanese participation. After all, without Japan — the world’s third largest economy — the TPP is small ball. While readers will have seen various breathless press accounts that tout the TPP as a “blockbuster” of a trade deal, it is far from that.

The US already has preferential trade deals with Singapore, Australia, Chile, Canada, and Mexico. Nor is the White House eager to liberalize those accords in the TPP negotiations (such as opening the door to increased imports of Australian sugar, a subject which the Americans have so far refused even to discuss). The remaining TPP negotiating partners are four smaller, if admirable, economies: Brunei, Malaysia, Vietnam, and New Zealand. Is that what a “blockbuster” of a trade deal looks like? China, Australia, New Zealand, Japan — they all have, or are discussing, preferential trade arrangements with the entire Association of Southeast Nations.

Consider one of the most important reasons for the White House reluctance to welcome America’s most important Pacific ally into the TPP. This has nothing to do with so-called cutting edge, gold standard, state-of-the-art 21st Century trade rules. It’s all about old-fashioned tariffs. And one protectionist tariff in particular illustrates the White House focus.

Enter the Detroit auto lobby. Ford, General Motors and Chrysler fear they would lose domestic market share to the Japanese in a TPP deal that would get rid of the U.S. 25 percent tariff on imported trucks. Defending that tariff — mainly with Japan, but also regarding Thailand, where foreign auto transplants have set up shop —has become a top White House priority.

The problem is that there has never been any economic justification whatsoever for the 25 percent U.S. tariff on trucks. That tariff dates to late 1963 and a decision made during an unrelated trade spat of that era by President Lyndon Johnson (when Barack Obama was barely two years old).

Angry that the Europeans weren’t buying enough American chickens, Johnson retaliated by imposing the 25 percent tariff rate on trucks — a tenfold increase from the normal 2.5 percent U.S. tariffs on cars. The so-called “chicken tariff” was aimed at punishing Germany’s then-popular exports of the hippie-era vans. To repeat: to this day, nobody in the United States government has ever pretended that the chicken tariff had any economic merits.

Moreover, the protectionist truck tax has “worked” over the decades much as the U.S. trade embargo against Cuba has succeeded in ousting the Castro brothers. Toyota and other Japanese automakers — who weren’t competitive threats during Lyndon Johnson’s time — simply have gotten around the tariff by producing their trucks in U.S. states like Texas, where tariffs can’t be applied. Detroit and the United Autoworkers remain furious that the Japanese have created a non-unionized (and well-paid) segment of the “American” auto industry. Obama now has become the eighth American president after Johnson to defend the economically indefensible tariff.

But wait, it gets worse. For another example of how shortsighted auto policies risk Uncle Sam’s increasing marginalization, let’s head to Jakarta.

Indonesia: driving on without the Americans

Indonesia, where Obama lived for several years as a youngster, was supposed to be the beneficiary of enhanced Washington-Jakarta trade ties. Nobody’s talking like that now. Obama has shown no interest in including Southeast Asia’s biggest economy in the TPP. Nor have the Indonesians — who have recently fallen into the trap of economic nationalism — indicated they much care what the Americans think.

Channel NewsAsia, a Singapore-based television news organization that is widely watched throughout the region (and beyond, thanks to channelnewsasia.com); reported on March 17 that Indonesia hits imported autos with a 40 percent tariff. Yet Toyota, Nissan, Mitsubishi, and Daihatsu “supply around 95 percent of Indonesia’s car market,” the report noted. No wonder. Japanese auto imports, thanks to a preferential trade deal Japan has with Indonesia, are duty free.

The rightly concerned European Union is talking with the Indonesians about a preferential trade deal with the Indonesians “to allow European firms to compete on a level playing field” there, the report added.

ASEAN is also busy negotiating new trade rules that will facilitate the auto trade across Southeast Asia.

Meanwhile, the Obama White House, having put all of its negotiating chips in the TPP basket, is left on the outside. China, which has already cut its own preferential trade deal with ASEAN — as well as Australia and New Zealand — is well-positioned to further deepen trade ties with Indonesia also.

Next stop: Manila — to see more missed American trade-policy opportunities to be generous to an old friend.

The next Asian tiger

Perched along key Pacific trading routes, the Philippines — population approaching 100 million, the world’s third largest English-speaking populace — is rich in what economists call “human capital.” So relations with Manila would be important to any American president, even if the former U.S. colony weren’t one of America’s oldest treaty allies.

To its credit, the Obama White House has encouraged the Pentagon and the State Department to strengthen existing political-military relations with the government of President Benigno Aquino III, who was elected in 2010. Dubious Chinese claims to parts of the South China Sea that are clearly within Philippine waters have also underscored the continued importance of close U.S.-Philippine security ties. (Policy paralysis is not only an American disease, to be sure. One wonders if China’s new leadership appreciates the fact that Beijing’s clumsy maritime provocations would remind any Philippine government of the importance in sticking close with their historic friends the Americans.)

Once Asia’s second-largest economy, after only Japan, for most of the last half century the Philippines — mired in cancerous corruption and inward-looking economically — has conspicuously lagged behind its neighbors. But now, Aquino has gotten his country on the move, sparked by a crackdown on corruption that former U.S. diplomat John Forbes admiringly calls “truly unprecedented in scope.”

(Forbes is the principal author of Arangkada, a publication of the Joint Foreign Chambers of the Philippines (www.arangkada.com). Arangkada, which means “move twice as fast” in Tagalog, is full of solid economic prescriptions for what the former “sick man” of Asia can do to become economically healthy again.)

Indeed, under Aquino’s leadership, the Philippines has come out of intensive care.

Philippine GDP growth last year was 6.6 percent and is projected to top 7 percent this year — the highest in Southeast Asia. Construction cranes dot Manila’s skyline. The area just north of Manila that once housed major U.S. military bases at Clark Field and Subic Bay is booming. Clark International Airport — where more birds used to land than airplanes just a few years ago— has taken off, with passenger arrivals skyrocketing from 50,000 in 2004 to 1.3 million last year. Korea’s Asiana, Malaysia’s Air Asia, Hong Kong’s Dragonair, are flying passengers to the Philippines from all over Asia. Emirates will launch daily flights from Clark to Dubai later this year. For anyone looking at the beneficial advantages that happen when foreign investments that foster Philippine economic growth are welcomed, this is it.

Indeed, the former American bases have become models of the benefits of attracting foreign investment. Yokohama Tires and Texas Instruments have billion-plus dollar investments at Clark; Samsung also has an important semiconductor operation there. Korea’s Hanshin has the world’s fourth-largest shipyard at Subic Bay. In their Cold-War heyday, the former U.S. bases employed perhaps 40,000 Filipinos. Now, under Philippine management, the number of jobs in Clark-Subic corridor has shot up more than fourfold — more than 160,000. I don’t think there has been a better time for the Philippines than today,” says Dennis Wright, a dynamic former U.S. Navy captain who is now developing a $3 billion industrial park at the former Clark Field for a group of Kuwaiti investors.

Aquino, as mandated by the Philippine constitution, has one six-year term that will expire in 2016. Now is the time, the reformers stress, for urgency in locking in as many reforms as possible. After 2016, Aquino’s successor could well be another politician mainly interested in lining his (or her) own pockets.

Here’s where the half-pivot part comes in. While the White House has supported enhanced U.S.-Philippine security ties, Washington has not put serious energy into deepening trade ties.

The Obama administration has not welcomed the Philippines into the TPP negotiations. The European Union is interested in negotiating a preferential trade agreement with the Philippines; the White House is not. Washington has no present plans to engage Manila seriously to promote trade liberalization anytime before 2016, when neither Obama nor Aquino will be in office.

The Filipinos have noticed. Last September, speaking to an influential audience in Washington that was convened by the U.S.-Philippines Society and the respected Center for Strategic and International Studies, Finance Secretary Cesar Purisima lamented that his country was not wanted in the TPP. That trade deal as presently constituted, including some Asian countries and ignoring others, the secretary explained, would distort regional trade flows and thus “hinder” the laudable goal of promoting genuine trade expansion.

Meanwhile, where the Philippines is concerned, the USTR is in full “enforcement” mode.

On March 28, the USTR’s trade police will preside over a hearing into complaints of labor-rights abuses from 2001– 2007 that were perpetrated on former President Gloria Arroyo’s watch — murders of union organizers, and such. The implied threat is that if President Obama personally determines that Aquino has not been diligent enough by way of cleaning up the mess he inherited, Obama could yank the Philippines’ duty-free privileges pursuant to the Generalized System of Preferences program.

That would, of course, be ridiculous. After all, Aquino has put Arroyo — who never lost her GSP privileges when she ran the Philippines — under house arrest while she faces graft charges. Aquino’s labor secretary, Rosalinda Baldoz, is widely respected for her integrity and dedication in addressing the Arroyo-era abuses. Nobody, either at the USTR, or with the International Labor Rights Forum, which filed the original complaint, wants or expects Obama to humiliate Aquino. The Philippines has been “making progress” on labor-rights,” notes Jeff Johnson, who heads the International Labor Organization’s Manila office.

Why would the USTR be holding such a hearing that by its nature is demeaning to an important American ally? While it’s tempting to blame the bureaucrats, the trade cops are essentially playing out their intended roles of “enforcement” oversight that Congress mandated in the GSP legislation. Countries like the Philippines that sign up for the GSP program must agree to submit themselves to such oversight from Washington, notwithstanding the indignities. That’s one of the main reasons why the U.S. Congress likes the GSP program — there is always an implicit understanding that economic privileges granted, can also be taken away. And no American president has ever complained that the generous GSP program is also a diplomatic lever that can always be pulled, if necessary to keep allies in line.

The GSP program isn’t particularly generous to the Philippines anyway. To cite just one example: Philippine canned tuna exports are not eligible for the duty-free treatment, as they are politically “sensitive.” The sensitivity involves American Samoa, which is an American territory.

Official U.S. policy has long discriminated against Asian tuna exporters like the Philippines, Thailand, and Indonesia. The Asian tuna exporting countries face protective U.S. tariffs of up to 12 percent. But American Samoa, because it is officially U.S. territory, can export its canned tuna to the U.S. mainland duty free. Without the protective tariffs, the Samoans could not compete. (For further details, see: Charlie the Tuna’s Troubles in Pago Pago, July 12, 2010, posted on www.rushfordreport.com).

Obama inherited the economically indefensible U.S. tuna tariffs from his predecessor, George W. Bush, who inherited them from his predecessors.  Bush rebuffed Gloria Arroyo when she sought their removal. It’s safe to say that Obama will also kick the tuna-tariff can down the road.

Onto Dacca, Phnom Penh, and Hanoi

Speaking of unjust American tariff barriers that U.S. presidents have passed along to their successors, who defend them more or less automatically, let’s head to the final three Asian stops, beginning with Dacca.

Bangladesh will also be in the dock at tomorrow’s USTR enforcement hearing. Unlike the Philippines, Obama really is considering yanking Dacca’s GSP preferences. And no wonder, considering Bangladesh’s dismal record over the years of cracking down on human rights abuses in its garment industry. The latest tragedy happened just last November, when at least 112 clothing workers were killed in a factory fire that should never have been allowed to happen.

But hold on. Garments and footwear are not eligible for duty-free treatment in the GSP program, anyway. (That decision that dates to President Richard Nixon and his national security adviser, Henry Kissinger, who framed the original political blueprint for GSP in the 1970s. Nixon and Kissinger faced a U.S. textile lobby that had considerable political clout in those days. Now Obama has the old protectionism still running on autopilot — even though very few items of clothing and footwear are still made in the U.S. and the diminished U.S. textile lobby no longer has the votes to defeat important trade legislation.

As viewed by developing countries that have women who want to sew their way out of poverty, the high U.S. tariffs — hovering generally around 12 percent, but which can be more than twice that for some items — are cruel.

Bangladesh’s exports to the U.S. totaled $4.9 billion last year. Of that, $4.4 billion was clothing, and thus not eligible for GSP. Put another way, 91 percent of what Bangladesh sells to the United States is excluded from the GSP’s duty-free privileges, notes Washington trade analyst Edward Gresser. “This not particularly generous,” he observes.

Gresser further points out that while U.S. tariffs hit poorer countries’ exports of clothing and footwear hard, the higher-end products that wealthy European countries sell to the United States — airplanes, electronics, automobiles and such (except for trucks) — face low tariffs. Last year, for example, Cambodia and Bangladesh exported $7.6 billion in goods to the United States, mostly clothing. These exports faced U.S. tariffs of 16.9 percent and 15 percent, respectively. U.S. Customs collected combined Cambodian and Bangladeshi tariffs amounting to $1.1 billion. German exports to the U.S. totaled $96 billion, and were taxed at only 1.4 percent — amounting to just $1.4 billion. This is “unfair” to two of the world’s most impoverished countries, Gresser reasons. No comment from the White House.

Does it make sense for Obama to take away Bangladesh’s GSP benefits when more than 90 percent of that country’s exports to the U.S. aren’t in the GSP program? Ask the Cambodians about such things.

When Bill Clinton was president, Cambodia agreed with the demands brought by U.S. organized labor to open its sweatshops to international labor inspections. It worked. Today, the International Labor Organization, through its Better Factories Cambodia program (www.betterfactories.org) conducts vigorous and effective oversight of that country’s garment industry.

Yet even though the Cambodians have done everything they could to meet the demands of the AFL-CIO, neither Obama nor his predecessors since Clinton, has been willing to give Cambodian clothing and footwear exports duty-free treatment. The Obama White House — now in its fifth year — has consistently refused to take questions on the subject.

Yes, Dacca ought to agree to open its sweatshops to ILO inspections. But from Dacca’s point of view, why should they, since the Americans wouldn’t give them any economic carrots for doing such anyway?

There’s a lot more of the same, as we end the tour in Hanoi.

As with the Philippines, the Obama administration is working with Vietnamese authorities — who also have good reason to fear Chinese aggressive moves in the South China Sea — to strengthen security ties. While Washington has welcomed Vietnam’s participation in the TPP trade talks, those negotiations have stalled. It’s a familiar story to regular readers of this journal (see: Imperial Preferences, www.rushfordreport.com). In short, the White House has held up the TPP negotiations by stonewalling Vietnamese requests to be granted more market access to the high-tariff U.S. clothing- and footwear markets. (The most recent protectionist move that Washington has inflicted upon Vietnam: hiking anti-dumping tariffs on imports of Vietnamese catfish (called Basa, or Tra, in Vietnamese) a whopping 79 percent, per kilo. Top leaders in Hanoi are very angry, because they have reason to believe that the U.S. Commerce bureaucrats deliberately crunched the numbers to punish Vietnam’s seafood industry — hardly for the first time.)

If there is a hint of more positive news to report, it’s that the more enlightened segments from the U.S. business community are becoming more outspoken about the need for a more effective U.S. trade policy.

Let’s end our tour back in Washington, D.C. by noting some basic insights offered by Rick Helfenbein and Harold McGraw III.

Helfenbein is the vice chairman of the American Apparel and Footwear Association. “For those of us engaged in the pursuit of trade, and for those of us who believe that a robust trade policy is essential to the enhancement of the U.S. economy, the last four years have been disappointing,” he recently wrote in an internal AAFA publication. “Both the Obama Administration and the U.S. Congress have demonstrated that talk about trade policy is simply a form of floating non-productive rhetoric, despite the positive economic growth that comes from achieving a robust trade policy.
It makes one wonder as to how such a worthy group of elected officials can work so hard at talking a good game, yet fail to perform.”

McGraw, also one of of Washington’s most influential figures on the trade scene, chairs the Emergency Committee for American Trade. President Obama “should lead by example,” McGraw wrote in a March 7 op-ed column for Politico. “Unfairly restricting access to our market sends the clear message to other governments that they can do the same. Regressive U.S. tariffs on clothing and footwear, trade restrictions on sugar and dairy products and other barriers end up imposing significant costs on U.S. businesses and consumers and must be addressed,” the ECAT leader added.

“We can’t ask others to let us fully access their markets when we don’t let them fully access ours.”

Meanwhile, perhaps Obama might reflect upon the irony that because he has not connected the economic side of his Asian pivot to the political-military side, U.S. economic ties throughout the region could diminish on his watch.