U.S.-Vietnam diplomatic and economic relations were non-existent for more then fifteen years following communist North Vietnam’s victory in 1975 over the 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 Warera 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.

This report will examine each of these trade issues, discussing their main elements and exploring their implications for the 111th Congress. This will be followed by an analysis of key trends in bilateral trade to discern any potential sources of trade friction in the future.

This report provides an overview of U.S. relations with Vietnam, including policy issues, the economic and political situation in Vietnam, and a list of pertinent legislation. The key issues in the relationship include how far to pursue strategic and military-to-military ties; whether to impose curbs on surges in imports of certain items from Vietnam; how much and what types of bilateral economic assistance to provide; whether and how to try to improve the human rights situation in Vietnam; and how to clear up legacy issues from the Vietnam war.

U.S.-Vietnam diplomatic and economic relations remained essentially frozen for more than a decade after the 1975 communist victory in South Vietnam. Over the past decade, Washington and Hanoi have normalized relations incrementally. Congress has played a significant role in the normalization process.