PBEC United States Member Committee

PACIFIC BASIN ECONOMIC COUNCIL
UNITED STATES MEMBER COMMITTEE | EVENTS | U.S. EVENTS | VIETNAM

Testimony of Gary Benanav

Chairman, PBEC US Member Committee
Chairman and Chief Executive Officer, New York Life International

Before the House Committee on Ways and Means
Hearing on House Joint Resolution 101
July 18, 2002

Mr. Chairman, members of the Committee, my name is Gary Benanav. I am Chairman and CEO of New York Life International, and Vice Chairman of New York Life Insurance Company. In addition to my corporate responsibilities, I chair the U.S. national committees of the Pacific Basin Economic Council (PBEC-US) and the Pacific Economic Cooperation Council (US-PECC). New York Life International also is a leader in the US-Vietnam Business Council and the US-ASEAN Business Council.

I appreciate this opportunity to testify on an issue which is important not only to the United States and Vietnam, but to the entire Asia Pacific region.

Once again this year, Mr. Chairman, the eyes of the world are looking to the United States to see if we are going to continue to engage fully with Vietnam. Once again this year, the House Ways and Means Committee must consider a resolution disapproving the waiver of the Jackson-Vanik provision of the 1974 Trade Act.

Since the first disapproval resolution, the bipartisan majority of the House has grown from 260 in 1998 to 324 in 2001. This steadily increasing majority reflects the improved understanding and insights which we all have gained as more officials, legislators, educators, business managers and tourists have seen Vietnam first hand. This year the stakes remain high. The continuation of Vietnam's Normal Trade Relations (NTR) status is vital because:

It is a precondition to the further integration of this important emerging nation into the Asia Pacific community;
It is an essential element to the continued progress of Vietnam towards WTO membership and the rules-based trading system;
It is necessary in order to improve the international investment environment in Vietnam;
And, most important, it is vital if we want to continue improving the U.S. - Vietnam relationship and enhancing the economic development, security and stability of the region.

Tying Vietnam to the Global System

I believe that we must remain fully engaged with Vietnam, both economically and politically, in order to anchor Vietnam in the world community of nations. The multilateral rules based on cooperation and transparency form a set of building blocks for a global system that can secure and sustain economic stability. Without economic stability no nation can hope to achieve political stability and security. Vietnam needs to be part of this global system if it is to realize its full growth potential.

The more Vietnam is rooted in the international rules-based trading system, the greater the stake Vietnam will have in supporting the system. This in turn will encourage Vietnam to continue to take steps that are beneficial to its domestic economic development and towards a more market based economy.

How can the U.S. best anchor Vietnam in the global rules-based system? By expanding our bilateral economic relationship. How can we best expand our bilateral economic relationship? By continuing Vietnam's NTR status and by not linking it to other, albeit important, issues which should be pursued vigorously, but separately, as part of the improving US-Vietnam relationship.

Vietnam needs to take further action to promote that process also. First and foremost, it must fully implement the terms of our Bilateral Trade Agreement (BTA). In addition, Vietnam should move as rapidly as possible to join the World Trade Organization and continue its transition to a market-based economy grounded in the rule of law.

WTO membership is the crucial next step. We should have no illusions about the challenges that Vietnam will face in ensuring an orderly evolution of the nation's economic and political underpinnings. There is no better economic option for Vietnam than joining the WTO. Neither should there be any illusions about NTR. The continuation of Vietnam's NTR status is a precondition for the full implementation of the BTA and for Vietnam's eventual entry into the WTO.

Building Institutional Capacity

Even with the determination demonstrated by the citizens and leadership of Vietnam, the process of joining the WTO will not be simple. Doing so will require that Vietnam develop the institutional capacity to operate as an effective competitor in the world's marketplace, and to construct a domestic market in which companies from the U.S. and other WTO member countries can operate effectively.

Mr. Chairman, I am convinced that it is in our national interest to assist Vietnam in developing that institutional ability. We should support capacity-building efforts that can be made available through multilateral and regional institutions. In addition, we should be prepared to offer bilateral technical assistance.

Many American companies committed to the development of Vietnam have already started the assistance process. For example, my company, New York Life, has made a corporate commitment to build capacity in Vietnam's financial sector. We are sponsoring training programs which regularly bring Vietnamese insurance regulators to the U.S. to work with their counterparts here on issues ranging from risk analysis to financial management. In addition, we are sending U.S. technical experts to Vietnam to help develop the skills of officials in Vietnam's Finance Ministry. The willingness and ability to continue private sector programs like this are fully dependent upon the overall economic context created by the granting of NTR status to Vietnam.

The Annual Waiver Process

Mr. Chairman, I would like to make one other point this morning. Although I believe that the House will reject the resolution of disapproval by a resounding, bipartisan majority, the annual Jackson-Vanik waiver process has outlived its usefulness. It creates uncertainty. It creates the impression that we are prepared to reverse course in our foreign economic policy from one year to the next as we manage through various issues in our relationship with Vietnam. This is not good for business, for our bilateral relationship or for the continued momentum needed to motivate and implement reforms in Vietnam. The Jackson-Vanik provisions no longer serve us well, and I strongly urge that we get beyond them as soon as possible.

Conclusion

In conclusion, Mr. Chairman, the continuation of broad engagement will benefit not only the United States and Vietnam, but also the community of responsible nations. Therefore, I strongly support the waiver of the Jackson-Vanik amendment. Continuation of progress in the relationship between the United States and Vietnam is dependent on this waiver.

Thank you.