WASHINGTON: THE LAST POW

By Kevin Fedarko

IF YOU WANT TO DO BUSINESS IN VIETNAM, FORGET ABOUT HELP FROM Washington. Encouraged by the recent opening of a U.S. liaison office in Hanoi, executives from Caterpillar and Boeing last January asked to talk to National Security Adviser Anthony Lake about business opportunities in Vietnam. When their request was denied, Alaska Senator Frank Murkowski tried to help by requesting his own meeting with Lake. Could the Senator bring the executives along? Lake replied that he would be happy to talk with Murkowski, but not with the businessmen.

When the subject is Vietnam, Clinton officials are not interested in talking business. Or trade. Or any other topic, for that matter, except one. "Our policy is very clear," explained an Administration official. "Normalization is linked to progress on the POW/MIA issue." That fixation has disrupted a diplomatic mating dance between the U.S. and Vietnam that had, until last year, brought both partners tantalizingly close to consummating their ticklish relationship. Clinton's February 1994 decision to lift the 19-year-old Vietnam trade embargo paved the way for full normalization, a move for which the State Department has been quietly preparing ever since. But goaded by a core of MIA families capitalizing on the President's reluctance to alienate those who lost relatives in a war he avoided fighting, the White House has now brought the pas de deux to a halt.

Critics find the strategy puzzling, especially since the MIA issue is increasingly seen as a phantasm. Allegations that the Vietnamese withhold data have been all but discredited by a wave of assistance from Hanoi. Of the remaining 2,211 mias, the number who were last seen alive but have never been accounted for has dwindled from 196 to 55, and progress has been made in reducing the number of other outstanding priority cases. And although Vietnam has been deceitful in the past, U.S. officials have applauded its cooperation in the past year. "What can we be cheated on at this point?" asks one diplomat.

Ever since the trade ban was lifted, moreover, a pack of U.S. companies has raced into the country to sniff out opportunities. But while the embargo's end may have opened the door, no American firm will manufacture in Vietnam products to be sold in the U.S. so long as Vietnam is not granted most-favored-nation status. Such a move enjoys growing support in the Senate, where a resolution calling for full diplomatic ties will be introduced soon. The resolution is popular for reasons that are not only economic but strategic: the end of the cold war has created an East Asian power vacuum in which Vietnam could play a key role. Swollen by an astonishing economic boom of its own, China appears eager to muscle into that vacuum. Its recent moves to garrison disputed islands in the South China Sea have even led to arguments by top Vietnamese officials that the U.S. uphold the regional balance of power by bringing Vietnam back into its orbit of influence.

To do that, however, Clinton would need to make the leap, and he would need to make it before primary politics complicate diplomacy. If not, America's Vietnam policy, prisoner of a war long past, may well be added to the list of missing in action. --Reported by Sandra Burton/Washington and Frank Gibney Jr./Hanoi

With reporting by SANDRA BURTON/WASHINGTON AND FRANK GIBNEY JR./HANOI