Lum, Thomas

UNT Digital Library

Laos: Background and U.S. Relations

1 In 2004, the three countries that did not have NTR status with the United States were Cuba,Laos, and North Korea. 2 Vaudine England, “Laotians Are Divided over U.S. Trade,” Wall Street Journal, September 1,2004; Daniel Lovering, “Former Enemies Wage Battle over U.S. Trade with Laos,” AssociatedPress, January 12, 2004; Frederic J. Frommer, “Free Trade Deal for Laos Splits Hmong(continued...)Congressional Research Service ˜ The Library of CongressCRS Report for CongressReceived through the CRS WebOrder Code RS20931Updated December 10, 2004Laos: Background and U.S. RelationsThomas LumSpecialist in Asian AffairsForeign Affairs, Defense, and Trade DivisionSummaryUntil November 2004, when Congress passed legislation extendingnondiscriminatory treatment to the products of Laos, the Southeast Asian nationremained one of the few countries with which the United States did not have normaltrade relations (NTR).  The debate in Congress over whether to grant NTR status to Laoswas long influenced by the legacy of U.S. military involvement in Laos during theVietnam War and by allegations of serious human rights abuses in the country,particularly against the Hmong ethnic minority.  Despite strained bilateral relations, theUnited States and Laos have cooperated in important areas, including recoveringremains of Americans missing in action (MIAs) and counter-narcotics efforts.  OnNovember 19, 2004, Congress passed the Miscellaneous Trade and TechnicalCorrections Act of 2004 (P.L. 108-429), which granted normal trade relations treatmentto Laos. Congressional InterestsSince 1997, when the United States and the Lao People’s Democratic Republic(LPDR) concluded a bilateral trade agreement, legislation to extend normal trade relations(NTR) treatment to the LPDR faced opposition from many Members of Congressconcerned about human rights conditions in Laos and the plight of the Hmong minority.Until November 2004, when Laos was granted NTR status, the LPDR was one of onlythree countries that did not have normal trade relations with the United States, and theonly country with normal diplomatic relations that was denied NTR treatment.1  Someprominent Hmong-American organizations opposed enacting the trade agreement,although the Laotian-American community as a whole was reportedly split on the issue.2CRS-22 (...continued)Community,” Associated Press, May 6, 2003.3 Laos is the world’s third-largest producer of opium.4  Xinhua News Agency, March 18, 2004.  According to some analysts, China and Vietnam havecompeted for influence in both Laos and Cambodia:  Yves Bourdet, “Laos in 2001,” Asian Surveyvol. 42, no. 1, January/February 2002; “In Laos, a Shift in Government,” Stratfor (StrategicForecasting), March 30, 2001.Laos in BriefChief of State: President Gen. KHAMTAI Siphandon Population: 5.7 millionPer Capita Income: $310 or $1,700 (purchasing powerparity)Life Expectancy: 54 yearsLiteracy: 53%Religious Affiliations: Buddhist — 60%; Animist — 30%; Christian — 1.5%.Ethnic Groups: Lao (lowland and upland) — 90%;   Highland (Hmong and Yao) — 9%; Vietnamese    andChinese (1%). Major Industries: hydroelectric power, tin and gypsummining, timber, agricultural processing, coffee  production,garments, and construction.Largest Export Markets: Vietnam, Thailand, FranceSources: CIA World Factbook; Economist Intelligence UnitOn November 18, 2004, S. 3000 was introduced in the Senate; the bill would postponethe extension of NTR status to Laos.  On November 19, 2004, the Senate agreed to S.Res.475, “A Resolution to Condemn Human Rights Abuses in Laos.” Although there are no formalrestrictions or sanctions, the amountof U.S. foreign assistance to Laosremains relatively small and mostlyc h a n n e l e d  t h r o u g h  n o n -governmental organizations.  U.S.foreign assistance programs includejoint efforts to account forAmericans missing in action andremove unexploded ordnance fromthe Vietnam War; counter-narcotics;3 anti-trafficking inpersons; HIV/AIDS prevention; andthe development of the silk sector.Total U.S. assistance to Laos inFY2004 is estimated to be $3.5million, plus an additional $500,000in Leahy War Victims Funds forlandmine education.  Political and Economic Situation in LaosPolitical Situation.  The Lao People’s Revolutionary Party (LPRP), a secretive,Leninist political organization, has sole authority over the government and society ofLaos.  The LPRP contains factions, but the Party appears to be united against fundamentalpolitical change or democratization.  The main factions in the LPRP represent economicreformers, economic conservatives, the military, regional and provincial interests, pro-China and pro-Vietnam leanings, and younger and older cohorts.  Some LPRP leadersreportedly view China as a model for economic reform.  China engages in cooperativeeconomic projects with Laos and provides technical and economic assistance (includinga grant of $3.6 million for a rubber plantation and a low interest loan worth $24 millionin 2004).  Vietnam’s influence remains strong, however, particularly in political andmilitary affairs.4 Since 1999, the LPRP has faced intermittent, sometimes violent incidents of politicalopposition.  In October 1999 and November 2000, university students and teachers stagedCRS-35 Bertil Lintner, “Stalled Reforms,” Far Eastern Economic Review, November 7, 2002.6 The United States dropped more than 2.5 million tons of ordnance on Laos during the VietnamWar, more than the total used against Germany and Japan in World War II.  An estimated 10million unexploded submunitions or “bomblets” remain scattered across the country, killingapproximately 200 Laotians per year.  Since 1973, 5,700 Laotians have been killed and 5,600injured by unexploded ordnance.  Paul Wiseman, “30-Year-Old Bombs Still Very Deadly inLaos,” USA Today, December 12, 2003; Ellen Nakashima, “U.S. Search Teams Scour OldBattlefields: More than 1,800 Are Still Missing in Vietnam Alone,” Washington Post, May 4,2004.7 Asian Development Bank; The Economist Intelligence Unit, “Country Report — Laos,” August2004.two demonstrations for democratic reforms, resulting in dozens of arrests.  Since 2000,rebel militias operating out of Thailand have staged several attacks on Lao border postsand anti-government groups have detonated over a dozen small bombs in the capital,Vientiene, and other cities, killing several people.  At least two groups, the FreeDemocratic People’s Government of Laos and the Committee for Independence andDemocracy in Laos, reportedly have claimed responsibility for the explosions.  BetweenFebruary and August 2003, seven ambushes of highway buses and other vehicles werereported, in which over 40 people were killed, including two Swiss tourists. The LaoGovernment has both attempted to downplay the attacks and occasionally blamed Hmonginsurgents.  So far, these isolated attacks have not sparked widespread anti-governmentactivity and, according to analysts, the regime’s hold on power remains firm.Economic Conditions and Trade.  Laos is a small, mountainous, landlockedcountry bordering Burma, Cambodia, China, Thailand, and Vietnam.  One of the poorestcountries in Asia, with a per capita annual income of $310, Laos ranks 135th on the UnitedNations Development Program Human Development Index, which measures lifeexpectancy, education, literacy, and gross domestic product (GDP) per capita.  Thecountry’s road and communications systems are underdeveloped.  Subsistence agricultureaccounts for about half of GDP and involves over 80% of the country’s labor force.About 18% of GDP comes from manufacturing.5  In addition, Laos continues to cope withthe damage and unexploded ordnance from U.S. bombing raids during the Vietnam War.6In 1986, the LPDR government began a policy of economic reform — disbandingcollective farms, allowing market forces to determine prices, legalizing private ownershipof land, and encouraging private enterprise in all but some key industries and sectors.Between 1988 and 1996, the country’s economy grew by 7% per year.  It began to falterin 1997 due to effects of the Asian financial crisis, a drop in exports to Thailand, andadverse economic policies such as the re-imposition of central controls.  The economybegan to stabilize in 2000.  Laos’s GDP grew by 5.9% in 2002-03 and is expected to growby 6% in 2004-05.7  The LPDR joined the Association of Southeast Asian Nations (ASEAN) in 1997 andhas lowered tariffs toward member nations.  Between 1998 and 2001, the value of Laos’sexports to the European Union, which grants Laos and other least developed countriespreferential tariff treatment, increased from $100 million to $110 million.  By contrast,its exports to the United States fell from $21 million to $3.9 million during the sameperiod.  In 2003, Laos exported $4 million worth of goods to the United States, up fromCRS-48 United States International Trade Commission.9 “Laos Economy: The Government Prepares for Planned WTO Entry,” Economist IntelligenceUnit — Viewswire, March 8, 2004.10  Over 300,000 Laotians, mostly Hmong, fled Laos after the communist takeover, mostly toThailand and then to other countries.  Mike Fahey, “Laotians Face Death If Sent Home, ActivistSays,” Madison Capital Times, December 16, 1999.11 In December 2000, the LPDR signed the International Covenant on Civil and Political Rightsand the International Covenant on Economic, Social, and Cultural Rights.  Laos has not yetratified the covenants.   12 Department of State, Bureau of Democracy, Human Rights, and Labor, “Country Reports onHuman Rights Practices 2003 — Laos,” February 25, 2004.$2.4 million in 2002 — mostly apparel, wood products, and coffee.8  In 2003, Laosimported $4.6 million worth of merchandise from the United States.  With the help offoreign investment, the LPDR has built several large dams since the late 1990s and hasbegun exporting electricity to Thailand and Vietnam.  The sale of hydroelectric powermakes up nearly one-third of the country’s exports, followed closely by garments.Experts estimate that it will take two years for Laos to make the required legal, financial,budgetary and other trade-related reforms to join the World Trade Organization.9  Human Rights IssuesFollowing the communist assumption of power in 1975, the Lao government dealtharshly with its perceived political opponents, including Royal Lao Government andArmy officials, the royal family, and U.S.-trained Hmong guerrilla fighters, sending30,000-50,000 of them to “seminar camps” (also called “reeducation centers”).  Nearlyall remaining political prisoners reportedly were released by the late 1980s.10  Thegovernment does not allow the independent organization of political, religious, or laborgroups, severely curtails free speech and association, controls the country’s judiciary, andregularly denies due process.11  In addition to hundreds of short- and long-term politicaldetainees, there were nine known political prisoners in 2003.  According to formerprisoners, extremely harsh conditions and the use of torture in Laotian jails are common.12Religious Freedom.  The State Department has characterized Laos as a“totalitarian or authoritarian regime”  for six consecutive years (1999-2004) although ithas never designated Laos as a “country of particular concern” (CPC).  The United StatesCommission on International Religious Freedom (USCIRF) recommended that Laos beplaced on the CPC list for four consecutive years (2000-2003), mostly for persecution ofthe Christian minority.  In 2004, the Commission placed Laos on a “watch list” but didnot recommend that the country be designated as a CPC, citing the release of religiousprisoners, the reduction in forced renunciations of faith, and the re-opening of manychurches that the government had closed.  In February 2004, the Lao government and theU.S. Embassy in Laos jointly conducted a seminar on religious freedom issues.  Althoughreligious organizations that are not officially approved by the state are illegal and thegovernment has blocked registration of new denominations, the Lao government appearsto tolerate some independent religious activity.CRS-513 U.S. Department of State, Bureau of Democracy, Human Rights, and Labor, InternationalReligious Freedom Report 2004 — Laos, September 15, 2004; U.S. Commission on InternationalReligious Freedom, Annual Report 2004, May 2004.14 Andrew Perrin, “Welcome to the Jungle,” Time Asia, May 5, 2003; Amnesty InternationalPublic Statement, No. 224, September 13, 2004; Jane Hamilton-Merritt, Tragic Mountains: TheHmong, the Americans, and the Secret Wars for Laos, 1942-1992 (Bloomington: IndianaUniversity Press, 1992).  Hamilton-Merritt suggests that as many as 30,000 Hmong soldiers andcivilians died as a result of their involvement in the Vietnam War.15 According to some estimates, the U.S. Hmong population totals approximately 250,000 personsand constitutes slightly over half of the U.S. Laotian population. 16 Department of State, Bureau of Democracy, Human Rights, and Labor, “Country Reports onHuman Rights Practices 2003 — Laos,” February 25, 2004.Because human rights in Laos lack legal protections, some violations of religiousfreedom continue at the local level, including arrests and short-term detentions of leadersof Christian congregations.  As of September 2004, there were two known religiousprisoners.  In some rural areas, government officials have suppressed Christian activitiesfor allegedly having foreign influences, disrupting local customs and practices, competingfor village resources, or challenging local authority.  A new religious decree, promulgatedby the Lao government in July 2002, reportedly has curbed some human rights abuses, butalso reaffirmed the government’s control over religious practice.  Article 9 of the law,which discourages acts that “create divisions among religions and persons,” has oftenbeen invoked to justify government restrictions on religious activities.13 The Hmong Minority.  Many observers have argued that although societaldiscrimination likely persists, the LPDR government does not currently engage insystematic persecution of the Hmong minority.  However, others have attested that theLao government has committed atrocities against defiant Hmong communities living inremote areas.  During the Vietnam War, the United States Central Intelligence Agency(CIA) trained and armed an estimated 60,000 Hmong guerillas to fight the Vietcong.After the Lao communist government took power in 1975, Lao and Vietnamese troopscrushed most of the Hmong army.  The Lao government allegedly has carried out a 25-year war of attrition to eliminate remaining Hmong militias and their communities, whomay total from one thousand to several thousand persons.  Several of an estimated 20rebel groups and their families are said to be surrounded by LPDR troops and facingstarvation.14  This continuing conflict has been a key stumbling block to better U.S.-LPDRrelations.  U.S. officials in Laos have been unable to independently verify claims of LaoPeople’s Army or Vietnamese troop movements in mountain areas, mass killings, or theuse of biological weapons against the Hmong.  Monitoring is difficult, however, becausemany highland villages are accessible only by helicopter and travel is restricted by thecentral government. Between 1975 and 1998, nearly 130,000 Hmong refugees were admitted to theUnited States.15  In the 1990s, about 29,000 Hmong were repatriated from camps inThailand to Laos.  Some returning Hmong claimed that they faced discrimination or lackof economic opportunities, while United Nations human rights observers found that theformer refugees were “successfully reintegrated.”16  An estimated 60,000 Hmong remainin Thailand; many have integrated into local society.  In January 2004, the BushAdministration announced that the approximately 15,000 Hmong living at the Wat ThamCRS-617 Since Laos (like Cambodia) was not considered a “non-market economy” when the Trade Actof 1974 was passed on January 3, 1975, Title IV, Section 402 (the Jackson-Vanik Amendment)does not apply to Laos as it does to Vietnam.  Congress extended NTR treatment to Cambodiaon September 25, 1996 (P.L.104-203) and to Vietnam on October 16, 2001 (P.L. 107-52).18 Catharine Dalpino and Edward Gresser, “Change Policy toward Laos, the Last Vestige of theVietnam War,” Seattle Post-Intelligencer, April 24, 2003.19 “Congressmen Call on Bush to Block Laos Trade Drive,” Agence France-Presse, April 26, 2003;Senator Russell Feingold, Floor Statement, Congressional Record (July 10, 2003), p. S9236.Krabok temple in central Thailand would be eligible to apply for resettlement in theUnited States.  Most have arrived in Minnesota, Wisconsin, and California, homes tolarge Hmong-American populations.  Normal Trade RelationsLegislative History.  The United States and Laos initialed a bilateral trade accordin 1997 and signed it on September 19, 2003.  However, the agreement could not be putinto effect unless Congress granted NTR status to Laos.  Unlike trade legislation forVietnam, which allowed for annual renewals of NTR, trade legislation for Laos andCambodia provided for permanent NTR status.17  Two bills that would extend NTRtreatment to Laos were introduced in the 105th Congress but not enacted, largely due toconcerns about human rights conditions.  In 2001, the Bush Administration included theU.S.-Vietnam and U.S.-Laos bilateral trade agreements in its international trade agenda.The 108th Congress introduced several bills that would grant NTR status to Laos.  TheMiscellaneous Trade and Technical Corrections Act of 2004 (P.L. 108-429), signed bythe President on December 3, 2004, extended nondiscriminatory treatment to the productsof Laos.Arguments for and against NTR.  Proponents of NTR for Laos argued thatbetter bilateral economic relations would enhance areas in which the two countriesalready cooperate.  They contended that greater U.S. trade and investment would bolsterU.S. leverage with Laos (including U.S. pressure on human rights issues), in relation tothe influences of Vietnam and China, and help strengthen the position of economicreformers within the Lao government.  For the people of Laos, it was held, NTR wouldhelp raise exports and create employment (with little impact on U.S. jobs) and help liftmany Laotians, including the Hmong minority, out of dire poverty.18  Furthermore, someargued, NTR would help spur the LPRD’s integration into the Southeast Asian regionaleconomy and strengthen commercial ties between Laotians and Laotian-Americans.  By contrast, opponents of normal trade relations stated that human rights conditionsin Laos would have to improve substantially before NTR treatment was considered.  Theycontended that granting NTR would strengthen the communist regime and betray theHmong people.  Some policy-makers held that enacting the bilateral trade agreementwould not likely improve the livelihoods of most people in Laos, and called upon the Laogovernment to deepen economic restructuring.  Some Members of Congress alsodemanded that the Lao government provide greater cooperation in investigating thedisappearance of two Hmong-Americans who were last seen near the Thailand-Laosborder in April 1999.19 

https://digital.library.unt.edu/ark:/67531/metacrs6744/m1/1/high_res_d/RS20931_2004Nov22.pdf

Laos: Background and U.S. Relations

Abstract

Similar works

Full text

Available Versions

UNT Digital Library

UNT Digital Library