WASHINGTON, April 7 -- U.S. Treasury Secretary Robert Rubin and his Vietnamese counterpart have signed Monday a debt settlement agreement under which Vietnam will pay Washington all money owed by the former South Vietnam. 'This is a significant step in the normalization of relations between our countries and the integration of Vietnam into the international financial community,' Rubin said after signing the deal with Vietnamese Finance Minister Nguyen Sinh Hung.
The treasury chief is on an eight-day trip to Asia aimed at improving relations between Washington and its Asia Pacific neighbors. Vietnam is the last leg of Rubin's tour. The debt agreement covers some $145 million owed to the United States, and a 'down payment' of more than $8.5 million of interest will be due within 30 days. Hanoi will have 25 years to repay all moneys, with an annual interest rate of 3.25 percent accruing on the debt. The bilateral accord implements part of a multilateral debt agreement Vietnam reached in 1993 with the so-called Paris Club of Western creditor nations. The larger Paris Club agreement helped clear the way for renewed international financing borrowing by Vietnam. Rubin is the first Treasury secretary to visit Vietnam, and the highest-ranking U.S. official to come to the former communist country since Warren Christopher toured in 1995. President Bill Clinton lifted the trade and investment embargo in 1994 and normalized diplomatic relations in July 1995 almost exactly 20 years after the communist victory in the Vietnam War in April 1975. Relations between the two countries remain strained, with some members of Congress against the normalization of relations due to outstanding issues surrounding prisoners of war and soldiers missing in action. ---
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