S ince it opened in 1995, the U.S. embassy in Vietnam has seemed like a forlorn outpost--a nondescript building stocked with hand-me-down furniture and equipment that rarely seemed to work--standing on the edge of a worn capital in a country on the fringe of diplomatic oblivion.

 Policy, too, has seemed caught in a time warp: Washington has spent millions of dollars a year combing the countryside for dead and missing soldiers and beaming in anti-communist radio broadcasts. Sure, it has added a few thousand dollars here and there for humanitarian extras such as tuberculosis research and typhoon relief. But Washington lifted its trade embargo on Hanoi on February 4, 1994, and normal trade ties have yet to develop. The Americans may have lost the war, but they aren't going to open the door to their vast market unless the Vietnamese are willing to do the same for U.S. firms and goods.

 On January 29, Hanoi finally indicated that it would at least consider Washington's steep demands and work with U.S. counterparts to develop an acceptable calendar for opening its market. Though just a first step on a long road, the move is a major breakthrough in trade talks that had gone nowhere since Washington presented a thick draft trade agreement to Hanoi in April 1997. 

Moreover, it shows that Hanoi is starting to be more practical at a time when its Communist Party leaders are huddling to try to map out a future for themselves and the country. When a trade deal is struck, Vietnam will have easier access to the world's largest market--critical for a developing country whose exports declined last year. "There does seem to be movement and a change in philosophy," says an American diplomat in Hanoi.

 The acknowledgment is a dramatic turnaround from previous negotiating sessions that left the U.S. frustrated by Vietnamese intransigence on basic trade principles, despite the fact that Hanoi needs the agreement more than Washington. Negotiators at the Ministry of Trade initially said they would be able to comply with the sweeping requirements--but not until 2020, when Vietnam had developed its own industrial base. The early written responses ignored most proposals in the five-chapter draft document, which was sent back with black lines drawn through much of it. Now Hanoi is talking about an eight-year phase-in period. 

Broad provisions in the draft covering general trade, tariffs, services, investment and intellectual-property rights would require Vietnam to virtually abandon its import-substitution policies and therefore threaten the dominance of state firms. There's the rub: "If the agreement improves trade, that's one thing," says a Vietnamese diplomat, "but it also pushes reform. That's what makes us hesitate. We must determine the steps of reform."

 The U.S. wants Vietnam to open its service industries--especially insurance and banking--to foreign competition, treat foreign firms the same as domestic ones, and drop tariffs and quotas. 

Vietnam is one of just five countries that don't enjoy normal trading status with the U.S.--the others are Cuba, Iraq, Libya and North Korea. Two-way trade between the U.S. and Vietnam amounts to less than $1 billion annually. Vietnam does manage to export a few items--including shoes--where tariffs under most-favoured-nation trading rules don't differ much from other tariffs.

 The Vietnamese have complained that the Americans are demanding too much, too soon. The Vietnamese diplomat likened the U.S. to "a beautiful woman who is very hard to please." Another went further, saying that the tough draft "reinforces the Vietnamese perception that the U.S. is trying to destroy Vietnam." Washington counters by saying the high hurdles will be good for Vietnam since the country will have to meet similar requirements to join the World Trade Organization, to which Hanoi applied in 1995. 

Hanoi has tried different tactics to win concessions from the Americans. A favourite has been to cite the refrain that Vietnam is a poor country, and therefore should receive more leeway. Then Hanoi decided to withdraw what it considers MFN status for countries with which it doesn't have a bilateral trade agreement. From January 1, the U.S., Japan, and others were subject to a 50% increase in tariffs.

 U.S. officials objected, but to no avail so far. They warn that it's the wrong move when the two countries are in the middle of trade negotiations. "It looked as though Vietnam was trying to pressure the U.S. or somehow have an impact on negotiations and it wouldn't be considered very conducive to building the negotiations in a more positive way," says Dennis Harter, deputy chief of mission at the embassy in Hanoi.

 Vietnamese trade officials declined to be interviewed for this article. But Nguyen Manh Hung, head of the Americas Department at the Ministry of Foreign Affairs, says the new categories are "in conformity with international practice" and that Vietnam will perhaps "learn from the U.S. and try to have a waiver for some nations," as Washington does for China annually.

 Hanoi can't really afford to make more enemies when its economy is stagnating and its major trading partners in Asia--who make up two-thirds of Vietnam's trade--have yet to recover from the recession. Yet the mixed message of boosting tariffs while showing some flexibility on trade negotiations reflects an ambiguity that runs through the country's leadership: They want to integrate with the world, but at no cost to their own state-dominated system or the Communist Party. 

Such a tactic could backfire, giving Washington an excuse to say it tried everything it could to conclude a deal, including spending $1.25 million for a technical-assistance team.

 But many Vietnamese, including top leaders, feel that the world--especially the U.S.--owes Vietnam. When U.S. Sen. John Kerry visited Hanoi in December, he met with former party chief Do Muoi, who remains a dominant, and conservative, force in decision-making. When Kerry asked why Vietnam appeared to be falling behind in reform while its neighbours were trying to move ahead, the party elder pointed the finger of blame at a century of colonial rule and war--including the conflict with the Americans. 

Muoi's argument overlooks one point, however: No matter who caused the problems, it's going to be up to Vietnam to solve them.

A fter working in Vietnam, foreign journalists often leave the country embittered and cynical. Perhaps the burden of negotiating one of the world's few remaining communist countries, enduring hard-bitten Vietnamese nationalism--not to mention the damp, grey Hanoi winter--leaves even the most open-minded observer short of praise and long on criticism.

Robert Templer, who for three years was a correspondent in Hanoi for French news agency Agence France-Presse, is no exception. Only his sharp eye and elegant prose keep the reader turning the pages.

 However, nothing really new leaps out of this book. Part of the problem is that Vietnam has failed to live up to the much-trumpeted economic promise that accompanied its early 1990s emergence from behind the bamboo curtain. After the United States-imposed trade embargo was lifted in 1994, newspapers carried pictures of Vietnamese carrying home imported television sets and eating Western fast food: comforting images of an emerging capitalist market, but far from reality, as Templer relates with thinly veiled disappointment. 

Economic reforms giving rise to a liberal political dawn, he writes, were instead supplanted by ageing communist party cadres. Suspicious of the outside world and fearful of losing their power, the communists elected Le Ka Phieu, a conservative army veteran, as secretary-general in 1997. This election, writes Templer, "had a deadening impact. It signalled another step backwards, another diversion from the road most Vietnamese wished to travel."

 Shadows and Wind highlights what truly is an alarming paucity of middle ground in the popular discussion about Vietnam. Not only does the constricted political landscape alienate most Western observers, but journalistic attempts to understand Vietnamese society are mostly met with government hostility. The result is a disappointing lack of understanding and perspective on both sides. 

In Templer's case, this drives him to make some rather bitter comments, often painting a bleak picture that neglects to take into account political and economic flaws elsewhere in the region. For example, he describes Vietnamese television news as an "amateur-hour of forced enthusiasm." Yet, he fails to look at any of the country's neighbours. In Thailand, for example, with its democracy and free press, viewers are compelled to watch a nightly news bulletin about the royal family and stand at cinemas when the royal anthem is played. Compliance and censorship remain facts of media life in other, ostensibly more open Southeast Asian societies.

 Yet all the way through this engaging, if frustrating book, Templer concedes that Vietnam is slowly changing. The government is playing less of a role in people's lives and consumerism is taking root in society--even if repeated descriptions of Vietnamese mobbing Western products at trade fairs drive the point home a little too strongly. Do we need another reminder that people living in modern Asia like to drink Coke and eat Kentucky Fried Chicken? There's a certain naivete about the idea that prosperity is "the essential urge in the 1990s," especially when the author uses as an example Vietnamese praying for prosperity at an ancient temple that they have come to for hundreds of years. 

These glimmers of change in Vietnamese life and politics should have been given more than passing anecdotal treatment, at the expense of the exhaustive analysis devoted to the rigours of Vietnamese socialism. The reader is left wanting to hear more about writers who manage to circumvent socialist ideologues and publications that manage to stay one step ahead of the censors. That would have helped bring out the more creative side of Vietnamese society, as well as the reality of many Asian authoritarian states--where authority may not be successfully challenged, but can always be eluded.

 The author falls victim to the same kind of stereotype he describes so well in two of the more fascinating chapters of this book. In "Imagining Vietnam" and "Remembering Vietnam," Templer, who was nine years old when the Vietnam War ended in 1975, offers a dispassionate view of how both the vanquished and victors have distorted history in the struggle to unify Vietnam. There's appropriate treatment of American veteran "Nam" hype and French "Indochine" neo-colonial chic: "the mythical landscapes of the West's past interactions with Vietnam."

 Templer only begins to reveal that the Vietnamese are capable of piercing the bureaucratic fug that suffuses the political environment at the end of his lengthy and thematic journey through modern Vietnam. With a touch of "cinema verite," Templer tellingly describes how a popular musician in Hanoi manages to get away with playing banned Beatles songs--by taking a ministry official for a drink every six months, showing him some lyrics he doesn't understand, and paying him a bribe. 

Michael Vatikiotis is the REVIEW's managing editor.

R eplete with potted ferns, polished hardwood floors and louvred shutters, the Press Club looks like it could have been lifted from the set of a 1940s Humphrey Bogart movie. Opened in November 1997, this is a place that offers the trappings of good living in the heart of one of the region's most charming cities: There are fine wines abundantly displayed and an extensive cigar list boasting one of the largest Cuban cigar selections in the region.

 Oddly enough, the Press Club, located in Hanoi's central business district, is not exactly what its name suggests. While the elegant building, situated directly behind the Metropole Hotel, used to house the foreign-press liaison office during the Vietnam War, it is not a full-fledged press club run by journalists or hosting journalistic events. The Hanoi government has remained cool to suggestions from foreign correspondents of setting up a true press club. The ersatz version is, however, still owned by the Vietnamese Press Association, and serves as a congenial place for most of Hanoi's foreign journalists to meet contacts. 

The idea, in fact, was to evoke the stylish and romantic era of travel in the 1940s. Inside, the louvred windows recall distant places--anywhere from old North Africa to the Caribbean. Indeed, the designers tried so hard to recreate the atmosphere of the period that sadly anything specifically Vietnamese seems to have been etched out. Yet, only a few steps outside the front door, the unmistakably Vietnamese cyclos and women in silky ao dais are ever-present. 

At the Press Club, comfort counts. Sinking into a well-upholstered couch with a cold beer, weary visitors can contemplate an imaginative menu of Eastern and Western dishes, ranging from rack of lamb to local delicacies served with distinctive Vietnamese fish sauce. Prices are steep by local standards, though. A steak runs anywhere between $9 and $12; a Caesar salad costs $4.50. Compare that with a fairly decent two-course European meal with wine at a nearby cafe, which costs less than $20 for two. And in Hanoi's streetside cafes, you can savour old-world atmosphere for free.

 Fine wines from France, Italy and Australia are nicely displayed instead of buried in a cellar, and prices are reasonable by regional standards--$35 for a decent bottle of Australian Shiraz; for those with money to burn, $630 will buy you a vintage bottle of Chateau Margaux. 

After your meal, there is, in the words of General Manager Riaz Mahmood, "the biggest selection of Cuban cigars in Indochina."

 Unfortunately, communist Vietnam's fraternal relations with Cuba do not extend to concessions on cigar prices. Nestled in the commodious humidor lie boxes of Romeo y Julieta and Cohiba cigars. Prices were more reasonable before the monetary crisis, Riaz admits. New stocks come in from Bangkok at higher prices.

 During the holiday season, hot mulled wine accompanied by a string trio playing Christmas carols came as close to evoking the Christmas spirit as anyone could get in Southeast Asia. Savouring this atmosphere in old Hanoi adds an element of surprise. 

The owners, Frenchmen Marc and Eric Merlin, appear to have bought into Vietnam's promise as a haven for investors. At the Press Club, prospective investors can find everything from an on-line office to a concierge service for mailing letters.

 Unfortunately, there are no rooms for overnight stays. Try the deli downstairs, though. And on the way out, window-shop Vietnam's communist-chic: hammer-and-sickle cuff links and star-shaped tiepins. A good selection of local and international newspapers are also on sale. 

But get there soon. The Press Club's Riaz warns that a 20% value-added tax may be on the way, which will wreak havoc with his prices.

 Michael Vatikiotis is the REVIEW's managing editor.