FOR Vietnam's aging communists, the prospect of seeing the United States economic embargo lifted is a mixed bag. As its economy sags under US-lead sanctions, Hanoi is eagerly pursuing its new opening with Washington. Since the US switched positions last July and opened direct talks with Vietnam and its Cambodian allies, diplomatic contacts have intensified, despite the extension of trade sanctions last month.
In the highest-level contact between the countries in a decade, US Secretary of State James Baker III met Nguyen Co Thach, Vietnam's deputy prime minister and foreign minister, in New York last month.
In Washington today, Mr. Thach is to meet with Gen. John Vessey, President Bush's special envoy on the issue of Americans missing in Vietnam, as well as with Ann Mills Griffith of the National League of Families of MIAS/POWS. The Hanoi delegation is also expected to talk with members of the US Congress.
Yet despite such signs of warming, and the prospect of trade to follow, Vietnam's party leaders worry that Western political ideas and influence will seep in with aid and investment.
Government leaders have pursued liberalization of the hamstrung communist economy. But stung by democratic upheaval in Eastern Europe, they have dodged multiparty reforms.
Facing growing criticism as a hard-line holdout against the changing face of world communism, Vietnam insists it is not ready to accept more democracy as the price for economic change.
``Our people are very much concerned about stability. We need stability so economic reforms can continue,'' Le Mai, Vietnam's vice foreign minister, said in a recent interview.
``China is a one-party system, and the United States lifted the embargo against China,'' he continued. ``If the United States imposes this condition, it would be a very rude interference in the affairs of Vietnam.''
Vietnamese leaders have long realized reconciliation will not be easy. Steps toward normal relations, broken off when North Vietnam defeated the US-backed South Vietnamese government in 1975, are being played out against the backdrop of America's 30-year confrontation with communism in Southeast Asia.
Even as Vietnam grasps for signals that its isolation is nearing an end, officials and foreign diplomats in Hanoi estimate a breakthrough is still months away.
For the US, the stumbling blocks are the still-unresolved political and military tangle in Cambodia - and the 2,300 Americans still listed as missing in action in Indochina. For the Vietnamese, economic hardship, more than the war itself, is the most bitter residue.
``The United States government has a moral responsibility to Vietnam,'' says Gen. Vo Nguyen Giap who led the fight against the French and Americans. ``The American government created too many casualties and losses for the Vietnamese people ... and should contribute to the healing of wounds from the war.''
On Kham Thien Street, not far from a memorial to war victims, Phan Manh Huynh sits in his tailoring shop and recalls Dec. 26, 1972 when US bombing destroyed much of the area.
He is angry the US has not paid war reparations. ``If the Vietnam government had this money, all people living in areas affected by the war would get compensation,'' he says. ``We have no help to make our lives normal again.''
Down the street, however, Truong Nguyen Dinh, a 33-year-old ex-soldier who works for a Thai-Vietnamese trading company, says he just wants a chance to do business.
``It [compensation] is not important for Vietnam. We can make our living ourselves,'' he says. ``I feel no hatred toward the American people or even the government.''
Deep cracks are already appearing in the US-lead economic blockade that prevents Vietnam from getting aid from the International Monetary Fund and World Bank. Though US humanitarian groups have a growing presence in Vietnam, US business still sits on the sidelines as other countries expand into Vietnam.
Vietnam has been expanding trade with Britain, Australia, South Korea, and other noncommunist countries. Its military pullout from Cambodia last year bettered ties with Europe. (See China and Vietnam, Page 3).
Yet more important than new ties with the US, Vietnamese observers say, is creating links with Japan. Although Japan officially defers to the US embargo, its companies have moved quietly to establish dummy corporations and develop a Vietnam foothold.
``The Japanese are already well-positioned here and will move into the open once the embargo is lifted,'' says a European businessman in Hanoi.
Vietnam's powerful and elderly revolutionaries are wary, however. Debate has raged in recent months over the wisdom of its doi moi or renovation policy launched more than a year ago to rescue the economy from communist mismanagement, Vietnamese observers say. Infighting is expected to intensify prior to the party congress in mid-1991.
Although grudgingly accepting market reforms, the Communist Party is torn between hard-liners scrambling to preserve party dominance and reformers pushing more political openness.
In recent months, conservatives have prevailed as authorities ousted critics within the party, expelled Americans and other foreigners, and put ethnic Vietnamese from abroad on trial for trying to overthrow the government.
``It's a crude but pretty effective campaign designed to scare the local population and to tell them to watch their step,'' a Western diplomat in Hanoi says.
The government also has become touchy about charges of corruption, widespread smuggling, and black-market deals. Although top leaders live modestly by East European standards, and retain the aura of revolutionary heroes, the party has been tarnished by middle-level corruption, foreign diplomats say.
``We are having a fierce discussion of the programs of our party and the future,'' says Tran Kien, deputy editor of the Communist Review newspaper. ``But during the most difficult times, only our party was there to lead the people. We think Vietnam can cleanse itself, and there is no need for another party.''