U.S. Ties Its Vietnam Policy to MIA Issue : Diplomacy: Senior envoy arrives in Hanoi for hand-over of remains. But the Administration is low- key on the question of normalizing relations.

HANOI — The somber ceremony at a wind-swept corner of Hanoi’s Noi Bai airport was almost painfully low-key, but it spoke volumes about the state of U.S. relations with Vietnam.

On one side stood Winston Lord, assistant secretary of state for East Asian and Pacific affairs, on his second trip this year to Hanoi, standing at attention in a gray suit with his hand over his heart. On the other were aluminum coffins containing what were believed to be the remains of eight U.S. servicemen declared missing in action in the Vietnam War, which ended almost 19 years ago.

The remains were recovered during a joint search operation carried out in October.

With a carefully folded American flag at the head of each coffin, a U.S. military honor guard carried the coffins into a U.S. Air Force C-141 for the flight back to the United States.

Apart from a few journalists and curious airport workers, the transfer went unnoticed in Hanoi.

Such hand-over ceremonies have become routine--more than 500 sets of remains have been repatriated--but Lord was the highest-ranking American official ever to attend one.

In public at least, the Clinton Administration appears to be making the issue of the missing in action the cornerstone of its policy toward Vietnam, while quietly taking steps toward normalization of relations with Hanoi.

In his arrival statement Monday, Lord referred exclusively to the missing and made no mention of other issues he might touch on in two days of talks with his hosts.

On Tuesday, Lord met with Vietnamese Premier Vo Van Kiet and other leaders to discuss questions related to the missing and other “bilateral issues.” The Vietnamese turned over a number of documents related to the search for MIAs and, Lord said, “we suggested ways for further progress.”

At a news conference, Lord praised Vietnamese cooperation on the MIA issue and said the Clinton Administration is grateful. But he refused to be drawn out about how long the process will continue before it leads to normalization.

Lord announced that Washington is giving Vietnam an additional $2 million in humanitarian aid and $25,000 to help with damage from a recent typhoon.

According to Defense Department figures, there are 2,248 U.S. servicemen listed as missing in Indochina, including 1,648 cases in Vietnam.

Because of what Washington calls unresolved questions about the missing, the United States has had no formal relations with Vietnam since the war ended in 1975.

More important, as far as the Vietnamese are concerned, the U.S. has maintained a trade embargo banning business dealings between Americans and Vietnamese.

Former President George Bush relaxed the embargo several times, eventually allowing U.S. companies to establish offices in Vietnam and negotiate contracts but not to implement them.

President Clinton relaxed the embargo further in July when he removed American objections to Vietnam’s receiving aid from the International Monetary Fund and other multinational donors. In September, the embargo was further eased to allow American companies to bid on projects in Vietnam financed by international aid donors.

But the Administration has come under increasing pressure from U.S. businesses to scrap the embargo entirely so they can compete with European and Japanese firms that have been scrambling to get established in Vietnam’s economy, which has been booming since the Communist government initiated a series of reforms in 1986.