Cablegate: Setting the Scene for Codel Bond Visit to Vietnam

VZCZCXRO1531
RR RUEHHM
DE RUEHHI #0018/01 0061030
ZNR UUUUU ZZH
R 061029Z JAN 10
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 0693
INFO RUEHGP/AMEMBASSY SINGAPORE 0056
RUEHHI/AMEMBASSY HANOI
RUEHHM/AMCONSUL HO CHI MINH CITY 0345

UNCLAS SECTION 01 OF 11 HANOI 000018

SENSITIVE
SIPDIS
DEPARTMENT FOR EAP/MLS
EMBASSY SINGAPORE PASS TO BOND

E.O. 12958: N/A
TAGS: OREP PREL PGOV PHUM MARR ECON SENV VM
SUBJECT: SETTING THE SCENE FOR CODEL BOND VISIT TO VIETNAM

1. (SBU) SUMMARY: U.S.-Vietnamese relations have advanced

significantly over the past three years and are arguably at

their most productive since relations were reestablished in

1995. We are Vietnam's largest export market, its third-

largest trading partner, and one of its largest foreign

investors. We have broadened our cooperation in public

health, education, mine clearance, and WTO and BTA compliance.

Strategically, Vietnam views the U.S. presence in the region

as a force for stability, and security cooperation has

expanded as our two militaries explore opportunities to

cooperate effectively. Powerful conservative voices in

Vietnam's Communist Party and security services, including the

military, remain wary of U.S. intentions, but their influence

will wane over time as the country's young population -- the

first generation in memory to live without war -- increasingly

looks to the West. At the same time, we continue to engage

with our Vietnamese counterparts to remove the few remaining

war legacy issues, including Agent Orange/dioxin and

unexploded ordinance, and are moving forward on joint efforts

to confront climate change, a keen concern for Vietnam, which

is particularly vulnerable to rising sea levels.

2. (SBU) Profound differences remain, however, particularly

in our approach to human rights. Vietnam has made strides in

religious freedom, but the situation surrounding political

rights and press freedoms has worsened as the Party clamps

down on dissent in advance of the January 2011 Party Congress.

Our approaches to international issues also differ. Vietnam's

performance on the UN Security Council has been lackluster and

its non-interventionist line has caused it to align with

Russia and China on issues such as Burma, Georgia, and Darfur.

Vietnam has a chance to exercise leadership in the region as

ASEAN chair beginning in January 2010, but will require

sustained, considerable U.S. support and prodding to tackle

tough issues like Burma. Your visit provides an opportunity

to reiterate our commitment to deepening bilateral relations

across the board, while reminding senior GVN leaders that

future progress will be affected by the degree to which

Vietnam respects human rights and the wishes of its people to

have a more inclusive, responsive government. END SUMMARY.

Foreign Policy Priorities: China and the United States

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3. (SBU) Vietnam professes that it is "friends to all," a

slogan that sounds naive but reflects a fundamentally

pragmatic approach to foreign policy. Vietnam's overriding

strategic concern remains China. Hanoi is realistic about the

power imbalance and is wary of antagonizing its neighbor.

Hanoi is also under no illusions that it can somehow "balance"

China with the United States, Russia, or Japan individually.

Nor is a more confrontational approach toward China something

the Party tolerates domestically: once unleashed,

nationalistic sentiment, though initially directed at China,

could easily turn toward the Party itself. Instead, Vietnam

seeks to maintain as cordial and stable a relationship with

China as possible, while also cautiously cultivating a diverse

range of bilateral friendships and enmeshing these in a

framework of multilateral engagement. In this context,

Vietnam's bilateral relationship with the United States enjoys

pride of place; however, Vietnam is wary of pushing the agenda

with the United States too far, too fast, lest it antagonize

China.

4. (SBU) Mistrust of China runs deep, fed by historical

animosities and simmering resentment over South China Sea

territorial disputes. Vietnam paid close attention to China's

harassment of the USNS Impeccable in March, and this may have

contributed to the MND's decision to participate in a

subsequent fly-out to the aircraft carrier Stennis. Senator

Jim Webb's hearings over the summer on South China Sea issues

were well received here. The United States, as a matter of

longstanding policy, takes no position on the competing legal

claims in the South China Sea (or East Sea, as it is called in

Vietnam). We do, however, have a strong interest in

maintaining freedom of navigation and the ability of our naval

ships to conduct legitimate operations. We have encouraged

all parties to the dispute to work together to build

confidence, in particular by enhancing the 2002 ASEAN

Declaration on the Code of Conduct in the South China Sea. In

this regard, Vietnam and Malaysia's decision in May to submit

a joint report on their extended continental shelf baseline

claims is a positive development.

Vietnam Intelligence Cooperation

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--------------------------------

5. (SBU) Intelligence cooperation between the U.S. and

Vietnam continues to advance one step at a time as the

Vietnamese incrementally but steadily increase their

interaction and integration into both the region and the

world. Vietnam has been willing to work with us and regularly

share information regarding counterterrorism and

counternarcotics. There are signs, as our cooperation

increases, that Vietnam is willing to move further in other

areas such as counterproliferation. You will receive

briefings on other intelligence-related matters during your

visit.

Multilateral Engagement: Vietnam at the UNSC and ASEAN

--------------------------------------------- ---------

6. (SBU) Vietnam has been professional and well-briefed but

cautious at the UN Security Council, where it has completed

its two-year term as a non-permanent member. Hanoi has been

eager to join consensus whenever possible, voting for example

to support sanctions on Iran and North Korea. Vietnam has

shied away from taking a leadership role, however, and where

there has been disagreement has tended to follow a strict non-

interventionist line. This led Vietnam to follow China and

Russia's lead on Kosovo and Georgia, Somali piracy and the ICC

Indictment of Sudanese President Bashir. We expect Vietnam to

do better as ASEAN Chair when it begins its term in 2010.

Vietnam puts great store in ASEAN and has suggested repeatedly

that it would like to facilitate better contact between ASEAN

and its "plus one" dialogue partners, the United States in

particular. The decision to accede to ASEAN's Treaty of Amity

and Cooperation was extremely well received in Vietnam, as was

Secretary Clinton's visit to the ASEAN Secretariat in Jakarta

and the strong support for deepened engagement that she

articulated in Phuket. Vietnam has lobbied hard to host a

U.S.-ASEAN summit in Hanoi in 2010.

7. (SBU) Vietnam tends to look at a number of regional

issues, including Burma, through an ASEAN lens. Thus, while

Vietnam has steadfastly followed China in rejecting a UNSC

role in Burma, Hanoi recognizes the negative effect that

Rangoon's continued intransigence has on ASEAN's credibility.

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Vietnam has long urged the United States to take a more

flexible approach to Burma and welcomed the Department's

policy review; they also expressed strong support for Senator

Webb's recent visit to Burma. Our MFA contacts say they

recognize the continued detention of ASSK makes it difficult

for the United States to be more accommodating, a message they

may not agree with, but insist they have communicated to the

leadership in Rangoon.

Human Rights and Religious Freedom

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8. (SBU) For Vietnam, non-interference is not just an

abstract principle, but also a reflection of narrow self-

interest. As a single-party authoritarian state, Vietnam has

had a consistently poor record on human rights, and still

reacts defensively to criticism, though it has learned to be

more responsive to international calls for dialogue, engaging

the United States and others in annual formal human rights

discussions, the most recent round of which took place in

Washington November 8-9.

For many in the Politburo and Central Committee, the "lessons"

of 1989 and 1991, and more recently of the "color revolutions"

in Ukraine, Georgia, and Kyrgyzstan, remain fresh. This,

coupled with lingering war-era animosities, colors the

perceptions of some hard-line elements in the Ministries of

Public Security and Defense, as well as the Party hierarchy.

It will be extremely useful for you to reinforce the message

that progress on human rights is not just a concern of

Congress or the State Department, but is something that can

affect progress in other areas of the relationship, including

trade and military sales.

9. (SBU) This is particularly the case now, as Vietnam's

Party-state apparatus moves to clamp down on political dissent

in advance of the 11th Party Congress, scheduled for January

2011. The current "crackdown" began with the arrest and

conviction of two prominent journalists in 2008 who had worked

to expose a major corruption scandal. Over the past year more

than twenty dissidents have been arrested, including prominent

corporate lawyer Le Cong Dinh, whose heavily edited taped

police confession, aired on state television, was cast to

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portray U.S. efforts to promote the rule of law and an

independent judiciary as somehow sinister. In the area of

civil society, a recently promulgated Prime Ministerial decree

("Decision 97") prohibits independent scientific/technical

institutes from publicizing research critical of

government/Party policies, and there is substantial evidence

that the Vietnamese government is blocking access to Facebook.

One positive area is in religious freedom. Much remains to be

done, but in general, Vietnam continues to take steps to

permit its citizens to worship freely.

Economic Successes and Challenges

---------------------------------

10. (SBU) Trade and investment with the United States form an

important pillar of the overall relationship, and Vietnam

welcomes signs that the U.S. economy is beginning to recover.

The country's 6.2% GDP growth in 2008 -- though not bad in a

regional context -- was the lowest since 2000, and according

to just released data, dropped further in 2009 to 5.3%.

Nevertheless, bilateral goods trade in 2008 was up 25% from

the previous year, and stood at an all-time high of $15.7

billion by the end of that year. U.S. exports, particularly

of agricultural products, are a particular success story and

grew 47% in 2008. Much of the increase of U.S. agricultural

exports was due to higher prices and not a growth in volume,

and should fall back into line with trend growth as the world

commodity boom slows because of the global recession. The

most recent numbers show bilateral trade down by about 5.7% in

2009.

11. (SBU) We are seeking to keep up the momentum with

Bilateral Investment Treaty talks and have had three rounds so

far, with the next proposed for early this year. We have

accepted the GVN's proposal for an Agricultural Working Group

proposed by Minister of Agriculture and Rural Development Phat

at the last round of Trade and Investment Framework Agreement

talks in April 2009. This working group will allow us to

raise agriculture issues with a variety of ministries before

they inhibit trade. We are also pushing Vietnam to further

open key markets such as beef, though our GVN contacts have

told us that beef access is linked to the pending catfish

regulation that could hurt Vietnam's catfish exports and rural

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economies, especially in the southern part of the country. We

were encouraged by Vietnam's decision to join the Trans-

Pacific Partnership, an 8-country regional free trade

negotiation, as an associate member. The first round of

negotiations is scheduled for March.

12. (SBU) Despite considerable USG support to assist the GVN

in modernizing its food and food safety regimes, including

support for the drafting of new food safety and biosafety

laws, Vietnam's current draft Food Safety Law requires

mandatory labeling of all food and agricultural products that

contain at least five percent genetically modified content.

The Food Safety Law is currently before the Science,

Technology, and Environment Committee of the National

Assembly. It is expected the current draft law will be

amended and sent to the full National Assembly for further

review in March 2010 and a final vote in May 2010. Ambassador

and emboffs have repeatedly requested that the government

remove all mandatory labeling provisions in the draft

legislation.

Health Diplomacy

-----------------

13. (SBU) Health diplomacy has been a major spur to improved

bilateral relations and has allowed us to engage with the GVN

in areas of mutual interest, such as pandemic preparedness.

Over the past several years, we have worked to boost Vietnam's

development capacity to stem the spread of infectious

diseases, respond to outbreaks, and address public health and

safety concerns. Currently about 80 percent of all U.S.

development aid is in the health sector. While we provide

cooperative assistance in a range of areas, HIV/AIDS

assistance under the President's Emergency Plan for AIDS

Relief (PEPFAR) has totaled $322 million since 2004, including

$88.6 million in FY09. The United States has also made a

substantial investment to prevent and control highly

pathogenic avian influenza, with total funding since 2004 of

about $50 million through FY 2009. In April 2010, USAID will

assist the GVN to host the seventh International Ministerial

Conference on Animal and Pandemic Influenza, and as a follow

up to July's Lower Mekong Ministerial, the United States has

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also announced plans to host in Vietnam a regional meeting on

infectious disease. In mid-October, the Ministry of Health

stopped counting confirmed cases of 2009 H1N1 influenza in

Vietnam, which surpassed 10,000, and to date has reported

about 49 fatalities. As with highly pathogenic H5N1, the

Centers for Disease Control and Prevention, USDA, and USAID

have cooperated actively with their Vietnamese counterparts to

track H1N1 influenza and to provide guidance on containment

and treatment.

14. (SBU) Agent Orange (and its contaminant, dioxin) remains

a sensitive issue in U.S.-Vietnamese relations. Despite

dissatisfaction with the pace of U.S. engagement, highlighted

in both the international and local media, we continue to work

with the GVN to find mutually acceptable solutions to

environmental contamination and potential health impacts from

dioxin. The two governments agree that dioxin contamination

is concentrated in approximately 20 "hotspots," mostly areas

within former U.S. airbases where Agent Orange was stored,

loaded, and transferred. Areas subjected to heavy aerial

spraying do not have soil concentrations considered hazardous.

The GVN has requested that the United States focus its efforts

at the "hotspot" at the former U.S. airbase in Danang.

15. (SBU) Our engagement on this issue has accomplished much,

both to transform the tone of the bilateral dialogue and to

build Vietnam's capacity to address environmental issues and

provide assistance for the disabled. From 2001 to 2007, the

USG spent over USD 2 million to initiate technical dialogues,

scientific conferences on the effects of AO/dioxin, and fund a

4-year project to build the capacity of Vietnamese scientists

to analyze soil samples collected from the Danang airport. In

2007, the State Department and EPA provided $400,000 to

support temporary dioxin containment measures at Danang. The

Joint Advisory Committee (JAC) for Agent Orange/dioxin brings

together scientists and researchers from both governments

(U.S. members represent State, USAID, EPA, HHS, and DOD) to

provide scientifically based advice to policy makers for

potential environmental and health cooperation. The JAC held

its fourth annual meeting in September 2009. It has helped

guide pilot remediation efforts and recently issued terms of

reference for its Health Working Group to begin disability

survey exercises and other activities to assess the impact, if

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any, of dioxin contamination.

16. (SBU) With strong financial support from Congress, we

work with the GVN, UNDP, Ford Foundation, and other donors to

form a multilateral coalition to support environmental

remediation. USAID continues to implement USD 6 million in

Congressional appropriations from 2007 and 2009 for dioxin

mitigation and health activities. USAID has provided grants

totaling USD 2 million (and will provide an additional USD 1

million) to East Meets West, VNAH, and Save the Children for

efforts focusing on health and social services delivery,

rehabilitation services, and employment and entrepreneurial

assistance. In September 2009, USAID awarded a USD 1.69

million contract to begin preparation for environmental

remediation at the Danang airport. Also at Danang, EPA and

the Vietnam Academy of Science and Technology recently

commenced a pilot test to determine the suitability of

bioremediation to destroy dioxin in Vietnam. With remaining

2009 funds and the recently announced additional USD 3 million

in FY2010, USAID will fund full containment at Danang in

preparation for dioxin destruction.

Unexploded Ordinance

--------------------

17. (SBU) Efforts to deal with the consequences of unexploded

ordinance (UXO) and landmines continue to be warmly received.

The United States has invested over USD $43 million so far in

a broad spectrum of programs to locate, remove, and destroy

unexploded ordinance and landmines, and to improve the health

and livelihood of Vietnamese living in affected areas,

particularly in Quang Tri and Quang Binh provinces, which

adjoin the former DMZ. Approximately $3.5 million has been

made available for FY 10 to support UXO activities in Vietnam.

While the US is committed to UXO/landmine issues, we cannot

guarantee that funding will always be available. It is

therefore necessary, given the complexity of the problem, to

support a systemic national approach to make Vietnam's own

mine action efforts more effective. With this in mind, the

United States has supplemented its assistance with efforts to

build the capacity of the newly formed Vietnam Bomb and Mine

Action Center (VBMAC) and to assist the VBMAC to draft and

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implement a National Strategy to address the explosive

remnants of war.

U.S. Assistance: Trade, Education, Environment, Governance

--------------------------------------------- -------------

18. (SBU) U.S. assistance levels in non-PEPFAR areas remain

disproportionally low, particularly when compared with aid

provided to neighboring developing nations. Even so, programs

such as USAID's STAR and the Vietnam Competitiveness

Initiative have become the government's preferred source of

expertise in reshaping trade and economic regulation, with

positive effects on governance. Treasury is also starting to

engage on economic issues, with programs in areas such as

small- and medium-sized enterprise financing, taxation, and

bond market development. Given its status as one of the

countries most vulnerable to rising sea levels, the GVN is

particularly eager to partner with the United States to

develop responses to climate change. Building on existing,

limited bilateral initiatives, USAID expects to begin

supporting climate change programs in 2010 and plans to expand

into environmental governance, water and coastal resource

management and biodiversity protection in future years. The

Joint Educational Task Force, formed in the wake of Prime

Minister Dung's 2008 visit, prepared recommendations on

improving Vietnam's education system, including establishing

an American university in Vietnam. In the meantime, programs

such as the Fulbright Program and the Vietnam Education

Foundation, with combined annual funding of almost $10

million, continue to bring scores of Vietnamese students to

the U.S. every year. The number of Vietnamese students

studying in U.S. colleges and universities now ranks eighth in

the world. This and USG programs to improve Vietnam's own

education system will be key to both political and economic

development in Vietnam over the long term.

19. (SBU) Your official hosts, Vietnam's National Assembly,

has in recent years moved to assert its independence, and now

plays an increasing role in oversight, the drafting of

legislation, and constituent services. The Mission is

actively seeking opportunities to work with the National

Assembly to promote good governance, including efforts to

boost the professionalism of its staff and improve its

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capacity to conduct independent research. Your National

Assembly hosts will likely pursue with you avenues for

building inter-legislative contact and exchanges.

Adoptions

---------

20. (SBU) The United States and Vietnam suspended their

adoption agreement in September 2008, after the Embassy and

HCMC Consulate uncovered repeated instances of baby selling

and manipulation of birth mothers, including at the Tu Do

hospital in HCMC. This ended a flow of Vietnamese children to

American adoptive parents that peaked at over 700 per annum in

2007. Since April 2009, Vietnam has made important strides to

reform its adoption regime, with significant assistance from

UNICEF. The National Assembly is currently considering a

draft adoption law, which could take effect as early as

January 2011. Once Vietnam has its new adoption law in place,

we believe it will attempt to accede to the Hague Convention

on Intercountry Adoption, enabling Americans to once again

adopt Vietnamese orphans.

Administrative Obstructions: Staffing and a New Embassy

--------------------------------------------- ----------

21. (SBU) Vietnam closely adheres to its rights under Article

11 of the Vienna Convention on Diplomatic Relations to limit

the size of the sending state's diplomatic mission. GVN

practice has been to accept requests for new positions once,

annually. However, the approval process has been

excruciatingly slow. At present, 10 positions (five in Hanoi,

and five in HCMC) are awaiting approval. The five in HCMC

have been outstanding for 22 months. This inability to

increase staffing size to keep pace with the growing workload

in what is otherwise a robust bilateral relationship has long

since reached the point where it is adversely affecting our

ability to perform our mission. FM/DPM Khiem told Secretary

Clinton during his visit to the U.S. in October the approvals

would no longer be an issue, but to-date, we have seen no

change. The U.S. Mission has advocated for abolishing caps on

staffing.

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22. (SBU) Currently, U.S. Embassy Hanoi is housed in three

office buildings around town. The primary building, the

Chancery, is a nine-story, rat-infested building with

inadequate space and substandard building systems. When

acquired in 1995, it was intended to serve as a temporary

facility. Although the search and negotiations for a site to

build a new Chancery took longer than the five years

originally envisioned, the USG and GVN were near agreement on

a selected site when negotiations were suspended in January

2009 over the length of the land lease. The GVN asserted it

legally could only offer 99 years. The USG insisted that

absent fee simple title to the land (not permitted in

Vietnam), it required 99 years plus 99 years. As a result of

the impasse, the construction project has been tentatively

rescheduled for 2020, although the Embassy believes it will

take 20-30 years before the GVN is able to change its laws

related to land ownership or leasing, thereby opening the way

to a building. In the meantime, the State Department's Office

of Overseas Building Operations (OBO) is developing a scope of

work for a major rehab of the existing Chancery, to begin in

2013. It is unknown how much funding will be available for

such a project or how practical it would be, given that no

amount of money can ever make the existing building what it is

not -- a Chancery that provides an adequate and appropriate

work environment for its staff and serves as a visual

statement of the USG's commitment to building a healthy,

vibrant bilateral relationship with Vietnam.
Michalak

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