VZCZCXRO3715
RR RUEHCHI RUEHDT RUEHHM
DE RUEHHI #2765/01 3031000
ZNR UUUUU ZZH
R 301000Z OCT 06
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 3853
INFO RUEHHM/AMCONSUL HO CHI MINH 2054
RUEHZS/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 02 HANOI 002765 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL ECON ETRD EINV ENRG KIPR JA VM
SUBJECT: PRIME MINISTER'S VISIT TO VIETNAM 
 
Ref: A) Hanoi 963 B) Tokyo 6249 
 
HANOI 00002765  001.2 OF 002 
 
 
¶1. (SBU) Summary:  Prime Minister Nguyen Tan Dzung's recent trip to 
Japan was intended to reaffirm the two countries' friendship and 
cooperation in a highly visible manner.  The PM's schedule included 
a full array of high-level events and meetings (Ref B).  In addition 
to protocol-driven events, trade and investment were major themes of 
the visit, highlighted by the participation in the PM's delegation 
of both the ministers of Trade and Planning and Investment, along 
with heads of over 60 trade associations, leading enterprises, banks 
and industrial parks.  The two sides agreed to begin official 
negotiations for a Japan-Vietnam Economic Partnership Agreement 
(JVEPA) in January 2007.  PM Dzung also committed to continue 
improving Vietnam's investment climate for foreign firms and to 
strengthen IPR enforcement.  According to Japanese Embassy sources, 
Dzung played hardball to force the Japanese to make vague 
commitments to huge infrastructure projects in return for Vietnam's 
tough statements on North Korea.  End Summary. 
 
Laying the Groundwork for Increased Trade and Development 
--------------------------------------------- ---- 
 
¶2. (SBU) According to MFA First Asia Department Deputy Director Vu 
Huy Mung, the Vietnam-Japan relationship is solid and developing 
well.  Japan is one of Vietnam's top trade partners and there is 
close cooperation on regional and international issues.  Prime 
Minister Dzung's trip had three objectives: 1) to reaffirm the 
policy of maintaining friendship and cooperation with Japan, while 
elevating relations to a new height; 2) to focus on economic, 
commercial and assistance ties; and, 3) to create a friendly 
relationship between the two new prime ministers. 
 
¶3. (SBU) Key economic accomplishments, in Hanoi's eyes, were Japan's 
affirmation of continued Official Development Assistance (ODA) in 
coming years, focused primarily on infrastructure improvements and 
high technology, and a call for the implementation of the 
Japan-Vietnam Joint Initiative, intended to encourage a "new wave" 
of Japanese investment in high technology, oil and gas production 
and refining and nuclear power.  PM Shinzo Abe promised special 
attention to three infrastructure projects involving North-South 
high-speed railways and expressways and a high-tech park.  The 
announcement that the two sides will launch negotiations for a 
Japan-Vietnam Economic Partnership Agreement (JVEPA) in January 2007 
is being touted as a significant development by the Vietnamese press 
and Vietnamese economic experts. 
 
¶4. (SBU) Dr. Luu Ngoc Trinh, Vice Dean of the Institute for World 
Economics and Politics, noted that JVEPA would be a new form of 
cooperation between the two sides -- packaging cooperation on trade, 
ODA, investment, tourism, and science and technology.  Such an 
agreement could play an integral role in reaching the goal included 
in the leaders' Joint Statement of nearly doubling two-way trade to 
USD 15 billion by 2010.  As a sign of the GVN's commitment to reach 
this goal, PM Dzung promised to continue improving the investment 
climate for foreign firms and recognized the need to enforce 
intellectual property protection in speeches delivered during 
investment seminars in Tokyo and Osaka.  Following last year's 
PMU-18 corruption scandal, in which Japanese ODA was alleged to have 
been misdirected by GVN officials, PM Dzung made pointed efforts to 
state his determination to fight corruption and continue economic 
reforms.  Commercial agreements with a value of over USD 600 million 
were signed in the areas of electronics and textiles.  The Japanese 
side took note of PM Dzung's proposal to create a Vietnam-Japan 
Joint Cooperation Committee at the ministerial level. 
 
Regional Issues 
--------------- 
 
¶5. (SBU) Concerning regional issues, the MFA's Mung said both sides 
agreed to support each other in regional and international forums, 
specifically in their respective aspirations for seats on the UN 
Security Council.  Both sides also expressed opposition to the 
DPRK's nuclear test and called for DPRK restraint and a return to 
the six-party talks.  In elevating the relationship to a "strategic 
partnership for peace and prosperity in Asia," Mung offered that the 
two sides had achieved an important result.  (Note: Vietnam's only 
other "strategic partnership" is with Russia, declared in March 
2001.)  He further explained that the framework for this 
relationship has been in place since 2002 and the two countries have 
pursued a reliable partnership and long-term stability.  In 2004, 
the two countries signed a joint statement about the new "strategic 
height" in their relations.  So, while the relationship has until 
now contained a strategic element, it is now made more explicit, 
Mung explained. 
 
Relations with Japan will be a GVN Priority 
------------------------------------------- 
 
¶6. (SBU) Echoing Mung's official analysis, the Director General of 
the Vietnam Institute for Northeast Asian Studies, Dr. Ngo Xuan 
Binh, suggested that Vietnam wants close relations with Japan and 
 
HANOI 00002765  002.2 OF 002 
 
 
that expanding the relationship will be a GVN priority in the 
future.  According to Binh, there are no "difficult" bilateral 
issues in the Vietnam-Japan relationship.  When asked how China 
might view PM Dzung's visit, he said the Chinese would be more 
"interested" in U.S.-Vietnamese interactions than they are about 
interactions between Vietnam and Japan.  The warm reception that PM 
Dzung received -- including his address to the Diet -- was described 
by Binh as a "way of setting an example for Vietnam" so that when PM 
Abe comes to Vietnam, he will be able to speak before the National 
Assembly.  Binh thought poorly of the economic impact of the trip, 
pointing to a total of only five relatively small projects signed. 
He agreed, however, that the various trade and investment-related 
meetings conducted by PM Dzung could result in long-term economic 
benefits. 
 
Japan's Pragmatic Approach to Relations with Vietnam 
--------------------------------------------- ---- 
 
¶7. (SBU) According to Japanese Embassy Political Counselor Satoshi 
Nakajima, negotiating the joint statement came down to the wire as 
PM Dzung's office insisted on including a explicit reference to the 
three huge infrastructure projects, even though the Vietnamese 
provided no details about the projects to the Japanese side.  As 
leverage, the GVN held out on the language regarding the DPRK.  In 
the end, the Japanese agreed to include mention of the projects, 
although it did so without a firm commitment to follow through. 
Concerning the negotiations on an economic partnership agreement 
scheduled to begin in January 2007, Nakajima said he had no idea 
what form the economic partnership might take, except that it would 
probably have a large official assistance component, since that is 
an area of bilateral economic relations that the GOJ controls. 
Since the actual amount of trade and investment is largely 
determined by private sector interest and decisions beyond the 
control of the GOJ, the trade volume target and calls for investment 
are viewed by the Japanese side as positive gestures without actual 
commitments.  Likewise, Nakajima was vague on the substance of the 
"strategic partnership" with Vietnam, saying that the United States 
is Japan's only real strategic partner. 
 
¶8. (SBU) Nakajima continued that, while the two countries agreed to 
promote cooperation in the area of nuclear energy, the GVN did not 
want any reference in the joint statement to Japanese cooperation on 
a nuclear power plant, in effect keeping its options open to choose 
among potential suppliers.  The reference to this issue in the joint 
statement is limited to laying the legal and administrative 
groundwork for cooperation on nuclear energy.  Japan insisted on 
including references to the importance of the IAEA Additional 
Protocol, the Convention on the Physical Protection of Nuclear 
Material and the Convention on Nuclear Safety, all agreements that 
Vietnam has yet to sign. 
 
Comment 
------- 
 
¶9. (SBU) This trip was Prime Minister Nguyen Tan Dzung's first 
bilateral overseas trip since assuming office in June.  His only 
other foreign visit, in September, was to the sixth Asia Europe 
Meeting Summit held in Helsinki.  While the PM's visit to Japan 
seems short on concrete deliverables, from the GVN perspective it 
most likely achieved all its objectives, including creating the 
appearance of a stronger, more engaged relationship with a global 
and regional power. 
 
MARINE