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DE RUEHHI #1010/01 2470953
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FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8386
INFO RUEHHM/AMCONSUL HO CHI MINH 5073
RUEHPF/AMEMBASSY PHNOM PENH 3748
RUEHHK/AMCONSUL HONG KONG 1509

UNCLAS SECTION 01 OF 05 HANOI 001010 
 
SENSITIVE 
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STATE FOR EAP/MLS 
 
E.O. 12958: N/A 
TAGS: PREL PTER ECON ETRD VM
 
SUBJECT:QSCENESETTER FOR DEPUTY SECRETARY NEGROPONTE VISIT TO 
VIETNAM 
 
Introduction 
------------ 
 
¶1. (SBU) Deputy Secretary Negroponte: Ambassador Michalak and 
Mission Vietnam look forward to welcoming you to Hanoi.  Your 
visit will be an important signal to the Vietnamese of the 
importance of our growing bilateral relationship, especially as 
we seek to build on the progress made during Prime Minister 
Prime Minister Nguyen Tan Dung?s June visit to the White House. 
Your discussions with the Vietnamese leadership will help push 
the bilateral relationship to a higher plane.  Together with its 
increasingly constructive relationship with the United States, 
Vietnam is taking a more active role in multilateral diplomacy, 
both as a non-permanent member of the UN Security Council and as 
an emerging leader in ASEAN.  You should encourage Vietnam to 
continue to pursue a more outward-looking and engaged role in 
the world community. 
 
¶2. (SBU) Our strengthening relations are in large part due to 
Vietnam?s realization that the United States is an important 
force in maintaining a stable geopolitical environment in which 
even small countries like Vietnam are assured independence and 
freedom of action.  Vietnam also sees in the United States an 
increasingly important source of investment and financial and 
technical assistance, as well as a huge market for Vietnamese 
goods.  Vietnam?s leaders are committed to continued progress in 
bilateral relations and will likely speak positively and 
optimistically about the future of U.S.-Vietnam ties. 
 
¶3. (SBU) Differences over human rights remain, however, and 
lingering fears that the United States supports the overthrow of 
the current regime continue to complicate the relationship. 
Similarly, while Vietnamese are overall quite positive about the 
United States, you will likely hear references to ?legacies of 
the war,? in particular Agent Orange.  On a more operational 
level, cumbersome restrictions on U.S. consulate officials in Ho 
Chi Minh City (HCMC) have impeded the development of bilateral 
ties. 
 
The China Factor 
---------------- 
 
¶4. (SBU) While Vietnam's engagement with the United States will 
continue to broaden, China is necessarily Vietnam's most 
important strategic preoccupation.  This is not to say that 
Vietnam is "choosing" China over the United States; Vietnam's 
leaders are sophisticated enough to realize that relations with 
China and the United States do not represent a zero sum game; it 
is possible to have good relations with both.  While tensions 
persist, the Vietnamese Communist Party is certainly aware of 
the Chinese model of spurring economic growth, while preserving 
single-party rule.  China constitutes a vital commercial partner 
and former ally, but it is also perceived as a significant and 
frustrating constraint to Vietnam's freedom of action. 
 
¶5. (SBU)  Chinese bullying of foreign companies in an attempt to 
compel them to cease oil and gas exploration efforts in the 
South China Sea reminds Vietnamese officials that just as the 
Vietnamese may not approve of all U.S. policies, neither do 
Chinese actions always serve Hanoi?s interest.  While progress 
has been made in settling the land border, there is no 
commonality of views on sovereignty issues regarding the South 
China Sea, known as the "East Sea" to the Vietnamese.  Hanoi is 
also "riding the tiger" with regard to managing the deeply 
negative views toward China of many Vietnamese, as was seen when 
the Olympic torch made its appearance in HCMC this summer. 
China is widely disliked and distrusted as a former colonial 
master, and Beijing's actions in the Spratlys and Paracels 
threaten to inflame those passions.  Should Hanoi allow 
unconstrained protests against the Chinese, however, it would 
appear weak in the face of calls to action that it could not 
satisfy, as well as risk Beijing's anger. 
 
¶6. (SBU) The GVN is understandably cautious with regard to 
China's potential reaction to improved U.S.-Vietnam relations. 
U.S.-Vietnam cooperation in the security field is constrained by 
an ingrained caution on the part of Vietnam's military in the 
face of relative power calculations vis-a-vis China.  Likewise, 
political cooperation is dampened by an institutional 
conservatism born of concern that U.S.-supported "peaceful 
evolution" -- not coincidentally, the same term the Chinese use 
-- poses a real threat to the regime. 
 
Trade and the Economy 
--------------------- 
 
 
HANOI 00001010  002 OF 005 
 
 
¶7. (SBU)  Trade and investment have played a central role in our 
improved relations and we are seeking to keep up the momentum 
with agreement soon on a new bilateral investment treaty and a 
more liberal civil aviation agreement.  We are seriously 
considering GSP for Vietnam but it is important that Vietnam 
take steps on IPR protection and labor rights.  We are also 
pushing Vietnam to approve several large U.S. investments. 
 
¶8. (SBU) After a decade of isolation and failed economic 
policies, Vietnam is determined to catch up with the Asian 
tigers.  Vietnam?s "doi moi" (renovation) program of economic 
reform, begun in 1986, has set the country on a successful 
market economy path, with an average growth rate of 7.5 percent 
over the past decade.  Te GVN understands that continued 
economic growth is essential to political survival.  The GVN 
focuses on exports and foreign direct investment in its drive to 
achieve middle-income status by 2010.  The United States is 
Vietnam's largest export market and third largest overall trade 
partner.  U.S. investors tell us the key challenges they face in 
Vietnam are underdeveloped infrastructure, a shortage of skilled 
workers and managers, and the considerable level of state 
participation in the economy.  For its part, the GVN is 
grappling with issues of corruption, improving the legal 
environment, and implementing its WTO commitments. 
 
¶9. (SBU) Vietnam is dealing with serious macroeconomic 
challenges which prompted some analysts in the spring to warn 
that it faced a 1997-like meltdown.  Inflation has risen sharply 
(28 percent year-on-year for August) and the current trade 
deficit is uncomfortably high.  High money and credit growth and 
global inflation are the main causes.  Vietnam has tightened 
monetary and fiscal policy in response.  These measures have 
proved effective so far and the government needs to stay the 
course.  Over the longer term, Vietnam needs to undertake 
serious reforms of its powerful State Owned Enterprises (SOEs) 
to ensure long-term economic growth. 
 
Human Rights Challenges 
----------------------- 
 
¶10. (SBU) Serious human rights problems in Vietnam include lack 
of freedom of speech, freedom of assembly and freedom of the 
press.  One of our key objectives is to end the use of catch-all 
"national security" provisions for the prosecution of peaceful 
dissent.  The recent arrests and sackings of Vietnamese 
reporters and editors in the wake of a corruption scandal reveal 
the on-going battle within the GVN over the role of the press as 
well as an internal debate of the importance of fighting 
corruption versus protecting the interests of top communist 
party insiders. 
 
¶11. (SBU) The continued existence of groups in the United States 
that advocate regime change complicates our overall relations 
and human rights engagement in particular by providing 
ammunition to hard-liners who want to stoke the fading paranoia 
that we are indeed still the enemy.  Reassuring the GVN that the 
USG does not support separatist groups will help build a human 
rights dialogue based on mutual trust.  Lingering suspicions 
about what the U.S. government is really up to explains some of 
our difficulties in gaining formal recognition for the Consular 
District of Consulate General Ho Chi Minh City. 
 
Restrictions on Ho Chi Minh City Consulate 
------------------------------------------ 
 
¶12. (SBU) Vietnam's interest in opening a Consulate General in 
Houston is a welcome development and reflects the continued, 
rapid development of our bilateral relations.  Before we move 
forward, however, we need to address the government of Vietnam's 
refusal to recognize the Consular District of the U.S. Consulate 
General in Ho Chi Minh City beyond the HCMC city limits.  After 
years of discussion, we are also in the final stages of 
negotiating an agreement on a site for a New Embassy Compound in 
Hanoi (remaining sticking points are land reciprocity and 
infrastructure). 
 
Counterterrorism 
---------------- 
 
¶13. (SBU) Vietnam says the right things about the threat of 
global terrorism and has participated with us in modest 
cooperative activities.  During President Bush's visit in 2006, 
the President and his Vietnamese counterpart pledged to increase 
cooperation to halt the proliferation of weapons of mass 
destruction and related technology and materials in accordance 
with international and national laws and each country's 
 
HANOI 00001010  003 OF 005 
 
 
capacities.  The United States provides counterterrorism 
assistance to Vietnam by funding Vietnamese participation in 
counterterrorism-related training at the International Law 
Enforcement Academy (ILEA) in Bangkok, and through military-to- 
military exchanges with an emphasis on counterterrorism themes. 
We are encouraging Vietnam to include the ports of HCMC and 
Haiphong in the Department of Energy?s Megaports Initiative to 
detect nuclear materials.  Vietnam has signed eight out of 
thirteen UN terrorism conventions.  Approval of the remaining 
five is winding its way through the cumbersome GVN bureaucracy, 
the delay explained in part by GVN concern with its capacity to 
carry out obligations under the conventions.  Vietnam says it is 
increasingly concerned with Wahhabist influences in its (very 
small) Cham community. 
 
Global Peace Operations Initiative 
---------------------------------- 
 
¶14. (SBU) Over past years, the GVN has expressed increasing 
interest in the potential for involvement in peacekeeping 
missions, especially those organized under UN auspices. 
Vietnam's recent UN Security Council membership has given 
significant impetus to such thinking.  Nonetheless, the GVN will 
have to do much more to meet the remaining challenges of the 
lack of interoperability, the paucity of English language 
speakers in the military and complications due to funding issues 
in order to fully engage in future peacekeeping operations. 
Their participation in Global Peace Operations Initiative (GPOI) 
is an important step in this direction. The Joint Statement from 
PM Dung?s June visit to Washington highlights Vietnam?s 
agreement to participate in the GPOI through participation in 
training courses and other peacekeeping operations activities. 
The next step is crafting a ?country plan? for Vietnam. 
 
Impacts of Remaining UXO 
------------------------ 
 
¶15. (SBU) In your meetings, you are likely to hear references to 
"legacies of war" issues, the catch-all term that the GVN 
applies to myriad problems, including Agent Orange(AO) and its 
contaminant, dioxin, unexploded ordnance (UXO) and land mines 
from the war era, and Vietnam?s own MIA problem.  Since 1989, 
USAID, with support from the Patrick J. Leahy War Victims Fund 
(LWVF) and other sources, has provided over USD 46 million to 
support NGOs and private voluntary organizations to develop 
comprehensive programs for people with disabilities.  Vietnam 
was formally accepted as the 37th participant in the U.S. 
Humanitarian Demining Program in June 2000, and the USG is now 
the largest donor of humanitarian assistance for mine action 
programs in Vietnam.  The USG has invested over USD 37 million 
in a broad spectrum of programs not only to locate, remove and 
destroy unexploded ordnance and landmines, but also to address 
the UXO effects on health and livelihood of Vietnamese living in 
affected areas. 
 
¶16. (SBU) Today, various NGOs conduct UXO and land mine 
clearance, risk education and victim rehabilitation. The USG has 
also donated a significant quantity of equipment to the People?s 
Army of Vietnam (PAVN) to assist efforts in UXO and landmine 
clearance and return land to productive use.  In 2006, the State 
Department provided USD 3.5 million to support UXO action and 
demining activities in Vietnam, almost a third of which went 
directly to PAVN in the form of donated demining equipment. 
FY08, an additional USD 2.5 million will be provided to 
underwrite mine action related activities in Vietnam.  For FY08, 
Congress directed that approximately $2.5 million be spent on 
demining programs, a substantial increase from the $800,000 
requested by the Administration. 
 
Agent Orange/Dioxin 
------------------- 
 
¶17. (SBU) While debate continues over the possible human effects 
of exposure to dioxin, a contaminant in the wartime defoliant 
Agent Orange, recent environmental studies show 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 currently have soil concentrations 
considered hazardous.  The United States and Vietnam have not 
reached agreement on the scope of possible health effects, with 
Vietnam continuing to argue that over three million handicapped 
can trace their disabilities to dioxin exposure.  We do not 
believe that this figure can be supported by scientifically- 
sound data and analysis.  However, our engagement on this issue 
has accomplished much, in both transforming the tone of the 
 
HANOI 00001010  004 OF 005 
 
 
dialogue and capacity building to address environmental issues 
and provide assistance for the disabled. 
 
¶18. (SBU) The Joint Advisory Committee (JAC) for Agent 
Orange/dioxin, which brings together scientists and researchers 
from both nations to provide science-based advice to policy 
makers for potential environmental and health cooperation, will 
meet for the second time while you are in Hanoi.  Projects have 
included dioxin containment at the Danang airport as well as a 
USD 3 million Congressional appropriation for "dioxin mitigation 
and health activities," which USAID has begun to implement. 
USAID will soon announce awards to partners to strengthen 
services for the disabled in Danang.  The USG is continuing to 
work with the GVN, UNDP, Ford Foundation and other NGOs to 
discuss the next steps in a multilateral approach to 
environmental remediation of three priority hotspots in Danang, 
Hoa Binh and Phu Cat airfields.  Despite this progress, it is 
not uncommon to hear every child born with a birth defect 
anywhere in Vietnam described as a "victim of agent orange" and 
AO remains a favorite propaganda tool for persons opposed to 
closer U.S.-Vietnam relations. 
 
Fullest Possible Accounting 
--------------------------- 
 
¶19. (SBU) U.S. military and DoD elements efforts achieve the 
fullest possible accounting of Americans missing from the 
Vietnam Conflict predate.  Since 1988, the Joint POW/MIA 
Accounting Command (JPAC), a USPACOM subordinate element, has 
evolved to include forward Detachments in Vietnam, Laos, and 
Thailand/Cambodia.  Its Vietnam Detachment (Det 2) has completed 
90 Joint Field Activities (JFA), which incorporated extensive 
research, interviews, analysis, and excavations.  In December 
2006 the GVN approved the use of U.S. naval vessels within their 
territorial waters to enhance JPAC's underwater investigations 
towards the identification of potential recovery sites. 
Ultimately, JPAC's efforts in Southeast Asia have resulted in 
accounting for 880 Americans previously listed as MIA; 1766 
remain missing throughout Southeast Asia.  Senior Vietnamese 
leaders remain attuned to their own internal political optics, 
saying they want us to focus attention on their MIA as well. 
 
U.S. Assistance Areas: Health, Humanitarian and Governance 
--------------------------------------------- ------------- 
 
¶20. (U) Since 1995, we have had an active program in health 
diplomacy.  Programs have provided aid in legal reform, 
governance, economic growth, HIV/AIDS, environmental protection 
and disaster prevention.  For FY 2008, total U.S. assistance 
from all agencies for the President's Emergency Plan for AIDS 
Relief (PEPFAR) was about USD 88.9 million, and since 2004, USD 
234 million, which has gone towards providing assistance in the 
area of HIV/AIDS treatment and prevention.  Vietnam is one of 
fifteen countries with a PEFAR program.  Over 50 percent of our 
overseas development assistance is devoted to health in areas 
such as influenza, tuberculosis, vaccine development, and 
tobacco control.  For example, the USG is the largest single 
bilateral donor in implementing the President?s Three Pillar 
Strategy to avert the next influenza pandemic.  These efforts 
are complemented by the provision of in-kind technical 
assistance, for example, in human capacity development, cholera 
control, and road safety.  Our fundamental goal is to assist 
Vietnam in the challenging road of health sector reform, given 
the rapid pace of economic change and modernization. 
 
¶21. (SBU) The flagship of USAID assistance is the economic 
reform program represented by the STAR and VNCI projects. These 
activities are important resources to help the GVN introduce 
administrative and regulatory reforms that will strengthen the 
market oriented economy, and support private investment. USAID 
is also introducing new activities in rule of law/governance and 
education. 
 
Adoptions 
--------- 
 
¶22. (SBU) Foreign adoptions of Vietnamese children have been 
plagued by corruption and allegations that children are sold or 
trafficked and we allowed our bilateral adoption agreement to 
lapse September 1.  Recent police actions to identify and arrest 
individuals engaged in trafficking in children for the purposes 
of adoption is an important step forward, as it the National 
Assembly?s recent statement supporting Vietnam?s accession to 
the Hague Convention.  These measures give us newfound hope that 
Vietnam may be able to reform its corruption-plagued 
international adoption system so that it protects the rights of 
 
HANOI 00001010  005 OF 005 
 
 
children and birth families.  We are seeking sources of U.S. 
assistance to help Vietnam with the technical aspects of this 
transition. 
 
Increasingly Conscious of International Role 
-------------------------------------------- 
 
¶23. (SBU) The GVN recognizes the strategic importance of the 
United States in the region and the world, but is not shy about 
criticizing the U.S. for ?interference in its internal affairs? 
or other U.S. actions it perceives as outside the multilateral 
system.  There is a significant faction within the communist 
party, particularly in the security forces, that constantly 
warns that ?peaceful evolution? from a communist to a democratic 
government represents the gravest long-term security risk facing 
Vietnam.  They routinely chafe over U.S. criticism of Vietnam's 
human rights and religious freedom record.  Nonetheless, 
Vietnam's leaders are also pragmatic and recognize that 
Vietnam's own continued economic well-being, growth and security 
are, in large measure, inexorably tied to its relationship with 
the United States. 
 
¶24. (SBU) Vietnam has begun to explore opportunities within 
regional organizations to increase joint efforts against 
terrorism, narcotics, maritime piracy and other issues of shared 
concern.  Vietnam recently began joint sea patrols with its 
neighbors in the Gulf of Thailand and has established hotlines 
to help facilitate coordination along sea boundaries. 
Nevertheless, for historic and foreign policy reasons, the GVN 
is generally reluctant to speak out against its "traditional 
friends" such as North Korea and Iran when they engage in 
behavior that the rest of the international community condemns, 
and in its current role as a non-permanent member of the 
Security Council it has adopted traditionally Non-Aligned 
Movement positions that do not generally line up with our own. 
 
What You Can Expect 
-------------------- 
 
¶25. (SBU) You can expect your interlocutors not only to be 
articulate and well informed, but also to speak in terms 
generally supportive of growth in the bilateral relationship. 
As noted above, lingering suspicions still exist among 
conservatives in leadership about the development of closer ties 
with the United States, but the overall tenor is one of support 
and interest at a measured pace that will not upset the GVN's 
calibrated attempts to maintain balance among its other regional 
partners.  Your trip to Hanoi will continue to help translate 
those good feelings into measurable accomplishments in the 
defense and security relationship.  Press interest in your visit 
will be very high, and you can expect media stakeouts outside 
your official meetings, significant turnout of international and 
Vietnamese journalists at your press conference and extensive 
coverage of your program in Hanoi. 
 
¶26. (SBU) We look forward to your visit and stand ready to do 
everything we can to make your time in Vietnam as productive as 
possible. 
 
Michalak