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OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHHI #0740/01 2180928
ZNR UUUUU ZZH
O 060928Z AUG 09
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0001
INFO RUEHHM/AMCONSUL HO CHI MINH 6057
RUEHZS/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 05 HANOI 000740 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR H, EAP/MLS.  PLS PASS TO SENATOR WEBB 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PHUM ECON ETRD MARR VM
 
SUBJECT: SCENESETTER FOR SENATOR WEBB'S AUGUST VISIT TO VIETNAM 
 
HANOI 00000740  001.2 OF 005 
 
 
OVERVIEW 
-------- 
 
¶1.  (SBU) Senator Webb: Your return to Hanoi and Ho Chi Minh City 
comes at an important moment in the U.S.-Vietnam relationship. 
Overall, bilateral ties have advanced significantly over the past 
two-three years, and are arguably at their highest point since 
relations were reestablished in 1995. The fundamentals are in place 
to build a more enduring, comprehensive partnership.  The United 
States remains Vietnam's largest export market and third-largest 
overall trade partner, and this year jumped to first position among 
foreign investors.  We have boosted cooperation in areas ranging 
from public health and higher education to mine clearance and 
technical assistance designed to help Vietnam meet its WTO and BTA 
obligations.  Conservative voices in Vietnam's leadership remain 
wary of U.S. intentions, but their influence will almost certainly 
continue to wane as the country's young population -- the first 
generation in memory to live without war -- increasingly looks to 
the West.  Strategically, Vietnam increasingly views the U.S. 
presence in the region as a force for stability, a perspective 
reinforced during the April fly-out to the USS Stennis and through 
the latest round of defense talks in June. 
 
¶2.  (SBU) At the same time as relations have strengthened, 
broadened, and matured -- passing from "normalizing" to "normal" -- 
the two sides also increasingly encounter frictions typical of a 
complicated relationship.  Despite their enormous potential, 
U.S.-Vietnam relations continue to face serious constraints; we are 
still far from the type of relationship that we ultimately want. 
This is particularly true in the area of human rights, as the recent 
arrest of prominent journalists, bloggers, and a leading lawyer -- 
as well as the brief detention of a U.S. citizen associated with a 
dissident youth group -- demonstrate.  Similarly, Vietnam's 
strategic obsession with China, understandable on its own terms, has 
combined with lingering historical suspicions to inhibit more robust 
military-military cooperation, though there has been significant 
progress this year.  On the international front, Vietnam's "friends 
to all" non-interventionist line has led Hanoi to consistently align 
with Beijing and Moscow on issues such as Georgia, Darfur, and 
Burma.  Even in areas where relations have been decidedly productive 
-- economics, trade, investment -- corruption and an inadequate 
educational system pose serious challenges. 
 
¶3.  (SBU) As we work to assist Vietnam's evolution into a more 
responsive, transparent, and better-governed state, it helps to 
remember that this is going to be a long and uneven process, 
conducted on Vietnam's timescale and terms as much as our own. 
Progress will continue; however, it will likely be incremental 
progress, built on regular interactions such as TIFA and Bilateral 
Investment Treaty talks, our human rights dialogue, and the 
political-military and policy planning discussions inaugurated late 
last year.  In the end, we are optimistic.  But we also recognize 
that managing the relationship requires persistent engagement and a 
broad, historical perspective.  This is why repeat visits by senior 
officials and members of Congress are vitally important.  Your visit 
will be particularly well received. 
 
Economic Success and Challenges 
------------------------------- 
 
¶4.  (SBU) Our economic ties remain a central part of the overall 
relationship.  While Vietnam's comparatively limited integration 
into the world financial system has shielded it from some of the 
worst consequences of the current crisis, a slowing global economy 
has affected Vietnam's exports and foreign investment inflows.  The 
country's 6.2% GDP growth in 2008 -- though not bad in a regional 
context -- was the lowest since 2000, and is expected to decline 
further in 2009, with most projections below 5%.  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 the year. 
U.S. exports, particularly of agricultural products, are a 
particular success story and grew 47% in 2008. 
 
¶5.  (SBU) We are seeking to keep up the momentum with BIT 
negotiations and are pushing Vietnam to further open key markets 
such as beef.  We were encouraged by Vietnam's decision to join the 
Trans-Pacific Partnership as an associate member.  The Vietnamese 
will be interested to hear how the concept is regarded in 
Washington, particularly in the context of other FTA negotiations. 
You will almost certainly hear familiar calls for Vietnam to be 
designated as a beneficiary under the U.S. Generalized System of 
Preferences; as Deputy USTR Demetrios Marantis remarked in his July 
visit, the United States would welcome Vietnam's receiving GSP 
status, provided it establishes required labor rights guarantees and 
intellectual property protection.  You will also likely hear 
expressed Vietnam's concerns about U.S. limitations on catfish 
imports from Vietnam and anti-dumping and countervailing duty cases, 
although these are also signs of a thriving trade relationship. 
 
HANOI 00000740  002.2 OF 005 
 
 
 
Human Rights and Religious Freedom 
---------------------------------- 
 
¶6.  (SBU) Economic growth has brought with it an enormous expansion 
of personal freedoms, and government is much less intrusive than it 
was twenty, ten, or even five years ago.  While much remains to be 
done, religious freedoms continue to expand, with most religious 
groups reporting improved conditions and growing memberships.  We 
view this progress as continuing.  We have not, however, seen 
corresponding progress in political rights, and the government 
continues to severely restrict freedom of speech and assembly. 
Political dissident groups such as "Bloc 8406" and the Democratic 
Party of Vietnam are banned and their members subject to harassment 
and arrest, nineteen over the past year.  The June arrest of 
prominent lawyer Le Cong Dinh and others provided a particularly 
poignant reminder that Vietnam's collective leadership, its 
commitment to market-oriented economic policies notwithstanding, 
remains determined to maintain political order and to preserve 
regime stability, goals it sees as synonymous.  The lessons of 1989 
and 1991 -- and more recently of the "color revolutions" in Ukraine, 
Georgia, and Kyrgyzstan -- continue to inform the perceptions of the 
generation that dominates the Politburo and Central Committee. 
 
¶7.  (SBU) Similarly, the October 2008 PMU-18 convictions, the 
subsequent firing of several senior newspaper editors, and the 
harassment/arrest of other journalists and bloggers have had a 
chilling effect on efforts to expose corruption.  Vietnam's internet 
blog scene remains a source of spirited debate, as seen in the 
continuing controversy (sustained by the active involvement of 
General Vo Nguyen Giap) over a Chinese involvement in two bauxite 
mining projects in the Central Highlands.  But here too the 
government is feeling for a way to curb what it considers to be 
overly sensitive discussions.  In a May report, the Committee to 
Protect Journalists listed Vietnam as one of "the ten worst places 
to be a blogger," in large part due to the arrest of prominent 
blogger Dieu Cay in September 2008; the July 2009 arrest of blogger 
Nguyen Tien Trung only serves to reinforce this.  A recent news 
report stated that only three percent of Vietnam's approximately 
three million bloggers are willing to use blogs or other social 
networking sites hosted within Vietnam.  It will be useful for your 
interlocutors to hear, from an acknowledged long-time friend of 
Vietnam, that our concerns over human rights are not tactical or 
simply rhetorical, but arise out of genuine desire for Vietnam to 
enjoy sustained stability and prosperity. 
 
Leadership Dynamics 
------------------- 
 
¶8.  (SBU) Anticipated leadership changes at the Eleventh Party 
Congress, scheduled for January 2011, provide an additional reason 
for the CPV's leading contenders to play it safe.  At this point, we 
assess that as many as six of the Politburo's fifteen members will 
retire, including General Secretary Nong Duc Manh, State President 
Nguyen Minh Triet, and National Assembly (NA) Chair Nguyen Phu 
Trong.  Most of our well-connected contacts maintain that Prime 
Minister Nguyen Tan Dung, though weakened by his support of the 
bauxite projects as well as criticism over his handling of economic, 
health, and educational programs, remains in a good position to 
continue in his current position.  Truong Tan Sang, Standing 
Secretary of the influential CPV Secretariat, is said to be the 
leading candidate to replace Manh as General Secretary.  (We have 
requested meetings with both Dung and Sang.)  The wild card in all 
of this is Vietnam's persistent regionalism: if conventional wisdom 
holds, the two leading positions in the Politburo will be held by 
Southerners.  If Sang is not selected, a dark horse contender might 
be, surprisingly, the Politburo's newest member: the conservative 
Chair of the CPV Propaganda and Education Commission, To Huy Rua. 
 
Working with Vietnam: UN, ASEAN, and Burma 
------------------------------------------ 
 
¶9.  (SBU) Vietnam has been professional and well-briefed at the UN 
Security Council, but cautious.  Hanoi has been eager to join 
consensus whenever possible, voting for example to support sanctions 
on Iran and North Korea.  But Vietnam has shied away from taking a 
leadership role, and where there has been disagreement has tended to 
follow a strict non-interventionist line.  We can expect more of the 
same as Vietnam finishes its term.  We expect Vietnam to do better 
as ASEAN Chair, a position it assumes 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.  If the U.S.-ASEAN summit 
is revitalized, Vietnam, as ASEAN Chair, would lobby hard to host. 
 
HANOI 00000740  003.2 OF 005 
 
 
 
¶10.  (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 obstacles that Rangoon's continued intransigence 
poses for ASEAN's credibility.  In this regard, it is significant 
that Vietnam did not block a relatively strong ASEAN statement about 
the retrial of Aung San Suu Kyi.  Vietnam has long urged the United 
States to take a more flexible approach to Burma and welcomed the 
announcement that we would be reviewing our policy.  At the same 
time, our MFA contacts say they recognize that the prospect of 
renewed detention for ASSK would make it extremely difficult for the 
United States to be more accommodating, a message they insist they 
have communicated to the leadership in Rangoon. 
 
The China Factor 
---------------- 
 
¶11.  (SBU) Mistrust of China runs deep, fed by historical 
animosities and simmering resentment over what is widely viewed as a 
weak position on South China Sea territorial disputes.   Vietnam 
paid close attention to China's harassment of USNS Impeccable, and 
this may have contributed to the MND's decision to participate in 
the Stennis fly-out.  Your hearings on South China Sea issues were 
watched closely in Hanoi, as in Beijing, and you will likely be 
asked to comment on China's moves to enforce its annual "fishing 
ban," which this year have involved the interdiction of a number of 
Vietnamese fishing vessels and the detention of Vietnamese 
fishermen.  The United States, as DAS Marciel indicated in his 
testimony, takes no position on the competing legal claims in the 
South China Sea (or East Sea, as it is called here).  We do, 
however, have a strong interest in maintaining freedom of navigation 
and the ability of our naval ships to conduct routine operations. 
We have encouraged all parties to the dispute to work together to 
build confidence, in particular by enhancing the 2002 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. 
 
¶12.  (SBU) Vietnam's leadership is sensitive to domestic criticism, 
articulated in blogs and the occasional protest, that they have been 
afraid to "stand up to China."  (Many of those arrested on political 
grounds over the past year had publically condemned Vietnam's "weak" 
China policy.)  Overall, though, and despite domestic pressures, 
Vietnam has maintained a very pragmatic approach to China, based on 
a realistic appraisal of the relationship's asymmetries.  For 
example, at the same time as Vietnam rejects China's claims in the 
South China Sea, senior leaders, including PM Dung, have actively 
supported increased Chinese involvement in strategic development 
projects such as plans to exploit Vietnam's large bauxite reserves 
in the Central Highlands.  Vietnam's leadership is under no illusion 
that it can somehow "balance" China with the United States, Russia, 
or Japan.  Instead, Vietnam seeks to maintain as 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, our relationship is but one of several, and 
Vietnam is wary of pushing the agenda with the United States too 
far, too fast, lest it antagonize China. 
 
The Military Relationship and JPAC 
---------------------------------- 
 
¶13.  (SBU) Vietnam's apprehensions about China come into play most 
directly perhaps in our military-military relations.  But here too 
there has been progress, despite our two countries' complicated 
history.  Efforts to provide the fullest possible accounting of 
missing personnel predate the establishment of diplomatic relations, 
and the development of trust on the issue has made gains in other 
fields possible.  We would like to see more progress in areas such 
as underwater recovery and archival access, but, overall, both sides 
can be proud of our achievements: accounting for 645 Americans 
previously listed as MIA (1332 remain missing in Vietnam).  The use 
of a U.S. Navy ship, the USNS Heezen, to search for U.S. MIAs in 
Vietnamese coastal waters demonstrates Vietnam's willingness to 
increase cooperation on the issue. 
 
¶14.  (SBU) Largely on these foundations, the two sides' militaries 
are slowly developing ties and have discussed cooperation in areas 
such as search and rescue, humanitarian assistance and disaster 
relief cooperation, military medicine, and meteorological 
information exchanges.  These and other initiatives -- such as 
expanding English-language training under IMET, ship visits, and 
encouraging Vietnam to participate in global peacekeeping operations 
-- were on the agenda for political-defense talks, the first of 
their kind, which were held in October 2008.  A second round took 
 
HANOI 00000740  004.2 OF 005 
 
 
place in June of this year and resulted in enhanced cooperation in 
search and rescue, with our Defense Attache attending a Vietnamese 
exercise in early July. 
 
Health Diplomacy/Agent Orange/Unexploded Ordinance 
-------------------------------------------- 
 
¶15.  (SBU) Currently about 80 percent of all U.S. development aid is 
in the areas of health and disability.  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 substantial investment to prevent and 
control avian influenza, with total funding since 2004 of about $45 
million projected through FY 2009.  In April 2010, USAID will assist 
the GVN to host the seventh International Ministerial Conference on 
Avian and Pandemic Influenza.  There have now been approximately 
1,000 confirmed cases of H1N1 influenza in Vietnam, with one 
reported fatality.  The actual number is probably higher, as many 
people do not seek medical treatment unless they are seriously ill. 
As with H5N1, the Centers for Disease Control and Prevention and 
USAID have cooperated actively with their Vietnamese counterparts to 
track the disease and to provide guidance on containment and 
treatment. 
 
¶16.  (SBU) Agent Orange (along with its contaminant, dioxin) remains 
a visceral and heavily propagandized issue, as evidenced in the 
local press coverage of the U.S. Supreme Court's decision not to 
revisit the dismissal of a lawsuit brought by alleged Vietnamese 
victims against U.S. chemical companies.  The first annual "Agent 
Orange Day," scheduled for August 10, no doubt will receive wide, 
and slanted, media coverage.  Nevertheless, over the longer term, we 
are gradually seeing more balanced reporting, for example, on the 
annual U.S.-Vietnam Agent Orange/Dioxin Joint Advisory Committee 
(JAC), as well as cooperative efforts to clean up contamination at 
the Danang airport.  Efforts to deal with the consequences of 
unexploded ordinance and landmines continue to be warmly received. 
 
U.S. Assistance: Trade, Education, and the Environment 
--------------------------------------------- --------- 
 
¶17.  (SBU) U.S. assistance levels in other 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 secondary 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.  Efforts to 
improve Vietnam's higher education -- expanding opportunities to 
study in the United States and enhancing partnerships with U.S. 
universities -- were a main focus of PM Dung's 2008 visit to 
Washington.  The Educational Task Force formed as a product of the 
visit met in January in HCMC to discuss ways forward in several key 
areas, including establishing an American university in Vietnam.  In 
the meantime, time-tested 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, exposing them to American society and 
creating goodwill.  The number of Vietnamese students studying in 
U.S. colleges and universities now ranks eighth in the world. 
 
¶18.  (SBU) During PM Dung's visit, the United States and Vietnam 
also agreed to accelerate cooperation on climate change adaptation 
and mitigation, and announced the creation of the Delta Research and 
Global Observation Network (DRAGON) Institute at Can Tho University. 
 Supported by the U.S. Geological Survey, the DRAGON Institute 
supplements U.S.-funded initiatives already underway to assist 
Vietnam's climate change response.  Expanded cooperation from the 
U.S. Department of Energy and U.S. Nuclear Regulatory Commission to 
support the creation of the necessary safety and security 
infrastructure for Vietnam's planned civilian nuclear power sector 
may also help mitigate Vietnam's future greenhouse gas emissions. 
 
WHAT YOU CAN EXPECT 
------------------- 
 
¶19.  (SBU) Complaints that we have heard from some Vietnamese 
officials that "this year is nothing special" miss the mark. 
Nevertheless, the series of senior-level visits that propelled the 
relationship -- from Hanoi's APEC summit in 2006 to the visit of PM 
Dung to Washington in June 2008 -- is unlikely to be repeated, at 
least in the near term.  The foundations are in place for a deeper 
partnership; building on this foundation, however, will require 
sustained, patient engagement.  Vietnam's leaders are fundamentally 
pragmatic.  They value Vietnam's relationship with the United 
States, both for its intrinsic importance and because Vietnam's 
security and economic growth have become inextricably enmeshed in an 
 
HANOI 00000740  005.6 OF 005 
 
 
international system of which the United States remains the primary 
guarantor.  At the same time, their worldview is informed by history 
and by ingrained suspicions of U.S.-led efforts to bring about 
political change, what they term "peaceful evolution."  All in all, 
the tenor of the relationship remains decidedly positive, if still 
cautious.  Your upcoming trip to Hanoi and Ho Chi Minh City, will 
add momentum to our efforts to help translate good feelings into 
sustainable accomplishments. 
 
¶20.  (U) We look forward to your visit and stand ready to do 
everything we can to make your discussions as productive as 
possible. 
 
MICHALAK