VZCZCXRO8923
OO RUEHDT RUEHHM RUEHPB
DE RUEHHI #0978/01 2611034
ZNR UUUUU ZZH
O R 181033Z SEP 09
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0156
INFO ASEAN REGIONAL FORUM COLLECTIVE
RUEHHM/AMCONSUL HO CHI MINH CITY 0029

UNCLAS SECTION 01 OF 05 HANOI 000978 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PHUM ECON ETRD KIRF SENV MARR KHIV KHDP BM
VM 
SUBJECT: Setting the Scene for Deputy Secretary Steinberg's September 
26-27 Visit to Hanoi 
 
¶1.  (SBU) SUMMARY: U.S.-Vietnamese relations have advanced 
significantly over the past three years and are arguably at their 
highest point 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 to 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 blossomed as our two militaries are exploring concrete areas of 
cooperation.  Powerful conservative voices in Vietnam's Communist 
Party and security services 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. 
 
 
 
¶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 
UNSC 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 is a useful opportunity to 
reiterate our commitment to deepening bilateral relations across 
the board, while warning senior GVN leaders that future progress, 
particularly in trade, will be contingent on greater respect for 
human rights and democracy.  END SUMMARY. 
 
 
 
Foreign Policy Priorities: China and the United States 
 
--------------------------------------------- --------- 
 
 
 
¶3.  (SBU) Vietnam professes a "friends to all" foreign policy., but 
it's foreign policy is fundamentally pragmatic.  While the 
overriding strategic concern remains China, Vietnam is under no 
illusions that it can somehow "balance" China with the United 
States, Russia, or Japan.  Nor is a more confrontational approach 
toward China something the Party could sustain domestically: once 
unleashed, nationalistic sentiment, though initially directed at 
China, could easily turn toward the Party itself.  We saw this most 
recently in the government's awkward efforts to downplay General Vo 
Nguyen Giap's remarkable -- and remarkably public -- criticisms of 
Chinese investment in bauxite development programs in the Central 
Highlands.  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 USNS Impeccable in March, and this may have 
contributed to the MND's decision to participate in the Stennis 
fly-out.  Senator Jim Webb's hearings on South China Sea issues 
were well received here.  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 
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. 
 
 
 
Multilateral Engagement: Vietnam at the UNSC and ASEAN 
 
--------------------------------------------- --------- 
 
HANOI 00000978  002 OF 005 
 
 
¶5.  (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.  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 anticipate more of the same as Vietnam 
finishes its term this year.  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.  If the U.S.-ASEAN 
summit is revitalized, Vietnam, as ASEAN Chair, would lobby hard to 
host. 
 
 
 
¶6.  (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 negative effect that Rangoon's continued intransigence 
has on 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 
Secretary's announcement in Jakarta that we would be reviewing our 
policy; 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 
 
---------------------------------- 
 
 
 
¶7.  (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 next 
U.S.-Vietnam dialogue on human rights is in Washington November 
8-9.  You should encourage the Vietnamese side to move beyond 
talking to concrete action.   It is critical that Vietnam 
understand that progress on human rights is essential to progress 
in other areas of the relationship, including trade. 
 
 
 
¶8.  (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. 
More than twenty dissidents have been arrested over the past year, 
eight in the past three months alone: eight are scheduled to face 
trial the week before you arrive.  The current "crackdown" began 
with the arrest and conviction of two prominent journalists who had 
worked to expose a major corruption scandal.  The action sent a 
chilling message to other independent-minded journalists.  Over the 
past year, several editors and reporters from prominent newspapers 
have been fired for sensitive coverage, and two bloggers were 
recently detained and released only after they promised to stop 
blogging.   A recently promulgated Prime Ministerial decree 
("Decision 97") prohibits independent scientific/technical 
institutes from publicizing research critical of government/Party 
policies.  The decree's main target, the reform-minded Institute 
for Development Studies, closed its doors.  However, the decree 
could have a wider effect: inhibiting other groups, dissuading 
foreign research partners, and discouraging R/D investment. 
 
 
 
¶9.  (SBU) The June arrest of lawyer Le Cong Dinh -- a successful 
corporate lawyer, Fulbright alum, and well-heeled member of the 
 
HANOI 00000978  003 OF 005 
 
 
establishment -- served as a particularly poignant reminder that 
Vietnam's collective leadership 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.  This paranoia was on remarkably 
clear display on August 19, when state Television broadcast a 
series of heavily edited police confessions from Dinh Dinh's 
confession focused on U.S. assistance, casting U.S. efforts to 
promote the rule of law and an independent judiciary as somehow 
sinister and specifically mentioning  the Ambassador and former 
Deputy Secretary Negroponte.  The Ambassador protested the 
broadcast in a strongly worded letter to your Vietnamese 
counterpart, VFM Pham Binh Minh, but has not received a response. 
 
 
 
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 is expected to decline further in 
2009, with most projections around 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.  Bilateral trade is down by 
about 5% so far in 2009. 
 
 
 
¶11.  (SBU) We are seeking to keep up the momentum with BIT talks 
and have proposed mid-November for the next round.  We are also 
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 want to 
know if the U.S. plans to join.  You will almost certainly hear 
calls for Vietnam to be designated as a beneficiary under the U.S. 
Generalized System of Preferences.  Deputy USTR Demetrios Marantis 
told the GVN the United States would welcome Vietnam's receiving 
GSP status, provided it establishes required labor rights 
guarantees and intellectual property protection required by U.S. 
law.  You may also likely hear expressed Vietnam's concerns about 
U.S. limitations on catfish imports from Vietnam and anti-dumping 
and countervailing duty cases  It would be useful to reassure the 
Vietnamese that we remain committed to deepening our trade and 
economic relations, while also noting that progress on our trade 
agenda, particularly in the Congress, could be imperiled by human 
rights problems. 
 
 
 
The Military Relationship and MIA/POW Issues 
 
-------------------------------------------- 
 
 
 
¶12.  (SBU) Vietnam's apprehensions about China come into play most 
directly perhaps in our military-military relations.  Here too, 
however, there has been progress:  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: since 
1973, 649 Americans previously listed as MIA have been accounted 
for in Vietnam (1,319 remain missing).  As a sign of continued 
goodwill, in June, Vietnam granted permission for a U.S. Navy 
oceanographic survey ship, the USNS Heezen, to search for U.S. MIAs 
in Vietnamese coastal. 
 
 
 
¶13.  (SBU) Our 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 
 
HANOI 00000978  004 OF 005 
 
 
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 place in June of this year 
and resulted in enhanced cooperation in search and rescue  In an 
unprecedented sign of warming mil-mil ties, in April, senior 
Vietnamese Navy and Air Force officers toured the USS John C. 
Stennis in international waters off the coast of Vietnam.  In his 
June 2008 visit, Prime Minister Nguyen Tan Dung announced that 
Vietnam would take part in GPOI, but progress has been slow, and 
Vietnamese officials are reluctant to do more than send observers. 
We suggest that you encourage Vietnam to participate actively, 
including in the July 2010 Capstone exercises in Cambodia. 
 
 
 
Health Diplomacy/Agent Orange/Unexploded Ordinance 
 
--------------------------------------------- ----- 
 
 
 
¶14.  (SBU) Health diplomacy has been a major spur to improved 
bilateral relations.  Over the past several years, we have worked 
to boost Vietnam's develop 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 areas of health and disability.  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 substantial 
investment to prevent and control highly pathogenic avian 
influenza, with total funding since 2004 of about $50 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, and as a follow up to July's Lower 
Mekong Ministerial, the United States has also announced plans to 
host in Vietnam a regional meeting on infectious disease.  As of 
September 17, the Ministry of Health reported 5,961 confirmed cases 
of 2009 H1N1 influenza in Vietnam, with six fatalities.  The actual 
number is probably higher, as many people do not seek medical 
treatment unless they are seriously ill.  As with highly pathogenic 
H5N1, the Centers for Disease Control and Prevention and USAID have 
cooperated actively with their Vietnamese counterparts to track 
H1N1 influenza and to provide guidance on containment and 
treatment. 
 
 
 
¶15.  (SBU) Agent Orange (and 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.  Vietnam's first-ever "Agent 
Orange Day" on August 10 received wide, and slanted, media 
coverage.  Nevertheless, we are gradually seeing more balanced 
reporting, for example, on the annual U.S.-Vietnam Agent 
Orange/Dioxin Joint Advisory Committee (JAC), the most recent round 
of which took place in September, 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, Environment 
 
--------------------------------------------- - 
 
 
 
¶16.  (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 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.  The Joint 
Educational Task Force formed in the wake of 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 
 
HANOI 00000978  005 OF 005 
 
 
U.S. colleges and universities now ranks eighth in the world. 
 
 
 
¶17.  (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 
 
------------------- 
 
 
 
¶18.  (SBU) 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 
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 discussions will add momentum to our 
efforts to help translate good feelings into sustainable 
accomplishments. 
Michalak