VZCZCXRO0800
OO RUEHHM
DE RUEHHI #0004/01 0051013
ZNR UUUUU ZZH
O R 051011Z JAN 10
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0677
INFO RUEHHI/AMEMBASSY HANOI
RUEHHM/AMCONSUL HO CHI MINH CITY 0331

UNCLAS SECTION 01 OF 06 HANOI 000004 
 
SENSITIVE 
SIPDIS 
DEPARTMENT FOR EAP/MLS, PLEASE PASS TO BOND, H 
 
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 
 
--------------------------------------------- --------- 
 
 
 
¶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. 
 
HANOI 00000004  002 OF 006 
 
 
Vietnam Intelligence Cooperation 
 
-------------------------------- 
 
 
 
¶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.  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 
 
---------------------------------- 
 
 
 
¶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 
 
HANOI 00000004  003 OF 006 
 
 
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 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 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 
 
HANOI 00000004  004 OF 006 
 
 
----------------- 
 
 
 
¶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 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 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. 
 
HANOI 00000004  005 OF 006 
 
 
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 
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 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 
 
HANOI 00000004  006 OF 006 
 
 
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. 
 
 
 
¶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