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Cablegate: Peace Corps and Gvn Fail to Conclude Country Agreement

VZCZCXRO1312
OO RUEHHM
DE RUEHHI #1139/01 1720331
ZNR UUUUU ZZH
O 210331Z JUN 07
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5691
INFO RUEHHM/AMCONSUL HO CHI MINH 3274
RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHBK/AMEMBASSY BANGKOK 5808

UNCLAS SECTION 01 OF 02 HANOI 001139

SIPDIS

STATE FOR EAP/MLS
NSC FOR ASIA/
BANGKOK FOR PC DIRECTOR JOHN WILLIAMS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON PREL EAID VM
SUBJECT: PEACE CORPS AND GVN FAIL TO CONCLUDE COUNTRY AGREEMENT

1. (SBU) Summary: Following three days of meetings, Peace Corps and
Ministry of Foreign Affairs were unable to conclude a country
agreement concerning a Peace Corps program in Vietnam. Outstanding
issues could conceivably be resolved in future discussions, but the
GVN would have to gain inter-agency accord, a process that has not
occurred over 11 months of talks so far and will apparently take
some additional time. Peace Corps Regional Director Jay Katzen
explained to the GVN that the failure to reach understanding after
extensive efforts, combined with the fact that 23 other countries
are competing for the Peace Corps, makes it harder to defend our
shared interests in seeking an agreement in the future. End
Summary.

2. (SBU) On June 16, 17 and 18, Jay Katzen, Peace Corps's Regional
Director for Europe, Mediterranean and Asia, and Lien Galloway,
Associate General Counsel, met with a Government of Vietnam (GVN)
delegation in Hanoi to discuss the establishment of a long-awaited
Peace Corps presence in Vietnam. The GVN invited Katzen and
Galloway to come on short notice to Vietnam in order to "wrap up"
negotiations begun in July, 2006 in advance of the meeting between
President Bush and President Nguyen Minh Triet on June 22 in
Washington. Tran Ba Viet Dzung, Director General of the Ministry of
Education and Training's (MOET) International Cooperation
Department; Lang of MOET; Nguyen Hoanh Nam and Nguyen Ba Hung,
Deputy Directors of the Ministry of Foreign Affairs' (MFA) Americas
Department; and MFA's Nguyen Trung Viet comprised the GVN
delegation.

3. (SBU) The negotiators agreed to structure the talks around first
concluding a Country Agreement to serve as the legal basis for the
establishment of a Peace Corps program. Second, the two sides hoped
to gain agreement on a separate Memorandum of Understanding (MOU)
that would outline program details over its first two years,
including provisions for forty volunteers to teach English as a
second language at universities in Hanoi and Ho Chi Minh City. The
MOU would also address envisioned future programmatic expansion into
environmental and health care areas.

4. (SBU) An air of optimism accompanied the start of the
negotiations on Saturday, June 16. Katzen stated his hope that the
two sides could negotiate and conclude an agreement in time for the
June 22 meeting at the White House pursuant to the Vietnamese stated
wish. Katzen and Galloway explained the time constraints involved,
but set out a road map for negotiations that could succeed in
meeting the inherent logistical deadlines of dealing with such
matters as translation. They also offered to meet morning, noon and
night each day to accomplish our mutual objectives.

5. (SBU) The meeting began smoothly and moved quickly through the
first part of the Country Agreement. The negotiation soon stalled,
however, as the GVN proceeded to express doubts over several
paragraphs of the language in the U.S. template. For example, MFA
officials focused early on the section of Article II that mandates
the GVN to accord treatment to Peace Corps personnel and volunteers
"no less favorable than that accorded generally to nationals of the
United States residing in Vietnam." MFA's Hung, in particular,
challenged the phrase "equitable treatment."

6. (SBU) Katzen and Galloway patiently and thoroughly answered all
questions posed on the various provisions, but the GVN side kept
coming back with more questions. Moreover, the Vietnamese officials
said they would have to seek guidance and approval of the Ministry
of Justice, the Ministry of Finance and even others in the MFA to
consent to the template language.

7. (SBU) By the third day, GVN negotiators concluded there were
still at least three major areas in the Country Agreement that
remain problematic. First, they could not give final agreement to
language related to the status of treatment of PC staff members,
which in the template calls for treatment equivalent to that
accorded administrative and technical staff personnel of the
diplomatic mission of the United States, except for immunities.
Second, the GVN introduced a sentence calling for the application of
Vietnamese law in case of disputes, which the U.S. side resisted as
unnecessary and unacceptable. Third, the Vietnamese expressed
confusion over the meaning of the Article V exemption from
investment and deposit requirements and currency controls all funds
introduced into Vietnam by Peace Corps personnel, despite U.S.
negotiators' attempts at clarification. Although the GVN did not
explicitly raise other minor issues on the third day that they had
focused on earlier, it is also possible they still had concerns
about exemptions from duties, visa fees, and income taxes.

8. (SBU) Katzen and Galloway suggested that the two sides, in
parallel with talks on the Country Agreement, initiate discussions
on the details of the separate Memorandum of Understanding (MOU)

HANOI 00001139 002 OF 002


addressing the details of the initial program for volunteers engaged
in teaching English. The Vietnamese side, however, declined to
engage on these points in advance of an agreement on the text of a
Country Agreement. Moreover, despite the opportunities for more
meetings to address all the questions in more detail, and the MOU,
they cancelled two scheduled morning sessions and declined
suggestions to meet in the evening.

9. (SBU) At the conclusion of the talks on Monday afternoon, MOFA's
Nam expressed his belief that the two sides had made "some progress"
and stated his hope that the Peace Corps would still consider
Vietnam in the near future. They promised to consult with relevant
ministries and provide answers to the Peace Corps as soon as
possible, perhaps "within a day or two." Katzen expressed his
disappointment at the GVN's inability to conclude an agreement, and
noted that 23 other countries were ready and willing to sign an
agreement with the Peace Corps. As a result, he could not make any
promises to the GVN.

10. (SBU) Comment: In the end, the GVN's expressed political will
to reach a quick agreement on language allowing for the launch of a
Peace Corps program in Vietnam was no match for the complexity of
its bureaucratic process. We do not believe that there was bad
faith involved, but rather an ultimately unrealistic GVN hope that
direct talks with the Peace Corps would prove easier and more
fruitful than the many rounds it had held with Embassy personnel
covering the same issues. While Katzen made it clear he arrived in
Vietnam with the full authority to negotiate and sign the agreement,
it was evident that the GVN delegation lacked similar negotiating
authority and/or that the political will to conclude such an
agreement is missing from critical elements of the GVN bureaucracy.
End Comment.

11. Peace Corps Regional Director Jay Katzen and Peace Corps
Associate General Counsel Lien Galloway have cleared this message.

ALOISI

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