Cablegate: German Chancellor Reaffirms Strong Relationship

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 HANOI 001263

SIPDIS

SENSITIVE

STATE FOR EAP/BCLTV, EUR/AGS

E.O. 12958: N/A
TAGS: PREL ETRD EAID PHUM PTER GM VM
SUBJECT: GERMAN CHANCELLOR REAFFIRMS STRONG RELATIONSHIP
-- WITH VIETNAM

1. (U) SUMMARY. German Chancellor Gerhard Schroeder's
visit to Hanoi focused on economics and concluded with a
number of economics-related agreements, but also touched,
albeit briefly, on a number of other issues, including Iraq,
transnational crime, and counterterrorism. Schroeder did
not raise the issue of human rights, but in speech at Hanoi
Polytechnic University, he discussed the need for Vietnam to
allow a freer flow of information, especially via the
Internet. A reciprocal visit by the GVN Prime Minister in
2004 "is possible." END SUMMARY.

2. (U) (U) Schroeder is the second German Chancellor to
visit Vietnam in recent years. In 1995, then-Chancellor
Helmut Kohl visited. In 2001, Wolfgang Thierse, President
of the Federal Parliament visited. On the Vietnamese side,
Former Prime Minister Vo Van Kiet visited in 1993; Prime
Minister Phan Van Khai visited in 2001.

3. (SBU) Schroeder's visit to Vietnam came at the end of a
swing through Asia that included stops in Indonesia,
Malaysia, and Singapore. According to press reports, the
long-planned visit to the region was in jeopardy due to
concerns over SARS. However, the Chancellor decided to go
forward with the trip, albeit with a reduced entourage.
During his stay in Hanoi, Schroeder met with Prime Minister
Phan Van Khai, Communist Party Secretary General Nong Duc
Manh, and President Tran Duc Luong. Schroeder also gave a
speech at the Hanoi Polytechnic University before about 750
students, faculty, and alumni of German institutions.

4. (SBU) The visit, originally planned for two days, ran
from the evening of May 14 through May 15. The reason for
the shortened visit in Vietnam was Schroeder needed to
return to Germany to meet Secretary Powell. According to
Dr. Bui Huy Khoat, Director of the Institute of European
Studies of the National Centre for Social Sciences and
Humanities, the GVN "was relieved" that Schroeder did not
cancel his visit. Between the SARS crisis and the meeting
with Powell in Germany, it appeared that the short visit to
Vietnam might not take place at all. Also, fewer officials
accompanied Schroeder than originally planned due to the
SARS threat. Based on guidance from the German health
authorities, the entourage accompanying Schroeder was
reduced from 60 to 30, mainly at the expense of the German
business community. Prominent officials accompanying
Schroeder included Minister of Economics and Labor Wolfgang
Clement and Heinrich von Pierer, the CEO of Siemens.
According to a German embassy contact, von Pierer
participated as the head of the Asia-Pacific Committee of
the German Business Association. (Note: According to the
German emboff, Siemens has an MOU with the Ministry of
Industry to conduct a feasibility study for construction of
a metrorail project in and around Ho Chi Minh City. End
Note).

5. (SBU) According to Dr. Khoat, the relationship with
Germany as "perhaps the most important within the EU for
Vietnam." He noted that Vietnam and Germany have strong
ties due to the large (approximately 85,000) overseas
Vietnamese population. In addition, Vietnam has "about
40,000" German speakers, most of whom studied or worked in
the former German Democratic Republic. According to German
embassy figures, 7,000 Vietnamese academics have graduated
from German universities and in 2002, about 1,600 Vietnamese
were enrolled in German institutions of higher learning.

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AGREEMENTS
----------

6. (U) At the conclusion of the visit, Germany and Vietnam
signed an aid package worth about USD 76 million, according
to the German embassy. The package includes:
--Sanitation improvement in several provincial capitals (USD
52.5);
--hospital services improvement in northwest Vietnam (USD
10.5);
--flood damage repair in the Mekong region (USD 9.3); and
--upgrading of vocational schools (USD 3.5).
In addition to these measures, the two sides also signed a
joint statement on tourism cooperation.

--------------------
STRONG ECONOMIC TIES
--------------------

7. (SBU) Germany is Vietnam's largest European Union (EU)
trading partner. In 2002, Germany accounted for 28 percent
of trade between Vietnam and the EU, with two-way trade
amounting to about USD 1.9 billion, according to press
reports. According to the German embassy, Vietnam's exports
to Germany are about double its imports. Vietnam's most
important exports to Germany include shoes, garments, and
coffee. The leading German exports to Vietnam include
machinery and chemicals. Germany is also an important
source of official development assistance for Vietnam and
its third largest bilateral donor. In 2002, Germany
provided about USD 36 million of loans and grants to
Vietnam.

--------------------------
BUSINESS COMMUNITY'S VIEWS
--------------------------
8. (SBU) Economics and Labor Minister Clement met with
representatives of the German business community (most of
whom traveled up from Ho Chi Minh City) for a breakfast
meeting on May 15. According to the German emboff, the
businessmen raised "normal complaints" such as the lack of
transparency and the frustrations of dealing with the GVN
economic bureaucracy. More importantly, they appeared
"somewhat frustrated" over what they perceive as having to
operate at a disadvantage since implementation of the U.S. -
Vietnam bilateral trade agreement in December 2001.

9. (SBU) According to our emboff contact, one of the
businessmen told Clement that since two-way trade with
Germany only increased by about three percent in 2002,
German business people were "disadvantaged" compared to
their US counterparts. In a meeting with Deputy Prime
Minister (and former Trade Minister) Vu Khoan, Clement
raised this issue and received assurances from Vu Khoan that
Germany, as well as other European Union countries, "will be
treated equitably." Clement also told his hosts that
Germany will continue to support Vietnam's accession to WTO,
according to the German emboff.

----------------------
ON THE POLITICAL FRONT
----------------------

10. (SBU) According to Dr. Khoat, Vietnam and Germany have
no "serious bilateral political issues." During the
meetings, areas such as Iraq, counterterrorism, and
transnational crime were "touched upon." The German emboff
said that Germany and Vietnam are "rather close" on Iraq and
counterterrorism to the extent that both countries share the
view that the United Nations should play a "key role."
Regarding crime, the leaders briefly discussed mutual
concerns regarding transnational crime and its connection to
the Vietnamese community in Germany, but the discussions
were "not substantive," according to our German embassy
contact. Schroeder, however, did receive assurances from
his hosts that Vietnam would "continue to cooperate" with
German law enforcement authorities.

11. (SBU) Regarding human rights, Schroeder did not
specifically raise the issue with his hosts; however, he did
present Prime Minister Khai the EU's list of 24 prisoners of
concern. According to our emboff contact, the Prime
Minister accepted the list without comment. At a speech at
the Hanoi Polytechnic University, Schroeder did speak about
the need for Vietnam to have a "freer information flow,
particularly via the Internet." According to the German
emboff, the event was "a highlight" of the visit because it
was the type of situation where Schroeder is "most
comfortable." When Schroeder formally handed over five new
scholarships to the Polytechnic's rector, Schroeder received
a big laugh when he told the audience, "It is better to come
as an uncle bringing gifts than as an aunt who only plays
the piano."

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WHAT'S NEXT
-----------

12. (U) Separately, Dr. Khoat and the German emboff said
that further high-level visits are unlikely this year.
However, Dr. Khoat predicted that the GVN Prime Minister
"might visit" sometime in 2004.
BURGHARDT

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