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Cablegate: Governor of Washington Meets with Prime Minister,

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 002655

SIPDIS

STATE FOR EAP/BCLTV

E.O. 12958: N/A
TAGS: PREL PGOV VM
SUBJECT: Governor of Washington Meets with Prime Minister,
Foreign Minister and other Senior Officials

1. (U) Summary: Governor of Washington Gary Locke and
delegation met September 22 with Prime Minister Phan Van
Khai and Foreign Minister Nguyen Dy Nien. He also met
earlier in the day with Minister of Trade Truong Dinh Duyen,
Minister of Planning & Investment Vo Hong Phuc and Vice
Minister of Finance Le Thi Bang Tam. The Prime Minister and
Foreign Minister warmly welcomed Washington State's strong
commercial relationship with Vietnam and expressed hope for
the continued expansion of ties in the areas of education,
medicine and culture. Both the PM and Foreign Minister
described Vietnam's needed for technical and other
assistance, and neither took the opportunity to raise the
recent dust-up over the designation of Vietnam as a "Country
of Particular Concern" in the area of religious freedom.
Even the "catfish and shrimp problems" were mentioned more
in sorrow than in anger. Press coverage of the visit was
broad and positive. End Summary.

Prime Minister Khai
-------------------

2. (U) Governor of Washington State Gary Locke and
delegation met for one hour September 22 with Prime Minister
Phan Van Khai. The Ambassador, Commercial Counselor and
Pol/C were also present. The Governor opened by noting that
Washington was the first U.S. state to send a delegation to
Vietnam after U.S.-Vietnam normalization in 1995. He
observed that 55 percent of all American exports to Vietnam
were from Washington (Note: Boeing aircraft sales are the
lion's share of this figure) and that one-third of all jobs
in Washington depended directly or indirectly on
international trade. Washington State was a strong
supporter of WTO accession for Vietnam, and Governor Locke
noted that the degree to which Vietnam implemented its
bilateral trade agreements with the United States would
affect Vietnam's WTO aspirations. He also stressed that his
state could help to play a role in the GVN's efforts to
modernize and raise the standard of living for its people.
The Governor underlined his hope that Washington would not
only continue to expand its exports of traditional products
such as agricultural goods but also introduce Vietnam to
some of the state's other leading-edge areas, such as
medical equipment, alternative energy technology and
education.

3. (U) PM Khai observed that a stable U.S.-Vietnam
relationship was a "requirement in today's world" and
expressed his delight at the great progress in bilateral
ties since normalization. What remained to be done was to
continue to boost further the relationship. Vietnam hoped
to develop comprehensively its relations with the United
States, and this included investment, medicine, training and
education, and culture. Washington State was helping to
lead the way in these areas, and the GVN sought to encourage
Vietnamese entrepreneurs to do business with enterprises in
the United States in general and Washington in particular.
Vietnamese businessmen still had limited understanding about
"the market, culture and history," and most Vietnamese
entrepreneurs would admit that they did not know much about
the United States. It was thus necessary to make efforts to
"understand each other further," the Prime Minister said.

4. (U) PM Khai noted that Vietnam, as a tropical country,
had a great diversity of products that it exported to the
United States and Washington. Coffee was a leading export,
but Vietnam could still do more because of the product's
"high quality." There were "obstacles" to the export of
seafood, but this area also had potential because of its low
price and high quality. Thanks to modern imported
equipment, Vietnam's products were widely accepted,
including in the United States. Vietnam hoped that the
United States could assist Vietnam with "management
knowledge" and believed that U.S. investors were "more
efficient" than "regional corporations" and could help to
increase Vietnam's efficiency, the PM said.

5. (U) Education cooperation was also very important to
Vietnam, and the people of Vietnam greatly appreciated the
support from the United States and highly valued the quality
of an American education. Vietnam, although poor, had a
high literacy rate and a tradition of families working hard
and saving to provide for their children's education. PM
Khai hoped that Washington State could play a role in U.S.-
Vietnamese education cooperation and expressed the GVN's
wish that it could expand the training of its civil servants
at American schools. Furthermore, Vietnam hoped to import
American hardwood for use in the manufacture of furniture
and handicrafts. The GVN had calculated that USD 100
million in wood products exports equaled 10,000 jobs, and
this area represented great growth potential for Vietnam.
Vietnam's per capita income had been USD 100 20 years ago,
but this figure had risen to USD 500. Similarly, Vietnam's
GDP had doubled since 1990. Although Vietnam was still
poor, and these figures were "small" in comparison to those
of the United States, they nonetheless represented a
"miracle" to the Vietnamese. The GVN hoped to enrich the
people of Vietnam, maintain a "diversity of foreign
relations" and always improve the environment for further
foreign direct investment. Although Vietnam greatly relied
on FDI, domestic investment was continuing to increase,
indicating that the Vietnamese people were "learning how to
do business," PM Khai said.

Foreign Minister Nien
---------------------
6. (U) During his earlier meeting with Foreign Minister
Nguyen Dy Nien, the Governor struck the same notes regarding
Washington State's relationship with Vietnam. FM Nien
expressed his gratitude for Washington State's support for
Vietnam's WTO accession. U.S. support was key, and the GVN
sought stable relations with the United States. The people
of the United States and Vietnam needed to understand each
other more. The two countries had a "painful history," one
that could have been avoided if they understood each other
like today, Nien said.

7. (U) Vietnam had made much economic progress, the Foreign
Minister continued, but problems remained, particularly in
remote and mountainous areas. Vietnam needed U.S.
assistance to increase its people's standard of living and
promote education, health care and culture. Vietnam had to
reform its legal system to make its investment environment
more attractive. There had been some progress, but further
steps were needed. Vietnam had an advantage in its low
labor costs and skillful work force, but still needed
technical assistance. During the recent U.S.-ASEAN Business
Council meeting in Hanoi, the American investors represented
there said that Vietnam was "not yet attractive" as an
investment. Although the United States was Vietnam's
biggest export market -- trade had increased from USD 60
million in 1995 to USD 6 billion in 2004 -- U.S. FDI in
Vietnam was still low. The two countries had problems over
shrimp and catfish, but Vietnam was "still learning" about
how to do business and needed U.S. support to increase its
competitiveness, FM Nien acknowledged.

8. (U) Vietnam hoped to send more students to the United
States, and FM Nien welcomed the Governor's idea about
bringing American university programs and professors to
Vietnam to increase the opportunities for Vietnamese young
people to have access to an American education. The Foreign
Minister also praised American health care and medical
advances and expressed his hope that Washington State could
expand technical and cultural exchanges with Vietnam.

Press
-----

9. (U) The Governor's visit received wide coverage,
including ten articles and an interview in major and popular
dailies. Coverage in HCMC was also broad and positive and
emphasized the importance of bilateral trade ties. None of
the stories raised anti-dumping issues or CPC designation.

Comment
-------

10. (U) The Governor and his delegation were well received
by the Prime Minister and Foreign Minister. As in the
Governor's other meetings with senior officials, the
atmosphere during both of these calls was very warm and
cordial. Neither PM Khai nor FM Nien hesitated to describe
the deficiencies of Vietnam's economy, and both
interlocutors underlined Vietnam's need for a stable
relationship with and the continued assistance of the United
States. Significantly, the Prime Minister and Foreign
Minister avoided discussion of the recent dust-up over the
designation of Vietnam as a "Country of Particular Concern"
in the area of religious freedom, and even the mention of
the "shrimp and catfish problems" was more in sorrow than in
anger.

MARINE

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