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Cablegate: Setting the Scene for U.S.-Vietnam Policy Planning Talks,

VZCZCXRO1119
OO RUEHDT RUEHHM RUEHPB
DE RUEHHI #0846 2380619
ZNR UUUUU ZZH
O R 260618Z AUG 09
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE
INFO ASEAN REGIONAL FORUM COLLECTIVE
RUEHHI/AMEMBASSY HANOI
RUEHHM/AMCONSUL HO CHI MINH

UNCLAS HANOI 000846

SENSITIVE
SIPDIS
STATE FOR S/P (GREEN) EAP/MLS

E.O. 12958: N/A
TAGS: PREL PGOV PHUM ECON ETRD MARR VM
SUBJECT: SETTING THE SCENE FOR U.S.-VIETNAM POLICY PLANNING TALKS,
8/31-9/1

OVERVIEW
--------

1. (SBU) Director Slaughter: Your Policy Planning Talks with the Vietnamese, the second since discussions were inaugurated last October, comes at an important moment in the bilateral relationship. Overall, ties between our two countries have advanced significantly over the past two-three years, and are arguably at their highest point since relations were reestablished in 1995. The United States remains Vietnam's largest export market and third-largest overall trade partner, and this year jumped to first position among foreign investors. We have boosted cooperation in areas ranging from public health and higher education
to mine clearance and technical assistance designed to help Vietnam meet its WTO and BTA obligations. Strategically, Vietnam views the U.S. presence in the region as a force for stability, a perspective reinforced during the April fly-out to the USS Stennis and through the latest round of defense talks in June. And while we are regularly reminded that powerful conservative voices in Vietnam's Communist Party and security services remain wary of U.S. intentions, their
influence will wane 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. While Vietnam has made strides in improving religious freedom -- resulting in the country being removed from the list of "Countries of Particular Concern" -- there has not been a corresponding improvement in political rights or press freedom. Deep-seeded suspicion over our human rights reporting and advocacy came to the surface in an unusually public and unprecedented way August 19, when Vietnam National Television aired taped confessions of four recently arrested dissidents during its primetime newscast and portrayed ongoing U.S. assistance efforts in the area of judicial reform and rule of law as part of a conspiracy to destabilize the Government of Vietnam We have our differences too on how Vietnam approaches international issues. While taking its UNSC obligations seriously, Vietnam's non-interventionist line has caused it to align with Russia and China on issues such as Georgia and Darfur. China, understandably, remains Vietnam's strategic obsession and provides the subtext for Hanoi's "friends to all" foreign policy -- an approach that can at first seem naive, but
which is firmly rooted in realpolitik.

YOUR HOSTS AND THE AGENDA
-------------------------

3. (SBU) Your direct counterpart for the talks, MFA Director General Pham Huu
Chi, is new to his position, but brings a range of interesting experiences. DG Chi's most recent assignment was as DCM in Seoul, and he is in a good position to offer insights on Hanoi's "lips and teeth" relationship with the DPRK. Prior to that, DG Chi was the Deputy DG in the MFA's ASEAN department, and he will be playing an active role crafting Vietnam's approach to its 2010 ASEAN Chair. Perhaps most intriguingly, DG was the MFA's lead official organizing the opening of Vietnam's embassy in Washington as relations were established in 1995; as such, he was EAP DAS Scot Marciel's direct equivalent. Vietnam's delegation
will be co-chaired by Dang Dinh Quy, who served as Political Counselor at Vietnam's embassy in Washington and is a longtime contact of DAS Marciel. Quy currently serves as Director of the Institute for Foreign Policy and Strategic Studies at the MFA-affiliated think tank, the Diplomatic Academy of Vietnam. Joining the Vietnam delegation as James Green's counterpart will be Assistant DG Nguyen Thanh Hai; Hai has several years' experience on the policy planning staff, and previously served in the MFA's office responsible for building relations with communities in Vietnam's diaspora. An official from the Vietnamese embassy will round out the delegation.

4. (SBU) As scheduled, the formal Policy Planning Discussions will encompass five sessions:

- Foreign policy priorities of the United States and Vietnam (dinner, no lead)
- Political, security, economic changes in Asia-Pacific; role of
major and emerging powers in the region (U.S. lead)
- Evolving regional institutions and structures in East Asia, including ASEAN,
ASEAN+3, ARF, EAS, Six Party Talks (Vietnam lead)
- Making multilateral formal and informal institutions work: G20, UN, ASEAN, (U.S. lead)
- Wrap-up: U.S.-Vietnam bilateral relations, policy planning follow up (Vietnam)

5. (SBU) As with last year, a common thread in all of these will be Vietnam's
desire to be seen as a responsible member of the international community, keen
to assume international and regional responsibilities. In your discussions, you will meet sophisticated individuals eager to put to rest the image of a hidebound, isolated, and inward-looking Vietnam. At the same time, you will likely
encounter a clear-eyed acknowledgment of Vietnam's status as a small power locked into an asymmetrical relationship with its northern neighbor, China.

VIETNAM'S FOREIGN POLICY PRIORITIES
-----------------------------------

6. (SBU) Vietnam professes a "friends to all" foreign policy, guided by a non-interventionist ethic similar to China's famous Five Principles of Peaceful Coexistence. But despite the Bandung-era rhetoric, Vietnam'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 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, our relationship is but one of several, and Vietnam is wary of pushing the agenda with the United States too far, too fast, lest it antagonize China.

7. (SBU) Mistrust of China runs deep, fed by historical animosities and simmering resentment over what is widely viewed as a weak position on 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 Webb's hearings on South China Sea issues were watched closely in Hanoi, as they were in Beijing. 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 routine operations. We have encouraged all parties to the dispute to work together to build confidence, in particular by enhancing the 2002 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.

8. (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. But Vietnam has shied away from taking a leadership role, and where there has been disagreement has tended to follow a strict non-interventionist line. This has led Vietnam to follow China and Russia's lead on Kosovo and Georgia, as well as on other issues such as Somali piracy and the ICC Indictment of Sudanese President Bashir. We anticipate more of the same as Vietnam finishes its term this year.

9. (SBU) We expect Vietnam to do better as ASEAN Chair, a position it assumes
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.

10. (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 obstacles that Rangoon's continued intransigence poses for 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. At the same time, our MFA contacts say they recognize that the continued detention of ASSK makes it extremely 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
----------------------------------

11. (SBU) For Vietnam, non-interference is not just an abstract principle, but also a reflection of narrow self-interest. Vietnam has a 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. While your talks do not include human rights as a formal agenda item, the subject is something that you should not shy away from raising -- both for its own sake and because human rights concerns have a real effect on our policy toward Vietnam. For its part,
Vietnam continues to deflect criticism by blaming "overseas Vietnamese" communities for spreading misinformation, as it did most recently during Senator Jim Webb's August visit. The MFA continues to be fixated on the possibility of a Vietnam Human Rights Act in Congress, and you are likely to hear objections to its passage.

12. (SBU) The human rights picture is not all bleak, to be sure. Economic growth has brought with it an enormous expansion of personal freedoms, and government is much less intrusive than it was twenty, ten, or even five years ago. While much remains to be done, religious freedoms continue to expand, with most religious groups reporting improved conditions and growing memberships. We view this progress as continuing. We have not, however, seen corresponding progress in political rights, and the government continues to severely restrict freedom of speech and assembly. Political dissident groups such as "Bloc 8406" and the Democratic Party of Vietnam are banned and their members subject to harassment and arrest, nineteen over the past year. The June arrest of prominent lawyer Le Cong Dinh and others provided a particularly poignant reminder that Vietnam's collective leadership, its commitment to market-oriented economic policies
notwithstanding, 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 and three of his alleged associates as part of its primetime news broadcast. Dinh's confession in particular focused on U.S. assistance, casting U.S. efforts to promote the rule of law and an independent judiciary as somehow sinister.

ECONOMIC SUCCESSES AND CHALLENGES
---------------------------------

13. (SBU) During last year's policy planning discussions, Dang Dinh Quy quipped that Vietnam's leadership welcomed the TARP and auto bailouts as indications
that the United States was progressing toward a "socialist economy." Apart from the obvious irony, the remark was telling because capitalist-oriented economic reform ("doi moi" or renovation) has over the past decade become institutionalized in Vietnam. 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 below 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.

15. (SBU) We are seeking to keep up the momentum with BIT negotiations and are 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 be interested to hear how the concept is regarded in
Washington, particularly in the context of other FTA negotiations. You may hear calls for Vietnam to be designated as a beneficiary under the U.S. Generalized System of Preferences. (As Deputy USTR Demetrios Marantis remarked in his July visit, the United States would welcome Vietnam's receiving GSP status, provided it establishes required labor rights guarantees and intellectual property protection.) 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, although these are also signs of a thriving trade relationship.

THE MILITARY RELATIONSHIP AND MIA/POW ISSUES
--------------------------------------------

16. (SBU) Vietnam's apprehensions about China come into play most directly perhaps in our military-military relations. But here too there has been progress, despite our two countries' complicated history. 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: accounting for 645 Americans previously listed as MIA (1332 remain missing in Vietnam). This summer's use of a U.S. Navy ship, the USNS Heezen, to search for U.S. MIAs in Vietnamese coastal waters demonstrates Vietnam's willingness to increase cooperation on the issue.

17. (SBU) Largely on these foundations, the two sides' 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 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, with our Defense Attache attending a Vietnamese exercise in early July.

HEALTH DIPLOMACY/AGENT ORANGE/UNEXPLODED ORDINANCE
--------------------------------------------- -----

18. (SBU) Currently about 80 percent of all U.S. development aid is in the areas of health and disability. 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 avian influenza, with total funding since 2004 of about $45 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. There have now been approximately 2,000 confirmed cases of H1N1
influenza in Vietnam, with two fatalities. The actual number is probably higher, as many people do not seek medical treatment unless they are seriously ill. As with H5N1, the Centers for Disease Control and Prevention and USAID have cooperated actively with their Vietnamese counterparts to track the disease and
to provide guidance on containment and treatment.

19. (SBU) Agent Orange (along with 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, over the longer term, we are gradually seeing more balanced reporting, for example, on the annual U.S.-Vietnam Agent Orange/Dioxin Joint Advisory Committee (JAC), 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. ASSIATANCE: TRADE, EDUCATION, ENVIRONMENT
--------------------------------------------- -

20. (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 secondary 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. Efforts to improve Vietnam's higher education -- expanding opportunities to study in the United States and enhancing partnerships with U.S. universities -- were a main focus of Prime Minister Nguyen Tan Dung's 2008 visit to
Washington. The Educational Task Force formed as a product of the visit met in January in HCMC to discuss ways forward in several key areas, including establishing an American university in Vietnam. In the meantime, time-tested 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, exposing them to American society and creating goodwill. The number of Vietnamese students studying in U.S. colleges and
universities now ranks eighth in the world.

21. (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
-------------------

22. (SBU) Complaints that we have heard from some Vietnamese officials that "this year is nothing special" miss the mark. Nevertheless, the series of senior-level visits that propelled the relationship -- from Hanoi's APEC summit in 2006 to the visit of PM Dung to Washington in June 2008 -- is unlikely to be repeated, at least in the near term. 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 in Washington will add momentum to our efforts to help translate good feelings into sustainable accomplishments.
MICHALAK

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