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Cablegate: Setting the Scene for Deputy Secretary Steinberg's September

DE RUEHHI #0978/01 2611034
O R 181033Z SEP 09



E.O. 12958: N/A
SUBJECT: Setting the Scene for Deputy Secretary Steinberg's September
26-27 Visit to Hanoi

1. (SBU) SUMMARY: U.S.-Vietnamese relations have advanced
significantly over the past three years and are arguably at their
highest point 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 to 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 blossomed as our two militaries are exploring concrete areas of
cooperation. Powerful conservative voices in Vietnam's Communist
Party and security services 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.

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
UNSC 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 is a useful opportunity to
reiterate our commitment to deepening bilateral relations across
the board, while warning senior GVN leaders that future progress,
particularly in trade, will be contingent on greater respect for
human rights and democracy. END SUMMARY.

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Foreign Policy Priorities: China and the United States

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3. (SBU) Vietnam professes a "friends to all" foreign policy., but
it'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 the government's awkward efforts to downplay 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, 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 USNS Impeccable in March, and this may have
contributed to the MND's decision to participate in the Stennis
fly-out. Senator Jim Webb's hearings on South China Sea issues
were well received here. 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
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.

Multilateral Engagement: Vietnam at the UNSC and ASEAN

--------------------------------------------- ---------

HANOI 00000978 002 OF 005

5. (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. 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 anticipate more of the same as Vietnam
finishes its term this year. 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. If the U.S.-ASEAN
summit is revitalized, Vietnam, as ASEAN Chair, would lobby hard to

6. (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 negative effect that Rangoon's continued intransigence
has on 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. 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


7. (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 next
U.S.-Vietnam dialogue on human rights is in Washington November
8-9. You should encourage the Vietnamese side to move beyond
talking to concrete action. It is critical that Vietnam
understand that progress on human rights is essential to progress
in other areas of the relationship, including trade.

8. (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.
More than twenty dissidents have been arrested over the past year,
eight in the past three months alone: eight are scheduled to face
trial the week before you arrive. The current "crackdown" began
with the arrest and conviction of two prominent journalists who had
worked to expose a major corruption scandal. The action sent a
chilling message to other independent-minded journalists. Over the
past year, several editors and reporters from prominent newspapers
have been fired for sensitive coverage, and two bloggers were
recently detained and released only after they promised to stop
blogging. A recently promulgated Prime Ministerial decree
("Decision 97") prohibits independent scientific/technical
institutes from publicizing research critical of government/Party
policies. The decree's main target, the reform-minded Institute
for Development Studies, closed its doors. However, the decree
could have a wider effect: inhibiting other groups, dissuading
foreign research partners, and discouraging R/D investment.

9. (SBU) The June arrest of lawyer Le Cong Dinh -- a successful
corporate lawyer, Fulbright alum, and well-heeled member of the

HANOI 00000978 003 OF 005

establishment -- served as a particularly poignant reminder that
Vietnam's collective leadership 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 Dinh's
confession focused on U.S. assistance, casting U.S. efforts to
promote the rule of law and an independent judiciary as somehow
sinister and specifically mentioning the Ambassador and former
Deputy Secretary Negroponte. The Ambassador protested the
broadcast in a strongly worded letter to your Vietnamese
counterpart, VFM Pham Binh Minh, but has not received a response.

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 is expected to decline further in
2009, with most projections around 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. Bilateral trade is down by
about 5% so far in 2009.

11. (SBU) We are seeking to keep up the momentum with BIT talks
and have proposed mid-November for the next round. We are also
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 want to
know if the U.S. plans to join. You will almost certainly hear
calls for Vietnam to be designated as a beneficiary under the U.S.
Generalized System of Preferences. Deputy USTR Demetrios Marantis
told the GVN the United States would welcome Vietnam's receiving
GSP status, provided it establishes required labor rights
guarantees and intellectual property protection required by U.S.
law. 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 It would be useful to reassure the
Vietnamese that we remain committed to deepening our trade and
economic relations, while also noting that progress on our trade
agenda, particularly in the Congress, could be imperiled by human
rights problems.

The Military Relationship and MIA/POW Issues


12. (SBU) Vietnam's apprehensions about China come into play most
directly perhaps in our military-military relations. Here too,
however, there has been progress: 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: since
1973, 649 Americans previously listed as MIA have been accounted
for in Vietnam (1,319 remain missing). As a sign of continued
goodwill, in June, Vietnam granted permission for a U.S. Navy
oceanographic survey ship, the USNS Heezen, to search for U.S. MIAs
in Vietnamese coastal.

13. (SBU) Our 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

HANOI 00000978 004 OF 005

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 In an
unprecedented sign of warming mil-mil ties, in April, senior
Vietnamese Navy and Air Force officers toured the USS John C.
Stennis in international waters off the coast of Vietnam. In his
June 2008 visit, Prime Minister Nguyen Tan Dung announced that
Vietnam would take part in GPOI, but progress has been slow, and
Vietnamese officials are reluctant to do more than send observers.
We suggest that you encourage Vietnam to participate actively,
including in the July 2010 Capstone exercises in Cambodia.

Health Diplomacy/Agent Orange/Unexploded Ordinance

--------------------------------------------- -----

14. (SBU) Health diplomacy has been a major spur to improved
bilateral relations. Over the past several years, we have worked
to boost Vietnam's develop 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 areas of health and disability. 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 substantial
investment to prevent and control highly pathogenic avian
influenza, with total funding since 2004 of about $50 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, 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. As of
September 17, the Ministry of Health reported 5,961 confirmed cases
of 2009 H1N1 influenza in Vietnam, with six fatalities. The actual
number is probably higher, as many people do not seek medical
treatment unless they are seriously ill. As with highly pathogenic
H5N1, the Centers for Disease Control and Prevention and USAID have
cooperated actively with their Vietnamese counterparts to track
H1N1 influenza and to provide guidance on containment and

15. (SBU) Agent Orange (and 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, we are gradually seeing more balanced
reporting, for example, on the annual U.S.-Vietnam Agent
Orange/Dioxin Joint Advisory Committee (JAC), the most recent round
of which took place in September, 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. Assistance: Trade, Education, Environment

--------------------------------------------- -

16. (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 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. The Joint
Educational Task Force formed in the wake of 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

HANOI 00000978 005 OF 005

U.S. colleges and universities now ranks eighth in the world.

17. (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

What You Can Expect


18. (SBU) 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 will add momentum to our
efforts to help translate good feelings into sustainable

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