Cablegate: Setting the Scene for Codel Bond Visit to Vietnam

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OO RUEHHM
DE RUEHHI #0004/01 0051013
ZNR UUUUU ZZH
O R 051011Z JAN 10
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0677
INFO RUEHHI/AMEMBASSY HANOI
RUEHHM/AMCONSUL HO CHI MINH CITY 0331

UNCLAS SECTION 01 OF 06 HANOI 000004

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SUBJECT: Setting the Scene for CODEL Bond Visit to Vietnam

1. (SBU) SUMMARY: U.S.-Vietnamese relations have advanced
significantly over the past three years and are arguably at their
most productive 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 in 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 expanded as our two militaries explore opportunities to
cooperate effectively. Powerful conservative voices in Vietnam's
Communist Party and security services, including the military,
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. At
the same time, we continue to engage with our Vietnamese
counterparts to remove the few remaining war legacy issues,
including Agent Orange/dioxin and unexploded ordinance, and are
moving forward on joint efforts to confront climate change, a keen
concern for Vietnam, which is particularly vulnerable to rising sea
levels.

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 UN
Security Council 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 provides an
opportunity to reiterate our commitment to deepening bilateral
relations across the board, while reminding senior GVN leaders that
future progress will be affected by the degree to which Vietnam
respects human rights and the wishes of its people to have a more
inclusive, responsive government. END SUMMARY.

Foreign Policy Priorities: China and the United States

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3. (SBU) Vietnam professes that it is "friends to all," a slogan
that sounds naive but reflects a fundamentally pragmatic approach
to foreign policy. Vietnam's overriding strategic concern remains
China. Hanoi is realistic about the power imbalance and is wary of
antagonizing its neighbor. Hanoi is also under no illusions that
it can somehow "balance" China with the United States, Russia, or
Japan individually. Nor is a more confrontational approach toward
China something the Party tolerates domestically: once unleashed,
nationalistic sentiment, though initially directed at China, could
easily turn toward the Party itself. 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 the USNS Impeccable in March, and this may have
contributed to the MND's decision to participate in a subsequent
fly-out to the aircraft carrier Stennis. Senator Jim Webb's
hearings over the summer on South China Sea issues were well
received here. The United States, as a matter of longstanding
policy, 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.

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Vietnam Intelligence Cooperation

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5. (SBU) Intelligence cooperation between the U.S. and Vietnam
continues to advance one step at a time as the Vietnamese
incrementally but steadily increase their interaction and
integration into both the region and the world. Vietnam has been
willing to work with us and regularly share information regarding
counterterrorism and counternarcotics. There are signs, as our
cooperation increases, that Vietnam is willing to move further in
other areas such as counterproliferation. You will receive
briefings on other intelligence-related matters during your visit.

Multilateral Engagement: Vietnam at the UNSC and ASEAN

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6. (SBU) Vietnam has been professional and well-briefed but
cautious at the UN Security Council, where it has completed its
two-year term as a non-permanent member. 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 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. Vietnam has lobbied hard to host a
U.S.-ASEAN summit in Hanoi in 2010.

7. (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 negative effect that Rangoon's continued
intransigence has on ASEAN's credibility. Vietnam has long urged
the United States to take a more flexible approach to Burma and
welcomed the Department's policy review; 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

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8. (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 most recent
round of which took place in Washington November 8-9.

For many in the Politburo and Central Committee, the "lessons" of
1989 and 1991, and more recently of the "color revolutions" in
Ukraine, Georgia, and Kyrgyzstan, remain fresh. This, coupled with
lingering war-era animosities, colors the perceptions of some
hard-line elements in the Ministries of Public Security and
Defense, as well as the Party hierarchy.

It will be extremely useful for you to reinforce the message that

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progress on human rights is not just a concern of Congress or the
State Department, but is something that can affect progress in
other areas of the relationship, including trade and military
sales.

9. (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.
The current "crackdown" began with the arrest and conviction of two
prominent journalists in 2008 who had worked to expose a major
corruption scandal. Over the past year more than twenty dissidents
have been arrested, including prominent corporate lawyer Le Cong
Dinh, whose heavily edited taped police confession, aired on state
television, was cast to portray U.S. efforts to promote the rule of
law and an independent judiciary as somehow sinister. In the area
of civil society, a recently promulgated Prime Ministerial decree
("Decision 97") prohibits independent scientific/technical
institutes from publicizing research critical of government/Party
policies, and there is substantial evidence that the Vietnamese
government is blocking access to Facebook. One positive area is in
religious freedom. Much remains to be done, but in general,
Vietnam continues to take steps to permit its citizens to worship
freely.

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 according to just released data,
dropped further in 2009 to 5.3%. 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 that year. U.S.
exports, particularly of agricultural products, are a particular
success story and grew 47% in 2008. Much of the increase of U.S.
agricultural exports was due to higher prices and not a growth in
volume, and should fall back into line with trend growth as the
world commodity boom slows because of the global recession. The
most recent numbers show bilateral trade down by about 5.7% in
2009.

11. (SBU) We are seeking to keep up the momentum with Bilateral
Investment Treaty talks and have had three rounds so far, with the
next proposed for early this year. We have accepted the GVN's
proposal for an Agricultural Working Group proposed by Minister of
Agriculture and Rural Development Phat at the last round of Trade
and Investment Framework Agreement talks in April 2009. This
working group will allow us to raise agriculture issues with a
variety of ministries before they inhibit trade. We are also
pushing Vietnam to further open key markets such as beef, though
our GVN contacts have told us that beef access is linked to the
pending catfish regulation that could hurt Vietnam's catfish
exports and rural economies, especially in the southern part of the
country. We were encouraged by Vietnam's decision to join the
Trans-Pacific Partnership, an 8-country regional free trade
negotiation, as an associate member. The first round of
negotiations is scheduled for March.

12. (SBU) Despite considerable USG support to assist the GVN in
modernizing its food and food safety regimes, including support for
the drafting of new food safety and biosafety laws, Vietnam's
current draft Food Safety Law requires mandatory labeling of all
food and agricultural products that contain at least five percent
genetically modified content. The Food Safety Law is currently
before the Science, Technology, and Environment Committee of the
National Assembly. It is expected the current draft law will be
amended and sent to the full National Assembly for further review
in March 2010 and a final vote in May 2010. Ambassador and emboffs
have repeatedly requested that the government remove all mandatory
labeling provisions in the draft legislation.

Health Diplomacy

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13. (SBU) Health diplomacy has been a major spur to improved
bilateral relations and has allowed us to engage with the GVN in
areas of mutual interest, such as pandemic preparedness. Over the
past several years, we have worked to boost Vietnam's development
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
health sector. 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 a
substantial investment to prevent and control highly pathogenic
avian influenza, with total funding since 2004 of about $50 million
through FY 2009. In April 2010, USAID will assist the GVN to host
the seventh International Ministerial Conference on Animal 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. In mid-October,
the Ministry of Health stopped counting confirmed cases of 2009
H1N1 influenza in Vietnam, which surpassed 10,000, and to date has
reported about 49 fatalities. As with highly pathogenic H5N1, the
Centers for Disease Control and Prevention, USDA, and USAID have
cooperated actively with their Vietnamese counterparts to track
H1N1 influenza and to provide guidance on containment and
treatment.

14. (SBU) Agent Orange (and its contaminant, dioxin) remains a
sensitive issue in U.S.-Vietnamese relations. Despite
dissatisfaction with the pace of U.S. engagement, highlighted in
both the international and local media, we continue to work with
the GVN to find mutually acceptable solutions to environmental
contamination and potential health impacts from dioxin. The two
governments agree that dioxin contamination is concentrated in
approximately 20 "hotspots," mostly areas within former U.S.
airbases where Agent Orange was stored, loaded, and transferred.
Areas subjected to heavy aerial spraying do not have soil
concentrations considered hazardous. The GVN has requested that
the United States focus its efforts at the "hotspot" at the former
U.S. airbase in Danang.

15. (SBU) Our engagement on this issue has accomplished much, both
to transform the tone of the bilateral dialogue and to build
Vietnam's capacity to address environmental issues and provide
assistance for the disabled. From 2001 to 2007, the USG spent over
USD 2 million to initiate technical dialogues, scientific
conferences on the effects of AO/dioxin, and fund a 4-year project
to build the capacity of Vietnamese scientists to analyze soil
samples collected from the Danang airport. In 2007, the State
Department and EPA provided $400,000 to support temporary dioxin
containment measures at Danang. The Joint Advisory Committee (JAC)
for Agent Orange/dioxin brings together scientists and researchers
from both governments (U.S. members represent State, USAID, EPA,
HHS, and DOD) to provide scientifically based advice to policy
makers for potential environmental and health cooperation. The JAC
held its fourth annual meeting in September 2009. It has helped
guide pilot remediation efforts and recently issued terms of
reference for its Health Working Group to begin disability survey
exercises and other activities to assess the impact, if any, of
dioxin contamination.

16. (SBU) With strong financial support from Congress, we work
with the GVN, UNDP, Ford Foundation, and other donors to form a
multilateral coalition to support environmental remediation.
USAID continues to implement USD 6 million in Congressional
appropriations from 2007 and 2009 for dioxin mitigation and health
activities. USAID has provided grants totaling USD 2 million (and
will provide an additional USD 1 million) to East Meets West, VNAH,
and Save the Children for efforts focusing on health and social
services delivery, rehabilitation services, and employment and
entrepreneurial assistance. In September 2009, USAID awarded a USD
1.69 million contract to begin preparation for environmental
remediation at the Danang airport. Also at Danang, EPA and the
Vietnam Academy of Science and Technology recently commenced a
pilot test to determine the suitability of bioremediation to
destroy dioxin in Vietnam. With remaining 2009 funds and the
recently announced additional USD 3 million in FY2010, USAID will
fund full containment at Danang in preparation for dioxin
destruction.

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Unexploded Ordinance

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17. (SBU) Efforts to deal with the consequences of unexploded
ordinance (UXO) and landmines continue to be warmly received. The
United States has invested over USD $43 million so far in a broad
spectrum of programs to locate, remove, and destroy unexploded
ordinance and landmines, and to improve the health and livelihood
of Vietnamese living in affected areas, particularly in Quang Tri
and Quang Binh provinces, which adjoin the former DMZ.
Approximately $3.5 million has been made available for FY 10 to
support UXO activities in Vietnam. While the US is committed to
UXO/landmine issues, we cannot guarantee that funding will always
be available. It is therefore necessary, given the complexity of
the problem, to support a systemic national approach to make
Vietnam's own mine action efforts more effective. With this in
mind, the United States has supplemented its assistance with
efforts to build the capacity of the newly formed Vietnam Bomb and
Mine Action Center (VBMAC) and to assist the VBMAC to draft and
implement a National Strategy to address the explosive remnants of
war.

U.S. Assistance: Trade, Education, Environment, Governance

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18. (SBU) U.S. assistance levels in non-PEPFAR 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. Given its status
as one of the countries most vulnerable to rising sea levels, the
GVN is particularly eager to partner with the United States to
develop responses to climate change. Building on existing, limited
bilateral initiatives, USAID expects to begin supporting climate
change programs in 2010 and plans to expand into environmental
governance, water and coastal resource management and biodiversity
protection in future years. The Joint Educational Task Force,
formed in the wake of Prime Minister 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 U.S. colleges
and universities now ranks eighth in the world. This and USG
programs to improve Vietnam's own education system will be key to
both political and economic development in Vietnam over the long
term.

19. (SBU) Your official hosts, Vietnam's National Assembly, has in
recent years moved to assert its independence, and now plays an
increasing role in oversight, the drafting of legislation, and
constituent services. The Mission is actively seeking
opportunities to work with the National Assembly to promote good
governance, including efforts to boost the professionalism of its
staff and improve its capacity to conduct independent research.
Your National Assembly hosts will likely pursue with you avenues
for building inter-legislative contact and exchanges.

Adoptions

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20. (SBU) The United States and Vietnam suspended their adoption
agreement in September 2008, after the Embassy and HCMC Consulate
uncovered repeated instances of baby selling and manipulation of
birth mothers, including at the Tu Do hospital in HCMC. This ended
a flow of Vietnamese children to American adoptive parents that
peaked at over 700 per annum in 2007. Since April 2009, Vietnam

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has made important strides to reform its adoption regime, with
significant assistance from UNICEF. The National Assembly is
currently considering a draft adoption law, which could take effect
as early as January 2011. Once Vietnam has its new adoption law in
place, we believe it will attempt to accede to the Hague Convention
on Intercountry Adoption, enabling Americans to once again adopt
Vietnamese orphans.

Administrative Obstructions: Staffing and a New Embassy

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21. (SBU) Vietnam closely adheres to its rights under Article 11
of the Vienna Convention on Diplomatic Relations to limit the size
of the sending state's diplomatic mission. GVN practice has been
to accept requests for new positions once, annually. However, the
approval process has been excruciatingly slow. At present, 10
positions (five in Hanoi, and five in HCMC) are awaiting approval.
The five in HCMC have been outstanding for 22 months. This
inability to increase staffing size to keep pace with the growing
workload in what is otherwise a robust bilateral relationship has
long since reached the point where it is adversely affecting our
ability to perform our mission. FM/DPM Khiem told Secretary
Clinton during his visit to the U.S. in October the approvals would
no longer be an issue, but to-date, we have seen no change. The
U.S. Mission has advocated for abolishing caps on staffing.

22. (SBU) Currently, U.S. Embassy Hanoi is housed in three office
buildings around town. The primary building, the Chancery, is a
nine-story, rat-infested building with inadequate space and
substandard building systems. When acquired in 1995, it was
intended to serve as a temporary facility. Although the search and
negotiations for a site to build a new Chancery took longer than
the five years originally envisioned, the USG and GVN were near
agreement on a selected site when negotiations were suspended in
January 2009 over the length of the land lease. The GVN asserted
it legally could only offer 99 years. The USG insisted that absent
fee simple title to the land (not permitted in Vietnam), it
required 99 years plus 99 years. As a result of the impasse, the
construction project has been tentatively rescheduled for 2020,
although the Embassy believes it will take 20-30 years before the
GVN is able to change its laws related to land ownership or
leasing, thereby opening the way to a building. In the meantime,
the State Department's Office of Overseas Building Operations (OBO)
is developing a scope of work for a major rehab of the existing
Chancery, to begin in 2013. It is unknown how much funding will be
available for such a project or how practical it would be, given
that no amount of money can ever make the existing building what it
is not -- a Chancery that provides an adequate and appropriate work
environment for its staff and serves as a visual statement of the
USG's commitment to building a healthy, vibrant bilateral
relationship with Vietnam.
Michalak

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