The Ambassador's October 28 Call on Prime Minister

UNCLAS SECTION 01 OF 05 HANOI 002946

SIPDIS

SENSITIVE

STATE FOR EAP/BCLTV and EB/TPP/BTA/ANA
PACOM FOR FPA
STATE PASS USTR ELBRAYN AND GHICKS
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO

E.O. 12958: N/A
TAGS: PREL PGOV PHUM KIRF ECON ETRD EINV VM HUMANR RELFREE ETMIN HIV AIDS WTO
SUBJECT: The Ambassador's October 28 Call on Prime Minister
Phan Van Khai

Reftel: A) Hanoi 2908; B) Hanoi 2863; C) Hanoi 2379; D)
Hanoi 2398


1. (SBU) Summary: Meeting officially for the first time
October 28, the Ambassador and Prime Minister Phan Van Khai
spent over an hour discussing the overall bilateral
relationship, trade and commercial matters, health
cooperation, religious freedom and human rights issues,
Montagnards in the Central Highlands and construction of the
new Embassy compound. The Prime Minister expressed
gratitude for the Ambassador's support for Vietnam's WTO
accession and urged the USG not to create "strict
conditions" during bilateral negotiations; called for the
creation of a "bilateral framework for long-term
cooperation;" noted that the GVN had selected Boeing to
supply Vietnam's long-haul aircraft; agreed that Vietnam's
leadership should speak out on HIV/AIDS and asked the United
States to send more experts in this field; underlined
Vietnam's policy to support ethnic minorities and promote
religious freedom, noting that the prominent prisoners
raised by the Ambassador had been imprisoned for breaking
the law; argued that Montagnards crossing into Cambodia did
so at the encouragement of the Montagnard Foundation in the
United States; and took note of the Ambassador's request to
move forward with our plans to purchase land identified as
the site for the new Embassy. End Summary.


2. (SBU) The Ambassador, accompanied by Pol/C, acting
Econ/C and Pol Assistant, met officially for the first time
October 28 with Prime Minister Phan Van Khai. Accepting the
Prime Minister's invitation to begin what turned into 70-
minute conversation, the Ambassador said that the bilateral
relationship is in good shape, with both sides' having made
significant progress in the nine years since normalization.
Military-to-military ties are growing, the United States has
its largest Fulbright program in the world in Vietnam and
bilateral trade is skyrocketing.


3. (SBU) Trade is the bedrock of the relationship, the
Ambassador continued, and both countries have clearly
benefited from continually expanding trade ties. The next
obvious step is Vietnam's accession to the WTO, and we had
heard good things about the ongoing discussions in
Washington. The Prime Minister's own statements on economic
reform and corruption and his speech at the opening of the
National Assembly (Ref A) made clear Vietnam's interest in
going further and faster in its international economic
integration efforts. The United States strongly supports
Vietnam's WTO accession, and, as the bilateral negotiations
proceed, we hope to focus more on the timetable and approach
for reaching WTO standards, which will help Vietnam to
achieve more rapid economic growth.


4. (SBU) Vietnam's accession to the WTO is especially
essential for Vietnam's textile industry. If Vietnam does
not succeed in acceding soon to the WTO, it will be
difficult for foreign buyers to continue to invest time and
money in Vietnam. The sooner Vietnam does not have to deal
with the quota system, the better, the Ambassador noted.
The United States also hopes to work with the GVN on
financial sector reform. Ultimately, domestic savings and
investment will be a greater source of capital than
development assistance, remittances or foreign assistance,
but Vietnam needs a good banking system to make this work,
the Ambassador stressed.


5. (SBU) Health cooperation has expanded considerably and
will expand much more thanks to the President's Emergency
Fund for HIV/AIDS, the Ambassador noted. For the United
States, the GVN's cooperation and coordination are vital,
particularly in three areas:

-- 1) A GVN-wide commitment is necessary for our efforts to
succeed, and the Ambassador expressed his hope to be able to
brief the GVN's interagency committee on our five-year
strategy;

-- 2) On drug imports, as part of its HIV/AIDS assistance
program, the USG hopes to import large amounts of drugs, and
we need a GVN waiver of the 15 percent import tariff;
-- 3) Publicity from the top is also critical, and the
Ambassador urged the Prime Minister and other Vietnamese
leaders to speak out on HIV/AIDS. The influence of
Vietnam's leadership can be important in our care and
prevention efforts, the Ambassador stressed, particularly in
dealing with stigma and discrimination.


6. (SBU) On the issue of adoptions, the Ambassador expressed
the USG's gratitude for the Prime Minister's assistance in
advancing our adoption program. By encouraging Vietnam's
relevant ministries to amend Decree 68, the Prime Minister
made possible achieving progress toward a pilot program for
the adoption of special needs orphans.


7. (SBU) However, a relationship as complex as that of the
United States and Vietnam requires further work, the
Ambassador noted. Both countries need new embassies, and,
for its part, the United States has identified land we hope
to buy. We want to move forward but cannot because the
Russians still control the property. The USG has put aside
funds to start as soon as possible, but, if we do not start
soon, these funds may be used somewhere else.


8. (SBU) The USG is pleased with the progress we have made
in bilateral counterrorism cooperation, but we are still
unhappy with the level of law enforcement cooperation,
particularly in the area of counternarcotics. The need for
increased cooperation with our Drug Enforcement Agency
personnel is an issue the Ambassador raised with the
Minister of Public Security (Ref B),he said.


9. (SBU) The year 2005 will mark the tenth anniversary of
the normalization of bilateral relations, and many events
will commemorate this, including, hopefully, a visit of the
Prime Minister to Washington, the Ambassador continued. We
believe that the PM's visit will send a message about the
changes in the bilateral relationship and the bright future
that our ties can have. We look forward to hearing from the
PM about how the visit can be organized. For our part, we
believe that there are three things to work on in the run-up
to the Prime Minister's trip:

-- 1) Positive decisions on major commercial projects, such
as the purchase of Boeing 7E7s and Lockheed-Martin's
interest in Vinasat, will be important as we prepare the
groundwork for the Prime Minister's visit;

-- 2) The United States recently designated Vietnam a
country of particular concern (CPC) regarding a lack of
religious freedom. This reflects the serious concern of the
American people. We will look closely at the implementing
regulations for the Ordinance on Religion and, hopefully,
these regulations will have a positive impact. There are
three main issues: Recognition of new denominations;
opening new churches in the Central Highlands; and banning
forced renunciations. Concrete steps in these areas, as
well as the vocal support of Vietnam's leadership for the
concept of religious freedom, will go a long way in changing
attitudes in the United States regarding the state of play
on the religious freedom issue in Vietnam;

-- 3) The broader issue of human rights also requires
attention. The cases of Nguyen Dan Que and Pham Hong Son
are troubling to the United States. We are aware that they
have been transferred to a prison far from their families.
Their release, as well as that of Fr. Nguyen Van Ly, perhaps
under a Tet amnesty, would be warmly welcomed, the
Ambassador said.


10. (SBU) The Prime Minister thanked the Ambassador for
raising many areas of bilateral progress and many issues
that require further cooperation. Vietnam is "delighted" to
see relations grow in so many areas, such as politics,
economics, security and defense. Both countries should
exert more effort to promote the bilateral relationship.
Vietnam welcomed the President's decision to grant a
continuing waiver of Jackson-Vanik and also to include
Vietnam on the list of priority countries for receiving
HIV/AIDS assistance. Vietnam's wish is to receive more
experts from the United States to fight this epidemic.
However, the Prime Minister continued, the GVN notes the
lack of understanding and disagreement between the two
countries, reflected in the CPC designation and the U.S.
House of Representative's vote on the Vietnam Human Rights
Act. The PM expressed his hope that the Ambassador will
gain firsthand experience in Vietnam and make "more
objective recommendations" to Washington such that U.S.
policy can "reflect the situation more truly."


11. (SBU) Turning to trade and economics, the Prime Minister
noted that the United States and Vietnam spent several years
negotiating the Bilateral Trade Agreement (BTA). To date,
Vietnam has not signed any other trade agreement as
comprehensive as the BTA. Considering the low level of
competitiveness and development of Vietnam's economy,
Vietnam's decision to sign the BTA reflected "political
will." The decision to promote WTO accession also required
this political will. For a weak economy such as Vietnam's,
WTO accession will provide many opportunities as well as
challenges. The GVN hopes that the USG will understand
Vietnam's situation of "being a developing country, with a
low level of economic development, still facing many social
and economic problems." The GVN also hopes that the USG
will put forward "conditions" to help Vietnam to "strive
ahead" and asked the Ambassador to ensure that the USG
negotiating team will not "put forward strict conditions"
during the bilateral negotiations. Vietnam is determined to
accede to the WTO by 2005 and, to that end, has completed
bilateral negotiations with the EU and is negotiating with
Japan and the United States.


12. (SBU) Trade and investment represent the cornerstone of
bilateral relations with the United States, the Prime
Minister continued. Vietnam looks forward to more
investments by U.S. companies in Vietnam. The GVN highly
values the science and technology and managerial skills that
U.S. companies can bring. Regarding Civair, Vietnam's 2010
aviation development strategy identified Boeing and Airbus
as the major aircraft manufacturers to supply Vietnam's
needs. Vietnam's strategy had further identified Boeing as
the "supplier for Vietnam's long-haul planes," the Prime
Minister said.


13. (SBU) Aside from economic cooperation, progress in the
areas of politics and security is important and can promote
peace and stability in Southeast Asia and Asia as a whole.
Vietnam thus hopes that the United States and Vietnam can
reach agreement "defining a framework for long-term
cooperation" which could also help to overcome "long-term
bilateral difficulties," the Prime Minister said (Note: The
Prime Minister raised this "framework" during Ambassador
Burghardt's farewell call (Ref C),but we have yet to learn
exactly what the GVN means by it. End Note.)


14. (SBU) The Prime Minister reiterated his gratitude for
the President's decision to include Vietnam among the
countries receiving assistance from the HIV/AIDS relief
fund. Vietnam remains inexperienced in this area and hopes
to receive increased expertise from the United States in
prevention and treatment. The problem of HIV/AIDS is
growing rapidly in Asia and threatening development in many
countries. The Prime Minister expressed his "full
agreement" that Vietnam needs to increase publicity to "help
people" and that Vietnam's leaders need to speak out more.
Vietnam looks forward to "receiving more experts" from the
United States.


15. (SBU) Regarding the construction of the future U.S.
Embassy, Vietnam understands the current embassy is
"inconvenient" because of the large containers in front of
it and "inconvenient for a large country like the United
States." Vietnam's MFA and Russia have, to date, worked
together to resolve this issue. The Prime Minister said he
"took note" of the Ambassador's request to step up progress,
adding that he would ask the Ministry of Foreign Affairs to
redouble its efforts.


16. (SBU) On religion and human rights issues, the Prime
Minister said that Vietnam "recognized" that the United
States is concerned, but he also expressed his hope that the
United States understands that all of Vietnam's leaders pay
attention to problems involving ethnic groups, religion and
human rights. The Vietnamese people, regardless of their
ethnic affiliation or religious beliefs, were involved in
Vietnam's long struggle. Therefore, Vietnam put in place a
policy of national unity to promote economic and social
development. Regardless of ethnicity or religious belief
(or lack thereof),everyone should enjoy equality in
Vietnam.


17. (SBU) If one looked closely at Vietnam's policies, one
could see that the GVN has a "preference policy" for ethnic
minorities, the PM continued. For example, the GVN
subsidizes many aspects of ethnic minorities' lives, such as
providing seeds to farmers, paying top price for
agricultural goods and developing irrigation, electricity
and transportation infrastructure. The GVN also builds free
health clinics, gives financial assistance to the rural poor
and mobilizes capital to build schools in ethnic minority
and mountainous areas. The GVN also sends ethnic minority
students to boarding schools free of charge and constructs
housing for ethnic minorities. Vietnam has learned from
other countries' experiences that ethnic and religious
issues are often "difficult to solve." These are
complicated issues, but Vietnam's goal is to encourage
integration into mainstream Vietnamese society, the Prime
Minister said.


18. (SBU) The role of religion in people's lives has grown
rapidly, particularly since the end of the war and because
the GVN introduced a policy of "freedom of belief." The
number of religious adherents has doubled in recent years,
as has the number of pagodas, churches and temples. In the
Central Highlands, Protestantism has also grown rapidly, and
the GVN has responded to the demand for more churches by
allowing their construction. The GVN prohibits only those
individuals who would use religion to "jeopardize the
political situation" or as a "cover to reach out to the
people politically." As in other countries, people need to
obey the law; violators will be punished, the PM said.


19. (SBU) As the Ambassador knows, Vietnam recently issued a
number of resolutions on religious freedom and national
unity. The GVN also put in place the Ordinance on Religion
and would soon promulgate a decree containing the
implementing regulations for this law. With regard to the
particular individuals mentioned by the Ambassador, all had
violated the law and therefore were put in prison. Because
the GVN realized that they are "influential" and have "many
followers," the GVN gives them "special treatment." For
example, in the case of Father Ly, because he complied with
prison regulations, he was given a reduced sentence. Also,
on the occasion of the recent National Day amnesty (Ref D),
Vietnam released many inmates who are religious followers,
the PM noted.


20. (SBU) Vietnam always hopes to have a "prosperous and
democratic" society, as Ho Chi Minh expressed in Vietnam's
Declaration of Independence in 1945. Under that document,
which is similar to the Declaration of Independence of the
United States, the Prime Minister explained, all people have
the right to religious freedom, democracy and human rights.
These are the criteria for modern society, and the GVN is
striving to reach these goals. The Prime Minister concluded
by suggesting to the Ambassador that, during his stay, he
hold a dialogue with Vietnam's relevant ministries on the
many issues he raised.


21. (SBU) Thanking the Prime Minister, the Ambassador noted
that part of his job is to explain the situation in Vietnam
more clearly to American citizens and policymakers and, to
that end, he will engage in discussions with senior
officials and travel widely. The United States recognizes
the political will the GVN exercised to enter into the BTA.
That this was the right decision is evident in the economic
fruits Vietnam now enjoys. As Vietnam exercises the same
political will to accede to the WTO, it will likely see
similar results. There will be more technology transfer and
investment once Vietnam enters the WTO. But, part of the
price for entering the WTO will be increased transparency
and increased enforcement of intellectual property rights.
Vietnam is in competition with its neighbors to attract U.S.
investment. Issues like tariff increases and the special
consumption tax for automobiles are watched closely by other
investors. The USG hopes that the GVN will continue to work
with the auto industry on this issue. Insurance companies
are also ready to invest in Vietnam, the Ambassador
continued. The support of these industries and others will
be crucial as we approach the debate in the United States
Congress over Permanent Normal Trade Relations (PNTR) for
Vietnam.


22. (SBU) We recognize that Vietnam is working hard to
address the problems of ethnic minorities in the Central
Highlands, the Ambassador said. The United States would
like to offer financial and technical assistance in this
effort. But, a signal from the Prime Minister and other
leaders to local authorities to encourage working with
foreign nongovernmental organizations and American
assistance would be good. However, we believe that, no
matter what the GVN does, some people will still want to
leave Vietnam, and the issue of those crossing the border
into Cambodia is of grave concern to the USG. The USG is
thus ready to accept a number of individuals for
resettlement, but they need travel documents. It would be
useful for the Central Government to encourage local
authorities to expedite the necessary procedures such as the
issuance of travel documents. The Ambassador concluded by
noting that he and the Prime Minister still had not had the
chance to discuss the PM's visit to the United States.


23. (SBU) The Prime Minister responded by thanking the
United States for the invitation to visit and expressed his
hope that the U.S. Embassy and the Department will continue
to work with the Vietnamese MFA to make the necessary
arrangements. The United States occupies an important part
of Vietnam's foreign policy, and high-level visits -- such
as the PM's trip to the United States in 2005 and the U.S.
President's visit to Vietnam in 2006 on the occasion of the
APEC summit -- will play an important role in promoting the
bilateral relationship, the PM said.


24. (SBU) On the issue of ethnic minorities in the Central
Highlands "fleeing Vietnam," Ksor Kok and his Montagnard
Foundation in the United States are largely responsible for
this. They tell Montagnards that they will have a better
life if they leave Vietnam, and their aim is to "destabilize
Vietnam." "You can trust me that we will do everything we
can to convince our people that no one can help them better
than the GVN," the Prime Minister concluded.

MARINE