CODEL SMITH MEETS WITH DEPUTY PRIME MINISTER NGUYEN

UNCLAS SECTION 01 OF 03 HANOI 003355

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E.O. 12958: N/A
TAGS: ETRD PREL OREP VM WTRO AFLU HIV AIDS WTO IPROP BTA
SUBJECT: CODEL SMITH MEETS WITH DEPUTY PRIME MINISTER NGUYEN
TAN DZUNG

SENSITIVE - DO NOT POST ON INTERNET


1. (SBU) Summary. A delegation of seven U.S. Senators, led
by Senator Gordon Smith (R-OR) and accompanied by the
Ambassador, met with Deputy Prime Minister Nguyen Tan
Dzung. Dzung warmly welcomed the senators and thanked the
United States for its assistance in the fights against
HIV/AIDS and Avian Influenza and for its support for
Vietnam's accession to the WTO. The senators stressed that
support in the Senate for Vietnam's WTO accession would
depend on a strong record on economic reform and
democratization. They also stressed the need for better
protection of intellectual property rights, full
implementation of the U.S.-Vietnam Bilateral Investment
Agreement, and effective measures to combat corruption. End
Summary.


2. (SBU) A delegation of seven senators led by Senator
Gordon Smith (R-OR) met with Deputy Prime Minister Nguyen
Tan Dzung on December 12, 2005 for over an hour to discuss
trade and economic issues. Apart from Senator Smith, the
U.S. delegation consisted of Senator Trent Lott (R-MS),
Senator Robert Bennett (R-UT),Senator Ron Wyden (D-OR),
Senator Jim Bunning (R-KY),Senator John Cornyn (R-TX),and
Senator Mike Crapo (R-ID),as well as staff and spouses.
The Ambassador also attended the meeting.

DPM Dzung's Vision
--------------


3. (SBU) DPM Dzung warmly welcomed the senators on behalf
of the Government of Vietnam and Prime Minister Phan Van
Khai. He emphasized that Vietnam had come a long way in the
past few years. Average real GDP growth for the past five
years was 7.5 percent and this year had reached 8.5 percent.
The number of poor households had been reduced by 10 percent
in the same period. Nevertheless, Vietnam is still a poor
country with an average per capital GDP of only USD 640 and
it is still among the 40 lowest income countries. In its
next five year plan, the GVN aims to double Vietnam's GDP to
USD 1,000 per person. (Note: The GDP per capita figure of
USD 640 is new, up from the World Bank number of USD 543,
and may reflect a GVN prediction for the 2005 number. End
note.) The first step is to push forward on market reforms
in order to mobilize domestic and foreign resources; second,
Vietnam will deepen its integration into the world and
regional economy. Third, parallel with economic
development, the GVN will pursue social justice and reduce
the number of poor households. Fourth, Vietnam will build a
democratic government "by the people, of the people and for
the people."


4. (SBU) Vietnam will also pursue a foreign policy of
independence and self-reliance and diversify its relations
in the region and in the world. In that spirit, Dzung
welcomed the senators and emphasized that bilateral
relations with the United States were on the rise. The
Bilateral Trade Agreement (BTA) was being implemented
successfully and the United States had become Vietnam's
number one export market. He thanked President Bush for
effective and timely assistance to help Vietnam combat
HIV/AIDS and Avian Influenza. He was also grateful to the
President for his support for Vietnam's bid to join the WTO.
Vietnam has wrapped up most of its bilateral negotiations
and is working to do so with the United States. President
Bush sent a letter to the Prime Minister reiterating that
support. Dzung thanked the Senators for their support and
said that he believed their visit would contribute much to
warmer relations.

"Help Us Help You": Address IPR Concerns
--------------


5. (SBU) After thanking the Deputy Prime Minister for his
welcome, Senator Smith emphasized that after completing the
bilateral WTO negotiations, the U.S. Senate would have to
approve the agreement, which was why it was so important for
Vietnam to continue the path of economic reform. He
welcomed Dzung's words on democratic reforms. Economic and
political reforms "help us to help you," Senator Smith said,
adding that it was important to put a difficult history
behind us. The United States does not want to put all its
"eggs in the Chinese basket," and the purpose of this visit,
which is focused primarily on trade, is to welcome Vietnam's
emergence from the third world to the first world. He
expressed appreciation for Vietnam's responsiveness on the
POW/MIA issue and for its constructive response to the State
Department's decision to keep Vietnam as a "country of
particular concern." The Senator noted the significant
contribution to Vietnam's economy made by the Nike
Corporation, an Oregon-based firm, and said that he hoped
that Vietnam would negotiate hard against restrictions on
textiles and would improve its infrastructure, especially
ports, so that companies like Nike could continue to export
and prosper. Finally, the Senator said that he continued to
hear from his constituents about the importance of
intellectual property rights (IPR) for the U.S.-Vietnamese
bilateral relationship and for the growth of business in
Vietnam.


6. (SBU) Senator Cornyn congratulated Vietnam for its
liberalization policies and reinforced Senator Smith's point
on IPR, which is necessary to foster innovation and
investment. Senator Wyden remarked that he was one of the
few Democrats to support free trade and quipped that he had
"the scars on my back to show it." He said that he
understood that Vietnam had strong IPR laws on the books,
but that enforcement was weak. Improving IPR enforcement
would make it easier for the Senate to approve the WTO
agreement and support permanent normal trade relations
(PNTR) for Vietnam. Senator Bunning added that Vietnam was
the fifth country on the Senators' trip and in each country
the delegation heard concerns from U.S. firms about IPR
enforcement. The United States wants to support Vietnam to
join the WTO, but it will need assurances that Vietnam will
observe its commitments.


7. (SBU) Senator Crapo stressed that he hoped to work with
Vietnam to achieve an early WTO accession. The goals that
the DPM had expressed are shared by the United States and
achieving them would help both countries. Senator Lott
congratulated Vietnam on the new offers it had made to the
United States in our bilateral negotiations. These offers
should help move the negotiations forward. He emphasized
that the way Vietnam dealt with U.S. companies already doing
business with Vietnam would be very important and urged
Vietnam to grant U.S. companies full trading and
distribution rights. On a personal note, the Senator said
he was from a state that had been hit hard by Hurricane
Katrina; his own house had been destroyed, and he thanked
DPM Dzung for Vietnam's help to hurricane victims.


8. (SBU) Senator Bennett noted the changes in Vietnam since
he and his wife had visited twelve years ago. He said that
he was heartened to hear the Deputy Prime Minister quote
Lincoln's phrase "government by the people, of the people
and for the people." He noted that during the Codel's trip
to Asia, they had found that the problem of corruption was
still pervasive. He urged Vietnam to work to combat
corruption.

Wrap-up by DPM Dzung
--------------


9. (SBU) DPM Dzung thanked the Senators for their candid
and straightforward comments. He reaffirmed Vietnam's
intention to move forward with economic reforms. These
reforms are not just an international requirement, but also
the desire of the Vietnamese government and people. If
Vietnam succeeds in making the transition to a market
economy, it will make a small contribution to the prosperity
of the world. He assured the Senators that Vietnam would
observe all its commitments and cited Vietnam's efforts to
fulfill all its obligations under the BTA. On IPR, he noted
that Vietnam had started from a point where people were not
aware of IPR and the country lacked a legal framework for
IPR. He admitted shortcomings in current enforcement of
IPR, but said that the GVN is committed to enforce strictly
the new IPR law, which will also benefit Vietnam's
innovators.


10. (SBU) He reminded the Senators that Vietnam, despite
its economic achievements, was still a poor country. WTO
membership presents challenges as well as opportunities.
Vietnam's recent offers in bilateral negotiations represent
difficult decisions by the GVN. Therefore, he sought the
Senators' understanding and sympathy and hoped for their
support. Prosperity and democracy are the GVN's "raisons
d'etre," he said. The democratization process will be long
because it depends on the level of economic and educational
development. However, democracy is both an objective and
the dynamic of development. To this end, the GVN must be
both more powerful and more transparent and must combat
corruption. He mentioned that in its last session, the
National Assembly had passed a new law against corruption.
The government is committed to fight against corruption and
if it fails, it cannot survive. Once again, he thanked the
senators for their candid comments and said that he thought
the visit would contribute to cooperation and development of
bilateral relations.


11. Codel Smith cleared this cable.

MARINE