CDA DISCUSSES POTUS VISIT, BILATERAL ISSUES WITH

C O N F I D E N T I A L SECTION 01 OF 04 HANOI 002599

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SIPDIS

STATE FOR EAP/MLS, DRL/AWH AND DRL/IRF

E.O. 12958: DECL: 10/12/2016
TAGS: PHUM KIRF PREL PGOV ECON VM
SUBJECT: CDA DISCUSSES POTUS VISIT, BILATERAL ISSUES WITH
MFA


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Classified By: Charge D'Affaires Jonathan Aloisi, reason 1.4 (b,d)

Summary
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1. (C) The Charge met on October 10 with MFA Americas
Department Acting Director General Pham Van Que to continue
discussions related to the POTUS visit. Que suggested that
President Bush consider adding a short visit with the
Communist Party's General Secretary Nong Duc Manh, in part to
balance the bilateral schedule being developed for PRC
President Hu Jintao. MFA also questioned us on a possible
POTUS "religious roundtable," suggesting a broader guest list
as more appropriate. The Charge stressed the need for a
country-to-country Peace Corps agreement with both Que and
subsequently with the Ministry of Education and Training
(MOET). He called for GVN decisions replacing highly
enriched uranium in the Dalat research reactor. Que noted
that Vietnam Airlines will definitely purchase ten Boeing
Aircraft and that a Motorola deal is "under active
consideration." Other issues raised included religious
freedom, the Maritime agreement, the Proliferation Security
Initiative, the Ambassador,s request to visit a prominent
dissident in prison, the text of the President,s joint
statement, the American Presence Post concept and the
DEA-Ministry of Public Security MOU. Que made a strong pitch
for U.S. "engagement" with Vietnamese banks regarding
establishment of U.S. representative offices. End Summary.


2. (SBU) On October 10, the CDA met with MFA Acting Director
Pham Van Que to continue discussions on a list of
POTUS-related bilateral issues. The first portion of the
discussion was dominated by North Korea (reported septel).
In this report, we also include information from the CDA's
subsequent meeting with the Ministry of Education and
Training (MOET) on the Peace Corps.

President's Meeting schedule (and General Secretary)
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3. (C) Regarding the POTUS visit, Que suggested that
President Bush seek a meeting with Communist Party General
Secretary Nong Duc Manh in addition to his meetings with

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President Nguyen Minh Triet and Prime Minister Nguyen Tan
Dzung, during his bilateral schedule on the afternoon of
November 17. Que argued that General Secretary Manh is
"Vietnam's top leader," and that such a meeting would
therefore be appropriate. Alluding to reports that former
President Clinton had found the former General Secretary
overly focused on "the past" during their year 2000 meeting,
Que promised that President Bush would find the conversation
with Manh "interesting and forward looking." Que then
implied that the MFA wishes the meeting to "provide balance,"
as Chinese President Hu Jintao will meet with all three top
leaders during his separate bilateral schedule on the margins
of APEC. The MFA does not want stories after the POTUS and
Hu visits to focus on differences in the reception Vietnam
gave the two leaders.

President's Meeting Schedule (and Religious Freedom)
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4. (C) Que noted that the GVN is waiting for information
about the President's proposed schedule of events in Ho Chi
Minh City. While a business roundtable with Vietnamese
businessmen is a "good idea" for the agenda, the GVN is
concerned about possible events with themes related to
religion or human rights. Que suggested that we consider
expanding the religious meeting to include GVN civil society
officials such as representatives of the Vietnam Fatherland
Front (the party's popular organization watchdog),the
Women's Union, the Vietnam's Veteran Association and
representatives of Vietnam's ethnic minority communities.
The CDA stressed that the White House is in charge of
preparing the POTUS schedule, and that all of the President's
events will be well-planned and appropriate. (Comment: We
assess the MFA's demarche on this point as an effort to go on
record expressing concern about possible POTUS events as
insurance against accusations within the GVN should the POTUS
schedule evoke criticism from hardliners here. End Comment.)

Peace Corps
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5. (SBU) The CDA noted that he planned to meet with Vice
Minister Nhung of the Ministry of Education and Training
(MOET) later October 10 to discuss the current status of the
negotiations to sign a country agreement establishing a Peace

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Corps (PC) mission in Vietnam. The Congress and the
Administration support the establishment of a mission as an
important sign of the state of the bilateral relationship,
but there are still problems. The United States absolutely
requires a government-to-government Country Agreement, for
example. While MOET has been designated as lead ministry in
dealing with Peace Corps, clearly others must weigh in on
status issues and overall policy issues. Que stated that
MOET will have the power to sign an agreement on behalf of
the entire GVN, but "the MFA will assist if there are any
problems." In addition, the GVN wants to make sure that the
ten initial volunteers "are suitable."


6. (SBU) The CDA subsequently met with MOET Vice Minister
Tran Van Phung to advance discussions on an agreement to
establish a PC presence in Vietnam. The CDA indicated that
we understand that the Prime Minister's Office had given MOET
the lead on reaching an agreement before the POTUS visit.
The United States shares the goal of reaching agreement
before the POTUS bilateral meetings on November 17, assuming
all necessary arrangements are completed. The CDA reiterated
that one necessary step was the conclusion of a
government-to-government "country agreement" clearly defining
the status of the PC in Vietnam. A separate "program
agreement" would include other details. We also will not
consider "pilot" or "test" status, but could discuss
step-by-step expansion of the program from an acceptable
initial number of volunteers (PC would need to send a minimum
of 20 volunteers each year in the first two years). We also
wish to anticipate in our agreements recognition of goals to
expand beyond: (a) the two initial cities; and (b) the
English language among subjects taught by volunteers on
future deployments.


7. (SBU) The CDA described at length our positions on these
issues and engaged in constructive discussion with the Vice
Minister and his staff. We passed the template country
agreement and underscored the need for a
government-to-government document.


8. (SBU) MOET confirmed the CDA's understanding that the GVN
is interested in quickly reaching an agreement. After some
discussion, they also acknowledged the benefit to all
(including MOET) of an unambiguous government-to-government
"country agreement" on status issues, which touch on various
GVN bureaucracies. They now also understand our concern
about "pilot" designation, and agree to discussion of stages,
with the possibility of discussion of new locations and new
subjects in future stages. They took note of our request for
20 volunteers in the first deployment, followed by 20 more
the next year. On the "Country Agreement" issue, in
particular, MOET - which would presumably not be the
signatory agency - must report to higher levels within the
GVN. The Vice Minister pledged to do this, but could not
promise when an answer would be received.


9. (SBU) Comment: Today's meetings helped increase
understanding, narrow differences, and define remaining
problems. While MOET appears ready to carry water on the
"country agreement," the Embassy will re-engage GVN officials
in other bureaucracies in an attempt to obtain a breakthrough
on the "Country Agreement" and other issues.

Dalat Reactor
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10. (SBU) The CDA noted that in a recent meeting with Vice
Minister Thang of the Ministry of Science and Technology
(MOST),he explained to the gathered MOST representatives why
the proposed swapping of highly enriched uranium for low
enriched uranium at the Dalat research reactor is a
counter-proliferation important issue that, if resolved in
advance of the POTUS visit, would be a strong indication of
our cooperation in that area. This is an easy matter to
address, but we need the GVN to make a political decision to
sign 1) a non-proliferation agreement and 2) a nuclear swap
agreement. We are willing to spend money and work with the
Russians to make this happen. If the GVN does not decide to
go ahead with the project now, the security at the reactor
must be improved as it is not adequate at present, the CDA
added. Que replied that the MOST is preparing a proposal in
tandem with other agencies for consideration by the Prime
Minister's office.

Religious Freedom
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11. (SBU) The CDA noted that he had twice called on

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Commission for Religious Affairs (CRA) Chairman Ngo Yen Thi
to press for progress in advance of the U.S decision on
Country Of Particular Concern (CPC) status. We are seeking
to meet again with the CRA for further updates. Que
acknowledged the GVN interest in engagement, hopefully
leading to the lifting of CPC status, which - along with PNTR
- the Vietnamese see as a "deliverable" for the upcoming
bilateral visit.

Proliferation Security Initiative
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12. (SBU) The CDA noted that recent events underscore the
importance of flexible, multilateral approaches to
non-proliferation issues. He reiterated our desire to see
Vietnam join the Proliferation Security Initiative. Que had
no response.

Commercial Advocacy
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13. (SBU) Que raised the issue of impending commercial deals
before the President's visit and noted that Vietnam Airlines
has decided to buy ten Boeing aircraft for approximately USD
two billion. On the two proposed power plant projects (AES
and Gannon),the GVN does not think it will be able to sign a
quick deal with Gannon as there are many "special interests"
involved and any deal would "take time to work out." On the
other hand, the GVN "is actively considering" a deal for the
purchase of Motorola equipment.

Maritime Agreement
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14. (SBU) The CDA noted that the Maritime Agreement is
apparently "in trouble" because of Vietnam's concerns that it
might complicate Vietnam,s WTO aspirations. However, if the
GVN gives us more information, we may be able to find ways to
resolve the issue. Que noted that the GVN hopes "no other
countries pay attention to the issue in Geneva so it can be
resolved."

American Presence Post (APP) Danang
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15. (SBU) Que asked for more information about our proposed
APP in Danang. The CDA noted that we have not made a formal
proposal yet to open such a post. Que stated that "if we
accept your eventual proposal we will want something in
return," such as the opening of a Vietnamese Consulate in
Houston. The CDA provided Que with a list of existing APPs
in France and Canada, as earlier requested.

Prisoners of Concern
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16. (SBU) The Charge reiterated the Ambassador's request to
visit prominent imprisoned dissident Nguyen Vu Binh in
prison. Que had no comment.

Joint Statement
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17. (SBU) The Charge asked about the status of GVN feedback
on the text of the Joint Statement for the President's visit.
Que promised to provide GVN feedback "within two weeks" and
predicted that "we will have a good, substantive statement,"
and that Hanoi will seek to add even more to the document.

PNTR/WTO Accession
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18. (SBU) Que noted that the Ministry of Trade (MOT) is
unhappy about the recent agreement between USTR, the Commerce
Department and Congress to remove the Senate's holds related
to textile concerns about Vietnam's WTO accession. "Some
Vietnamese businessmen are now saying that it would be better
to have textile quotas rather than be subject to anti-dumping
charges under the deal," he said. The CDA noted that the
deal cannot be changed, but the U.S. experts are engaging all
concerned parties to explain the implications of the
assurances presented in the letter to Senators Dole and
Graham.

Banking/Money-Laundering/DEA-MPS MOU
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19. (SBU) Que noted that the GVN would like Vietnamese

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commercial banks to be able to open representative offices in
the United States. Econ/C explained that, according to the
Federal Reserve, only one Vietnamese bank (VietCom Bank) has
applied to open an office in the last two years, and that the
bank is not actively pursuing its application. Although the
Federal Reserve has strict criteria for allowing foreign
banks to operate in the United States, the process is open
and over 20 percent of the banks operating in the United
States are foreign-owned. Among the Federal Reserve's
concerns are in the area of anti-money laundering and there
are still problems with Vietnam's anti-laundering
regulations, he added.


20. (SBU) Que stated that Vietnamese banks are not
experienced doing business in the United States and they are
watching to see how Vietcom Bank fares. Que stated that the
uncertainty is affecting views of the United States within
the financial sector, and ) via the press - more broadly in
Vietnamese society. There are concerns that the USG has made
a political decision to deny Vietnamese banks entry into the
United States.


21. (SBU) The CDA debunked this notion but acknowledged that
both sides should seek to correct this false perception. One
way this might be done would be to arrange discussions
between the Vietnamese banking community and/or media and the
Federal Reserve Bank, not to discuss specific cases but
rather to outline general requirements and the application
process. He promised to provide feedback on the status of
Vietcom Bank's application as soon as it is available from
the Federal Reserve.


22. (SBU) The CDA noted that the Ambassador recently met with
the Department of Justice and the Drug Enforcement
Administration in Washington to be briefed on the full extent
of the money laundering problem affecting the United States
and Vietnam. On the subject of broader law enforcement
cooperation, the USG would like to see MPS agree to sign an
MOU with the DEA prior to the President's visit, the CDA
said.
ALOISI