HOUSE SPEAKER DENNIS HASTERT MEETS VIETNAMESE PM

UNCLAS SECTION 01 OF 03 HANOI 000853

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TAGS: OTRA PREL ETRD WTO PHUM KIRF VM
SUBJECT: HOUSE SPEAKER DENNIS HASTERT MEETS VIETNAMESE PM
KHAI, PLEDGES TO WORK TO ACHIEVE PNTR

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1. (SBU) Summary: Visiting Speaker of the House Dennis
Hastert told Prime Minister Phan Van Khai that he is
committed to working hard to pass Permanent Normalized Trade
Relations (PNTR) for Vietnam because "it is the right thing
to do" and because economic development and international
integration will benefit Vietnam and the global economy.
Other members of the delegation gave the Prime Minister
detailed warnings of the concerns that will come up as a
result of a PNTR vote, including specific human rights and
religious freedom issues as well as market access concerns.
The PM praised U.S.-Vietnam cooperation to date and asked
for more assistance in facilitating Vietnam's accession to
the WTO and in attracting more technology, investment and
human resources from the United States to Vietnam. End
Summary.


2. (U) In the second of two meetings in Hanoi, visiting
Speaker of the House of Representatives Dennis Hastert (R-
IL) met Vietnamese Prime Minister Phan Van Khai April 14 at
Government House. Khai welcomed the Speaker's visit,
declaring that both the legislative and executive branches
of the GVN supported receiving the delegation. Khai
expressed his satisfaction with U.S.-Vietnam relations on
all fronts, highlighting the recent USD 600 million
investment in Vietnam by Intel and the upcoming visit of
Microsoft CEO Bill Gates. He said security, defense and
intelligence relations have "successfully taken their first
steps" and thanked the United States for its generous
assistance in working with Vietnam to combat HIV/AIDS and
Avian Influenza. Operations to cooperate in accounting for
MIA personnel are also positive, Khai declared.


3. (SBU) The Speaker recalled his meeting with PM Khai in
Washington in June 2005 and apologized for having had to
cancel his planned January 2006 visit. He agreed with Khai
that bilateral work on HIV/AIDS and Avian Influenza is an
example of the good that can come out of U.S.-Vietnam
cooperation.

PM KHAI'S THREE PRESSING ISSUES
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4. (SBU) PM Khai told the Speaker that Vietnam's efforts to
carry out "Doi Moi" (renovation) and integration into the
world economy have achieved "important results" but still
are not complete. "If you had visited Hanoi ten years ago,
it would not be like this," Khai told the Speaker. "But you
must remember that Vietnam was heavily damaged by the war
and is still very poor." Vietnam's economic achievements
(and shortcomings) need to be evaluated against a starting
point that was very low. With that in mind, PM Khai asked
the Speaker to consider focusing U.S.-Vietnam cooperation in
a few key areas:

- WTO accession: U.S. and Vietnam negotiators are working
very hard, and Vietnam wants to close negotiations by May.
The Vietnam side pledges to do its best, but the United
States should keep in mind that Vietnam's level of
development is low and Vietnam will never be a real economic
competitor of the United States. With that in mind, Khai
said, he hopes the Speaker and President Bush will be able
to facilitate the closure of negotiations by May.

- Permanent Normalized Trade Relations (PNTR): PM Khai said
he would appreciate it if the Speaker would assist Vietnam
in achieving PNTR with the United States. The process of
achieving PNTR is new for Vietnam, and the GVN will need
assistance and guidance in working through it.

- The Asia Pacific Economic Cooperation (APEC) and the
President's visit to Vietnam: Vietnam attaches great
importance to the visit of President Bush as part of his
attendance at APEC in November. The associated bilateral
visit will be of historic significance, and so Vietnam looks
forward to close cooperation between U.S. and Vietnamese
ambassadors and foreign affairs bureaucracies to achieve a
successful visit. Vietnam also hopes the United States will
work with Vietnam to achieve a successful APEC summit.

THE SPEAKER RESPONDS

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5. (SBU) The Speaker introduced the U.S. delegation, which
included:

Speaker Hastert (R-IL)
Rep. Michael Oxley (R-OH)
Rep. Sherwood Boehlert (R-NY)
Rep. Frank Lucas (R-OK)
Rep. Ray LaHood (R-IL)
Rep. Paul Ryan (R-WI)
Rep. Randy Neugebauer (R-TX)
Rep. Dan Boren (D-OK)

The U.S.-Vietnam relationship should be like a good
marriage, the Speaker said, "open, trusting and
transparent," and ideally "long and productive." He said he
looks forward to opening dialogue on Vietnam's accession to
the WTO. The House of Representatives is separate from the
White House, he explained, and its job is to ratify
agreements that the White House negotiates. Under his
leadership, the U.S. House of Representatives will work
towards PNTR for Vietnam. Vietnam should keep in mind that
every member of the U.S. House of Representatives has a
constituency to answer to, and each member has influence.
Members have important issues relevant to their constituents
that will come up as part of the PNTR debate. With that in
mind, it is important to complete PNTR as fast as possible.
That will depend on the GVN and the USG concluding
negotiations, which the Speaker also hopes will happen by
May. The faster negotiations are concluded, the faster the
deal can be moved through the political process, which can
be complicated, especially in an election year. The sooner
that deal can be considered, the better, because the closer
the election gets, the harder it will be for PNTR to avoid
being "snaggled in the tentacles of politics."


6. (SBU) In terms of practical steps to achieve PNTR, the
Speaker advised PM Khai that the concerns of constituents
will be paramount. In the Speaker's district, Caterpillar,
John Deere, Boeing and Motorola are all interested in
expanded trade and investment with Vietnam. Each member
present in the delegation has similar interests to
represent, he said. The Speaker conveyed President Bush's
regards, and said that the President looks forward to his
visit to Vietnam.

REP. LAHOOD: TARIFFS MATTER
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7. (SBU) Representative LaHood noted that in his 12 years in
Congress, he has seen many trade agreements passed, and they
are always difficult. The last trade bill, authorizing the
Central American Free Trade Area, passed by only one vote.
More and more members are having difficulty with trade
votes, he explained. The main problem is tariffs; on
engines, manufactured goods, insurance products, financial
services, etc., they represent a huge issue for American
companies. If Vietnam can lower tariffs on American goods,
then it will be possible to persuade members of Congress to
vote for the legislation.

REP. LUCAS: WE SHOULD BE PARTNERS IN AGRICULTURE REFORM
-------------- --------------


8. (SBU) Rep. Lucas noted that in the State of Oklahoma,
energy and agriculture are very important issues. In his
view, WTO members should be allies in the modernization and
development of agriculture, especially in resisting those
such as the EU who want to slow the development of
agriculture. Rep. Lucas said he personally hopes that
bilateral cooperation continues, and that important
regulations are implemented in Vietnam.

REP. BOEHLERT: HUMAN RIGHTS WILL BE IMPORTANT TO PNTR
-------------- --------------


9. (SBU) Rep. Boehlert expressed his surprise at the level
of development and dynamism he had witnessed thus far in
Vietnam. He too believes that passing a trade bill will be

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difficult this year because of the election. Rep. Boehlert
noted that commercial considerations are less important in
his district, but that with 15 colleges and universities,
political issues are significant. "I can go back to my
constituents and tell them about economic democracy in
Vietnam and how the Declaration of Independence here mirrors
our own," Boehlert warned, "but they will immediately point
out that in the United States the Constitution and
particularly the Bill of Rights followed the Declaration of
Independence and guaranteed the political freedom of
citizens." This issue is particularly important in the
United States, and it will be vital for Vietnam to show
progress in that areas as well as economic reform. "To vote
for PNTR for Vietnam, I will need to be able to show my
constituents that Vietnam has progressed on human rights,
religious freedom and freedom of the press, all rights and
values that Americans cherish."

THE SPEAKER COMMITS TO TRY TO PASS PNTR
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10. (SBU) The Speaker pointed out that there is a bigger
picture, which is Vietnam's taking advantage of its low
labor costs relative to the rest of the world to drive
economic development, much as Japan did in the 1950s, Taiwan
in the 1960s, Thailand in the 1970s and China in the 1980s.
This leads laborers and others in Vietnam to achieve more
education, better health care and a higher standard of
living. For this reason, the Speaker said, "I will commit
to working hard to pass PNTR, so that our legacy will be a
better world to pass on to our children and grandchildren."

PM KHAI'S CONCLUSION
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11. (SBU) PM Khai said he particularly likes the idea of the
U.S.-Vietnam relationship as a marriage rather than a
competition. Vietnam sees the United States as having a
special role and position in the world. Vietnam wants a
stable and long-lasting partnership with the United States
because of this. To do this, it is vital that both the
United States and Vietnam work to implement the words in the
joint statement "signed" by President Bush and PM Khai
during Khai's June 2005 visit to Washington. If WTO
negotiations can be concluded in May, and PNTR granted in
June, "another important milestone in our relationship will
have been reached." Vietnam is eager to attract more U.S.
investment, more U.S. technology and more U.S. managerial
expertise to allow Vietnam to increase its competitiveness.
PM Khai thanked the Speaker for his commitment on PNTR, and
said he hopes to see WTO negotiations closed and PNTR
finished before Congress' summer vacation.


12. (U) Speaker Hastert's staff members have cleared this
message.

MARINE