CODEL BAUCUS SCORES POINTS WITH HCMC AND CAN THO LEADERS

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 001092

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, USAID/ANE, EEB/TPP/BTA/ANA, OES/STC
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO
USTR FOR BISBEE
TREASURY FOR CHUN

E.O. 12958: N/A
TAGS: ECON EAGR ETRD EFIN SOCI PGOV PREL OTRA OVIP VM
SUBJECT: CODEL BAUCUS SCORES POINTS WITH HCMC AND CAN THO LEADERS

HO CHI MIN 00001092 001.2 OF 002



1. (SBU) Summary. Political, business and civil society
leaders in Ho Chi Minh City (HCMC),Can Tho City and Long An
Province all warmly welcomed Senator Max Baucus during his
December 18-20 visit to promote bilateral relations, advance
U.S. trade policy and increase educational cooperation. Ho Chi
Minh City offered up the Reunification Palace -- an honor
normally reserved for visiting heads of state -- as the venue
for the Chairman of the Finance Committee to meet with HCMC
People's Committee Chairman and Central Committee member Le
Hoang Quan. The Senator encouraged Vietnam to lift restrictions
on U.S. beef and to improve intellectual property rights and
labor rights quickly, as clear progress would support the
country's applications for generalized system of preferences
(GSP) and market economy status as well as its participation in
the Trans-Pacific Partnership (TPP). The Senator also
challenged southern leaders to find ways to cooperate with U.S.
universities, especially the University of Montana, to improve
Vietnam's education system. Southern provincial leaders said
new U.S. regulations for imported "catfish" could seriously harm
Vietnam and called for the garment import monitoring mechanism
to end. End Summary.

HCMC Rolls out the Red Carpet...
--------------

2. (SBU) Ho Chi Minh City (HCMC) warmly welcomed the December
18-20 visit of Senator Max Baucus and his delegation. People's
Committee Chairman Le Hoang Quan hosted the Senator in the
Reunification Palace's "Golden Room", once the receiving room
for the Vice President during the building's time as the
Presidential Palace of the Republic of South Vietnam. Chairman
Quan lauded the senator's leadership role in granting permanent
normal trade relations (PNTR) to Vietnam, which paved the way
for its accession to the WTO. Quan asked the Senator to once
again support Vietnam, this time in its applications for
generalized system of preferences (GSP) and market economy
status, ending the Vietnam garment import monitoring mechanism
and guarding against rules that would arbitrarily close the U.S.
market to Vietnamese "catfish" (pangasius). The Chairman also
noted the importance of ongoing bilateral investment treaty
(BIT) and Trans Pacific Partnership (TPP) discussions.


3. (SBU) Senator Baucus said that as Vietnam's financial and
commercial center, HCMC's economy stands to benefit from
improving worker rights, specifically by accelerating GVN plans
to meet International Labor Organization standards. Similarly,
improving intellectual property rights is important to
modernizing the city's economy. In addition to adopting a trade
policy consistent with World Organization for Animal Health
(OIE) standards, opening Vietnam's market to U.S. beef from
cattle older than 30 months old would benefit consumers in HCMC.
In closing, Chairman Quan wished the delegation "a merry
Christmas" and invited the Senator to visit the city center now
decked out with Christmas lights and nativity scenes.

...and Saigon Pulls out All the Stops
--------------

4. (SBU) The Senator hosted a roundtable with economic, civil
society and media representatives. The American citizen deputy
managing director of one of the largest investment funds in HCMC
said that the global economic downturn is driving down demand
for Vietnamese exports and that foreign direct investment in
Vietnam is slowing as well. Dr. Mai Hong Quy, Rector of the
HCMC Law University, emphasized the importance of improving
education to professionalize Vietnam's legal system and
suggested partnerships between HCMC Law University and
continuing education programs at U.S. law schools as one way
forward. The pioneering owner of Vietnam's first private media
company, Ms. Le Thi Phuong Thuy, explained that her Tri Viet
Media company now concentrates on developing partnerships with
foreign companies to provide content to Vietnamese television
audiences, with plans to develop local content in the future; as
a result IPR protection and understanding GVN sensitivities are
key to her company's future.


5. (SBU) The HCMC American Chamber of Commerce echoed political
and civil society leaders, saying that labor issues (e.g., the
rise in the number of "illegal strikes"),the global economic
downturn (especially its impact on tourism and investment) and
the GVN's inclination to interpret its WTO commitments as "a
ceiling rather than a floor" all give American businesses in
HCMC heartburn. Nevertheless, the USAID-funded Support for
Trade Acceleration (STAR) program has given U.S. companies

HO CHI MIN 00001092 002.2 OF 002


amazing opportunities to review and comment on draft
legislation, and to participate in Vietnam's ongoing economic
reform.

Can Tho and Long An Focus on Education and Trade Rules
-------------- --------------

6. (SBU) Making his way off the beaten track, Senator Baucus
took his message of increasing education cooperation to Can Tho
University in the Mekong Delta. Representatives of the
University's 35 thousand-strong student body turned out to
welcome the delegation to Can Tho University. The Senator told
the students that the United States is the best place in the
world to study and challenged them to find a way to study at an
American university. We want more Vietnamese to come study in
the United States, he told the students, adding that the USG is
working to streamline visa procedures for students. Students
and faculty alike stayed late into the evening to ask the
Senator and his delegation questions especially about the
election of Barack Obama as president of the United States and
what this means for U.S. foreign policy.


7. (SBU) Also in the Mekong Delta, General Manager of Long An
Foods (rice processing and export) Mr. Truong Van Anh and Chief
Executive Officer of Hiep Thanh Foods (rice and pangasius
processing and export) Nguyen Van Phan said that Vietnam's
agriculture and aquaculture industries benefit from trade with
the U.S. markets, both importing from and exporting to the
United States. Both urged the United States to regulate the
quality and safety of imports in ways that do not disrupt trade,
adding that the modest gains to per capita income in the Mekong
Delta (still less than Vietnam's average of 825 dollars per
year) could be lost if the U.S. closes its markets to Vietnamese
aquaculture (primarily pangasius and shrimp) exports.

Comment:
--------------

8. (SBU) When the highest city official in HCMC wishes his
high-ranking American guest "a merry Christmas" it is clear that
Vietnam is changing, even on issues the GVN once considered
sensitive. Senator Baucus is widely regarded as a friend of
Vietnam because of his support for Vietnam's WTO accession and
PNTR. As a result, southern provincial leaders from various
facets of Vietnamese society were keen to meet him. While there
is much economic anxiety in Vietnam, especially over the future
of pangasius exports to the United States, the Senator's message
on the need to improve trade rules, intellectual property and
labor rights was well-received. End comment.


9. (U) This cable was coordinated with Embassy Hanoi and
cleared with the delegation.
DICKEY