SECOND U.S.-LAO COMPREHENSIVE BILATERAL DIALOGUE

C O N F I D E N T I A L SECTION 01 OF 08 VIENTIANE 000083

SIPDIS

SIPDIS

STATE FOR EAP DAS SCOT MARCIEL
STATE FOR EAP/MLS (BESTIC)
STATE FOR AIAG (PATTERSON, SUMMERS)
COMMERCE FOR HP PHO
DOD FOR OSD-POLICY (STERN, SHUBERT)
DOD FOR DSCA (JUDKINS)
PACOM FOR J52 (LACY)
PACOM FOR J45 (NICHOLLS)
PACOM FOR POLAD
PACOM FOR PACAF/SGZ (CINCO, OH, PALMER)
BANGKOK FOR ICE (HURST)
BANGKOK FOR AID (KISSINGER)

E.O. 12958: DECL: 02/05/2018
TAGS: EAID ECON KHDP MARR MASS MOPS OTRA PGOV PHUM
PREF, PREL, SMIG, SNAR, TBIO, KFLU, KIRF, LA
SUBJECT: SECOND U.S.-LAO COMPREHENSIVE BILATERAL DIALOGUE

REF: A. 06 VIENTIANE 1117

B. 07 VIENTIANE 840

C. 07 VIENTIANE 761

D. 07 VIENTIANE 295

E. ARCHIBALD-BESTIC EMAIL 12/18/2007

F. 07 VIENTIANE 790

G. VIENTIANE 61

VIENTIANE 00000083 001.2 OF 008


Classified By: AMBASSADOR RAVIC R. HUSO. REASON: 1.5 B AND D


1. (SBU) Summary: The second U.S.-Lao Comprehensive
Bilateral Dialogue (CBD),led by Department of State East
Asia and Pacific Bureau (EAP) Deputy Assistant Secretary
(DAS) Scot Marciel on January 25, highlighted the slowly
maturing relationship between Laos and the United States.
Unlike the previous dialogue (ref A),which included only
Lao Foreign Ministry officials, representatives from the
Ministries of National Defense, Industry and Commerce,
Public Security, Planning and Investment, and Foreign
Affairs, as well as officials in the offices responsible
for unexploded ordnance clearance and counternarcotics,
attended the meeting. DAS Marciel used the Dialogue as an
opportunity both to impart our desire to see Laos as a
strong, independent, and economically secure actor within
ASEAN and to reinforce the need for open bilateral
communication. MFA Director General of the Europe and
Americas Department Southam Sakonhninhom, in his swan song
prior to departure to become Ambassador to the EU, focused
on the positive aspects of the relationship, calling
cooperation on MIA recovery the cornerstone of the
relationship, reiterating the Lao government's intention to
exchange defense attaches (ref B),promising to provide
additional information on three missing Hmong-Americans
(ref C),and appearing to leave the relationship on firm
grounds for his successor. END SUMMARY.

--------------
Overview
--------------


2. (SBU) Unlike the previous dialogue (ref A),which
included only Foreign Ministry officials on the Lao side,
this year's Lao delegation included representatives from
the Ministries of National Defense, Industry and Commerce,
Public Security, Planning and Investment, and Foreign
Affairs, as well as the National Unexploded Ordnance
Regulatory Authority and the Lao National Commission for
Drug Control (LCDC). Participants on the U.S. side
included DAS Marciel, Ambassador Huso, the DCM, Pol/Econ
Chief, Economic Officer, Public Affairs Officer, Consular
Chief, Joint POW/MIA Accounting Command Detachment 3
Detachment Commander, Narcotics Affairs Section head,
Embassy Phnom Penh Defense Attache Col. Michael Norton, and
Skip Kissinger, Director of the General Development Office
within USAID's Regional Development Mission for Asia in
Bangkok.


3. DAS Marciel opened with a statement on the U.S.
national interest in Laos: we want strong, independent, and
prosperous nations in South East Asia; we have a specific
interest in having friendly relations with Laos and helping
to build prosperity and wealth for its citizens through
improved economic ties and more U.S. investment; we would
like to develop stronger military ties; we remain committed
to continuing cooperation in the "traditional" areas of
cooperation (unexploded ordnance (UXO) abatement, POW/MIA
accounting, and counternarcotics); and we would like to
expand our assistance in health and other areas. Noting
that the 2008 U.S. presidential candidates are all using
the word "change," Director General (DG) of the Europe and
Americas Department Southam Sakonhninhom, who provided most
of the comment for the Lao side, responded that he hoped
future changes would lead to a broader and better

VIENTIANE 00000083 002 OF 008


relationship. He said the U.S. and Laos have maintained an
unbroken diplomatic relationship for 53 years, even through
"difficult periods." While cooperation on MIA issues,
which started in the early 1980's, continues to be the
"cornerstone8 of the relationship, our ties have expanded
to other areas, including counternarcotics,
counterterrorism, and trade. The mil-mil area is a new
chapter, and the exchange of defense attaches in 2008 is a
significant step forward.


4. (SBU) Southam noted five points from President Bush,s
introductory meeting with the Lao Ambassador to the U.S.:
The President 1) valued the relationship, 2) looked forward
to strengthening ties, 3) appreciated the GOL's cooperation
in accounting for missing American soldiers, 4) saluted the
GOL's success in eradicating opium, and 5) supported Lao
accession to the World Trade Organization (WTO). Southam
emphasized that the relationship must be on an equitable
basis of mutual respect. He said the USG must avoid a
carrot and stick policy and that there should be no
"diplomacy through the Internet," meaning that the Embassy
should check information with the Government of Laos (GOL)
rather than believing Internet reports. In addition,
Southam said the MFA should be the point of contact for
contacts between the Embassy and other ministries. He
good-humoredly admonished his colleagues from other
ministries not to ignore meeting and information requests
once the MFA passed them on. Ambassador Huso replied that
the Embassy maintained contact with a broad range of GOL
ministries and offices and recognized the MFA's
coordinating role. Both the Ambassador and DAS Marciel
emphasized that the timely exchange of accurate information
was critical to maintaining an open and transparent
relationship.

--------------
Fullest Possible Accounting
--------------


5. (SBU) DAS Marciel expressed appreciation for the GOL's
excellent cooperation with the USG and JPAC Detachment
Three on POW/MIA recovery and accounting. The recent
decision to allow JPAC to work in Houaphan province was a
positive step, he said. Ambassador Huso and Det 3
commander Lt. Colonel Brandt Deck requested that DG Southam
pass their thanks to the provincial and local officials
without whom the work could not go forward. Southam
thanked the USG for the humanitarian assistance (HA) it
provides and requested additional help for local people.
DAS Marciel said the USG would continue to look for
promising HA opportunities. Southam said that such help
answers those who inevitably ask why the GOL is devoting
personnel and resources to assist the USG with MIA recovery
when the GOL does not have resources to recover remains of
Lao lost during the war. Southam suggested more U.S. and
Lao media coverage of the JPAC mission and urged that the
Embassy organize a 25th anniversary celebration of MIA
recovery activities, which began in December

1983.

--------------
Transnational Crime
--------------


6. (SBU) DAS Marciel congratulated the Lao on their
successful efforts against opium production and urged the
GOL to expand cooperation with the USG to better address
transnational law enforcement issues, including working
more closely with the Drug Enforcement Administration
office in Vientiane. DAS Marciel noted that trafficking in
persons (TIP) is a problem everywhere, and expressed
appreciation for the efforts Laos had made to raise its
capacity to fight TIP by, for example, beginning

VIENTIANE 00000083 003 OF 008


cooperation on the issue with the International
Organization for Migration (IOM) in 2007. DAS Marciel
reiterated the utility of good information exchanges so
that the Embassy could report on the positive work being
done by the Lao. Noting that the United States and Vietnam
had recently signed a repatriation agreement, he said he
hoped to discuss the status of Lao citizens facing
deportation from the U.S. with the GOL in the future.


7. (SBU) Mr. Khamkheuang Bounteum, Director General of the
MFA's Treaties and Legal Affairs Department, responded that
the GOL was willing to work with the U.S. to fight illegal
drugs and TIP. He noted Laos had made progress over the
previous year on TIP issues, enacting anti-TIP legislation
and amending the penal code to include provisions for the
prosecution and prevention of trafficking. According to
Khamkheuang, the GOL has recently set up a new hotline for
young people that addresses, inter alia, TIP issues. DG
Khamkheuang suggested the Embassy contact his department,
which oversees a TIP coordination unit, for information.
He requested that the USG keep Laos on Tier 2 in
recognition of this progress. DG Southam noted the GOL had
made major steps in fighting TIP but said that it had not
always done a good job of communicating them to the USG.


8. (SBU) Ambassador Huso discussed the regional
implications of the growing trade in methamphetamines and
noted the U.S. could assist with training in areas such as
airport security and financial crimes. DG Southam agreed
there was scope for additional Lao-U.S. cooperation, noted
Laos fully supported UN resolutions on terrorism, and
observed that in order to continue the fight against opium
and amphetamines, Laos would need continued resources. He
said that recent U.S. budget cuts to NAS assistance
restrict the ability of Laos to continue its
counternarcotics efforts. Southam indicated the U.S. and
Laos had previously discussed the possibility of
negotiating a repatriation agreement, and accepted the
topic as appropriate for renewed bilateral discussions.

--------------
Avian Influenza (AI)
--------------


9. (SBU) DAS Marciel observed that the GOL's rapid and
successful reaction to the March 2007 AI outbreak in
Vientiane (ref D) had impressed officials in Washington,
adding that he looked forward to continued cooperation in
this important area. Ambassador Huso described the broad
range of U.S. AI assistance provided to Laos and noted that
the USG had spent over $7 million towards fighting AI in
Laos. The Ambassador noted that the GOL had received
assistance from a wide range of aid sources for AI
prevention, including USAID, the Centers for Disease
Control, and the U.S. Pacific Command (PACOM) and Pacific
Air Forces (PACAF). DG Southam thanked the U.S. for its
aid, stated AI was a serious priority for the GOL, and
indicated the GOL would continue its cooperation.

---
UXO
---


10. (SBU) The U.S. and Lao sides discussed the possibility
of providing military training assistance to Laos as a
means to augment ongoing civilian UXO programs. DG Southam
expressed gratitude for the more than $25 million that the
U.S. has provided to Laos since 1996 for UXO removal and
stated his hope that this assistance would continue into
the future. He noted the terrible human toll that UXO
extracts each year, observing that many children are killed
or injured when they pick up air-dropped bomblets that
litter the ground in contaminated areas. He said that the

VIENTIANE 00000083 004 OF 008


GOL holds the USG primarily responsible for the presence of
the munitions, and that the U.S. has a responsibility to
assist with UXO clearance until it is completed. Southam
noted that current USG assistance to Lao UXO programs flows
through a U.S. contractor, Armor Group, and that he hoped
that, in the future, the U.S. would consider providing
assistance directly from government to government by
funding the Lao National UXO Trust.


11. (SBU) Somnuk Vorasarn, Deputy Director of the National
Regulatory Authority, the Lao agency with oversight of the
UXO sector in Laos, pointed out that the U.S. military had
in the past provided assistance to the UXO Lao organization
for the Lao UXO training center. However, he expressed
reservation over any shifting of U.S. assistance from
civilian agencies to the Lao military - the primary
responsibility for UXO removal, he stressed, remains with
civilian agencies. He noted that much of the clearance
equipment provided by the U.S. is more than a decade old,
and a great deal of it is no longer serviceable. He and
Southam both asked for assistance in replacing items that
had worn out. After expressing appreciation to the U.S.
for providing previously classified bombing reports to
Laos, Somnuk said that the GOL had heard that there is
additional data available from classified sources in
Washington. He expressed the hope that this data might be
made available in the future.


12. (SBU) The Ambassador clarified that the proposed
exchange between U.S. military and Lao military UXO experts
was an augmentation to our current UXO programs rather than
a replacement for non-military UXO programs, which will
continue. He assured the Lao side that all military
assistance would be coordinated with the Lao National
Regulatory Authority. DAS Marciel expressed appreciation
for the GOL's willingness to consider U.S. proposals for
expanded assistance to include U.S. military expertise and
said that the U.S. would consider the possibility of both
government-to-government direct assistance and the
replacement of unserviceable UXO clearance equipment. On
the latter point, he urged the GOL officials to keep an
open mind on potential sources for assistance, as the
funding of U.S. programs changes over time.

--------------
USAID programs in Laos--help us help you
--------------


13. (SBU) Skip Kissinger, Director of the General
Development Office within USAID's Regional Development
Mission for Asia in Bangkok, described current and future
USAID programs in Laos. After touching upon prior USAID
assistance to Laos and current efforts to reduce wildlife
trafficking and protect tropical forests, Mr. Kissinger
focused his comments on economic technical assistance
(TA). Nathan Associates, a USAID contractor, recently
delivered a workplan for comment and approval to the GOL.
The TA project is designed to help Laos implement the
Bilateral Trade Agreement (BTA),accede to the WTO, and
comply with ASEAN liberalization requirements. Mr.
Kissinger urged the GOL to rapidly approve the TA project
in order to bolster the case to Washington that USAID
should allocate additional economic TA funds to Laos in
order to create a program for Laos similar to the STAR
program in Vietnam. (Note: The STAR program is a USAID
project to implement the U.S.-Vietnam BTA, help Vietnam
accede to the WTO, and comply with WTO obligations. End
note.) Mr. Kissinger stressed the importance of rapid,
tangible results from the TA in order to secure additional
funding. DG Southam noted the importance of more TA for
Laos on implementing the BTA and mentioned the U.S. should
not discriminate when awarding Fulbright scholarships to
ASEAN countries. (Note: We believe Mr. Southam was

VIENTIANE 00000083 005 OF 008


referring to an ASEAN-specific Fulbright program. Last
year there was only one such scholarship given out
ASEAN-wide. End note.)

-------------- --------------
Trade and Investment--How to attract more of both
-------------- --------------


14. (SBU) Ministry of Industry and Commerce (MIC)
representative Ms. Latthana Douangboupha, Deputy Director
of the Bilateral Policy Department, observed that bilateral
trade was growing but remained small. The BTA, she noted,
was a very tough agreement, not understood by many Lao
agencies. She said that her Ministry appreciated the USAID
proposal for TA on BTA implementation, and that MIC would
respond with comments soon. The comments were likely to
focus on getting tangible results from the program, she
said, in order to avoid the standard donor-sponsored
training workshops that tend not to produce concrete
results. Specifically, the Ministry is looking for help
with new regulations, enforcement, and establishing an
information center to better inform businesses.


15. (SBU) Noting that investment is another important
part of bilateral economic relations, DAS Marciel said
attracting more U.S. investment to Laos will require some
U.S.-focused success stories; the USG stands ready to
help. DG Southam said that all investors are welcome,
asserting that the one American company, Friend of the
Upland Farmer (ref E),has had problems because it was not
in compliance with the law. (Note: At the end of the
session, Southam showed a letter to Amb. Huso and DAS
Marciel that indicated the problems with provincial
authorities faced by another American-owned company,
Natural Products International (ref E),are being
resolved. End note.) Southam said that, by continuing to
exclude Laos from the countries where it operates, Eximbank
appears to be treating Laos in a manner inconsistent with
the current economic reality and state of relations. DAS
Marciel pointed out that the provision blocking Laos from
Exim access is based on its designation as a
"Marxist-Leninist" country. The concerned agencies are
reviewing the restrictions. DAS Marciel noted that
Eximbank loans are demand driven. Exim access will not
provide tangible benefits until American companies have
specific financing proposals. He reiterated that opaque
licensing regulations and overly complicated approval
mechanisms make it difficult to create investment success
stories that will attract more U.S. investors.

--------------
Military to Military
--------------


16. (SBU) LTC Khamsing So-seng-inh, the Ministry of
National Defense,s Europe-Americas Director within the MND,
s External Relations Department outlined current areas of
military-military cooperation. He highlighted the GOL
decision to exchange defense attaches in 2008 and noted
that the GOL has chosen two fields for training: English
language and medical assistance. LTC Khamsing noted the
U.S. side had offered two positions for English language
training at the Defense Language Institute in San Antonio,
and said he expected the MND to be ready to send two
candidates by the end of February or early March.
According to Southam, the GOL's decision to establish
defense attaches is a very important one; it should be
realized within 2008. He called this a "good message" the
GOL is sending to the USG and said the next step is for the
Embassy and the MND to work together to nominate officers
to serve as defense attaches.


17. (SBU) DAS Marciel called the decision to exchange

VIENTIANE 00000083 006 OF 008


defense attaches "a very positive step" to improve
relations and mutual understanding. The USG looks forward
to welcoming a Lao defense attach this year and also
establishing our own office this year. DG Southam reviewed
other military-military steps which have been accomplished
during the past year. These include the PACOM-MND
bilateral defense talks in January and October 2007 (ref
F); the Distinguished Visitors Orientation Tour (DVOT) of
MND Permanent Secretary General Sisophon Bangone-sengdet
and LTC Khamsing to Washington, DC in June 2007; and
sending a number of GOL officials to training at the
Asia-Pacific Center for Security Studies (APCSS). Southam
added that training in Avian Influenza (AI) preparations
(ref G) and possibly UXO removal are part of the
"military-military basket."

--------------
Governance Issues
--------------


18. (SBU) DAS Marciel expressed appreciation for the GOL's
willingness to discuss religious freedom and other
governance issues with the USG. He noted that Lao central
government officials have been working with provincial and
local officials to make sure that they understand Lao laws
regarding religious freedom. He encouraged the GOL to
allow the importation of Bibles and urged the GOL to allow
additional religious groups to register. Southam said that
poor countries like Laos have a different vision on human
rights from that of a "superpower." Each country's ideas
on human rights are shaped by its own situation. The Lao
government fought 30 years ago for its independence and
sovereignty, which form the basis of human rights in Laos.
The goal is to eradicate poverty and educate the
population. With regard to complaints about Christians
being arrested, he said, it often turns out that they were
arrested not for their religious beliefs but for committing
illegal acts. He said that the GOL is committed to good
governance, noting that it had passed an anti-corruption
law. DAS Marciel agreed that each country's situation is
different but emphasized that the Universal Declaration of
Human Rights forms the basis of respect for human rights in
all countries.


19. (SBU) With regard to the situation of the ethnic Hmong
in remote areas, DAS Marciel expressed concern over reports
from Hmong-Americans and other sources of human rights
violations. Access to accurate information is the key to
resolving these reports and broadening U.S. and
international understanding of the situation. Southam said
that the GOL has a hard time understanding the USG's
preoccupation with the Hmong, who are only one of 49 ethnic
groups in Laos. Some members of Congress, he asserted,
take at face value reports from Hmong-Americans who have
never been back to Laos since leaving in the 1970s. He
noted that the Lao government has organized trips for
diplomats to visit Hmong repatriated from Thailand.
Southam said that it is not the policy of the Lao
government to kill or harm the Hmong or any other Lao
people, adding, "we have no ethnic cleansing." DAS Marciel
agreed that the presence of a large Hmong-American
population is a factor in U.S. interest, and reiterated
that information-sharing is the key to avoiding
misunderstandings. Southam noted that the U.S. government
has clearly stated that hostile action against the Lao
government by American citizens is a violation of U.S.
law. He asked DAS Marciel to continue sending this message
to the Hmong community in the U.S.

--------------
Consular
--------------


VIENTIANE 00000083 007 OF 008



20. (SBU) DAS Marciel noted that the volume of consular
interaction between the USG and GOL is increasing as the
volume of travelers in both directions grows.
Communication is key to problem-solving. He said that GOL
assistance in the case of Ryan Chicovsky, an American who
disappeared in Laos in 2006, serves as an example of
effective cooperation on a challenging consular issue. DAS
Marciel noted that notification of the arrest of American
citizens in Laos often takes place late or not at all.
When consular access has been granted, it has not always
been in a timely manner. Most disturbing are the recent
disappearances of several American citizens, about whom
little information has been provided by the GOL. DAS
Marciel said that information flow is critical, especially
in difficult cases, where families in the U.S. are waiting
for explanations of what has happened to their relatives.


21. (SBU) Southam responded that these are very important
issues in the U.S.-Lao relationship and asked for U.S.
understanding that not every country is perfect or able to
provide complete information in a consistently timely
manner. Southam said that communications in Laos remain
technically inferior compared to the U.S., delaying
information flow. He said that it is GOL policy to
cooperate in every case and cited ongoing missing persons
investigations and the granting of prison visits. He
promised to provide copies of border crossing cards for
three missing Hmong-Americans (ref C). (Note: The three
were arrested in Laos in late August and have not been seen
since. According to the Lao government, which has not
acknowledged their arrest, they left Laos for Thailand via
the Friendship Bridge in Vientiane at the end of August.
The Thai provided copies of the entry documents associated
with the individuals but, so far, the Lao have not provided
the departure cards. End note.) Southam pointed to the
announcement made only that day that one of two convicted
Americans would be released shortly as indicative of the
GOL's desire to cooperate on consular issues, stating that
the individual had been treated far more leniently than was
likely elsewhere in Southeast Asia considering the
seriousness of his crime. (Note: On January 25, Mr. Houa
Yang was deported after being convicted of possession of
600 grams of opium. End note.)

-------------- --------------
Dinner Conversations on Burma and Hmong in Thai refugee
camps
-------------- --------------


22. (C) At the beginning of the dialogue, DG Southam
proposed moving regional issues to the end of the agenda,
but closed the dialogue before this discussion took place,
seemingly preferring a more private discussion. This took
place during the dinner following the dialogue, which the
Ambassador hosted. Emphasizing the U.S. interest in
stability, DAS Marciel requested that the GOL inform the
Burmese Government that regime change there is not U.S.
policy and that the U.S. believes the Burmese regime's
refusal to open a dialogue with representatives of the
Burmese people such as Aung San Suu Kyi and the National
League for Democracy (NLD),who had already won a fair
election overseen by the military regime itself, would lead
to increased instability. DG Southam's response
encapsulated Lao policy: Laos does not believe in
sanctions and avoids interference in other countries'
internal affairs. He did note that the GOL supports the
Gambari mission and that Gambari had asked the GOL to
convey a message to the Burmese government on the
importance of cooperating with the United Nations, which
the GOL had done. In a separate part of the conversation,
DG Southam told DAS Marciel that the GOL believes it is its
responsibility to accept Lao Hmong in Thailand back into
Laos, but that the GOL was not opposed to Thailand seeking

VIENTIANE 00000083 008 OF 008


third country resettlement for the Hmong currently in camps
in Thailand's Nong Khai and Petchabun provinces.

--------------
Comment
--------------


23. (C) The dialogue was a step forward in the improving
U.S.-Lao relationship. While not all of the non-MFA
participants spoke, their presence (especially that of
representatives of the Ministry of Public Security) was an
encouraging development. DG Southam had clearly looked
for, and found, specific deliverables to bring to the
dialogue. These included the decision to offer visas for
Lao-Americans valid for 3 months, rather than the standard
30 day validity for other Americans, and an announcement
that a land law revision is under consideration which would
allow Lao-Americans to return and buy property. He also
urged Ambassador Huso to continue to speak to Hmong groups
in the U.S. (as he has already done once) and offered to
arrange for the Ambassador to visit Hmong resettlement
villages. Finally, the day prior to the dialogue, JPAC was
given permission to work in Huaphan province, resolving a
long impasse. The permission appears to have been achieved
by MFA and MND officials meeting the provincial
administration and was brokered by Southam's direct
intervention with the Governor.


24. (U) DAS Marciel cleared on this message.

Huso