Setting the Scene for Deputy Secretary Steinberg's September

UNCLAS SECTION 01 OF 05 HANOI 000978 SIPDIS E.O. 12958: N/A TAGS: PREL PGOV PHUM ECON ETRD KIRF SENV MARR KHIV KHDP BM VM SUBJECT: Setting the Scene for Deputy Secretary Steinberg's September 26-27 Visit to Hanoi ¶1. (SBU) SUMMARY: U.S.-Vietnamese relations have advanced significantly over the past three years and are arguably at their highest point since relations were reestablished in 1995. We are Vietnam's largest export market, its third-largest trading partner, and one of its largest foreign investors. We have broadened our cooperation to public health, education, mine clearance, and WTO and BTA compliance. Strategically, Vietnam views the U.S. presence in the region as a force for stability, and security cooperation has blossomed as our two militaries are exploring concrete areas of cooperation. Powerful conservative voices in Vietnam's Communist Party and security services remain wary of U.S. intentions, but their influence will wane over time as the country's young population -- the first generation in memory to live without war -- increasingly looks to the West. ¶2. (SBU) Profound differences remain, however, particularly in our approach to human rights. Vietnam has made strides in religious freedom, but the situation surrounding political rights and press freedoms has worsened as the Party clamps down on dissent in advance of the January 2011 Party Congress. Our approaches to international issues also differ. Vietnam's performance on the UNSC has been lackluster and its non-interventionist line has caused it to align with Russia and China on issues such as Burma, Georgia, and Darfur. Vietnam has a chance to exercise leadership in the region as ASEAN chair beginning in January 2010, but will require sustained, considerable U.S. support and prodding to tackle tough issues like Burma. Your visit is a useful opportunity to reiterate our commitment to deepening bilateral relations across the board, while warning senior GVN leaders that future progress, particularly in trade, will be contingent on greater respect for human rights and democracy. END SUMMARY. Foreign Policy Priorities: China and the United States -------------- -------------- ¶3. (SBU) Vietnam professes a "friends to all" foreign policy., but it's foreign policy is fundamentally pragmatic. While the overriding strategic concern remains China, Vietnam is under no illusions that it can somehow "balance" China with the United States, Russia, or Japan. Nor is a more confrontational approach toward China something the Party could sustain domestically: once unleashed, nationalistic sentiment, though initially directed at China, could easily turn toward the Party itself. We saw this most recently in the government's awkward efforts to downplay General Vo Nguyen Giap's remarkable -- and remarkably public -- criticisms of Chinese investment in bauxite development programs in the Central Highlands. Instead, Vietnam seeks to maintain as cordial and stable a relationship with China as possible, while also cautiously cultivating a diverse range of bilateral friendships and enmeshing these in a framework of multilateral engagement. In this context, Vietnam's bilateral relationship with the United States enjoys pride of place; however, Vietnam is wary of pushing the agenda with the United States too far, too fast, lest it antagonize China. ¶4. (SBU) Mistrust of China runs deep, fed by historical animosities and simmering resentment over South China Sea territorial disputes. Vietnam paid close attention to China's harassment of USNS Impeccable in March, and this may have contributed to the MND's decision to participate in the Stennis fly-out. Senator Jim Webb's hearings on South China Sea issues were well received here. The United States, as DAS Marciel indicated in his testimony, takes no position on the competing legal claims in the South China Sea (or East Sea, as it is called in Vietnam). We do, however, have a strong interest in maintaining freedom of navigation and the ability of our naval ships to conduct legitimate operations. We have encouraged all parties to the dispute to work together to build confidence, in particular by enhancing the 2002 ASEAN Declaration on the Code of Conduct in the South China Sea. In this regard, Vietnam and Malaysia's decision in May to submit a joint report on their extended continental shelf baseline claims is a positive development. Multilateral Engagement: Vietnam at the UNSC and ASEAN -------------- -------------- HANOI 00000978 002 OF 005 ¶5. (SBU) Vietnam has been professional and well-briefed at the UN Security Council, but cautious. Hanoi has been eager to join consensus whenever possible, voting for example to support sanctions on Iran and North Korea. Vietnam has shied away from taking a leadership role, however, and where there has been disagreement has tended to follow a strict non-interventionist line. This led Vietnam to follow China and Russia's lead on Kosovo and Georgia, Somali piracy and the ICC Indictment of Sudanese President Bashir. We anticipate more of the same as Vietnam finishes its term this year. We expect Vietnam to do better as ASEAN Chair when it begins its term in 2010. Vietnam puts great store in ASEAN and has suggested repeatedly that it would like to facilitate better contact between ASEAN and its "plus one" dialogue partners, the United States in particular. The decision to accede to ASEAN's Treaty of Amity and Cooperation was extremely well received in Vietnam, as was Secretary Clinton's visit to the ASEAN Secretariat in Jakarta and the strong support for deepened engagement that she articulated in Phuket. If the U.S.-ASEAN summit is revitalized, Vietnam, as ASEAN Chair, would lobby hard to host. ¶6. (SBU) Vietnam tends to look at a number of regional issues, including Burma, through an ASEAN lens. Thus, while Vietnam has steadfastly followed China in rejecting a UNSC role in Burma, Hanoi recognizes negative effect that Rangoon's continued intransigence has on ASEAN's credibility. In this regard, it is significant that Vietnam did not block a relatively strong ASEAN statement about the retrial of Aung San Suu Kyi. Vietnam has long urged the United States to take a more flexible approach to Burma and welcomed the Secretary's announcement in Jakarta that we would be reviewing our policy; they also expressed strong support for Senator Webb's recent visit to Burma. Our MFA contacts say they recognize the continued detention of ASSK makes it difficult for the United States to be more accommodating, a message they may not agree with, but insist they have communicated to the leadership in Rangoon. Human Rights and Religious Freedom -------------- ¶7. (SBU) For Vietnam, non-interference is not just an abstract principle, but also a reflection of narrow self-interest. As a single-party authoritarian state, Vietnam has had a consistently poor record on human rights, and still reacts defensively to criticism, though it has learned to be more responsive to international calls for dialogue, engaging the United States and others in annual formal human rights discussions. The next U.S.-Vietnam dialogue on human rights is in Washington November 8-9. You should encourage the Vietnamese side to move beyond talking to concrete action. It is critical that Vietnam understand that progress on human rights is essential to progress in other areas of the relationship, including trade. ¶8. (SBU) This is particularly the case now, as Vietnam's Party-state apparatus moves to clamp down on political dissent in advance of the 11th Party Congress, scheduled for January 2011. More than twenty dissidents have been arrested over the past year, eight in the past three months alone: eight are scheduled to face trial the week before you arrive. The current "crackdown" began with the arrest and conviction of two prominent journalists who had worked to expose a major corruption scandal. The action sent a chilling message to other independent-minded journalists. Over the past year, several editors and reporters from prominent newspapers have been fired for sensitive coverage, and two bloggers were recently detained and released only after they promised to stop blogging. A recently promulgated Prime Ministerial decree ("Decision 97") prohibits independent scientific/technical institutes from publicizing research critical of government/Party policies. The decree's main target, the reform-minded Institute for Development Studies, closed its doors. However, the decree could have a wider effect: inhibiting other groups, dissuading foreign research partners, and discouraging R/D investment. ¶9. (SBU) The June arrest of lawyer Le Cong Dinh -- a successful corporate lawyer, Fulbright alum, and well-heeled member of the HANOI 00000978 003 OF 005 establishment -- served as a particularly poignant reminder that Vietnam's collective leadership remains determined to maintain political order and to preserve regime stability, goals it sees as synonymous. The lessons of 1989 and 1991, and more recently of the "color revolutions" in Ukraine, Georgia, and Kyrgyzstan, continue to inform the perceptions of the generation that dominates the Politburo and Central Committee. This paranoia was on remarkably clear display on August 19, when state Television broadcast a series of heavily edited police confessions from Dinh Dinh's confession focused on U.S. assistance, casting U.S. efforts to promote the rule of law and an independent judiciary as somehow sinister and specifically mentioning the Ambassador and former Deputy Secretary Negroponte. The Ambassador protested the broadcast in a strongly worded letter to your Vietnamese counterpart, VFM Pham Binh Minh, but has not received a response. Economic Successes and Challenges -------------- ¶10. (SBU) Trade and investment with the United States form an important pillar of the overall relationship, and Vietnam welcomes signs that the U.S. economy is beginning to recover. The country's 6.2% GDP growth in 2008 -- though not bad in a regional context -- was the lowest since 2000, and is expected to decline further in 2009, with most projections around 5%. Nevertheless, bilateral goods trade in 2008 was up 25% from the previous year, and stood at an all-time high of $15.7 billion by the end of the year. U.S. exports, particularly of agricultural products, are a particular success story and grew 47% in 2008. Bilateral trade is down by about 5% so far in 2009. ¶11. (SBU) We are seeking to keep up the momentum with BIT talks and have proposed mid-November for the next round. We are also pushing Vietnam to further open key markets such as beef. We were encouraged by Vietnam's decision to join the Trans-Pacific Partnership as an associate member. The Vietnamese will want to know if the U.S. plans to join. You will almost certainly hear calls for Vietnam to be designated as a beneficiary under the U.S. Generalized System of Preferences. Deputy USTR Demetrios Marantis told the GVN the United States would welcome Vietnam's receiving GSP status, provided it establishes required labor rights guarantees and intellectual property protection required by U.S. law. You may also likely hear expressed Vietnam's concerns about U.S. limitations on catfish imports from Vietnam and anti-dumping and countervailing duty cases It would be useful to reassure the Vietnamese that we remain committed to deepening our trade and economic relations, while also noting that progress on our trade agenda, particularly in the Congress, could be imperiled by human rights problems. The Military Relationship and MIA/POW Issues -------------- ¶12. (SBU) Vietnam's apprehensions about China come into play most directly perhaps in our military-military relations. Here too, however, there has been progress: Efforts to provide the fullest possible accounting of missing personnel predate the establishment of diplomatic relations, and the development of trust on the issue has made gains in other fields possible. We would like to see more progress in areas such as underwater recovery and archival access, but, overall, both sides can be proud of our achievements: since 1973, 649 Americans previously listed as MIA have been accounted for in Vietnam (1,319 remain missing). As a sign of continued goodwill, in June, Vietnam granted permission for a U.S. Navy oceanographic survey ship, the USNS Heezen, to search for U.S. MIAs in Vietnamese coastal. ¶13. (SBU) Our militaries are slowly developing ties and have discussed cooperation in areas such as search and rescue, humanitarian assistance and disaster relief cooperation, military medicine, and meteorological information exchanges. These and other initiatives -- such as expanding English-language training under IMET, ship visits, and encouraging Vietnam to participate in HANOI 00000978 004 OF 005 global peacekeeping operations -- were on the agenda for political-defense talks, the first of their kind, which were held in October 2008. A second round took place in June of this year and resulted in enhanced cooperation in search and rescue In an unprecedented sign of warming mil-mil ties, in April, senior Vietnamese Navy and Air Force officers toured the USS John C. Stennis in international waters off the coast of Vietnam. In his June 2008 visit, Prime Minister Nguyen Tan Dung announced that Vietnam would take part in GPOI, but progress has been slow, and Vietnamese officials are reluctant to do more than send observers. We suggest that you encourage Vietnam to participate actively, including in the July 2010 Capstone exercises in Cambodia. Health Diplomacy/Agent Orange/Unexploded Ordinance -------------- -------------- ¶14. (SBU) Health diplomacy has been a major spur to improved bilateral relations. Over the past several years, we have worked to boost Vietnam's develop capacity to stem the spread of infectious diseases, respond to outbreaks, and address public health and safety concerns. Currently about 80 percent of all U.S. development aid is in the areas of health and disability. While we provide cooperative assistance in a range of areas, HIV/AIDS assistance under the President's Emergency Plan for AIDS Relief (PEPFAR) has totaled $322 million since 2004, including $88.6 million in FY09. The United States has also made substantial investment to prevent and control highly pathogenic avian influenza, with total funding since 2004 of about $50 million projected through FY 2009. In April 2010, USAID will assist the GVN to host the seventh International Ministerial Conference on Avian and Pandemic Influenza, and as a follow up to July's Lower Mekong Ministerial, the United States has also announced plans to host in Vietnam a regional meeting on infectious disease. As of September 17, the Ministry of Health reported 5,961 confirmed cases of 2009 H1N1 influenza in Vietnam, with six fatalities. The actual number is probably higher, as many people do not seek medical treatment unless they are seriously ill. As with highly pathogenic H5N1, the Centers for Disease Control and Prevention and USAID have cooperated actively with their Vietnamese counterparts to track H1N1 influenza and to provide guidance on containment and treatment. ¶15. (SBU) Agent Orange (and its contaminant, dioxin) remains a visceral and heavily propagandized issue, as evidenced in the local press coverage of the U.S. Supreme Court's decision not to revisit the dismissal of a lawsuit brought by alleged Vietnamese victims against U.S. chemical companies. Vietnam's first-ever "Agent Orange Day" on August 10 received wide, and slanted, media coverage. Nevertheless, we are gradually seeing more balanced reporting, for example, on the annual U.S.-Vietnam Agent Orange/Dioxin Joint Advisory Committee (JAC),the most recent round of which took place in September, as well as cooperative efforts to clean up contamination at the Danang airport. Efforts to deal with the consequences of unexploded ordinance and landmines continue to be warmly received. U.S. Assistance: Trade, Education, Environment -------------- - ¶16. (SBU) U.S. assistance levels in other areas remain disproportionally low, particularly when compared with aid provided to neighboring developing nations. Even so, programs such as USAID's STAR and the Vietnam Competitiveness Initiative have become the government's preferred source of expertise in reshaping trade and economic regulation, with positive effects on governance. Treasury is also starting to engage on economic issues, with programs in areas such as small- and medium-sized enterprise financing, taxation, and bond market development. The Joint Educational Task Force formed in the wake of Dung's 2008 visit prepared recommendations on improving Vietnam's education system, including establishing an American university in Vietnam. In the meantime, programs such as the Fulbright Program and the Vietnam Education Foundation, with combined annual funding of almost $10 million, continue to bring scores of Vietnamese students to the U.S. every year. The number of Vietnamese students studying in HANOI 00000978 005 OF 005 U.S. colleges and universities now ranks eighth in the world. ¶17. (SBU) During PM Dung's visit, the United States and Vietnam also agreed to accelerate cooperation on climate change adaptation and mitigation, and announced the creation of the Delta Research and Global Observation Network (DRAGON) Institute at Can Tho University. Supported by the U.S. Geological Survey, the DRAGON Institute supplements U.S.-funded initiatives already underway to assist Vietnam's climate change response. Expanded cooperation from the U.S. Department of Energy and U.S. Nuclear Regulatory Commission to support the creation of the necessary safety and security infrastructure for Vietnam's planned civilian nuclear power sector may also help mitigate Vietnam's future greenhouse gas emissions. What You Can Expect -------------- ¶18. (SBU) The foundations are in place for a deeper partnership; building on this foundation, however, will require sustained, patient engagement. Vietnam's leaders are fundamentally pragmatic. They value Vietnam's relationship with the United States, both for its intrinsic importance and because Vietnam's security and economic growth have become inextricably enmeshed in an international system of which the United States remains the primary guarantor. At the same time, their worldview is informed by history and by ingrained suspicions of U.S.-led efforts to bring about political change, what they term "peaceful evolution." All in all, the tenor of the relationship remains decidedly positive, if still cautious. Your discussions will add momentum to our efforts to help translate good feelings into sustainable accomplishments. Michalak