US embassy cable - 04HANOI2655

UNCLAS SECTION 01 OF 02 HANOI 002655 
 
SIPDIS 
 
STATE FOR EAP/BCLTV 
 
E.O. 12958: N/A 
TAGS: PREL, PGOV, VM 
SUBJECT:  Governor of Washington Meets with Prime Minister, 
Foreign Minister and other Senior Officials 
 
1. (U) Summary:  Governor of Washington Gary Locke and 
delegation met September 22 with Prime Minister Phan Van 
Khai and Foreign Minister Nguyen Dy Nien.  He also met 
earlier in the day with Minister of Trade Truong Dinh Duyen, 
Minister of Planning & Investment Vo Hong Phuc and Vice 
Minister of Finance Le Thi Bang Tam.  The Prime Minister and 
Foreign Minister warmly welcomed Washington State's strong 
commercial relationship with Vietnam and expressed hope for 
the continued expansion of ties in the areas of education, 
medicine and culture.  Both the PM and Foreign Minister 
described Vietnam's needed for technical and other 
assistance, and neither took the opportunity to raise the 
recent dust-up over the designation of Vietnam as a "Country 
of Particular Concern" in the area of religious freedom. 
Even the "catfish and shrimp problems" were mentioned more 
in sorrow than in anger.  Press coverage of the visit was 
broad and positive.  End Summary. 
 
Prime Minister Khai 
------------------- 
 
2. (U) Governor of Washington State Gary Locke and 
delegation met for one hour September 22 with Prime Minister 
Phan Van Khai.  The Ambassador, Commercial Counselor and 
Pol/C were also present.  The Governor opened by noting that 
Washington was the first U.S. state to send a delegation to 
Vietnam after U.S.-Vietnam normalization in 1995.  He 
observed that 55 percent of all American exports to Vietnam 
were from Washington (Note: Boeing aircraft sales are the 
lion's share of this figure) and that one-third of all jobs 
in Washington depended directly or indirectly on 
international trade.  Washington State was a strong 
supporter of WTO accession for Vietnam, and Governor Locke 
noted that the degree to which Vietnam implemented its 
bilateral trade agreements with the United States would 
affect Vietnam's WTO aspirations.  He also stressed that his 
state could help to play a role in the GVN's efforts to 
modernize and raise the standard of living for its people. 
The Governor underlined his hope that Washington would not 
only continue to expand its exports of traditional products 
such as agricultural goods but also introduce Vietnam to 
some of the state's other leading-edge areas, such as 
medical equipment, alternative energy technology and 
education. 
 
3. (U) PM Khai observed that a stable U.S.-Vietnam 
relationship was a "requirement in today's world" and 
expressed his delight at the great progress in bilateral 
ties since normalization.  What remained to be done was to 
continue to boost further the relationship.  Vietnam hoped 
to develop comprehensively its relations with the United 
States, and this included investment, medicine, training and 
education, and culture.  Washington State was helping to 
lead the way in these areas, and the GVN sought to encourage 
Vietnamese entrepreneurs to do business with enterprises in 
the United States in general and Washington in particular. 
Vietnamese businessmen still had limited understanding about 
"the market, culture and history," and most Vietnamese 
entrepreneurs would admit that they did not know much about 
the United States.  It was thus necessary to make efforts to 
"understand each other further," the Prime Minister said. 
 
4. (U) PM Khai noted that Vietnam, as a tropical country, 
had a great diversity of products that it exported to the 
United States and Washington.  Coffee was a leading export, 
but Vietnam could still do more because of the product's 
"high quality."  There were "obstacles" to the export of 
seafood, but this area also had potential because of its low 
price and high quality.  Thanks to modern imported 
equipment, Vietnam's products were widely accepted, 
including in the United States.  Vietnam hoped that the 
United States could assist Vietnam with "management 
knowledge" and believed that U.S. investors were "more 
efficient" than "regional corporations" and could help to 
increase Vietnam's efficiency, the PM said. 
 
5. (U) Education cooperation was also very important to 
Vietnam, and the people of Vietnam greatly appreciated the 
support from the United States and highly valued the quality 
of an American education.  Vietnam, although poor, had a 
high literacy rate and a tradition of families working hard 
and saving to provide for their children's education.  PM 
Khai hoped that Washington State could play a role in U.S.- 
Vietnamese education cooperation and expressed the GVN's 
wish that it could expand the training of its civil servants 
at American schools.  Furthermore, Vietnam hoped to import 
American hardwood for use in the manufacture of furniture 
and handicrafts.  The GVN had calculated that USD 100 
million in wood products exports equaled 10,000 jobs, and 
this area represented great growth potential for Vietnam. 
Vietnam's per capita income had been USD 100 20 years ago, 
but this figure had risen to USD 500.  Similarly, Vietnam's 
GDP had doubled since 1990.  Although Vietnam was still 
poor, and these figures were "small" in comparison to those 
of the United States, they nonetheless represented a 
"miracle" to the Vietnamese.  The GVN hoped to enrich the 
people of Vietnam, maintain a "diversity of foreign 
relations" and always improve the environment for further 
foreign direct investment.  Although Vietnam greatly relied 
on FDI, domestic investment was continuing to increase, 
indicating that the Vietnamese people were "learning how to 
do business," PM Khai said. 
 
Foreign Minister Nien 
--------------------- 
6. (U) During his earlier meeting with Foreign Minister 
Nguyen Dy Nien, the Governor struck the same notes regarding 
Washington State's relationship with Vietnam.  FM Nien 
expressed his gratitude for Washington State's support for 
Vietnam's WTO accession.  U.S. support was key, and the GVN 
sought stable relations with the United States.  The people 
of the United States and Vietnam needed to understand each 
other more.  The two countries had a "painful history," one 
that could have been avoided if they understood each other 
like today, Nien said. 
 
7. (U) Vietnam had made much economic progress, the Foreign 
Minister continued, but problems remained, particularly in 
remote and mountainous areas.  Vietnam needed U.S. 
assistance to increase its people's standard of living and 
promote education, health care and culture.  Vietnam had to 
reform its legal system to make its investment environment 
more attractive.  There had been some progress, but further 
steps were needed.  Vietnam had an advantage in its low 
labor costs and skillful work force, but still needed 
technical assistance.  During the recent U.S.-ASEAN Business 
Council meeting in Hanoi, the American investors represented 
there said that Vietnam was "not yet attractive" as an 
investment.  Although the United States was Vietnam's 
biggest export market -- trade had increased from USD 60 
million in 1995 to USD 6 billion in 2004 -- U.S. FDI in 
Vietnam was still low.  The two countries had problems over 
shrimp and catfish, but Vietnam was "still learning" about 
how to do business and needed U.S. support to increase its 
competitiveness, FM Nien acknowledged. 
 
8. (U) Vietnam hoped to send more students to the United 
States, and FM Nien welcomed the Governor's idea about 
bringing American university programs and professors to 
Vietnam to increase the opportunities for Vietnamese young 
people to have access to an American education.  The Foreign 
Minister also praised American health care and medical 
advances and expressed his hope that Washington State could 
expand technical and cultural exchanges with Vietnam. 
 
Press 
----- 
 
9. (U) The Governor's visit received wide coverage, 
including ten articles and an interview in major and popular 
dailies.  Coverage in HCMC was also broad and positive and 
emphasized the importance of bilateral trade ties.  None of 
the stories raised anti-dumping issues or CPC designation. 
 
Comment 
------- 
 
10. (U) The Governor and his delegation were well received 
by the Prime Minister and Foreign Minister.  As in the 
Governor's other meetings with senior officials, the 
atmosphere during both of these calls was very warm and 
cordial.  Neither PM Khai nor FM Nien hesitated to describe 
the deficiencies of Vietnam's economy, and both 
interlocutors underlined Vietnam's need for a stable 
relationship with and the continued assistance of the United 
States.  Significantly, the Prime Minister and Foreign 
Minister avoided discussion of the recent dust-up over the 
designation of Vietnam as a "Country of Particular Concern" 
in the area of religious freedom, and even the mention of 
the "shrimp and catfish problems" was more in sorrow than in 
anger. 
 
MARINE