US embassy cable - 03HANOI1263

UNCLAS SECTION 01 OF 02 HANOI 001263 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EAP/BCLTV, EUR/AGS 
 
E.O. 12958: N/A 
TAGS: PREL, ETRD, EAID, PHUM, PTER, GM, VM 
SUBJECT:  GERMAN CHANCELLOR REAFFIRMS STRONG RELATIONSHIP 
--         WITH VIETNAM 
 
 
1.  (U) SUMMARY.  German Chancellor Gerhard Schroeder's 
visit to Hanoi focused on economics and concluded with a 
number of economics-related agreements, but also touched, 
albeit briefly, on a number of other issues, including Iraq, 
transnational crime, and counterterrorism.  Schroeder did 
not raise the issue of human rights, but in speech at Hanoi 
Polytechnic University, he discussed the need for Vietnam to 
allow a freer flow of information, especially via the 
Internet.  A reciprocal visit by the GVN Prime Minister in 
2004 "is possible."  END SUMMARY. 
 
2.  (U)  (U)  Schroeder is the second German Chancellor to 
visit Vietnam in recent years.  In 1995, then-Chancellor 
Helmut Kohl visited.  In 2001, Wolfgang Thierse, President 
of the Federal Parliament visited.  On the Vietnamese side, 
Former Prime Minister Vo Van Kiet visited in 1993; Prime 
Minister Phan Van Khai visited in 2001. 
 
3.  (SBU)  Schroeder's visit to Vietnam came at the end of a 
swing through Asia that included stops in Indonesia, 
Malaysia, and Singapore.  According to press reports, the 
long-planned visit to the region was in jeopardy due to 
concerns over SARS.  However, the Chancellor decided to go 
forward with the trip, albeit with a reduced entourage. 
During his stay in Hanoi, Schroeder met with Prime Minister 
Phan Van Khai, Communist Party Secretary General Nong Duc 
Manh, and President Tran Duc Luong.  Schroeder also gave a 
speech at the Hanoi Polytechnic University before about 750 
students, faculty, and alumni of German institutions. 
 
4.  (SBU)  The visit, originally planned for two days, ran 
from the evening of May 14 through May 15.  The reason for 
the shortened visit in Vietnam was Schroeder needed to 
return to Germany to meet Secretary Powell.  According to 
Dr. Bui Huy Khoat, Director of the Institute of European 
Studies of the National Centre for Social Sciences and 
Humanities, the GVN "was relieved" that Schroeder did not 
cancel his visit.  Between the SARS crisis and the meeting 
with Powell in Germany, it appeared that the short visit to 
Vietnam might not take place at all.  Also, fewer officials 
accompanied Schroeder than originally planned due to the 
SARS threat.  Based on guidance from the German health 
authorities, the entourage accompanying Schroeder was 
reduced from 60 to 30, mainly at the expense of the German 
business community.  Prominent officials accompanying 
Schroeder included Minister of Economics and Labor Wolfgang 
Clement and Heinrich von Pierer, the CEO of Siemens. 
According to a German embassy contact, von Pierer 
participated as the head of the Asia-Pacific Committee of 
the German Business Association.  (Note:  According to the 
German emboff, Siemens has an MOU with the Ministry of 
Industry to conduct a feasibility study for construction of 
a metrorail project in and around Ho Chi Minh City. End 
Note). 
 
5.  (SBU)  According to Dr. Khoat, the relationship with 
Germany as "perhaps the most important within the EU for 
Vietnam."  He noted that Vietnam and Germany have strong 
ties due to the large (approximately 85,000) overseas 
Vietnamese population.  In addition, Vietnam has "about 
40,000" German speakers, most of whom studied or worked in 
the former German Democratic Republic.  According to German 
embassy figures, 7,000 Vietnamese academics have graduated 
from German universities and in 2002, about 1,600 Vietnamese 
were enrolled in German institutions of higher learning. 
 
---------- 
AGREEMENTS 
---------- 
 
6.  (U)  At the conclusion of the visit, Germany and Vietnam 
signed an aid package worth about USD 76 million, according 
to the German embassy.  The package includes: 
--Sanitation improvement in several provincial capitals (USD 
52.5); 
--hospital services improvement in northwest Vietnam (USD 
10.5); 
--flood damage repair in the Mekong region (USD 9.3); and 
--upgrading of vocational schools (USD 3.5). 
In addition to these measures, the two sides also signed a 
joint statement on tourism cooperation. 
 
-------------------- 
STRONG ECONOMIC TIES 
-------------------- 
 
7.  (SBU)  Germany is Vietnam's largest European Union (EU) 
trading partner.  In 2002, Germany accounted for 28 percent 
of trade between Vietnam and the EU, with two-way trade 
amounting to about USD 1.9 billion, according to press 
reports.  According to the German embassy, Vietnam's exports 
to Germany are about double its imports.  Vietnam's most 
important exports to Germany include shoes, garments, and 
coffee.  The leading German exports to Vietnam include 
machinery and chemicals.  Germany is also an important 
source of official development assistance for Vietnam and 
its third largest bilateral donor.  In 2002, Germany 
provided about USD 36 million of loans and grants to 
Vietnam. 
 
-------------------------- 
BUSINESS COMMUNITY'S VIEWS 
-------------------------- 
8.  (SBU)  Economics and Labor Minister Clement met with 
representatives of the German business community (most of 
whom traveled up from Ho Chi Minh City) for a breakfast 
meeting on May 15.  According to the German emboff, the 
businessmen raised "normal complaints" such as the lack of 
transparency and the frustrations of dealing with the GVN 
economic bureaucracy.  More importantly, they appeared 
"somewhat frustrated" over what they perceive as having to 
operate at a disadvantage since implementation of the U.S. - 
Vietnam bilateral trade agreement in December 2001. 
 
9.  (SBU)  According to our emboff contact, one of the 
businessmen told Clement that since two-way trade with 
Germany only increased by about three percent in 2002, 
German business people were "disadvantaged" compared to 
their US counterparts.  In a meeting with Deputy Prime 
Minister (and former Trade Minister) Vu Khoan, Clement 
raised this issue and received assurances from Vu Khoan that 
Germany, as well as other European Union countries, "will be 
treated equitably."  Clement also told his hosts that 
Germany will continue to support Vietnam's accession to WTO, 
according to the German emboff. 
 
---------------------- 
ON THE POLITICAL FRONT 
---------------------- 
 
10.  (SBU)  According to Dr. Khoat, Vietnam and Germany have 
no "serious bilateral political issues."  During the 
meetings, areas such as Iraq, counterterrorism, and 
transnational crime were "touched upon."  The German emboff 
said that Germany and Vietnam are "rather close" on Iraq and 
counterterrorism to the extent that both countries share the 
view that the United Nations should play a "key role." 
Regarding crime, the leaders briefly discussed mutual 
concerns regarding transnational crime and its connection to 
the Vietnamese community in Germany, but the discussions 
were "not substantive," according to our German embassy 
contact.  Schroeder, however, did receive assurances from 
his hosts that Vietnam would "continue to cooperate" with 
German law enforcement authorities. 
 
11.  (SBU)  Regarding human rights, Schroeder did not 
specifically raise the issue with his hosts; however, he did 
present Prime Minister Khai the EU's list of 24 prisoners of 
concern.  According to our emboff contact, the Prime 
Minister accepted the list without comment.  At a speech at 
the Hanoi Polytechnic University, Schroeder did speak about 
the need for Vietnam to have a "freer information flow, 
particularly via the Internet."  According to the German 
emboff, the event was "a highlight" of the visit because it 
was the type of situation where Schroeder is "most 
comfortable."  When Schroeder formally handed over five new 
scholarships to the Polytechnic's rector, Schroeder received 
a big laugh when he told the audience, "It is better to come 
as an uncle bringing gifts than as an aunt who only plays 
the piano." 
 
----------- 
WHAT'S NEXT 
----------- 
 
12.  (U)  Separately, Dr. Khoat and the German emboff said 
that further high-level visits are unlikely this year. 
However, Dr. Khoat predicted that the GVN Prime Minister 
"might visit" sometime in 2004. 
BURGHARDT