VIETRADE HCMC CLAIMS SEPTEMBER 11 EVENTS HURT VIETNAM EXPORTS, WORRIES ABOUT VN COMPANIES IN US MARKET

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 001221

SIPDIS

USDOC FOR 3132/OIO/EAP/KELLEHER
USDOC FOR 1431/MAC/AP/HPPHO

E.O. 12958: N/A
TAGS: ECON ETRD VN BTA
SUBJECT: VIETRADE HCMC CLAIMS SEPTEMBER 11 EVENTS HURT VIETNAM EXPORTS, WORRIES ABOUT VN COMPANIES IN US MARKET


SUMMARY
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1. IN AN OCTOBER 26 MEETING, VIETRADE HCMC DIRECTOR
CITES DAMAGE FROM THE EVENTS OF SEPTEMBER 11 TO
VIETNAM'S EXPORTS, NOTING THAT EXPORT GROWTH IS
ESTIMATED AT 7% THIS YEAR, A DRAMATIC FALL FROM LAST
YEAR'S 30% INCREASE. ALTHOUGH LAUDING PASSAGE OF THE
BTA, HE STATED THAT VIETNAMESE COMPANIES NEED MUCH MORE
INFORMATION IF THEY WERE TO EXPAND INTO THE U.S.
MARKET. END SUMMARY

EXPORTS HURT BY OSAMA BIN LADEN
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2. IN A MEETING WITH DPO AND ECONOFF, MR. VO TA LUONG,
THE DIRECTOR OF THE VIETNAM TRADE PROMOTION AGENCY FOR
SOUTHERN VIETNAM, STATED THAT THE EVENTS OF SEPTEMBER
11 HAD AN INDIRECT BUT DAMAGING IMPACT ON VIETNAM'S
EXPORTS. HE STATED THAT ALTHOUGH VIETNAM EXPORTED
RELATIVELY LITTLE TO THE U.S., SHIPMENTS TO OTHER MAJOR
MARKETS HAD BEEN AFFECTED. HE NOTED THAT NATIONAL
EXPORT GROWTH, WHICH HAD BEEN TARGETED AT 16% FOR THE
YEAR, HAD, UNTIL A FEW WEEKS AGO, BEEN ESTIMATED AT
10%. NOW IT IS EXPECTED TO BE A MERE 7%. THIS
COMPARES TO LAST YEAR'S GROWTH RATE OF 30%. ALTHOUGH
SOME OF THIS DROP CAN BE ATTRIBUTED TO THE OVERALL
SLOWDOWN IN THE WORLD ECONOMY, HE STATED THAT THE
EVENTS OF SEPTEMBER 11, AND INCREASED SECURITY WORRIES
WORLDWIDE, HAD CLEARLY MADE LIFE MORE DIFFICULT FOR
VIETNAMESE EXPORTERS IN THE SOUTH.


3. MR. LUONG'S VIEW CORRESPONDS TO COMMENTS FROM OTHER
OFFICIALS AND BUSINESS PEOPLE IN HCMC WHO NOTE THAT THE
NUMBER OF TRAVELERS, TRADE MISSIONS, AND NEW BUSINESS
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INITIATIVES IN THE HCMC AREA HAVE FALLEN NOTICEABLY
OVER THE PAST FEW WEEKS. ALTHOUGH VIETNAM IS CURRENTLY
TRUMPETING ITS RATING FROM THE POLITICAL AND ECONOMIC
RISK CONSULTANCY AS THE SAFEST PLACE TO DO BUSINESS IN
ASIA (BASED ON A SURVEY CONDUCTED IN THE WAKE OF THE
TERRORIST ACTS),THE EVENTS OF SEPTEMBER 11 HAVE
CLEARLY HAD A NEGATIVE IMPACT HERE, AND LOCAL OFFICIALS
AND BUSINESS PEOPLE KNOW IT.

VIETRADE PROMOTES EXPORT AND INVESTMENT
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4. THE VIETNAM TRADE PROMOTION AGENCY (VIETRADE) IS
ONLY ABOUT A YEAR AND A HALF OLD. THE HO CHI MINH CITY
OFFICE HAS A STAFF OF 10 PEOPLE AND IS RESPONSIBLE FOR
MOST OF THE SOUTHERN REGION OF VIETNAM. PART OF THE
MINISTRY OF TRADE, IT IS RESPONSIBLE FOR STATE
MANAGEMENT, COORDINATION, AND IMPLEMENTATION OF TRADE
AND TRADE-RELATED INVESTMENT PROMOTION ACTIVITIES IN
VIETNAM. VIETRADE ORGANIZES SEMINARS, TRADE MISSIONS,
AND ALL ASPECTS OF TRADE PROMOTION. UNLIKE BUSINESS
ORGANIZATIONS THAT FINANCE THROUGH FEE-BASED SERVICES
OR MEMBERSHIP DUES, VIETRADE IS FUNDED BY THE NATIONAL
BUDGET AND CAN DRAW UPON ITS BUDGET TO COVER THE COSTS
OF SOME OF ITS EVENTS OR SUBSIDIZE PARTICIPATION OF
VIETNAMESE COMPANIES.


5. ITS WORK IS SIMILAR TO THE MYRIAD OF OTHER
ORGANIZATIONS THAT ARE SET UP IN VIETNAM TO PROMOTE
TRADE AND INVESTMENT FOR A PARTICULAR PROVINCE, CITY,
INDUSTRIAL OR EXPORT ZONE, OR AMONG MEMBER COMPANIES.
IT ALSO SERVES AS A GOVERNMENT-TO-GOVERNMENT CHANNEL
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FOR FOREIGN GOVERNMENTS OR INTERNATIONAL ORGANIZATIONS
TO WORK WITH THE GVN ON TRADE PROMOTION ACTIVITIES.
FOR EXAMPLE, VIETRADE IS CURRENTLY WORKING WITH THE
UNDP AND AN AGENCY OF THE SWISS GOVERNMENT ON A THREE-
YEAR PROJECT ON DEVELOPING EXPORT MARKETS FOR SEAFOOD
AND FOOTWEAR. IT HAS ALSO WORKED CLOSELY WITH THE
ASEAN-JAPAN CENTER, WHICH IS A JAPAN-FUNDED
ORGANIZATION TO ASSIST ASEAN NATIONS IN ENTERING THE
JAPAN MARKET.


6. VIETRADE ALSO SERVES AS AN INFORMATION RESOURCE
WHICH GATHERS TRADE INFORMATION FROM A VARIETY OF
SOURCES OVERSEAS AND IN VIETNAM. LUONG NOTED TO
CONOFFS THAT HE WOULD BE HAPPY TO FOLLOW UP DIRECTLY
WITH ANY VIETNAMESE COMPANIES THAT CONOFFS ENCOUNTER
WITH QUESTIONS ABOUT EXPORTING.

HOW DO WE EXPORT TO THE U.S.?
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7. LUONG STATED THAT WITH THE PASSAGE OF THE BTA THE
VIETNAMESE BUSINESS COMMUNITY IS VERY INTERESTED IN
INFORMATION AND ASSISTANCE ON HOW TO ENTER THE U.S.
MARKET. HE NOTES THAT, IN PARTICULAR, SMALL COMPANIES
DO NOT HAVE THE EXPERTISE OR RESOURCES TO PARTICIPATE
IN WHAT HE CHARACTERIZED AS "DISTANT U.S. MARKETS."
CAN THE USG HELP?
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PAGE 02 HO CHI 01221 02 OF 02 290950Z
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8. HE ASKED IF THE USG WOULD BE ABLE TO PROVIDE
ASSISTANCE TO VIETNAMESE COMPANIES SEEKING TO ENTER THE
U.S. MARKET. DPO ADVISED THAT WHILE THE USG IS
PLANNING TECHNICAL ASSISTANCE PROGRAMS FOR VIETNAM AND
DIRECTLY ASSISTS U.S. EXPORTERS SEEKING TO DO BUSINESS
WITH VIETNAM, THE GVN WOULD GENERALLY HAVE THE LEAD
ROLE IN ASSISTING VIETNAMESE BUSINESSES HOPING TO
EXPORT TO THE U.S. AT THE SAME TIME, WE RECOGNIZE THE
IMPORTANCE OF LOCAL COMPANIES BENEFITING FROM THE BTA
AND A CLOSER U.S.-VIETNAM TRADE RELATIONSHIP. IN THAT
SPIRIT WE SHOULD TRY TO FIND CREATIVE WAYS TO SHARE
INFORMATION, CONTACTS AND EXPERIENCE. DPO POINTED TO
THE PAST EXAMPLE OF CONGEN AND VIETRADE ORGANIZING A
U.S. CUSTOMS SEMINAR WHICH INCLUDED PARTICIPATION OF
VIETNAMESE COMPANIES.

BIO NOTE
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9. MR. LUONG HAS WORKED FOR THE MINISTRY OF TRADE
SINCE GRADUATING FROM UNIVERSITY IN MOSCOW IN 1980 WITH
A DEGREE IN ENGLISH AND ECONOMICS. HE HAS SERVED IN
HCMC SINCE 1992 AND HAS HELD A LEADERSHIP POSITION FOR
THE PAST THREE YEARS. HE HAS HEADED UP THE HO CHI MINH
CITY OFFICE OF VIETRADE SINCE IT WAS ESTABLISHED A YEAR
AND A HALF AGO. HE CONCURRENTLY HOLDS THE TITLE OF
DEPUTY DIRECTOR GENERAL OF THE HCMC OFFICE OF THE
MINISTRY OF TRADE. MR. LUONG SPEAKS CONVERSATIONAL
ENGLISH, AND EXCELLENT RUSSIAN. HE HAS NEVER TRAVELED
TO THE U.S.

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COMMENT
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10. ALTHOUGH VIETRADE SEEMS FOCUSED ON MAJOR PROJECTS
PARTNERING WITH FOREIGN FUNDERS, CONGEN WILL TRY TO
FIND CREATIVE WAYS TO WORK WITH THE ORGANIZATION TO
ENCOURAGE VIETNAMESE BUSINESS TO TAKE ADVANTAGE OF THE
BTA. HIS CONCERNS ABOUT WHETHER OR NOT VIETNAMESE
COMPANIES ARE READY TO COMPETE IN THE U.S. MARKET IS AN
OFT HEARD REFRAIN HERE.

YAMAUCHI

UNCLASSIFIED