VIETNAM: CONGRESSMAN COLLINS MEETS MINISTER OF

UNCLAS SECTION 01 OF 03 HANOI 000636

SIPDIS

STATE FOR H, PM, EAP/BCLTV
STATE PLEASE PASS TO USTR EBRYAN
USDOC FOR 6500 AND 4431/MAC/AP/OPB/VLC/HPPHO
DOD FOR DASD JJENNINGS AND OSD/ISA LSTERN

E.O. 12958: N/A
TAGS: OREP ETRD ECON PREL KPOW VM BTA LABOR WTO DPOL
SUBJECT: VIETNAM: CONGRESSMAN COLLINS MEETS MINISTER OF
TRADE


1. (U) Summary: On February 27, Congressman Mac Collins (R-
GA) met with Vietnam's Minister of Trade Truong Dinh Tuyen
to discuss bilateral trade relations. Collins emphasized
that bilateral cooperation on trade is closely linked to
cooperation in other areas such as MIA issues. Tuyen
emphasized the GVN's commitment to developing a
"multifaceted" relationship with the U.S. and opined that
relations between the two countries had grown more positive
and constructive in the two years since entry-into-force of
the U.S.-Vietnam bilateral trade agreement (BTA) in December

2001. End summary.


2. (U) Congressman Mac Collins of Georgia met on February 27
with Vietnamese Minister of Trade Tuyen to discuss bilateral
trade relations. The Ambassador; Grant Bassett, from
Collins' personal staff; Col Randy O'Boyle, U.S. Air Force
Legislative Affairs; Garnett "Bill" Bell, also from Collins'
staff, accompanied Congressman Collins, along with
Navy/Marine Attache and econoff (notetaker).


3. (U) Minister Tuyen welcomed Congressman Collins, noting
his belief that exchanging visits helps increase the two
countries' mutual understanding. Tuyen noted that his own
visit to the U.S. (in September 2003) had given him new
perspective on the relationship. Collins responded that
this was his second visit to Vietnam in the last six months,
but the first opportunity he had to travel outside Hanoi.
During his trips to and from the airport as well as his
visit to Danang and the surrounding countryside he saw
evidence of a lot of change occurring in Vietnam. Collins
said that that the new industrial parks and manufacturing
sites he had seen must be helpful to the GVN because they
indicate an increase in jobs. "Jobs" are a big part of the
political discussion in the U.S. these days, he added.

Vietnam's Economic Reforms
--------------


4. (U) Minister Tuyen described the three main components of
Vietnam's economic reform process: 1) policy restructuring,
(i.e. GVN administrative reform and the transition to a
market-oriented economy); 2) restructuring industry to
increase Vietnam's competitiveness (including "equitization"
of state-owned enterprises and private sector development);
and 3) international economic integration (with an emphasis
on the key roles of the EU, U.S., Japan and China). Tuyen
noted that although both the GVN and the Vietnamese people
are willing to reform, large obstacles remain. Vietnam's
transition has been going on for only ten years, but other
countries like the U.S. have been developing for hundreds of
years and have "everything in order." The GVN has achieved
some success however, and the leadership remains committed
to the path it has chosen.

MOT Views on the Bilateral Relationship
--------------


5. (U) Tuyen then outlined his views on the U.S.-Vietnam
bilateral relationship. Since normalization, and
particularly since the signing of the BTA, he said, the
bilateral relationship has grown increasingly positive and
constructive. The GVN views the U.S. as an important trading
partner, but GVN policy also clearly favors developing a
multifaceted relationship. Last year many high-ranking GVN
officials visited the U.S., including the Minister of
Defense and many National Assembly members. The Minister
also noted that he had met with many U.S. Congressmen in
Vietnam last year and had the opportunity to meet former
President Bush several years ago. The GVN and the
Vietnamese people "hope, expect, want" relations with the
U.S., Tuyen added. However, sensitivities remain on both
sides and the two countries need to make sure that
"diplomatic" policies do not create impediments to the
further development of the relationship.

Powerful Legislators on Both Sides
--------------


6. (U) U.S. policies do sometimes create problems for
Vietnam, Tuyen continued. It has been just two years since
entry-into-force of the BTA and there have already been two
dumping cases filed against Vietnam. The current
antidumping case on shrimp could have a more negative impact
on Vietnam (than the frozen fish fillet dumping case
concluded last year) because it involves millions of
laborers. These laborers do not understand claims of
dumping, Tuyen asserted; they do, however, still recall
historical events. Minister Tuyen asked Collins to "have a
positive voice in the dumping case." President Bush and
Secretary of Commerce Evans are afraid of the Congress; we

SIPDIS
are in the same position in Vietnam, under the watchful eye
of the National Assembly. Previously members of the CPV
were not afraid of the National Assembly, Tuyen declared.
Now, however the National Assembly is more powerful, which
is good for Vietnam because the National Assembly represents
the people.

Vietnam Should Import More from the U.S.
--------------


7. (U) The BTA set demanding requirements for Vietnam. The
U.S. has never signed such a comprehensive bilateral trade
agreement and the high criteria and standards are difficult
for Vietnam. However, two years after entry-into-force of
the BTA, the U.S. has become Vietnam's "leading trade
partner." In 2003 Vietnam exported about USD four billion
worth of goods to the U.S. and imported about USD 1.5
billion. Tuyen said he expected the growth rate of
Vietnamese exports to decline in 2004, but the growth rate
of imports from the U.S. to increase. Tuyen smiled and said
he supports an increase in imports from the U.S. Even
though Vietnam already has a trade deficit, this is due to
imports from other countries, not the U.S. Vietnam's demand
for imports of high technology goods from the U.S. is
growing, especially since the signing of the bilateral Air
Services Agreement (in December 2003). In 2004 Vietnam will
need additional aircraft and machinery. There is good
potential for import growth, Tuyen added and reiterated that
he strongly supports that trend.

Vietnam needs Sympathy and Support for WTO Accession
-------------- --------------


8. (U) Tuyen affirmed that Vietnam is working tirelessly in
preparation for the next working party on Vietnam's
accession to the WTO and expects to make progress during the
next round. The GVN is willing and determined to integrate,
but that is not enough, Tuyen said. Vietnam needs the
"sympathy and support" of its trade partners. The GVN knows
the U.S. voice in this process is very important. Vietnam
is a developing country with more than eighty percent of its
population engaged in small-scale farming. Even with
multiple planting seasons, it is very hard for Vietnam's
farmers to get by. Tuyen expressed hope that the U.S. would
not allow the WTO to impose criteria and standards on
Vietnam that it cannot meet. Tuyen also asked that the U.S.
support extending special and differential treatment to
Vietnam, given its low level of development. In response,
Collins advised Tuyen that as Vietnam proceeds through the
WTO process, it should follow the rules closely including on
such issues as licensing, permitting, and taxation.

It's All About Jobs
--------------


9. (U) Collins emphasized that the U.S. is facing difficult
times itself. While the U.S. is not isolationist, Americans
are worried about jobs. In the bilateral textile agreement
signed last year, Vietnam got a significant textile quota
for export to the U.S. Many U.S. workers feel this came at
the expense of their jobs. Minister Tuyen responded that
the GVN recognizes that Vietnam's textile exports to the
U.S. increased after entry-into-force of the BTA, but the
GVN believes the volumes are still modest. At the same
time, the capacity of Vietnam's textile industry is huge and
the quota given to Vietnam is limited. Additionally,
importing textiles from Vietnam helps the U.S. diversify its
outsourcing and reduce its dependence on Chinese textile
exports. Congressman Collins noted that the two sides could
debate the issue at length, but that ultimately the "real
debate is among the candidates in the U.S. and protectionism
is a real subject."

What About Autos and Motorcycles?
--------------


10. (U) Collins then questioned Minister Tuyen's claim that
he wants Vietnam to import more from the U.S. Collins noted
that Vietnam had imposed special taxes on auto manufacturers
and denied Harley Davidson the right to export to Vietnam.
These acts cast doubts on the Minister's sincerity, Collins
asserted.

All Issues are Connected
--------------


11. (U) Collins then noted that his primary purpose in
Vietnam was to discuss MIA issues with the GVN, but said he
wanted to meet with Minister Tuyen because "all the issues
in the legislative body have a tendency to come together."
Unanswered questions on MIA issues increase concerns about
trends in bilateral cooperation. When there is a lack of
cooperation in one area, Collins said, it casts doubt on
future cooperation in other areas such as trade. Minister
Tuyen responded that the GVN sees the MIA issue as a
humanitarian one and noted that the GVN has and will
continue to be cooperative with the USG on this issue.
"Vietnam truly understands the pain of families with MIA,"
Tuyen added. Collins encouraged Tuyen to ensure the GVN
addresses U.S. concerns in a "better and faster" manner than
it has to date. People in America who make up our workforce
are tired of free trade -- they want fair trade. Americans
welcome trade but it must be an exchange of goods, not just
an exchange of our currency for someone else's goods,
Collins concluded.

The Role of Domestic Politics
--------------


12. (U) The Ambassador highlighted that Congressman Collins'
visit to Vietnam provided Minister Tuyen with an opportunity
to hear how important trade issues have become in American
domestic politics this year. The Administration has
supported free trade, but if you listen to the debates going
on now, you hear candidates criticize existing trade
agreements. It is an important year to deal with these
issues seriously and carefully so as not to provide any
arguments for protectionism, the Ambassador added.

13.(U) Congressman Collins did not have an opportunity to
clear this report.
BURGHARDT