Identifier
Created
Classification
Origin
05HANOI2276
2005-08-31 10:35:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Hanoi
Cable title:  

VIETNAM'S MINISTER OF TRADE URGES PROGESS ON WTO

Tags:  ECON ETRD VM WTRO WTO BTA 
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This record is a partial extract of the original cable. The full text of the original cable is not available.

311035Z Aug 05
UNCLAS SECTION 01 OF 03 HANOI 002276 

SIPDIS

STATE FOR EAP/BCLTV AND EB/TPP/BTA/ANA JBELLER
STATE PASS USTR ELENA BRYAN
USDOC FRO 4431/MAC/AP/OPB/VLC/HPPHO
TREASURY FOR OASIA

SENSITIVE

E.O. 12958: N/A
TAGS: ECON ETRD VM WTRO WTO BTA
SUBJECT: VIETNAM'S MINISTER OF TRADE URGES PROGESS ON WTO


SENSITIVE - DO NOT POST ON INTERNET

UNCLAS SECTION 01 OF 03 HANOI 002276

SIPDIS

STATE FOR EAP/BCLTV AND EB/TPP/BTA/ANA JBELLER
STATE PASS USTR ELENA BRYAN
USDOC FRO 4431/MAC/AP/OPB/VLC/HPPHO
TREASURY FOR OASIA

SENSITIVE

E.O. 12958: N/A
TAGS: ECON ETRD VM WTRO WTO BTA
SUBJECT: VIETNAM'S MINISTER OF TRADE URGES PROGESS ON WTO


SENSITIVE - DO NOT POST ON INTERNET


1. (SBU) Summary: On August 30, the Ambassador met with
Minister of Trade Truong Dinh Tuyen, at the Minister's
request, to discuss Vietnam's WTO accession. Tuyen asked
for a bilateral round of negotiations with the U.S. Trade
Representative (USTR) in late September after the bilateral
meeting on the margins of the next WTO Working Party meeting
in Geneva. He urged the U.S. side to be flexible,
particularly on industrial subsidies, which he said
presented technical difficulties, and on state owned
enterprises. Drawing on material provided by USTR, the
Ambassador summarized the points where the respective sides
still owed each other responses, urged the Vietnamese to
follow through, and emphasized that it would not be possible
to get Congress to approve permanent normal trade relations
(PNTR) for Vietnam unless Vietnam fully implemented the
bilateral trade agreement (BTA) and its WTO accession
package improved on the BTA. The Minister stressed the
political importance of taking advantage of the goodwill
generated by the recent visit of the Prime Minister to the
United States. He warned that if Vietnam could not complete
its WTO accession by the end of 2005, half of the value of
the Prime Minister's visit to the United States would be
lost. End Summary.


2. (SBU) On August 30, the Ambassador met with Vietnam's
Minister of Trade Truong Dinh Tuyen, at the Minister's
request, to hear the Minister describe Vietnam's desire to
accelerate its WTO accession. Because the Minister has been
seriously ill, this was their first meeting in almost a
year. The Minister opened the meeting by pointing to the
recent visit of Vietnam's Prime Minister to the United
States and expressed his pleasure that, 30 years after the
war, the United States and Vietnam were again friends.


3. (SBU) The Prime Minister's visit had improved bilateral
relations, as both the U.S. Trade Representative (USTR) and
the U.S. business community had acknowledged, but the two
sides had not taken full advantage of that progress, he

said. He was disappointed that the two sides had not met in
July, as he had expected. They are now to meet in September
on the margins of the WTO Working Party meeting in Geneva,
but time and human resources there will be limited, so
another, more formal meeting will be needed afterwards. He
urged the U.S. side to come to Hanoi, but if that is not
possible the Vietnamese side can come to Washington. In
either case, the negotiation round should take place in late
September or early October, he stressed. Wherever the
follow-on meeting takes place, the Minister wants to visit
Washington before negotiations, so that he can meet the new
key U.S. players, USTR Rob Portman and Secretary of Commerce
Carlos M. Gutierrez, and be able to provide political
guidance to the Vietnamese negotiating team. If the meeting
is in Washington, he would come a few days early and then
stay for the negotiations.


4. (SBU) Expressing regret for the misunderstanding over
the possibility of meeting in July, the Ambassador promised
to convey the Minister's request to Washington. He
emphasized that both sides need to continue to work
diligently to ensure that the next round of meetings are a
success. In order to ensure the Minister understands where
we are, he summarized the state of play in the negotiations.
The United States appreciates receiving Vietnam's revised
offers, which experts in Washington are analyzing before
responding. The United States would like to see a written
response to its paper on the methodology for resolving
telecom differences, clearly a key issue. The United States
looks forward to seeing the second draft of the Working
Party report on which the Vietnamese side is working with
the WTO Secretariat. At the end of June, the U.S. side
provided Vietnam with detailed approaches for resolving
differences in the areas of trading rights, industrial
subsidies, and State-owned enterprises (SOE). Getting
responses to these approaches in the next week or so would
help to advance the negotiation process. It is very
important that Vietnam's legislative action plan remains on
track. The U.S. side appreciates receiving copies of draft
legislation and hopes to get written comments back to
Vietnam soon. USTR promised Vietnam a legislative checklist
and it will be sent soon. Vietnam is now beginning to
publish implementing regulations and decrees in Vietnamese.
It would help for the United States to get English language
versions of the proposed decrees and regulations.


5. (SBU) The Minister responded that he understood the U.S.
side's interest in the new Vietnamese legislation. Vietnam
has been following the advice of U.S. advisors and
recognizes the importance of publishing documents. He has
studied comments received, including those from Dorothy
Dwoskin, Assistant U.S. Trade Representative (AUSTR) for WTO
and Multilateral Affairs, so that any adjustment in the
draft laws can be made before they are submitted to the
National Assembly. He is working with the Standing
Committee of the National Assembly, which approved the
legislative program for WTO accession and remains committed
to adhering to its current bill-passing timetable.


6. (SBU) The Minister complained that some U.S.
requirements are difficult to follow. For example, on
industrial subsidies, the Vietnamese authorities cannot
calculate the amount of revenue foregone. About 500
companies may have benefited, but many made no profit, so
the benefits, if any, are difficult to calculate and the
amounts involved are not significant. He promised to get
back to the United States with information on subsidies and
other issues, but said that there were things that
technically Vietnam could not do.


7. (SBU) State trading enterprises are another difficult
issue, he continued. Vietnam is in a period of transition
and still needs controls, not because the state wants a
monopoly, but because the private sector is still
underdeveloped. Tuyen urged the U.S. side to distinguish
between what the Vietnamese Government wants to do, and what
it does not want to do, but must. The United States needs
to be flexible, he said. The Ambassador noted that Vietnam
has a "chicken and egg" problem; as long as state owned
firms have a monopoly in certain sectors, private firms
cannot develop. He promised to pass to Washington Vietnam's
concerns on industrial subsidies and state owned
enterprises, but suggested that the Vietnamese also respond
to USTR in writing.


8. (SBU) Minister Tuyen again urged that the United States
be flexible. There are still some people in Vietnam who do
not want to be friends with the United States and if America
is "too rigid", it will encourage them. Vietnam is being
asked to meet requirements not imposed on other countries,
he noted. The Ambassador agreed that the United States
should not be rigid, but then neither should Vietnam. He
pointed out that Vietnam is driving the accession timetable
and pushing to complete negotiations, but there are very
sensitive issues for U.S. business, whose support is needed
in order to get Congress to approve permanent normal trade
relation (PNTR) status for Vietnam.


9. (SBU) The prospects for completing Vietnam's accession
in time for the December 2005 WTO meeting in Hong Kong are
virtually non-existent, the Ambassador added. It may still
be possible to complete bilateral and multilateral
negotiations this year, but getting PNTR status by year-end
is not possible. Even getting through Geneva would be very
difficult so the Ambassador was pleased when he saw a press
report that Vice Minister Luong Van Tu had told the National
Assembly that Vietnam is now aiming at WTO accession in late
spring next year. Lowering expectations is a smart move.
The Minister said that after his interview, Tu had been
criticized and pressed to send a letter to the press
"correcting" his remarks, but Tuyen had defended Tu, arguing
that, while Vietnam's goal was still to accede by December,
that goal also depended on cooperation from other countries
and Vietnam had to prepare for the "next best outcome," a
spring 2006 accession.


10. (SBU) On PNTR, the Ambassador stressed that the USG
must put together a complete package for Congress. Vietnam
needs to have a clean record on implementing the U.S.-
Vietnam Bilateral Trade Agreement (BTA). The package for
Congress must, at minimum, provide for no less than current
market access and should show some progress from the BTA.
Some in Congress will oppose PNTR because they believe that
another trade agreement is not in the interests of the
United States while others will oppose it because of other
issues, such as human rights and religious freedom.
However, with a good package and the support of U.S.
business, the Administration would go forward and win
support for PNTR for Vietnam.


11. (SBU) (SBU) Some U.S. companies are complaining that
some BTA obligations have not been implemented, however, the
Ambassador hoped that the Minister could help implementation
of trading rights, IPR protection and investment rights.
The Ambassador said the U.S. side had been pleased by when
Vietnam promised that U.S. companies could access BTA
benefits pending passage of implementing legislation.
However, a number of U.S. companies had complained that they
could not reach the point of contact on trading rights that
the Ministry of Planning and Investment had set up. He
hoped that the GVN would ensure that someone is at the other
end of the telephone and email.


12. (SBU) On BTA implementation, the Minister pointed out
that the GVN is working on a new IPR law, which has been
shared with the United States for comments. Vietnam
recently destroyed a number of pirated CDs. Vietnam does
not have separate implementing legislation for the BTA, but
its obligations will be implemented by other laws. He is
willing to meet with U.S. companies that are having a
problem and asked the Ambassador to inform them so.


13. (SBU) At the end of the meeting the Minister returned
to the need to develop a schedule to complete negotiations.
He proposed that after meeting in Geneva, the two sides
should meet again at the end of the month. Otherwise, it
would not be possible to complete the paperwork. He warned
that if Vietnam could not complete its WTO accession by the
end of 2005, half of the value of the Prime Minister's visit
to the United States would be lost. Vietnam has concluded
negotiations with all Asian partners, including China, and
with all its European partners, including Denmark and
Switzerland. There is progress in negotiations with
Australia and New Zealand. Beyond them, the United States
and five Latin American countries are left so there is
strong possibility to conclude by the end of 2005.


14. (SBU) Comment: The Ministry of Trade is beginning to
prepare the rest of the GVN and the public for the
likelihood that Vietnam will not make its self-imposed goal
of completing WTO accession by the end of 2005. However,
the Minister still intends to make an all-out effort to
complete negotiations by year's end. At the same time, he
has not abandoned the hope of persuading the United States
to soften its demands and accept a "political" agreement.
End comment.

MARINE