APEC OFFICIAL MICHALAK'S MEETINGS AT THE MINISTRY

UNCLAS SECTION 01 OF 02 HANOI 002708

SIPDIS

STATE FOR EAP/MLS AND EAP/EP AND EB/TPP/BTA/ANA GOODMAN AND
WICKMAN
STATE PASS USTR ELENA BRYAN AND GREG HICKS
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO
TREASURY FOR OASIA

SENSITIVE

E.O. 12958: N/A
TAGS: ECON EFIN ETRD EINV VM WTRO APEC WTO
SUBJECT: APEC OFFICIAL MICHALAK'S MEETINGS AT THE MINISTRY
OF FOREIGN AFFAIRS AND CUSTOMS BUREAU


1. (SBU) Summary: On October 10 U.S. Senior Official for
the Asia Pacific Economic Cooperation (APEC) Michael
Michalak met separately with Ministry of Foreign Affairs
(MOFA) Vice Minister Le Cong Phung and Vice General Director
of the General Department of Customs (GDC) Vu Ngoc Anh to
discuss bilateral issues, including World Trade Organization
(WTO) negotiations, the upcoming export controls conference
co-hosted by the United States and Vietnam, APEC 2005 agenda
items, and the Government of Vietnam's (GVN) progress in
planning for APEC 2006. End Summary.

MOFA: EXPORT CONTROLS
--------------


2. (SBU) Michalak began his meeting with Vice Minister Le
Cong Phung by stating that Vietnam was a strong U.S. partner
in export controls, and though there had been some
difficulties in the conference organization, he looked
forward to seeing the Vietnamese delegation in November and
hoped they would deliver one of the keynote speeches.
Phuong said he welcomed the opportunity to deliver a keynote
speech and acknowledged that he personally would have liked
to have hosted the conference in Hanoi. He simply did not
have enough time "to work the issue around" to the different
ministries.

MOFA: APEC PLANNING: A LITTLE SLOW
--------------


3. (SBU) Michalak moved on to the larger question of APEC
2006, emphasizing what a great opportunity it was for
Vietnam. "We have a good agenda for 2005," said Michalak.
He expressed hope that Vietnam and the United States can
build on this agenda and can focus in 2006 on continuing
support for greater trade facilitation, free trade
agreements (FTAs),small and medium enterprise (SME)
investment, export controls, anti-moneylaundering (AML),
anti-corruption efforts, and energy cooperation as well as
progress on the Doha Development Agenda (DDA),all of which
are issues of great interest to most all APEC members.
Michalak mentioned he had just come from a meeting of the
Asia Pacific Council (APC) of American Chambers of Commerce,
held in Thailand last week; the APC expressed strong
interest in working with their counterparts in Vietnam to
make APEC private sector events a big success. He
emphasized, again, the importance of knowing the limits of
delegation size and the formal schedule and agenda as soon
as possible.


4. (SBU) Phung replied he recognized that Vietnam is indeed
"a little late" in its planning. He assured Michalak,
however, that Vietnam attaches great importance to U.S.
relations and cooperation on APEC and will work closely with
us in the future on the agenda. "We know we are the ones
who suffer from not hurrying," he added. The GVN is
currently consulting with its leaders to finalize a list of
themes. Phung welcomed any suggestions from the United
States and said he fully expected a final schedule and
agenda to be issued very soon. "Give us a little more
time," he asked. The proposed agenda, he assured Michalak,
included U.S. business priorities.

MOFA: DETAILED 2005 AGENDA QUESTIONS
--------------


5. (SBU) Michalak pressed Phung on the status of several
items for the 2005 agenda, including signature on the
International Atomic Energy Association (IAEA) additional
protocol, comments on the MANPADS briefer, and feedback on
the Radioactive Sources Initiative (RSI) now that the United
States had replaced the word "agree" with "aim to" at
Vietnam's request. Phuong replied that the IAEA protocol
was "not a problem" for Vietnam "because they are not a
nuclear country," but that the GVN needed more time to
discuss it. RSI, he said, is now acceptable.

MOFA: WTO
--------------


6. (SBU) When Phung raised the issue of an early conclusion
to WTO negotiations, Michalak promised that the United
States would do its best to conclude as soon as possible,
but that Vietnam also needed to concentrate now on the
Permanent Normalized Trade Relations (PNTR) vote that had to
take place in the U.S. Congress after negotiations finish.
He urged Vietnam to use the momentum of APEC, PNTR, WTO, and
the President's visit next year to set a new framework in
place to carry the bilateral relationship beyond 2006.
Phung replied that he was looking forward to the results of
the WTO talks, and while a number of issues remain for
discussion, the negotiations needed efforts from both sides
to reach a conclusion. Phung added that he plans to travel
to Washington, D.C. soon to talk with his counterparts and
see how much they can help him.

CUSTOMS: STRIKING THE RIGHT BALANCE IN TRADE
--------------


7. (SBU) In his meeting with Vice General Director of the
GDC Vu Ngoc Anh, Michalak began by stating the importance of
balance between trade security and trade facilitation.
Supply chain security is a key part of strong trade
relations, he added, and export controls a key part of trade
security. Michalak said he welcomed Customs' presentation
at the November export control conference and asked whether
Vietnam had selected its participants for the conference.
Anh did not answer the question on participants, but said
that the Vietnamese were very pleased to cosponsor the
conference. Vietnam shares the U.S. goal of balance in
security and facilitation. He noted that the recently
amended customs laws they have put in place allow them to
better coordinate customs information with APEC economies
and customs agencies in the region. Vietnam is also
actively preparing to participate in supply chain security.
Anh said he regularly meets with the APEC Southeast Asia
coordinator to ensure cooperation on customs projects and
documentation.

CUSTOMS: COOPERATION WITH FEDERAL EXPRESS
--------------


8. (SBU) At Anh's prompting, Michalak detailed his own
experiences with the Shanghai customs project that had so
dramatically improved that city's customs operations in

2000. As Michalak described the partnerships with private
companies that Shanghai established, Anh interjected that
Vietnam has also set up similar cooperative relationships,
especially with Federal Express (FedEx). FedEx has a
customs office in its distribution center already and that
both sides "are pleased with the results." In fact, it is
now the model that GDC, who ultimately reports to the
Ministry of Foreign Affairs and the Ministry of Trade, will
use in the future.


9. (U) Mr. Michalak has cleared this cable.

MARINE