Vietnam: STAR Experts Discuss GVN WTO Preparations

UNCLAS SECTION 01 OF 03 HANOI 000568

SIPDIS

SENSITIVE

STATE PLEASE PASS TO USTR EBRYAN, GHICKS
STATE ALSO FOR E, EB AND EAP/BCLTV
STATE PASS USAID FOR CHAPLIN/ANE
USDOC FOR 4430/MAC/ASIA/OPB/VLC/HPPHO
GENEVA FOR USTR

E.O. 12958: N/A
TAGS: ETRD ECON VM WTO
SUBJECT: Vietnam: STAR Experts Discuss GVN WTO Preparations



1. This cable contains sensitive information and should not
be posted on the internet.


2. (SBU) Summary: On March 3, the Ambassador hosted a lunch
with staff and consultants of the USAID-funded Support for
Trade AcceleRation (STAR) Project and representatives of the
European Union to discuss the status of GVN efforts to
accede to the WTO. Participants noted GVN officials may be
trying to dampen public expectations regarding Vietnam's
ability to accede in 2005; it remains difficult to assess
what role the National Assembly will have in facilitating
passage of WTO-related legislation; and an omnibus bill
would provide a useful mechanism to fill in "gaps" not
covered by legislation already on track to be approved in

2005. The Ambassador and EU Ambassador Markus Cornaro
agreed to explore a coordinated approach to the GVN on the
legislative requirements for WTO accession. Septel will
provide an update on the specific technical assistance STAR
is providing on WTO-related legislation. End Summary.



3. (U) On March 3, the Ambassador hosted a lunch with staff
and consultants of the USAID-funded Support for Trade
AcceleRation (STAR) Project and representatives of the
European Union to discuss the status of GVN efforts to
accede to the WTO. The EU Ambassador to Vietnam Markus
Cornaro, EU Trade Counselor, Econ/C, USAID Country Manager
and Econoff (notetaker) also attended the lunch.

Internal Debate
--------------


4. (SBU) Even as GVN officials push forward with WTO
bilateral negotiations and passage of WTO-related
legislation, GVN officials are taking steps to dampen public
expectations regarding the possibility of accession in 2005.
EU Ambassador Cornaro noted that the GVN has been very
careful in recent public statements not to make accession in
2005 a make or break issue for the Government. GVN
officials have tended to say that Vietnam will accede "soon"
rather than "in 2005" in recent public statements. More
explicitly, on March 1, Minister of Trade Truong Dinh Tuyen
was quoted in the press as saying that WTO negotiations have
been "tougher than Vietnam expected" and accession by the
end the year is "almost unattainable" for Vietnam.


5. (SBU) According to to the STAR Project, the GVN and
National Assembly (NA) leaders called a meeting on March 4
specifically to discuss whether it is still feasible for the
GVN to meet its December 2005 deadline for WTO accession,
and if so, how to finish all of the necessary legislation.
The hastily arranged meeting reflects the GVN's growing
unease about its ability to accede in 2005 as well as its
recognition of the need for greater coordination between the
Government and the NA on passage of legislation. (Note:
MOT's chief WTO negotiator Tran Quoc Khanh had previously
confirmed this meeting to Econ Counselor. Post will report
septel on its outcome. End Note.) Ambassador Michael
Samuels, President of Samuels Associates International and a
former U.S. Ambassador to the GATT (and a STAR consultant),
opined that, based on his discussions with GVN officials the
last two weeks in Hanoi and HCMC, he believes accession in
2005 is still "possible," but not "probable." Political
decisions still have to be made and this will be difficult
for the GVN to do quickly, he explained.

Role of the National Assembly
--------------


6. (SBU) Ambassador Samuels emphasized that it is still not
clear what impact an increasingly more "activist" NA will
have on the passage of legislation. The NA committees
tasked with oversight of key WTO legislation appear more
inclined than in the past to make significant changes to
drafts submitted by GVN drafting teams, he noted. Recently
the Law Committee made a number of changes to the draft
Civil Code submitted by the Ministry of Justice (MOJ).
These changes have weakened the draft of the law and STAR
consultants and the MOJ drafters are seeking opportunities
to reverse them. In addition, coordination between
individual NA committees can be "tricky," complicating
efforts to ensure provisions on related laws overseen by
different committees do not contradict each other. For
example, while the Law Committee is handling the Civil Code,
the Committee on Economics and Budgetary Affairs (CEBA) is
overseeing revisions to the Commercial Law. Together these
two laws will establish the framework for commercial
transactions in Vietnam and it is important that the drafts
complement each other. STAR has worked to develop joint
programs with these two committees to improve coordination
on the drafts.


7. (SBU) According to the STAR Project team, it is still not
clear which NA committee will control the WTO legislative
process. The Committee on Foreign Affairs was critical for
passage of the Bilateral Trade Agreement and will likely
have a role in WTO as well. (Note: This committee is
overseeing passage of the new Law on International Treaties,
which will govern how Vietnam ratifies WTO accession. End
Note.) However, the Law Committee (one of the most
conservative NA committees) is responsible for a number of
key pieces of legislation and will clearly have an important
role in the process.

Need for Omnibus Bill
--------------


8. (SBU) As its self-imposed December 2005 deadline for
accession grows closer, the GVN is struggling over how to
make the legislative process more efficient. Ambassador
Samuels reported that he had advised the GVN to look at the
situation "pragmatically." Use of an omnibus bill could
significantly streamline passage of necessary rules and
regulations. EU Ambassador Cornaro noted that he believed
the WTO Working Party would prefer for Vietnam to accomplish
as much as possible in individual legislation, rather than
resort too quickly to the use of an omnibus bill. The STAR
team stressed that a significant number of laws already in
process are slated for passage by the NA in 2005. Progress
on these laws is moving quickly and there is domestic
pressure to complete the reforms. An omnibus bill might
only be necessary to "fill in the gaps," a STAR team member
noted.


9. (SBU) Fred Burke, Managing Partner at Baker & McKenzie
(and a STAR consultant) pointed out that meeting WTO
requirements is not just about having laws that "look good."
The GVN also needs to put in place effective implementing
regulations. The question then becomes, should the WTO
require Vietnam to have the implementing regulations
finished prior to accession. If so, it could be a long time
before Vietnam is ready for WTO, Burke stressed.

Drafts
--------------


10. (SBU) Ambassador Samuels noted that STAR has been
"bombarding" the GVN with the message that they need to
begin sending drafts to the Working Party (WP) for review.
However, he added, the decision to share early drafts with
the WP invokes questions of sovereignty that the GVN is
still struggling to resolve internally. The STAR team
pointed out that the GVN has posted many draft laws in
Vietnamese on the Vietnam Chamber of Commerce and Industry's
(VCCI) website for comment and that STAR has done unofficial
translations of many of these. However, the GVN does not
appear to have formal translations of the laws ready for
submission to the WP. Participants in the luncheon agreed
that a visit by WTO staff to Vietnam soon would be very
useful to spur GVN efforts in this area.

Diplomatic Efforts
--------------


11. (SBU) Pondering the question of how WTO members could
better help facilitate Vietnam's accession efforts, the
Ambassador said that the proposed visit of a senior GVN
official to the United States this summer would likely serve
as a "catalyst" to accelerate Vietnam's accession. However,
although the GVN would like to conclude a bilateral
agreement as a "deliverable" for the visit, there is a limit
to how much leverage the visit will provide. The Ambassador
and EU Ambassador Cornaro both emphasized the need for a
unified voice on WTO with the GVN. Ambassador Cornaro said
it would be better to coordinate the message as "friends of
Vietnam." The Ambassador noted that he wants to ensure that
the GVN does not view the United States as the only obstacle
to accession. He and Ambassador Cornaro agreed to explore a
coordinated approach to the GVN on the legislative
requirements for WTO accession.

MARINE