VIETNAM COMMENTS ON BILATERAL MARITIME AGREEMENT

UNCLAS HANOI 002605 SIPDIS STATE FOR EAP/MLS AND EB/TPP/BTA/ANA STATE PASS USTR DAVID BISBEE STATE PASS DEPT OF TRANSPORTATION VARNEY/HALL/CARLTON COMMERCE FOR 4431/MAC/AP/OPB/VLC/HPPHO SENSITIVE BUT UNCLASSIFIED SIPDIS E.O. 12958: N/A TAGS: ECON ETRD VM SUBJECT: VIETNAM COMMENTS ON BILATERAL MARITIME AGREEMENT SENSITIVE - DO NOT POST ON INTERNET ¶1. (SBU) Summary: Post met with the Vietnam Ministry of Transport (MOT) on October 5 to urge speedy approval of the U.S.-Vietnam Maritime Transport Agreement (MTA) and inquire as to the reasons for hold-ups in the government approval process. MOT says that it too wants approval of the agreement to be approved as soon as possible, but claims that MOT is powerless to move other ministries any faster. Though the GVN has not finished vetting the text, the official provided several comments on the current draft. Tuong said MOT does hope to try to visit the United States in late October or early November to meet and finalize the text so that even if there is no signing of the agreement, perhaps an announcement of the finalization of the text could take place when the President visits. Significantly, after the meeting, Nguyen Tuong pulled aside Econ Assistant and told her privately that the Ministry of Trade was holding up the agreement until Vietnam's WTO entry took place. End Summary. ¶2. (SBU) Econoff met with Vietnam Ministry of Transport (MOT) Deputy Director General for International Cooperation Nguyen Tuong regarding the U.S.-Vietnam Maritime Transport Agreement on October 5 in order to press for a speedy clearance of the MTA by the Government of Vietnam (GVN) and to inquire why the approval process is moving so slowly. Mr. Tuong, accompanied by an MOT lawyer, stated that the MOT is eager for an agreement to move as quickly as possible and is interested in having the agreement finalized before President Bush's visit to Vietnam in November. Tuong said he sees a Presidential deliverable working in two ways: 1) a signing of the agreement around the time of the leaders' meeting, or 2) an announcement of the finalization of the agreement without a signing. Officially, Tuong said another three weeks to one month is necessary before the GVN is fully prepared to fly to Washington to finalize the agreement. After the meeting, however, Tuong pulled aside Econ Assistant and told her privately that the Ministry of Trade was delaying approval of the text until after Vietnam's WTO entry because it "is worried about MFN (Most Favored Nation)" issues that the agreement might raise within the WTO. (Comment: Because of the still ongoing negotiations on WTO accession in Geneva, the concerns expressed by the Ministry of Trade make it unlikely the Ministry of Transportations will be able to visit Washington as early as they have suggested. End Comment.) ¶3. (SBU) During the meeting Tuong added that he wished to speak "informally" and provide several comments on the current draft which the GVN will raise at the finalization meeting in Washington. Though speaking informally, he asked that these be communicated to Washington in order to give U.S. authorities some time to prepare a response. (Note: There may be other comments as well, but he was certain MOT would raise these issues. End note.) The points were as follows: --Article 3.1: Tuong stated that the inclusion of "organized under the laws" in the paragraph, as suggested in ref A, could be misconstrued. The GVN wants the paragraph to specify that the entities that will be open for investment will only be Vietnamese firms wholly owned by Vietnamese citizens, not those which are organized under the laws of Vietnam but which are foreign-owned. "If we could find an alternative, that would be appreciated," he said. --Article 3.4: Tuong asserted the GVN believes the paragraph needs to state specifically that the entities of each arty shall have the right to fund the constructin of ports and to operate such ports or their anillary facilities "in accordance with the laws of he country where such port facilities are to be onstructed." Tuong said the MOT is flexible as t the exact language, as long as it is clear thatthe laws of the country receiving the investment gvern the investments. --Annex: Tuong noted tht, given that the U.S.-Vietnam WTO negotiations ave been concluded, that part of the annex to theagreement should be deleted. Specifically, the wods "upon signature of a bilateral agreement betwen the United States and Vietnam relating to Vienam's accession to the World Trade Organization"are no longer relevant, he said. ¶4. (SBU) Tuong,who took an extremely cooperative tone, pledged to continue providing informal comments on developmnts within the GVN regarding the MTA. ALOISI