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