TRADE MINISTER -- THANKS ON QUOTA ELIMINATION BUT STILL

UNCLAS SECTION 01 OF 02 HANOI 003071

SIPDIS

STATE FOR EAP/MLS
STATE PASS TO USTR DAVID BISBEE
COMMERCE FOR 4431/MAC/AP/OPB/VLC/HPPHO

SENSITIVE BUT UNCLASSIFIED
SIPDIS

E.O. 12958: N/A
TAGS: ETRD KTEX ECON PREL WTRO VM
SUBJECT: TRADE MINISTER -- THANKS ON QUOTA ELIMINATION BUT STILL
CONCERNED ON MONITORING MECHANISM

REF: (A) December 21 e-mail from David Bisbee
(B) Federal Register notice December 4, 2006 (Volume
71, Number 232),Page 70364-70366

(U) SENSITIVE - DO NOT POST ON INTERNET


1. (SBU) Summary: Minister of Trade Tuyen has sent a letter thanking
USTR for clarifying the timing of the elimination of textile and
apparel quotas. He also expresses appreciation for President Bush's
signing of PNTR. At the same time, he notes continued concern about
the development of a "Monitoring Program on Imports of Textile and
Apparel products from Vietnam." The Ministry provided separate
diplomatic notes addressed to USTR and Commerce focused on the
monitoring mechanism. End Summary.


2. (SBU) As requested in ref A, on December 22, Post delivered
Deputy USTR Karan Bhatia's letter to Minister of Trade Truong Dinh
Tuyen Tuyen explaining the timing of the expiration of U.S. quotas
on apparel and textile goods from Vietnam in 2007 and including a
copy of a federal register notice regarding specific line items and
quantities. On December 26, Post received Minister Tuyen's response
to Ambassador Schwab and Ambassador Bhatia as well as the Ministry's
formal comments on the textile monitoring system (ref b) in
identical diplomatic notes addressed to USTR and the Department of
Commerce. Full texts are below.


3. (SBU) Begin text of letter (GVN-provided translation):

Hanoi, December 22, 2006

Ambassador Susan C. Schwab
Ambassador Karan K. Bhatia
United States Trade Representative
600 17th Street, N.W.
Washington, DC 20508
United States of America

Dear Ambassador Schwab,
Dear Ambassador Bhatia,

First of all, I would like to express my sincere thanks for your
letter of December 20, 2006 welcoming Vietnam into the WTO on
January 11, 2007. Your letter has well answered to our concern
about the timing for elimination of quotas on textile and apparels
goods from Vietnam. This facilitates the ongoing business between
Vietnamese exporters and U.S. importers especially in the period
from now till January 11, 2007.

We highly appreciate President Bush's signing of legislation
authorizing him to grant Permanent Normal Trade Relations (PNTR) to
Vietnam. Trade preference programs extended would surely contribute
to the poverty alleviation of Vietnam and create more economic
opportunities for the peoples of our two countries.

I would like to take this opportunity to express our concern about
the discriminatory Import Monitoring Program on Textile and Apparel
Products from Vietnam. As we have already mentioned, the
discriminatory monitoring would cause U.S. importers great anxiety
for building up a normal textile and apparel business relation with
Vietnam. They are, therefore, obliged to limit their imports. We
do not accept this proposal and hope that monitoring measures on
textile and apparel from Vietnam would be taken in a same way as on
textile and apparel from other trading partners that are members of
WTO.

I would like to take this chance to send best wishes to you and your
family for the new year of 2007.

Sincerely yours,
(Signed)
Truong Dinh Tuyen
Minister of Trade

End text of letter.


4. (SBU) The Ministry of Trade also sent identical diplomatic notes
addressed to the Department of Commerce and USTR detailing Vietnam's
concerns with the Department of Commerce's request for public
comments on the development of a "Monitoring Program on Imports of
Textile and Apparel products from Vietnam" (ref b). Full text of
the diplomatic notes is in paragraph 5.


5. (SBU) Begin text of diplomatic notes (GVN-provided translation):

Ref: VN-US/1/12/06


HANOI 00003071 002 OF 002


The Ministry of Trade of the Socialist Republic of Vietnam presents
its compliments to the United States Trade Representative [the
Department of Commerce of the United States] and would like to voice
our disappointment over the Department of Commerce's invitation for
public comments on the development of a "Monitoring Program on
imports of textile and apparel products from Vietnam" in order to
initiate antidumping investigations against Vietnamese textile and
apparel imports. The intention of establishing such monitoring
program has led to considerable uncertainty for not only Vietnamese
textile and apparel manufacturers and exporters but also the U.S.
importers.

A unique and separate monitoring program on imports of textile and
apparel products from Vietnam which is completely different from
monitoring regimes applied by the U.S. to cover imports from other
WTO members constitutes an overt discrimination against Vietnam and
runs contrary to the WTO's most fundamental principle of
non-discrimination. This program is a violation of Article XXIII of
the GATT 1994 as it causes nullification and serious prejudice to
the interests of Vietnam as a WTO member. Furthermore, this program
is also inconsistent with the Bilateral Agreement between Vietnam
and the United States on Vietnam's accession to the WTO signed on 31
May 2006.

The fact remains that Vietnam's textile and apparel products cannot
compete against exports of many other countries since most of
accessories and materials for its production of textile and apparel
products must be imported, and the U.S. is currently the largest
supplier of cotton for Vietnam.

Vietnam is always in favor of legitimate initiatives to protect the
interests of good-faith businesses of both Vietnam and the U.S.
Thus we have, during years of implementation of the Bilateral
Textile Agreement, offered close, timely and effective cooperation
with the U.S. authorities, particularly the Customs and Border
Protection (CBP),to ensure strict enforcement of the U.S. Customs
regulations. The Ministry of Trade of Vietnam, therefore, requests
that any monitoring measure applied to Vietnamese textile and
apparel exports to the U.S. should not be different from those
currently imposed by the U.S. on other WTO members so that there
would not be neither discrimination nor prejudice to the interests
of the Vietnamese manufacturers and the U.S. clients doing business
with Vietnam.

For the reasons stated above, the Ministry of Trade of the Socialist
Republic of Vietnam would like to call on the U.S. Government to
reconsider seriously and withdraw the proposal for developing a
Monitoring Program on imports of textile and apparel products from
Vietnam.

The Ministry of Trade of the Socialist Republic of Vietnam avails
itself of this opportunity to renew to the Department of Commerce of
the United States (United States Trade Representative) the
assurances of its highest consideration.

Hanoi, 22 December 2006

To: The Department of Commerce of the United States
(The United States Trade Representative)
Cc: The Embassy of the United States of America in Hanoi,
Vietnam
The Embassy of the S.R. of Vietnam in the United States
of America

End text.


6. Post is sending originals of letter and diplomatic notes to
Washington via diplomatic pouch.

ALOISI