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