Identifier
Created
Classification
Origin
06VIENTIANE564
2006-06-22 09:48:00
UNCLASSIFIED
Embassy Vientiane
Cable title:  

USTR VISIT TO LAOS

Tags:  ETRD KIPR EFIN LA 
pdf how-to read a cable
VZCZCXRO7073
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHVN #0564/01 1730948
ZNR UUUUU ZZH
R 220948Z JUN 06
FM AMEMBASSY VIENTIANE
TO RUEHC/SECSTATE WASHDC 0036
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHCHI/AMCONSUL CHIANG MAI 0415
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
UNCLAS SECTION 01 OF 02 VIENTIANE 000564 

SIPDIS

SIPDIS

DEPT FOR EB AND EAP/MLS
DEPT PASS TO USTR FOR DAVID BRISBEE

E.O. 12958: N/A
TAGS: ETRD KIPR EFIN LA
SUBJECT: USTR VISIT TO LAOS


VIENTIANE 00000564 001.2 OF 002


UNCLAS SECTION 01 OF 02 VIENTIANE 000564

SIPDIS

SIPDIS

DEPT FOR EB AND EAP/MLS
DEPT PASS TO USTR FOR DAVID BRISBEE

E.O. 12958: N/A
TAGS: ETRD KIPR EFIN LA
SUBJECT: USTR VISIT TO LAOS


VIENTIANE 00000564 001.2 OF 002



1. Summary. On June 21 and 22 USTR Director for Southeast
Asia and Pacific, David Bisbee, met with GoL officials from
the Ministry of Industry and Commerce (MIC),Customs and
Tax Officials from the Ministry of Finance (MoF),the IPR
officers in the Science, Technology and Environment Section
in the Office of the Prime Minister, and the Committee for
Investment and Planning. With all his interlocutors, Bisbee
emphasized the need to quickly and fully implement the
Bilateral Trade Agreement (BTA) with the US, and to improve
the business and investment climate generally. On behalf of
US companies, he also made specific points regarding
outstanding IPR and level playing field issues. End Summary.

Ministry of Industry and Commerce
--------------

2. At MIC, Mr. Bisbee emphasized the USG's desire to engage
with the Southeast Asian Region economically, especially in
ASEAN contexts. He urged the GoL to keep an eye on the
progress of Vietnam's BTA, and to emulate it. An improved
investment climate and BTA implementation have been key to
Vietnam's progress toward WTO accession, and should be for
Laos, as well. He told his interlocutors that national
treatment and IPR are among the primary BTA components, and
that the Lao services sector, particularly, needs outside
competition. Countries who undertake to reform the service
sectors benefit quickly. He reminded them of their
obligation to share drafts of laws and regulations
affecting trade, so that the USG may comment on them in a
timely manner. He inquired about progress toward Lao entry
into the World Customs Organization (WCO). MIC officials
said that they are in the process of entering WCO, and are
currently running a series of workshops intended to
facilitate the process.


3. The MIC praised Embassy sponsored NTR/BTA seminars
conducted during 2005, and suggested that more such
activities would be useful in educating the Lao business
and official communities. They maintained that Laos is
indeed moving forward on BTA implementation and does intend
to eventually enter the WTO, with a second working group
meeting before the end of 2006. They are currently working
to answer the questions put by the USG and Australia during

2004-05. After mentioning that some of the items in Annex A
of the BTA are no longer controlled, and may be removed,
they inquired about the long-awaited (USG-produced)
authoritative Lao Language version of the BTA, which they
need to post on their website.

STEA: Intellectual Property
--------------

4. At STEA, the first order of business was IPR violations
by Lao Telecom, which has illegally acquired and retailed a
UBC signal with American content from a Thai source. STEA's
Director of Intellectual Property, Khalansy Keobounpanh,
responded positively, saying that upon being informed of
the matter by the Embassy, he had begun an investigation.
His first approach was parried by Lao Telecom's legal
section, which claimed to have a valid agreement with UBC
for the signal (but did not produce it). He said that he
will make a second approach, with greater ministerial and
law enforcement support, beginning with an
inter-ministerial meeting on June 26.


5. In response to questions about the IPR Law, Keobounpanh
replied that the draft law, covering patents and copyrights
is in now in the National Assembly, but is unlikely to pass
in this session due to the confusion of setting up a new
government. The law will contain both civil and criminal
sanctions and will be TRIPS compliant. Meanwhile,
supporting regulations are also being drafted, and he
agreed to furnish these to the USG. He praised the
training given him and his assistant by USPTO and hoped
that the USG will keep it up. Bisbee replied that an
American IPR legal expert will shortly take up residence in
Amembassy Bangkok, and that her expertise will be available
to IPR enforcement offices throughout the region.

Customs
--------------

6. In response to Bisbee's questions regarding Lao Customs
procedures, Lao Customs officials, led by Bounthoum Lomany
complained of inadequate staff and asked for assistance in
publishing their laws and regulations (something that can
be done adequately on the internet). They complained of a
lack of training and equipment. Lao Customs would welcome a
closer relationship with US Customs, in order to build its

VIENTIANE 00000564 002.2 OF 002


capacity. Referring to the NTE, the Lao wished that US
would take cognizance of the fact that many of the
personnel doing customs work around the country are not
actually Customs officials, but come from other offices and
ministries. Bisbee remarked that the procedures they
described were unduly cumbersome, whoever was applying
them, and discourage commerce. When asked about tariffs
they referred to three extant tariff schedules, newly
revised, for ASEAN, the BTA, and regular MFN. When asked
for clarification on any differences between the BTA and
MFN, they promised to furnish us with the schedules.
(Comment: Post does not expect to find differences between
the
BTA Annex Tables and MFN, and has told the GoL in the past
that we expect US products to enter the country at
the lowest rate, regardless of whether that is defined as
an ASEAN rate or MFN.)


7. The Tax Office Deputy Director, Maniwon Insisiangmai
met with Bisbee separately to explain the GoL's impending
switch to a VAT, and the abandonment of the current tax
structure, which has a turnover tax that disadvantages
imported goods and therefore violates National Treatment
clauses in the BTA. The law and implementing regulations
are being drafted. She seemed taken aback by a request to
examine the drafts, but upon being told that this is a BTA
requirement, she promised to request permission from the
new Minister ASAP.

CPI
--------------

8. At the Committee for Planning and Investment (CPI)
Bisbee took up the question of a level playing field for
all potential investors, with special reference to an
American soft-drink company whose application was recently
denied for unclear reasons. Thongmy Phomvixay, the CPI
Vice-President, insisted that all investment, especially
American, is welcome and he outlined in detail the steps
CPI has taken to ensure this. He referred particularly to
the amended Investment Law, which is indeed liberal on
paper. He claimed that investment is up (citing only the
large Nam Theun II Hydropower Project and Australian
Oxiana's gold and copper mining in the south-central part
of the country),and claimed that many Americans have
inquired about investing, though admittedly thus far only
on small scales. He professed to be keen to further reform
the investment climate and to attract higher levels of
FDI.


9. Bisbee maintained that the treatment afforded the
American company in question was emblematic of the opaque
investment climate in Laos, and strongly urged the GoL to
reconsider their application, should they re-apply. The
Americans then heard from the Director of the Investment
Office (with whom we have had previous dealings on this
issue),who said that the market is still too small to
absorb the products of more soft drink ventures, and that
they should wait until 2008 or 2009. The American side
replied that that was far too long for business purposes, and
that in any case, this is a business decision for investors
to make - and not properly within the purview of
government. (Comment: The new President of CPI, Soulivong
Daravong, who was out of the country when Bisbee visited,
has proven to be forward thinking in the past. Post will
pursue this matter with him ASAP.)


11. The American side mentioned an impending visit of the
US-ASEAN Business Council in late July as an opportunity
for the CPI to put its best foot forward and demonstrate
that the investment climate is indeed improving.


12. Bisbee departed Post before being able to clear this
message.
BAUER