VIETNAM FRETS OVER ANTI-DUMPING POLITICS DESPITE CONFIDENCE

UNCLAS SECTION 01 OF 02 HANOI 001731

SIPDIS

STATE PASS USTR FOR DBISBEE
USDOC FOR 4430/MAC/ASIA/OPB/VLC/HPPHO

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: KTEX ECON EIND ETRD ETTC VM
SUBJECT: VIETNAM FRETS OVER ANTI-DUMPING POLITICS DESPITE CONFIDENCE
IN ITS NUMBERS

REF: (A) HANOI 1654; (B) HCMC 995

HANOI 00001731 001.2 OF 002



1. (SBU) Summary: The Vietnamese government (GVN) and apparel
industry are confident that the data gathered by the Department of
Commerce's import monitoring program will vindicate their claims
that the country is not dumping apparel exports to the United
States. In his meetings with concerned GVN and apparel sector
audiences in Hanoi, Import Administration Assistant Secretary David
Spooner underscored that the facts and the figures, not politics,
will guide the program's first report, due in early November. End
summary.

CONFIDENCE IN THE NUMBERS...
--------------


2. (SBU) In meetings in Hanoi on September 26 and 27, GVN and
apparel industry representatives told A/S Spooner that the data
gathered and reported so far by the Commerce Department shows that
apparel exports' growth has been moderate and prices have not dipped
below market averages. They claimed that Vietnam's aggressive
anti-dumping stance --which includes monitoring its own exports and
lobbying the U.S. textile and retail sectors -- should ensure a
clean sheet for Vietnam when Commerce issues its first import
monitoring report. A/S Spooner told his interlocutors that he
expected to issue the report no later than the first week of
November, ahead of the U.S. trade mission to Vietnam led by Commerce
Secretary Carlos Gutierrez.

SIPDIS


3. (SBU) According to the Ministry of Industry and Trade (MOIT) and
the Vietnam Textile and Apparel Association (VITAS),first-half 2007
apparel exports to the United States were up by 20% over the same
period in 2006, and below the 26% growth in Vietnam's other apparel
export markets. "The increase this year is moderate, and is indeed
lower than when we had quotas," MOIT Minister Vu Huy Hoang said.
Meanwhile, VITAS Chairman Le Quoc An pointed that Vietnam's average
price of $3/sq. mt. was double that of China. MOIT Vice-Minister
Bui Xuan Khu added that many if not most of the garments that
Vietnam exports to the United States are in categories where the
U.S. market depends almost exclusively on imports.

...AND IN ITS ANTI-DUMPING EFFORTS
--------------


4. (SBU) The GVN and the apparel sector also cited their efforts in
reaching out to U.S. businesses. VITAS Chairman An told A/S Spooner
that a joint GVN-apparel industry delegation had met in Washington
in September with representatives from the National Council of
Textile Organizations (NCTO) to assuage the NCTO's fears of direct
competition with Vietnam's exporters. While in Washington, the
delegation also met with Import Monitoring staff from the Department
of Commerce and offered data from Vietnam's own internal monitoring
mechanisms, which the Vietnamese claim is wholly consistent with the
Commerce numbers published so far. The delegation also lobbied the
American Apparel and Footwear Association, the National Retail
Federation, and the Retail Industry Leaders Association, among
others.

CONCERNS ABOUT THE POLITICAL DEBATE
--------------


5. (SBU) Despite the GVN and apparel sector's confidence in the
numbers, they expressed concerns that politics would play a role in
Commerce's review of the data. A/S Spooner underscored that the
report would be factual and that there was "no secret deal to keep
Vietnamese imports out." At an industry roundtable, the
apprehensive GM of a garment factory in the outskirts of Hanoi
summed up the general feeling by saying: "The data doesn't concern
me, what worries me is the political debate over the data." A/S
Spooner acknowledged a deteriorating political climate on trade
liberalization but admitted that to date no domestic apparel company
had claimed market injury by Vietnamese imports. "Our commitment
was to monitor imports not to initiate [an anti-dumping] case."


6. (SBU) Both the GVN and the apparel manufacturers restated their
preoccupation with the monitoring program's potential chilling
effect on orders. Many Vietnamese businesses complained that
customers in the United States have refrained from placing orders
for fears of anti-dumping measures. For their part, Minister Huong
and his deputies cautioned against disruptions in a sector that
employs directly over two million workers.

COMMENT
--------------


7. (SBU) Although the first report of the import monitoring group is

HANOI 00001731 002.2 OF 002


still pending, the GVN and the textile sector are confident that
there is no dumping. A/S Spooner's visit was timely in setting the
record straight that politics will not play a role in the report.


8. (U) A/S Spooner cleared this cable.

MICHALAK