UNCLAS SECTION 01 OF 02 HANOI 001957

SIPDIS

STATE FOR EAP/MLS
STATE PASS USTR FOR DBISBEE
USDOC FOR 4430/MAC/ASIA/OPB/VLC/HPPHO AND IMPORT ADMINISTRATION SSU

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: KTEX ECON EIND ETRD ETTC VM
SUBJECT: MOIT EXPRESSES CONTINUED CONCERNS OVER APPAREL MONITORING
MECHANISM

REF: (A) HCMC 1144; (B) HCMC 1109; (C) HANOI 1731; (D) HANOI 1654

HANOI 00001957 001.2 OF 002



1. (U) The Ministry of Industry and Trade (MOIT) sent Post an
October 31 Diplomatic Note addressed to the U.S. Department of
Commerce, urging the United States not to self-initiate an
antidumping investigation against Vietnam and to revoke its Textile
and Apparel Import Monitoring Program. Full text of the Diplomatic
Note follows in paragraph 2. Vietnamese Minister of Industry and
Trade Vu Huy Hoang conveyed a similar message orally to U.S.
Secretary of Commerce Carlos Gutierrez during their November 7

SIPDIS
meeting (Reftel A), when he asked the Secretary personally to help
abolish the program, or, at a minimum, to reduce the number of line
items subject to monitoring.


2. (U) FULL TEXT OF DIPLOMATIC NOTE AS DELIVERED (Unofficial
Translation):

Department of Commerce
The United States of America

No. /07

The Ministry of Industry and Trade of the Socialist Republic of
Vietnam presents its compliments to the United States Department of
Commerce and has the honor to present the Department issues
concerning the monitoring program of apparel imports from Vietnam.


First of all, the Ministry of Industry and Trade would highly
appreciate the Department of Commerce's decision not to
self-initiate an antidumping investigation against Vietnam apparel
imported into the United States after the first data review. We
see this is a fair and objective decision reflecting the reality.

However, maintaining such a program contrary to the WTO's
regulations and failing to clarify the criteria for a
self-initiating investigation will continue to create an uncertain
market causing many difficulties in business planning for both U.S.
importers and Vietnam manufacturers; injuring the normal trade
relations between our two countries in general and in textiles in
particular.

The Ministry of Industry and Trade of Vietnam once again would like
to remind the Department of our objection to the program and would
urge the Department to revoke the program of apparel imports from
Vietnam or at least immediately stop monitoring product groups that
the United States is not manufacturing or having a limited
production capacity, product groups that have no imports from
Vietnam, and product groups of which the unit prices are rising or
have price reductions equivalently to those of imports from other
countries into the United States over the past time.

The Ministry of Industry and Trade wishes to receive early
acceptance of the Department of our proposals in order to encourage
the development of trade in textiles between our two countries in
accordance with the aspiration of both United States and Vietnamese
businesses.

The Ministry of Industry and Trade of the Socialist Republic of
Vietnam avails itself of the opportunity to renew to the Department
of Commerce of the United States the assurances of its highest
consideration.

The Ministry of Industry and Trade
The Socialist Republic of Vietnam
Hanoi, October 31, 2007.

CC: United States Trade Representative
The Embassy of the United States of America in Hanoi
The Embassy of the Socialist Republic of Vietnam in the
United States


3. (U) No signed original to follow.


4. (SBU) Comment: It appears that MOIT drafted this note prior to
receiving official word that the U.S. Department of Commerce found
insufficient evidence in the first six months of data from the
monitoring program to initiate a case. Although the Government of
Vietnam and industry representatives expressed relief over
Commerce's October 26 announcement (Reftel B), they continue to
press for abolishment or, at a minimum, a reduction in scope of the
program. Amidst claims that the program is affecting negatively
Vietnamese exports, the Vietnam Textile and Apparel Association is
reporting that Vietnam is on track to export USD 4.3 billion in
garments and textiles to the United States this year - an increase

HANOI 00001957 002.2 OF 002


of 26.5 percent over 2006. End comment.

MICHALAK