AUSTR BARBARA WEISEL DISCUSSES MOVING TRADE RELATIONS

UNCLAS SECTION 01 OF 02 HANOI 000233

SIPDIS

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

SENSITIVE
SIPDIS

TAGS: ETRD ECON KTEX USTR VM
SUBJECT: AUSTR BARBARA WEISEL DISCUSSES MOVING TRADE RELATIONS
FORWARD WITH TRADE VM TU


(U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET.

REF: A) STATE 9329, B) HANOI 197


1. (SBU) Summary: In a February 1 meeting with Vice Minister of
Trade Luong Van Tu, Assistant U.S. Trade Representative (AUSTR)
Barbara Weisel expressed the United States' strong interest in
building upon the current momentum in our bilateral trade relations.
VM Tu reacted positively to AUSTR Weisel's proposal to launch talks
on a Trade and Investment Framework Agreement (TIFA),but reported
he must share the draft text with other relevant ministries and
agencies before formally commencing TIFA negotiations. Weisel also
noted that Vietnam has expressed interest in becoming a beneficiary
of the U.S. Generalized System of Preferences (GSP) program and that
the United States is prepared to work with Vietnam as it seeks to
get through the complex qualification process for the program. As a
first step, USTR's GSP Executive Director will hold an informational
roundtable on February 9 for GVN officials to better understand the
program and its requirements. The United States understands and
will consider GVN's comments and concerns as it proceeds with the
development of a proposed apparel mechanism. These comments will be
used to ensure that the process moves forward in a balanced and
transparent manner, Weisel said. Deputy USTR Karan Bhatia and the
Department of Commerce (DOC) Assistant Secretary for Import
Administration will soon travel to Vietnam to help clarify the
monitoring program and address Vietnam's concerns. End Summary.

TIFA
--------------


2. (SBU) AUSTR Barbara Weisel provided Vice Trade Minister Luong Van
Tu with a draft TIFA agreement and proposed that the two sides
formally launch negotiations with the aim of completing an agreement
"very quickly." She suggested that a TIFA would not only establish
a formal dialogue to address outstanding trade issues, the Bilateral
Trade Agreement (BTA),and World Trade Organization (WTO)
implementation concerns, but would also provide a framework to
negotiate any additional agreements that the two sides mutually
agreed, such as a Bilateral Investment Treaty (BIT). Weisel noted
the goals of the 2002 Enterprise for ASEAN Initiative and that
discussions and agreements reached under a TIFA have been used (as
in the cases of Thailand and Malaysia) as building blocks toward a
future Free Trade Agreement (FTA),when the relationship has reached
an appropriate point.


3. (SBU) The Vice Minister agreed on the need for a regular forum to
discuss trade issues. Claiming to echo Trade Minister Truong Dinh
Tuyen's preparedness to consider TIFA talks, VM Tu said he must
first share the draft agreement with other relevant agencies, and
committed to "get back to the United States soon." Weisel
encouraged them to respond quickly so the two sides can build upon
current momentum in our trade relations and initiate discussions
over an appropriate workplan of issues to consider under a TIFA.
Comment: Tu gave every indication that the Ministry of Trade (MOT)
is ready to launch TIFA talks. His unwillingness to commit formally
seemed to stem from bureaucratic caution, perhaps in the interest of
allowing Minister Tuyen to announce the talks formally at a later
date. End Comment.

GSP
---


4. (SBU) Citing recent steps Vietnam has taken to meet its long-held
goal of qualifying for the GSP program, such as WTO accession and
joining the International Labor Organization Convention on Forced
Labor, VM Tu asked Weisel and USTR to consider approving Vietnam as
a GSP program beneficiary. While acknowledging Vietnam's recent
progress, Weisel noted there are statutory requirements for
participation in the GSP program, and the United States is
interested in helping Vietnam understand the complex process before
it formally requests consideration. In Vietnam's case, protection
of intellectual property rights and labor standards are two areas
which will require additional work before Vietnam would be approved
as a GSP beneficiary, Weisel said. USTR's GSP program Executive
Director Marideth Sandler will travel to Hanoi on February 9 to
explain the GSP program to interested GVN officials. Following this
exchange, Vietnam would be in a better position to determine if it
is ready to formally request GSP consideration at this time, AUSTR
Weisel explained.

Textile and Apparel Monitoring Mechanism
--------------


5. (SBU) VM Tu raised Vietnam's continued concerns over the DOC's
proposed development of an apparel and textile monitoring mechanism.
Speculation over the program has already negatively affected
bilateral trade, Tu said, and asked the United States to consider
removing the mechanism. AUSTR Weisel explained that recent Federal

HANOI 00000233 002 OF 002


Register notices were published to ensure all interested parties
could provide input into the mechanism's development. She confirmed
the United States received Vietnam's comments, which it will take
into consideration, along with others, to ensure the program is
developed in a balanced and transparent manner so that both sides
can move beyond this issue. Deputy USTR Karan Bhatia and DOC's
Assistant Secretary for Import Administration will travel to Vietnam
in the coming months to clarify the program and address Vietnam's
concerns.


6. (U) This cable has been cleared by USTR David Bisbee.

MARINE