Identifier
Created
Classification
Origin
07HANOI294
2007-02-15 03:09:00
UNCLASSIFIED
Embassy Hanoi
Cable title:  

Vietnamese Official Discusses MCA, TIFA Proposal, Apparel

Tags:  ETRD ECON EAID KTEX VM 
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VZCZCXRO8203
RR RUEHHM
DE RUEHHI #0294/01 0460309
ZNR UUUUU ZZH
R 150309Z FEB 07
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 4628
INFO RUEHHM/AMCONSUL HO CHI MINH 2557
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
UNCLAS SECTION 01 OF 02 HANOI 000294 

SIPDIS

STATE FOR EAP/MLS
STATE PASS USTR DBISBEE

SENSITIVE BUT UNCLASSIFIED
SIPDIS

E.O. 12958: N/A
TAGS: ETRD ECON EAID KTEX VM
SUBJECT: Vietnamese Official Discusses MCA, TIFA Proposal, Apparel

(U) This cable is sensitive but unclassified. Not for internet.

REF: A) STATE 7634 B) STATE 14171 C) HANOI 233

UNCLAS SECTION 01 OF 02 HANOI 000294

SIPDIS

STATE FOR EAP/MLS
STATE PASS USTR DBISBEE

SENSITIVE BUT UNCLASSIFIED
SIPDIS

E.O. 12958: N/A
TAGS: ETRD ECON EAID KTEX VM
SUBJECT: Vietnamese Official Discusses MCA, TIFA Proposal, Apparel

(U) This cable is sensitive but unclassified. Not for internet.

REF: A) STATE 7634 B) STATE 14171 C) HANOI 233


1. (SBU) Summary: During a February 7 meeting with USTR, Commerce
Department, and Embassy representatives, Office of the Government
International Relations Department Director Mr. Bui Huy Hung pressed
USTR on details for a potential Trade and Investment Framework
Agreement (TIFA),expressed concern over the United States proposed
apparel monitoring mechanism for Vietnam, and showed interest in
continuing to discuss ways Vietnam might become more competitive for
Millennium Challenge Account (MCA) funds in the future. Paras 10-11
detail Vietnam's response to the action request in Ref B. End
summary.

Details on the TIFA
--------------


2. (SBU) After congratulating Vietnam on its January 11, 2007
accession to the World Trade Organization, USTR Director for
Southeast Asia David Bisbee began the meeting by reviewing the
recent conversation in Davos, Switzerland between Deputy U.S. Trade
Representative Karan Bhatia and Vietnamese Minister of Trade Truong
Dinh Tuyen. Ambassador Bhatia and Minister Tuyen discussed the
possibility of signing a Trade and Investment Framework Agreement
(TIFA) between the United States and Vietnam, with Tuyen expressing
his desire that the TIFA not be "too general." Bisbee also
mentioned that Assistant USTR Barbara Weisel met with Vice Trade
Minister Luong Van Tu and other MOT officials on February 1 to
propose formally launching TIFA talks (reftel C). Bisbee appealed
to Hung, who also serves for Vietnam as the general secretary of the
Bilateral Trade Agreement (BTA) Joint Council, to assist on the
coordination aspect of the TIFA negotiation, noting that a TIFA will
be a valuable tool for Vietnam. Citing examples of the kinds of
issues that could be addressed in a TIFA, Bisbee said it could
provide a regular forum for Vietnam to manage WTO implementation,
seek approval to become a beneficiary of the Generalized System of
Preferences (GSP) program and discuss apparel related issues. The
TIFA itself is not a very specific document, noted Bisbee, but could
include general language that helps bolster bilateral cooperation on

these outstanding issues.


3. (SBU) Bisbee added that the TIFA would not need to duplicate the
management structure of the BTA. The TIFA committee could consist
of the same people as the BTA Review Committee, and would include a
work plan that focused on possible issues such as IPR issues, or
building blocks for an eventual Bilateral Investment Treaty (BIT).
The TIFA's language and the structure of its implementation, said
Bisbee, is very flexible and can be adapted to best serve Vietnam's
needs.


4. (SBU) Director Hung began his response to Bisbee's presentation
by explaining that the GVN has developed an action plan that will
ultimately show each ministry's role in implementing WTO
obligations. He promised to share this plan with the United States
once it is approved for release (which he estimated would occur
after the Tet holiday). Hung noted that the TIFA would be a useful
mechanism for helping to implement these obligations. Hung also
asked for an explanation of how USTR had concluded TIFAs with other
ASEAN countries in the past.


5. (SBU) After some further exchange on the TIFA structure, Bisbee
and Hung agreed that the TIFA should be a very general document, but
include a specific work plan that would evolve over time, and that
the TIFA Joint Council Committee should be chaired by someone from
the GVN who could ensure interagency coordination and cooperation.
They also agreed that future annual reviews of the BTA could take
place under the TIFA dialogue in a consolidated process.


6. (SBU) After clarifying the nature of the TIFA implementation
process, Hung said he is in a better position to secure agreement on
signing a TIFA and will speed up the process within the GVN. He
promised to be in touch with Bisbee soon with more information.

IT Procurement Decree and GSP
--------------


7. (SBU) Bisbee then tried to raise the labeling issue currently
under discussion with the Ministry of Trade (see septel),but Hung
deferred to other agencies because he had not read up on the issue.
Bisbee promised to send him more information, and then turned
instead to the problems related to the Information Technology (IT)
Procurement Decree (Decree 169). The original Decree appeared
inconsistent with Vietnam's WTO commitments regarding State-owned
enterprises, noted Bisbee. The most recent changes to the draft
implementing circular more clearly excluded SOEs, which is a
positive step, however, the U.S. IT industry is still seeking a more
technology neutral and non-preferential procurement approach, said

HANOI 00000294 002 OF 002


Bisbee. Bisbee added that USTR will continue to work with the
Ministry of Posts and Telematics to support U.S. industry's efforts
to raise their concerns.


8. (SBU) Bisbee and Hung also briefly discussed the steps Vietnam
would have to take in order to gain approval to become a beneficiary
of the Generalized System of Preferences (GSP) program. Hung
observed that the GVN is trying to learn about the GSP in greater
detail, and hopes that in the near future it might be eligible for
the program. The two agreed to continue talking about the subject
in the coming months.

Apparel monitoring
--------------


9. (SBU) Bisbee also assured Hung that Ambassador Bhatia plans to
visit Vietnam in the near future, and will bring a representative
from the Department of Commerce's Import Administration to help
clarify the apparel monitoring mechanism to be established in the
near future. He noted that there is some misunderstanding
surrounding the monitoring issue and that the visit by Deputy USTR
Bhatia and the Department of Commerce will provide more clarity
about U.S. anti-dumping procedures. Hung said the GVN would welcome
such a visit.

Millennium Challenge Account
--------------


10. (SBU) Econoff delivered the talking points on the Millennium
Challenge Account (MCA) provided in Ref A and Ref B, as well as a
copy of Vietnam's FY2007 scorecard. Econoff stressed that even
though Vietnam technically passed the indicators according to the
MCA's criteria, its low scores in the Ruling Justly category, as
well as the lack of any change in those areas, is a problem. Hung
asked specifically in what areas Vietnam needed to improve its
performance, and Econoff singled out per Ref B Voice and
Accountability, Civil Society, and Political Rights as well as
Corruption. Econoff also stressed that even if Vietnam is not able
to improve these scores right away, it is important to demonstrate
to the MCA decision-makers the potential for transformational change
in these areas.


11. (SBU) Hung made clear that he understood, and that he would talk
to the Ministry of Foreign Affairs in greater detail about the
subject since it is the lead agency for programs like this. Hung
said that the OOG is looking at MCA for ways to mitigate the
potential negative social impact of WTO accession on the poor.
Econoff replied that while MCA does not necessarily focus on poverty
alleviation or job creation, a program to develop truly independent
domestic non-governmental organizations in rural areas might be a
way to meet the MCA's expectations and some of the GVN's own focus.
Hung said the GVN would consider this information and contact the
USG should they have questions in the future.


12. (U) David Bisbee cleared this cable.

ALOISI