VIETNAM SUPPORTS MAINTAINING ITA DUTY-FREE COVERAGE

UNCLAS HANOI 000404

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/MLS
COMMERCE FOR ERIC HOLLOWAY
STATE PASS USTR FOR DAVID BISBEE AND JASON BERNSTEIN
GENEVA PASS TO USTR

E.O. 12958: N/A
TAGS: ETRD ECON WTRO VM
SUBJECT: VIETNAM SUPPORTS MAINTAINING ITA DUTY-FREE COVERAGE


(U) SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET.

REF: STATE 22242


1. (SBU) Summary: In a March 1 meeting, the Ministry of Trade's
(MOT) Multilateral Trade Policy Department Deputy Director General,
Luong Hoang Thai, expressed support for the U.S. position on
maintaining duty-free coverage of information technology (IT)
products covered under the World Trade Organization (WTO)
Informational Technology Agreement (ITA),as detailed in reftel.
Mr. Thai committed to ask Vietnam's representatives in Geneva to
attend the March 6 informal ITA Committee meeting and voice support
for the U.S. position. ASEAN countries typically develop a unified
position on these issues, Thai explained, commenting that possible
new European Union (EU) duties on certain products covered by the
ITA would negatively impact exports from many ASEAN countries -
thereby making an ASEAN-wide statement supporting the U.S. position
"highly likely." The MOT will direct Vietnam's representative in
Geneva to push for such a statement. End Summary.


2. (SBU) In a March 1 meeting, Ministry of Trade's Multilateral
Trade Department Deputy Director General Luong Hoang Thai agreed
with United States opposition to new duties by ITA member countries
on technologically advanced versions of ITA-covered products.
Although still relatively small, Vietnam's exports of ITA products
to the European Union are growing rapidly, Thai said. Furthermore,
new tariffs by the European Union could potentially hamper future
development in Vietnam's IT industry - an area the Prime Minister
has targeted as a key growth sector in the coming years.


3. (SBU) Mr. Thai said that Vietnam's representatives in Geneva
informed him that this issue was discussed during the first round of
informal discussions on January 19. He committed to ask them to
attend the second round of discussions on March 6 and voice support
for the U.S. position. Econoff provided Thai a copy of the U.S.
proposal (G/IT/W/26) circulated during the January 19 meeting along
with ITA trade statistics detailing EU imports of ITA-covered
products. DDG Thai noted that he would incorporate this trade data
in the ministry's request to Geneva.


4. (SBU) Although Vietnam's experience in the World Trade
Organization (WTO) is short, having only been a member since January
11, it typically works to develop a unified position with fellow
ASEAN members on WTO-related matters such as this, Thai explained.
Referring to the EU import statistics, DDG Thai noted that countries
like Singapore, Malaysia, the Philippines, Thailand and Indonesia
would also stand to lose should the EU apply new tariffs on their IT
exports. He presumed, therefore, that it would be "highly likely"
the ASEAN countries will agree to publicly support the U.S. position
during the March 6 meeting. The Ministry of Trade will instruct its
Geneva-based representatives to push for such an agreement with
other ASEAN member representatives in Geneva, Thai said.


5. (SBU) DDG Thai concluded the meeting by thanking the United
States for bringing this important issue to the Ministry of Trade's
attention. He expressed his hope that this would be among the first
of many opportunities for our countries to cooperate in the WTO.

MARINE