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Viewing cable 07HOCHIMINHCITY1144, SECRETARY GUTIERREZ AND MINISTER OF INDUSTRY AND TRADE HOANG

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Reference ID Created Released Classification Origin
07HOCHIMINHCITY1144 2007-11-13 10:29 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Ho Chi Minh City
VZCZCXRO4542
PP RUEHDT RUEHPB
DE RUEHHM #1144/01 3171029
ZNR UUUUU ZZH
P R 131029Z NOV 07
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC PRIORITY 3334
RUCPDOC/USDOC WASHDC PRIORITY 0048
INFO RUEHHI/AMEMBASSY HANOI 2290
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE
RUEHHM/AMCONSUL HO CHI MINH CITY 3549
UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 001144 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS 
STATE PASS TO USTR DBISBEE 
COMMERCE FOR 4431/MAC/AP/OPB/HPPO 
EEB/TPP/BTA/ANA 
 
E.O. 12958: N/A 
TAGS: ECON EIND ETRD BEXP KTEX OTRA OVIP VM
SUBJECT: SECRETARY GUTIERREZ AND MINISTER OF INDUSTRY AND TRADE HOANG 
TALK TRADE 
 
REF: Ho Chi Min 1131 
 
HO CHI MIN 00001144  001.2 OF 002 
 
 
1. (SBU) U.S. Secretary of Commerce Carlos Gutierrez met the 
newly appointed Vietnamese Minister of Industry and Trade of 
Vietnam Vu Huy Hoang on November 7 to explore commercial 
opportunities in a rising Vietnam. The Vietnam Apparel Import 
Monitoring program and current anti-dumping orders topped the 
Minister's list if concerns, while Secretary Gutierrez raised 
trading and distribution rights, IPR and project licensing -- 
issues that were foremost on the minds of the 22 U.S. companies 
in his trade delegation. Looking forward, Minister Hoang asked 
for the Secretary's support for Generalized System of 
Preferences (GSP), a bilateral investment treaty (BIT) and 
market economy status. End summary. 
 
Textile Monitoring and Antidumping 
---------------------------------- 
2. (SBU) Minister Hoang opened by thanking the Secretary, on 
behalf of producers in the garments and textiles sectors, for 
Commerce's help in allowing Vietnamese companies to continue 
exporting to the United States. Vietnam appreciates the recent 
announcement that Commerce found no evidence of dumping and will 
not self-initiate an anti-dumping case on garments imports from 
Vietnam. He asked the Secretary to help abolish this mechanism 
because it causes uncertainty among buyers, and because it is 
not appropriate under the WTO. If the mechanism cannot be 
totally abolished, he called for the reduction of the number of 
line items under monitoring, especially those not produced in 
the United States. 
 
3. (SBU) The Secretary reassured his counterpart that the 
textile monitoring mechanism was a necessary accommodation the 
Administration made with Congress to approve Permanent Normal 
Trade Relations (PNTR) for Vietnam, and the program will expire 
at the end of the Administration in 2009. He added that the good 
news is that the first of three reviews found no evidence of 
dumping and pledges that the process will remain a transparent 
legal process, not politically driven. 
 
4. (SBU) The Minister expressed his hope that Commerce will 
start analysis soon to reduce the number of line items under the 
monitoring mechanism. The Secretary promised to explore the 
possibility for reducing the number of product line items 
subjected to monitoring, currently 468 in five categories. 
 
5. (SBU) Secretary Gutierrez proposed to Minister Hoang holding 
a trade remedy exchange program aimed at providing Vietnamese 
officials with a better understanding of this complex set of 
issues and asked Assistant Secretary David Spooner to brief the 
Minister of the status of the frozen fish fillets and shrimps 
anti dumping cases. Minister Hoang told the Secretary as many as 
9 to 10 million people depend on the seafood industry for their 
livelihoods. He asked the Secretary to help facilitate and 
reduce measures that limit Vietnamese exports of shrimps and 
frozen fish fillet to the United States. 
 
Trading and Distribution Rights 
------------------------------- 
6. (SBU) The Secretary next raised trading and distribution as 
an area of critical importance to U.S. companies where there is 
still much confusion. Minister Hoang said he understands that 
U.S. exporters' position is that they should not be limited by 
the number of distributors. However, according to the Minister, 
implementation of distribution rights should be done 
step-by-step to increase the number of distributors in Vietnam 
and he is listening to suggestions from foreign distributors. 
His Ministry is working with USTR and learning about the U.S. 
experience in distribution. The Minister indicated that Vietnam 
will adhere to the provision of paragraph 147 (the portion of 
the WTO working party report providing for multiple 
distributors). 
 
Major Project Licensing 
----------------------- 
7. (SBU) The Secretary then mentioned the sizeable trade deficit 
and the letter he sent to Prime Minister Nguyen Tan Dung 
expressing hope for contract signing for key projects. He 
briefly mentioned major advocacy projects including the Boeing 
contract for 12 Dreamliners, GE Capital's interest in a 20 
percent stake of state-owned Vietcombank, AES's Mong Duong 
coal-fired power plant, SSA Marine's joint venture to develop 
and operate a port, Gannon's proposed power project to supply 
industrial zones in Dong Nai province. On Gannon, the Secretary 
specifically raised Gannon's difficulty in obtaining a meeting 
with Electricity of Vietnam. 
 
HO CHI MIN 00001144  002.2 OF 002 
 
 
 
8. (SBU) Minister Hoang carefully responded to every advocacy 
projects raised by the secretary. The Boeing deal will be 
finalized soon. MoIT supports GE Capital's project with 
Vietcombank. SSA marine's services are much needed to improve 
Vietnam's logistical efficiency for export. Gannon has received 
guidance on their proposed power project and has just turned in 
a revised proposal using oil as fuel. 
 
Encouraging More on IPR 
----------------------- 
9. (SBU) The Secretary raised the importance of IPR protection 
to foreign investors, saying that countries that protect IPR 
will enjoy a competitive advantage in the future. He recognized 
Vietnam's good progress in building the legal framework for IPR 
protection, and cited the Microsoft contracts as good examples 
of implementation. 
 
10. (SBU) Minister Hoang cited a range of statistics intended to 
show increased enforcement for both administrative and criminal 
cases. The Minister admitted that IPR enforcement need stronger 
measures to be effective. He informed the Secretary that a draft 
circular on criminal enforcement has been sent to the U.S. side 
for review and that the Vietnamese Supreme Court will formally 
issue the circular after full consultation with all stake 
holders. 
 
The Road Forward: GSP, BIT and NME Status 
------------------------------------------ 
11. (SBU) The Minister assured the secretary that no one can 
dampen progress in Vietnam and offer to work together to resolve 
obstacles. Minister Hoang asked for Commerce support in the 
process of preparing its petition for Generalized System of 
Preference (GSP) status. Minister Hoang also asked for market 
economy status for Vietnam as soon as possible, and earliest 
possible negotiation of a bilateral investment treaty (BIT). MPI 
has the lead on BIT negotiations, but MoIT coordinates very 
closely with MPI on investment issues. The Minister told the 
Secretary that Vietnam supports the Doha round, but indicated 
 
SIPDIS 
that Vietnam is not ready to take higher obligations than its 
WTO accessions commitments. 
 
12. (SBU) He added that President Bush and his administration 
highly value the growing friendship and relationship between our 
two countries. The Secretary said will convey Vietnam's interest 
in GSP and BIT to the USTR, which is responsible for those 
issues. On the Doha round the Secretary will ensure USTR is 
aware of Vietnam's request and that Vietnam is treated fairly. 
 
13. (SBU) The Secretary explained that market economy status has 
six criteria. If interested, Vietnam should make a formal 
request for review under this quasi-judicial (rather than 
political) decision process. Minister Hoang suggested that the 
U.S. takes a similar approach to the EU in assessing Vietnam's 
market economy status, recognizing market economy qualifications 
one measure at a time. 
 
14. (SBU) The Secretary thanked Minister Hoang for the candid 
discussion of issues and invited the latter to visit when in 
Washington. 
 
Comment: 
-------- 
15. (SBU) During his visit, Secretary Gutierrez clearly laid out 
the range of issues that U.S. business identified as impediments 
to further U.S. exports to and investment in Vietnam. The 
Minister argued that a year after WTO entry, Vietnam is 
implementing its WTO commitments in a serious manner, but it is 
not unusual for some issues to arise. Still, the Minister's wish 
list of future activities ensures that the United States 
continues to have considerable leverage to exert to help resolve 
trade and investment issues. End comment. 
 
16. (U) This cable was drafted and cleared by the delegation. 
FAIRFAX