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 
 
¶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