VZCZCXRO5591
RR RUEHHM
DE RUEHHI #0325/01 0540755
ZNR UUUUU ZZH
R 230755Z FEB 07
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 4682
INFO RUEHHM/AMCONSUL HO CHI MINH 2606

UNCLAS SECTION 01 OF 02 HANOI 000325 
 
SIPDIS 
 
STATE FOR EAP/MLS 
STATE PASS USTR MSANDLER AND DBISBEE 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EAID ELAB KIPR VM
SUBJECT: VIETNAM OFFICIALS EAGER TO ENTER GSP PROGRAM 
 
 
(U) SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION. 
 
REF: A) Hanoi 233, B) 06 Hanoi 3019 
 
¶1. (SBU) Summary: In a meeting with USTR visitors, Government of 
Vietnam officials expressed a strong interest in applying for the 
GSP program as soon as possible.  USTR GSP Executive Director 
Marideth Sandler explained the GSP program and eligibility criteria 
to a 25-person forum of government officials and answered their 
questions.  USTR Director for Southeast Asia David Bisbee noted how 
a TIFA could facilitate the process.  Sandler also met with 
International Labor Organization representatives to discuss 
GSP-relevant labor rights issues, USAID staff to learn more about 
their in-country projects, and the World Bank to discuss cooperation 
on the review of the GSP economic criteria.  End Summary. 
 
¶2. (SBU) U.S. Trade Representative (USTR) Executive Director of the 
Generalized System of Preferences (GSP) Program Marideth Sandler met 
with about 25 Government of Vietnam (GVN) officials in Hanoi on 
February 9.  The following agencies attended the briefing, hosted by 
the Ministry of Trade: 
 
   --The Office of the Government (OOG) 
   --The Ministry of Foreign Affairs (MFA) 
   --The Ministry of Finance (MOF) 
   --The Ministry of Labor, Invalids and Social Affairs 
     (MOLISA) 
   --The Ministry of Agriculture and Rural Development (MARD) 
   --The National Office for Intellectual Property (NOIP) 
   --The Vietnam Literary and Artistic Copyright Office (COV) 
   --The Central Institute for Economic Management (CIEM) 
   --The Ministry of Trade (MOT) 
 
¶3. (SBU) Sandler's visit to Vietnam came in response to numerous 
indications of interest in the GSP program from the GVN.  Minister 
of Trade Tuyen first raised it with USTR Susan Schwab in their 
November 16 meeting. More recently, Vice Minister of Trade Luong Van 
Tu requested during their February 1 meeting that Assistant USTR 
Barbara Weisel consider approving Vietnam as a GSP program 
beneficiary.  Weisel and other USG officials have been very direct 
in explaining to GVN officials that there are statutory requirements 
for eligibility for the GSP program, and the United States is 
interested in helping Vietnam understand the complex process before 
the GVN formally requests consideration (Ref A).  Sandler reiterated 
those points, described the program's statutory requirements and 
criteria, particularly those on worker rights and intellectual 
property rights (IPR), explained the steps in the eligibility review 
and then fielded questions. 
 
¶4. (SBU) Dr. Nguyen Van Binh, MOT's Deputy Director General of the 
Trade Policy Department for the Americas, opened the question and 
answer period by stating that the GVN is "very interested" in the 
GSP program.  Binh asserted that USTR Schwab told Minister of Trade 
Tuyen in November that she would put obtaining GSP for Vietnam at 
the top of her agenda when she returned to Washington.  "So, can we 
get it?" he asked.  Sandler responded that the United States was 
obligated to follow the statutory requirements in recommending to 
the President the designation of GSP beneficiary developing 
countries. There is no way to determine the final outcome or 
duration of the review until it has begun, Sandler added. 
 
¶5. (SBU) Officials posed a range of other questions and concerns, 
most notably related to IPR enforcement, labor rights, tariff 
preferences and market access.  Luong Van Tuong, an officer with the 
NOIP, asked what criteria would be used to determine the level of 
IPR protection in Vietnam.  Sandler responded that the United States 
would examine Vietnam's IPR laws and the GVN's IPR enforcement 
record, and would also review the Special 301 Report on Vietnam's 
IPR practices.  David Bisbee, USTR Director for Southeast Asia, 
noted that an additional aspect of the GSP eligibility review would 
be the opportunity for public comments via a U.S. Federal Register 
notice.  He indicated that comments received as part of the ongoing 
Special 301 Process could be a good indication of the types of 
IPR-related comments Vietnam might expect if it formally requests 
eligibility for the GSP program.  Ms. Dien Hien Minh of the Central 
Institute for Economic Management noted the short two-year period of 
the GSP program's authorization and asked whether it would be useful 
for Vietnam to seek consideration for a program of such short 
duration.  Ms. Sandler responded that while the duration of 
authorization was short, the program has been extended many times 
and that the program continues to have strong support in Congress. 
 
¶6. (SBU) On worker rights, Tran Thi Tuoc, Director of International 
Cooperation at MOLISA, asserted that the Vietnamese law protects 
labor rights.  Vietnam has ratified five of the eight core 
conventions of the International Labor Organization (ILO), and 
Vietnam's Constitution and labor code guarantee worker rights, he 
said.  Mr. Bisbee responded that both worker rights and IPR are, 
among others, clearly important issues in the GSP program. 
 
HANOI 00000325  002 OF 002 
 
 
 
¶7. (SBU) Pointing out that the GSP statute forbids the beneficiary 
country from providing preferential treatment to products of other 
nations, one official stated such a restriction seems contrary to 
Vietnam's free trade agreements with other nations and bodies, 
including ASEAN.  Sandler responded that the United States looks at 
these issues on a case by case basis and noted that included within 
this criterion is whether the preferences have a significant adverse 
effect on U.S. commerce.  Another official asked what "fair and 
reasonable access" to Vietnam's markets meant, and Sandler responded 
that Vietnam's WTO membership will be an important consideration but 
it is also impossible to predict what concerns will be raised by 
public comments. Concluding the roundtable, Sandler urged Vietnam to 
provide responses to the GSP statute's criteria as fully as possible 
when the GVN sends its letter of application.  Mr. Nguyen Hong 
Dzuong, Deputy DG of MOT's Trade Policy Department for Americas and 
moderator for the Vietnamese delegation, responded by saying that 
GVN will submit a formal written request for GSP consideration 
"shortly." 
 
ILO: Improvements in Worker Rights 
--------------------------------- 
 
¶8. (SBU) Prior to the roundtable, Sandler met with Jan Sunoo, Chief 
Technical Advisor of the Vietnam Industrial Relations project. Sunoo 
noted the fluidity of the labor situation due to Vietnam's rapid 
urbanization and movement toward a market economy.  He also noted 
recent improvements made regarding labor rights, even though 
citizens do "not technically" enjoy the freedom of association 
because Vietnamese law only permits unions affiliated with the 
Communist Party-directed Vietnam General Confederation of Labor 
(VGCL).  Sunoo also noted that while Vietnam had not ratified three 
of the so-called eight "ILO Core Conventions" -- on the freedom of 
association, collective bargaining and forced labor -- the country 
had recently ratified ILO convention 29 and was due to ratify the 
second convention on forced labor "fairly soon."  Vietnamese law 
does guarantee the right to strike.  Moreover, Sunoo said VGCL does 
not exercise strong control over its affiliated unions.  In the 
past, GVN has not punished workers for striking, even though almost 
all of the 1,300 strikes since 1995 have technically violated the 
law for not following the labor code's legal process.  Furthermore, 
Sunoo added that in November 2006, the government passed a new 
chapter of the labor law allowing non-unionized workers to represent 
themselves in labor disputes for the first time (Ref B). The 
government will also be re-writing its entire labor code in 2007 and 
¶2008.  These moves will have a large impact on the status of worker 
rights, he said. 
 
World Bank: Cooperation 
----------------------- 
 
¶9. (SBU) Vivek Suri, Senior Economist at the World Bank office in 
Vietnam, expressed his interest in working with Sandler and USTR to 
help the United States to examine Vietnam's status relative to the 
GSP statutory economic criteria for beneficiary eligibility.  Suri 
suggested several indicators, such as vulnerability of GDP to 
external shocks (including export diversification), and extent of 
poverty.  Suri noted the GVN and World Bank have completed the 2006 
household survey, but have not yet analyzed the data.  GSP 
eligibility would benefit Vietnam, he indicated, because it would 
encourage diversification of Vietnam's exports.  The country focuses 
heavily on wood products, apparel and shoes, and the GSP program 
would encourage firms to produce other goods -- generally helping to 
stabilize the economy. 
 
¶10. (U) This cable has been cleared by USTR's Sandler and Bisbee. 
 
ALOISI