VZCZCXRO7452
RR RUEHHM
DE RUEHHM #0178/01 0571035
ZNR UUUUU ZZH
R 261035Z FEB 07
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC 2151
INFO RUEHHI/AMEMBASSY HANOI 1543
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHBK/AMEMBASSY BANGKOK 0220
RUEHGV/USMISSION GENEVA 0027
RUEHHM/AMCONSUL HO CHI MINH CITY 2323

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000178 
 
SIPDIS 
 
USDOC 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS AND EB/TPP/BTA/ANA 
STATE PASS USTR DAVID BISBEE 
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO AND EMIKALIS 
TREASURY FOR OASIA 
GENEVA FOR USTR 
BANGKOK FOR USPTO JNESS 
 
E.O. 12958: N/A 
TAGS: ETRD ECON WTRO KIPR VM
SUBJECT: USTR DISCUSSES WTO MEMBERSHIP, IT AND IPR WITH HCMC BUSINESS 
COMMUNITY 
 
REF: HANOI 233  B) HANOI 310 
 
¶1. (SBU) Summary: Area businesspeople discussed new trading 
rules and changes to Vietnam's legal framework as a result 
of its WTO membership with representatives of the Office of 
the U.S. Trade Representative (USTR) and the U.S. 
Department of Commerce, during a February 5-6 visit to Ho 
Chi Minh City.  The USG visitors provided American Chamber 
of Commerce members with an overview of the U.S. - Vietnam 
bilateral trade relations following Vietnam's accession to 
the World Trade Organization in January of this year, and 
the U.S. proposal to Vietnam to negotiate a Trade and 
Investment Framework Agreement.  USTR also explained many 
of the important commitments Vietnam has undertaken as part 
of its WTO accession agreement including comprehensive 
tariff reductions, significant service sector 
liberalization and adoption of WTO consistent rules in 
areas such as trading rights, IPR, and transparency.   In 
turn, AmCham members outlined their plans to form a WTO 
implementation committee to monitor implementation, and 
asked a broad range of questions relating to specific 
service sector commitments, trading rights, and customs 
duties.  In separate meetings representatives of U.S. 
information technology (IT) companies registered concern 
about new regulations that they believe could make it 
difficult for U.S. companies to qualify for Vietnamese 
government IT contracts.  Legal experts outlined challenges 
to adequately protecting intellectual property rights (IPR) 
under Vietnam's new IPR law. The visit followed meetings on 
February 1-2 in Hanoi and HCMC by Assistant United States 
Trade Representative Barbara Weisel. In those meetings USTR 
proposed to the GVN to move our bilateral relationship 
forward along the path set out under the Enterprise for 
ASEAN Initiative by negotiating a Trade and Investment 
Framework Agreement (TIFA) (ref A).   End summary. 
 
AMCHAM 
------ 
 
¶2. (SBU) David Bisbee, Director for Southeast Asia and 
Pacific Affairs for USTR, and Elena Mikalis, Director for 
ASEAN Affairs for the International Trade Administration at 
the Department of Commerce, visited HCMC February 5-6 to 
discuss Vietnam's WTO obligations and its legal reform 
efforts with members of the U.S. business community here. 
In a lengthy session with the American Chamber of Commerce, 
USTR fielded questions and provided additional details and 
clarifications on the terms and coverage of Vietnam's WTO 
accession package. AmCham members admitted that more study 
of the agreement was needed by members and that to better 
monitor and track implementation of the commitments by 
Vietnam, Amcham was considering forming a WTO 
Implementation Committee. Bisbee encouraged the formation 
of such a group and suggested that AmCham propose a formal 
dialogue with the Ministry of Trade as part of the process 
to facilitate a better understanding of the many legal and 
regulatory developments underway to meet WTO commitments. 
 
¶3. (SBU) The meeting also included lengthy discussions over 
trading rights and distribution services.  Members asked 
for clarification of Vietnam's commitments, which include 
the ability for all Vietnamese and foreign companies and 
individuals to directly import most goods into Vietnam as 
of January 1, 2007. Vietnam's commitments also provide for 
foreign individuals and enterprises without a physical 
presence in Vietnam to act as an importer of record, an 
important provision for many U.S. exporters.  Foreign firms 
can engage in distribution services of most goods without 
going through a Vietnamese intermediary in 2009. In the WTO 
accession agreement, Vietnam improved upon the timetable 
for granting trading rights established in the U.S.-Vietnam 
Bilateral Trade Agreement (BTA) to meet its GATT 
obligations, and reduced the range of products subject to 
transition periods. For distribution services, Vietnam also 
reduced the list of products excluded in Vietnam's WTO 
commitments compared to the BTA. 
 
IT 
-- 
 
HO CHI MIN 00000178  002 OF 002 
 
 
 
¶5. (SBU) Representatives of U.S. IT companies met with 
Bisbee and Mikalis to voice their concerns about an IT 
procurement policy announced by Vietnam in late July 2006 
(Decision 169).  USTR and Embassy Hanoi have worked closely 
with the Ministry of Post and Telecommunication (MPT) since 
July to raise USG and industry concerns about the policy, 
which seeks to provide procurement preferences for 
localized IT products and open source software.  MPT 
released a draft implementing circular on January 30 for 
industry comments, and USTR urged the IT industry members 
to raise their concerns directly with MPT.  In response to 
concerns raised by the USG in July, the MPT has worked to 
revise the original Decision to limit coverage to only 
government agencies and explicitly exclude state owned 
enterprises.  USTR and Hanoi Econoff explained to the 
industry representatives that MPT was open to hearing from 
industry about global procurement best practices, and 
industry was urged to engage the GVN directly on this 
issue. (Note: In meetings in Hanoi, USTR raised industry 
concerns with MPT directly. (Ref B) End note.) 
 
IPR 
--- 
 
¶6. (SBU) Bisbee and Mikalis also met with lawyers and HCMC 
government officials to discuss the implementation of 
Vietnam's new IPR law, which came into effect in 2006.  An 
attorney at a foreign law firm reported that in her opinion 
Vietnam's IPR enforcement activities had slowed as 
authorities familiarized themselves with the new law and 
its regulations.  The attorney and a representative from 
HCMC's Department of Science and Technology (DOST) observed 
that new rules meant to preserve the impartiality of IPR 
enforcement activities (by clearly separating registration 
and enforcement activities) have, in the short term, 
reduced the ability of experts at DOST and other agencies 
to assist enforcement authorities in pursuing IPR 
violations.  During a discussion on USTR's Special 301 
review of IP protection among major trading partners, DOST 
requested USTR's assistance in establishing a dialogue 
mechanism specific to HCMC's local efforts, similar to the 
301 review but on a semi-annual basis. DOST explained that 
provincial level implementation could be supported by 
regular dialogue with USTR and other USG agencies on the 
problems and bottlenecks experienced by the private sector. 
DOST also acknowledged the valuable technical assistance 
received from the U.S. Patent and Trademark Office (USPTO) 
and the USAID-funded Support for Trade Acceleration (STAR) 
program and reiterated the common request among Vietnam's 
IP agencies for increased levels of technical assistance. 
 
¶7. (SBU) The private sector attorney also explained her 
understanding that in order for IPR rights-holders to 
pursue those who sell counterfeit goods or goods that 
violate trademarks, rights-holders must first send "cease 
and desist letters" to violators.  While these letters are 
meant to be used as evidence that violations have taken 
place, they often tip off infringers, who are then able to 
evade prosecution. In subsequent meetings in Hanoi with IP 
authorities and advisors to the STAR program, it was 
clarified that the relevant decree requires 'cease and 
desist' letters only in cases of unfair competition, not in 
cases of clear trademark infringement. 
 
¶8. (U) Mr. Bisbee and Ms. Mikalis cleared this cable. 
WINNICK