VZCZCXRO8763
PP RUEHCHI RUEHDT RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHNH RUEHPB
DE RUEHHI #0703/01 2100226
ZNR UUUUU ZZH
P 290226Z JUL 09
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC PRIORITY 9957
INFO RUEHHM/AMCONSUL HO CHI MINH 6035
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC

UNCLAS SECTION 01 OF 02 HANOI 000703 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS MBROWN 
SINGAPORE FOR TREASURY 
TREASURY FOR SCHUN 
USTR FOR DBISBEE 
USAID FOR DAA/ASIA MELLIS AND EAA DSHARMA 
 
E.O. 12958: N/A 
TAGS: ECON ETRD ECIN EINV VM
 
SUBJECT:  VIETNAMESE OFFICIALS POSITIVE ABOUT TRADE TIES DESPITE 
CHALLENGES 
 
HANOI 00000703  001.2 OF 002 
 
 
¶1. (SBU) Summary.  In meetings with visiting Deputy U.S. Trade 
Representative Demetrios Marantis, Deputy Prime Minister Hai and 
other senior Vietnamese officials were enthusiastic and positive 
about the rapid development of bilateral trade relations.  The 
Vietnamese officials pledged to agree on dates for Bilateral 
Investment Treaty (BIT) discussions, urged that Vietnamese exports 
of basa and tra fish not be covered under a proposed new U.S. 
regulatory regime for catfish, noted the partial opening of the 
Vietnamese beef market, and requested information on their request 
for GSP status.  DUSTR Marantis said that the United States strongly 
shared the interest in continuing to pursue expanded trade 
opportunities through the Trade and Investment Framework Agreement 
(TIFA) and BIT talks.  The U.S. was reviewing possible participation 
in Trans-Pacific Partnership (TPP) negotiations but had made no 
decisions.  Marantis stated that support for trade in the U.S. had 
weakened, and in this new atmosphere, the GVN's recent negative 
human rights actions could endanger further development of bilateral 
trade ties.  Marantis said that GSP would require improvement of 
labor rights and IPR protection in Vietnam and emphasized that the 
GVN's proposed partial opening of its beef market was not 
acceptable.  End summary. 
 
¶2. (U) During his July 16-17 visit to Hanoi, DUSTR Marantis met with 
Deputy Prime Minister Hoang Trung Hai, Trade and Industry Minister 
Vu Huy Hoang, Planning and Investment Vice Minister Coa Viet Sinh, 
and Agriculture and Rural Development Vice Minister Bui Ba Bong.  He 
also met with U.S. business representatives and gave a trade speech 
to a group of university students.  In the meeting with DPM Hai, 
Ambassador Michalak, U.S. Ambassador to Vietnam, raised the pending 
$4 billion Chevron gas-to-power project which had stalled. 
Subsequently, Chevron reported that agreement was reached.  The 
signing ceremony for the project occurred on July 23. 
 
SHARED ENTHUSIASM FOR BILATERAL TRADE PROGRESS 
--------------------------------------------- 
 
¶3. (SBU) In his meetings, DUSTR Marantis lauded the rapid and broad 
progress of bilateral trade ties based on the Bilateral Trade 
Agreement (BTA) and regular discussions under the Trade and 
Investment Framework Agreement (TIFA).  He encouraged his 
interlocutors to build on this success and move the trade 
relationship forward even more.  Marantis noted that one mechanism 
was ongoing discussions on a BIT.  He urged the GVN to respond to 
U.S. proposals for dates for additional rounds of talks in September 
and later in the year.  The Vietnamese officials said they shared 
the enthusiasm for the growing trade relationship and TIFA talks and 
agreed to work with the U.S. side to set dates for BIT discussions. 
 
 
EARLY WARNING ON HUMAN RIGHTS 
----------------------------- 
 
¶4. (SBU) DUSTR Marantis said that Vietnam's recent negative actions 
on human rights could present problems for bilateral trade ties. 
Support for trade in the U.S. had waned, as demonstrated by the 
draft Trade Act recently signed by 107 Congressman, and unless 
Vietnam improved its human rights record, it would become more 
difficult to continue to advance our bilateral trade agenda.  The 
Vietnamese responded that the GVN respects human rights and each 
country has its own characteristics.  Human rights should not become 
an impediment to progress on trade.  DPM Hai stated that there were 
other channels to address human rights issues.  The Trade Act was 
not good for the U.S. image. 
 
U.S. REVIEWING TPP 
------------------ 
 
¶5. (SBU) Marantis told his Vietnamese counterparts that the U.S. was 
reviewing its participation in the TPP.  USTR Ronald Kirk would be 
attending the upcoming Singapore meeting on the TPP.  Vietnamese 
officials responded that they appreciated the chance to participate 
in the TPP as an associate member and were working hard to prepare 
for negotiations. 
 
IPR CRIMINALIZATION NEEDS MORE WORK FOR WTO COMPLIANCE 
----------------------------------------- 
 
 
HANOI 00000703  002.2 OF 002 
 
 
¶6. (SBU) Marantis said he appreciated Vietnam's efforts on IPR 
protection, but noted that recently passed Vietnamese legislation 
that criminalized IPR violations was vague and the two sides should 
work together on the implementing regulations for the new law to 
ensure it complied with Vietnam's WTO obligations.  The Vietnamese 
responded that their aim was to comply with WTO commitments and said 
they would work with the U.S. side on the implementing regulations. 
 
 
HURDLES REMAIN IN AGRICULTURAL TRADE 
------------------------------------- 
 
¶7. (SBU) Vietnamese officials urged that Vietnamese exports of basa 
and tra fish not be covered under a proposed new U.S. regulatory 
regime for catfish.  They also asked the USG to apply the zeroing 
principle on shrimp anti-dumping cases.  DUSTR Marantis said the 
U.S. understood the importance of the basa/tra issue to Vietnam and 
would be transparent in handling the issue.  The GVN and seafood 
industry would have an opportunity to comment and the USG would work 
with Vietnam on any transition to a new rule. 
 
¶8. (SBU) Vietnamese officials noted that the GVN had offered to open 
its beef market to boneless beef over 30 months of age.  They had 
done this to fulfill commitments made at the June 2008 summit and to 
Senator Baucus.  DUSTR Marantis expressed appreciation for the GVN's 
efforts on beef but made clear that this partial market opening was 
not enough, as there is "no sound scientific basis" for Vietnam to 
not import bone-in beef over 30 months old.  The two sides would 
need to hold additional discussions.  MARD Vice Minister Bong agreed 
to this suggestion.  Marantis said the USG would respond to the 
GVN's proposal to establish an Agricultural Working Group to deal 
with agricultural issues. 
 
VIETNAM MUST IMPROVE LABOR AND IPR TO GET GSP 
------------------------------------------ 
 
¶9. (SBU) DUSTR Marantis told DPM Hai that the U.S. was prepared to 
offer GSP to Vietnam but only after Vietnam improved its labor 
standards and IPR protection.  Labor would likely be the more 
difficult issue and U.S. law required that Vietnam be "taking steps" 
to adhere to fundamental labor standards, such as freedom of 
association and collective bargaining.  DPM Hai responded that 
Vietnam was working hard to reform its labor laws and obtain GSP 
status. 
 
¶10. (SBU) The Vietnamese side requested that the U.S. Department of 
Commerce not apply CVD law in an ongoing case to Vietnamese exports 
of plastic bags.  The CVD case was dangerous to trade relations and 
the exports of both countries, especially those of Vietnam. 
Vietnamese officials also said they were working on relevant 
procedures to become an observer to the Government Procurement 
Agreement. 
 
AUSTR WEISEL REVIEWS TRADE AGENDA 
--------------------------------- 
 
¶11. (SBU) In a lengthy July 16 meeting with Vietnamese Office of the 
Government Director Bui Huy Hung, AUSTR Barbara Weisel previewed the 
issues to be raised by DUSTR Marantis the following day.  She noted 
the increasing concern about Vietnam's human rights record and said 
human rights and trade could not be separated.  Hung and Weisel also 
reviewed the status of key bilateral trade issues. 
 
¶12. (U) This telegram was cleared by USTR. 
 
MICHALAK