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Cablegate: Following Up with Vietnam On Taft and Environmental Goods

VZCZCXRO6636
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHHI #0312/01 0770949
ZNR UUUUU ZZH
P 170949Z MAR 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC PRIORITY 7426
INFO RUEHHM/AMCONSUL HO CHI MINH 4460
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHAM/AMEMBASSY AMMAN 0034
RUEHAK/AMEMBASSY ANKARA 0069
RUEHBK/AMEMBASSY BANGKOK 6256
RUEHBJ/AMEMBASSY BEIJING 7087
RUEHSW/AMEMBASSY BERN 0066
RUEHEG/AMEMBASSY CAIRO 0017
RUEHBY/AMEMBASSY CANBERRA 2368
RUEHLM/AMEMBASSY COLOMBO 0052
RUEHKA/AMEMBASSY DHAKA 0066
RUEHGT/AMEMBASSY GUATEMALA 0021
RUEHIL/AMEMBASSY ISLAMABAD 0100
RUEHJA/AMEMBASSY JAKARTA 0691
RUEHMU/AMEMBASSY MANAGUA 0002
RUEHML/AMEMBASSY MANILA 2579
RUEHME/AMEMBASSY MEXICO 0045
RUEHNE/AMEMBASSY NEW DELHI 0402
RUEHNY/AMEMBASSY OSLO 0063
RUEHOT/AMEMBASSY OTTAWA 0520
RUEHPF/AMEMBASSY PHNOM PENH 3739
RUEHPL/AMEMBASSY PORT LOUIS 0002
RUEHRB/AMEMBASSY RABAT 0008
RUEHSJ/AMEMBASSY SAN JOSE 0025
RUEHSN/AMEMBASSY SAN SALVADOR 0007
RUEHDG/AMEMBASSY SANTO DOMINGO 0007
RUEHTG/AMEMBASSY TEGUCIGALPA 0006
RUEHTU/AMEMBASSY TUNIS 0027
RUEHWL/AMEMBASSY WELLINGTON 0285
RUEHGV/USMISSION GENEVA 1235
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 HANOI 000312

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, EBB/TPP/MTA/RHEE AND SCHEIBE
USTR FOR NORTON, WEISS, BISBEE
COMMERCE FOR BRZYTWA

E.O. 12958: N/A
TAGS: ETRD WTRO ECON VM
SUBJECT: FOLLOWING UP WITH VIETNAM ON TAFT AND ENVIRONMENTAL GOODS
PROPOSALS

REF: A) HANOI 155 ("Demarche to Vietnam on TAFT Goods Proposal);
B) STATE 12905 ("WTO Demarche Request")

HANOI 00000312 001.2 OF 002


1. (SBU) On March 13, acting Econ Counselor followed up with the
Government of Vietnam (GVN) on the proposal on labeling for textile,
apparel, footwear, and travel (TAFT) goods, in a joint demarche with
his EU counterpart in Hanoi. The GVN said that it "warmly welcomed"
the proposal and "shares it objectives," but that there was no GVN
consensus to co-sponsor it.

2. (SBU) The Deputy Director General of the Multilateral Trade
Office of the Ministry of Industry and Trade (MOIT), Luong Hoang
Thai, said that the main opposition to having Vietnam co-sponsor the
proposal were "the TBT people" on his side, who are uncomfortable
with setting a precedent for "changing" the TBT through an
understanding like the TAFT proposal. Although he declined to name
the "TBT people" in question, at one point he seemed to point to the
Chief Negotiator of the Vietnamese side as one who remained
unconvinced.

3. (SBU) Thai, who was accompanied by Nguyen Hong Duong, Deputy
Director of the MOIT's Americas Department (and to whom we delivered
our first demarche, REF A), acknowledged that the GATT example (REF
B) made a good case for overcoming the objections on setting a
precedent. He noted that outspoken support from other development
countries, like China, and the Vietnamese garment industry would
also make it easier for him to make the case. On the latter, he
suggested exchanges with U.S. experts who could explain the issue
better to the local garment industry.

TARIFF BARRIERS ON ENVIRONMENTAL GOODS AND SERVICES
--------------------------------------------- ---

4. (SBU) Embassy's Science and Technology Officer also joined
Embassy Econ Counselor and the EU Trade Representative on the
proposal to remove tariff barriers on environmental goods and
services under paragraph 31 (III) of the Doha Ministerial
Declaration. The Vietnamese noted a general hesitancy to consider
additional tariff cuts as the nation continued to familiarize itself
with its WTO obligations and concerns that tariff cuts were not the
proper means to address environmental issues. They were still
discussing this proposal internally, especially regarding the
technical issues and policy implications, and did not yet have a
response. The EU rep said that they were willing to consider
offering technical assistance to Vietnam to better grapple with
these issues, which the Vietnamese took into consideration.

CLARIFYING COMMENTS ON EXPORT TAXES
-----------------------------------

5. (SBU) The EU Trade Representative also raised his concerns at
comments attributed to the Vietnamese delegation in Geneva to the
effect that Vietnam not only was against phasing out export taxes

HANOI 00000312 002.2 OF 002


but also against notifying them. The EU rep said that this went
contrary to the understanding on excluding recently-acceded members
(VRAM) outside the obligations, and that if the comments reflected
the Vietnamese position, "then we may have to revisit this
understanding." Thai and Duong both attributed the comments to a
"misunderstanding" and said that they did not reflect the Vietnamese
position, which does not oppose notification or an eventual phase
out of export taxes.

MICHALAK

3

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