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Cablegate: Vietnamese Exporters Welcome Cpsc Safety Standards Message

VZCZCXRO7771
OO RUEHDT RUEHPB
DE RUEHHM #0915/01 2770947
ZNR UUUUU ZZH
O P 030947Z OCT 08
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4997
INFO RUEHHI/AMEMBASSY HANOI PRIORITY 3352
RUEHHM/AMCONSUL HO CHI MINH CITY PRIORITY 5226
RUCPDOC/USDOC WASHDC PRIORITY 0081
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000915

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, USAID/ANE, EEB/TPP/BTA/ANA
USAID/ANE/EAA FOR FRANK DONOVAN
STATE PASS USTR FOR BISBEE
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO

E.O. 12958: N/A
TAGS: ECON ETRD PREL SOCI VM
SUBJECT: VIETNAMESE EXPORTERS WELCOME CPSC SAFETY STANDARDS MESSAGE

HO CHI MIN 00000915 001.2 OF 002


Subject: (U) Vietnamese Exporters Receptive to CPSC Safety
Standards Message

1. (SBU) Consumer product exports have been a central pillar of
Vietnam's economic development success story -- in 2007 Vietnam
was the 31st largest source of imports to the United States and
the surprising leader in some products, candles for instance.
So when Consumer Product Safety Commission Chair Nancy Nord came
to Vietnam to explain new U.S. product safety regulations, local
businesses turned out in force. Company managers said they are
eager to understand and meet new U.S. safety regulations, in
order to expand their exports to the United States. Their
enthusiasm is creating a new market for
internationally-certified product testing services in Vietnam
and also slowly beginning the process of improving the safety of
consumer product in Vietnam. End summary.

Exporters Flock to CPSC Seminars
--------------------------------
2. (U) Consumer Product Safety Commission (CPSC) Chair Nancy
Nord led a series of industry seminars from September 11-12 in
Hanoi and September 15-17 industry seminars in Ho Chi Minh City
(HCMC) to educate Vietnam's export sector about new U.S.
consumer product safety regulations. The HCMC branches of the
Vietnam Chamber of Commerce and Industry (VCCI) and Vietnam
Textile and Apparel Association (VITAS) each played host to
CPSC, drawing 120 and 130 company representatives respectively.
Participants said they were looking to understand how the CPSC
would implement new safety requirements. Chairman Nord
explained product safety regulation in the United States,
outlining new requirements in the Consumer Product Safety
Improvement Act of 2008 ("CPSIA") including mandatory third
party testing for children's products and textile production
safety.

3. (SBU) Companies focused their questions on international
harmonization of safety standards, chain of custody and
liability, and expressed concern that new safety regulations be
implemented in a way that does not disrupt trade. [Comment:
The level of sophistication of these questions demonstrates the
Vietnamese trade experts have matured dramatically from the days
of diplomatic protests over catfish labeling or proscribed
substances in seafood. End comment.] Chairwoman Nord urged
Vietnamese producers to maintain an ongoing safety dialogue with
their U.S. importers, saying this is a proven strategy for
keeping abreast of changing safety regulations.

4. (U) The CPSC seminars were widely covered in the press, both
in trade journals and in the mainstream media. Chairwoman
Nord's speech to HCMC University of Technology faculty and
students resulted in reporting that cast proactive U.S.-Vietnam
cooperation on consumer product safety standards as crucial to
exporters and consumers, especially in light of growing worries
of the safety of products from China, Vietnam's largest source
of imports.

New Standards Improve Domestic Testing, even Quality
--------------------------------------------- -------

5. (U) Vietnamese companies recognize the need to meet
standards, even at a steep cost. One furniture factory said it
exports 80 percent of production to the European Union. To meet
safety standards the company spends over USD 50,000 each year to
air freight furniture samples to Germany for stability testing.
The result is a production process aimed at European standards,
but that provides better quality furniture for the domestic
market as well and raises the bar for its local competition.

6. (U) Another spillover effect of stronger international
product safety standards is increased demand for
internationally-accredited Vietnamese laboratories capable of
performing product safety testing. Representatives from
international product safety testing firms expect the new U.S.
requirements for independent testing of flammability and lead
content of children's products, coupled with the high costs of
international testing, will lead to more local laboratory
testing capacity because locally-based firms employing
Vietnamese technicians can offer equivalent testing services at
30 to 40 percent below international rates.

Comment:
--------
7. (SBU) The Vietnamese press is currently seized with product
safety issues -- soy sauce, unsafe helmets and tainted milk
products -- creating a receptive environment for messages on the

HO CHI MIN 00000915 002.2 OF 002


importance of ensuring product safety. The CPSC encountered
audiences and press that were engaged and approachable. This
bodes well for the Vietnamese exporters trying to successfully
assimilate the latest regulatory changes and suggests that
product safety seminars are effective tools for expanding
Vietnamese exports and ensuring the safety of U.S. consumers.
Growing concerns about the safety of Chinese imports creates a
window of opportunity for Vietnamese producers to enhance the
reputation of the 'made in Vietnam' brand and expand U.S. market
share. End comment.

8. (U) This cable was coordinated with Embassy Hanoi.
FAIRFAX

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