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Cablegate: On the Eve of Deputy Prime Minister Dzung's Visit: Vinatex has High Hopes for the U.S. Market

This record is a partial extract of the original cable. The full text of the original cable is not available.

291014Z Nov 01

2001HOCHI01345 - UNCLASSIFIED

UNCLASSIFIED PTO8869

PAGE 01 HO CHI 01345 291026Z
ACTION EAP-00

INFO LOG-00 NP-00 AID-00 AMAD-00 ACQ-00 CIAE-00 CTME-00
DODE-00 ITCE-00 DS-00 EB-00 EXME-00 E-00 FBIE-00
UTED-00 VC-00 FRB-00 H-01 TEDE-00 INR-00 ITC-01
LAB-01 VCE-00 AC-01 NSAE-00 OES-01 OMB-01 OPIC-01
PM-00 ACE-00 P-00 SP-00 SSO-00 STR-00 TEST-00
TRSE-00 USIE-00 PMB-00 DSCC-00 DRL-02 G-00 NFAT-00
SAS-00 /009W
------------------44A341 291026Z /38
FM AMCONSUL HO CHI MINH CITY
TO SECSTATE WASHDC PRIORITY 5751
INFO AMEMBASSY HANOI
USDOC WASHDC

UNCLAS HO CHI MINH CITY 001345

SIPDIS

STATE FOR EAP/BCLTV (THORIN/LANGLAND); PASS TO USTR FOR
ELENA BRYAN AND CAROYL MILLER
USDOC FOR 3132/OIO/EAP/KELLEHER
USDOC FOR 1431/MAC/AP/HPPHO

E.O. 12958: N/A
TAGS: ETRD KTEX PREL VM BTA
SUBJECT: ON THE EVE OF DEPUTY PRIME MINISTER DZUNG'S VISIT: VINATEX HAS HIGH HOPES FOR THE U.S. MARKET


1. SUMMARY: THE VIETNAM TEXTILE INDUSTRY'S PUSH TO
UNCLASSIFIED

PAGE 02 HO CHI 01345 291026Z
ENTER THE U.S. MARKET HAS ALREADY BEGUN, ACCORDING TO
MR. LE QUOC AN, HEAD OF VIETNAM'S STATE-OWNED TEXTILE
ENTERPRISES (VINATEX), AND CHAIRMAN OF THE NATIONAL
TEXTILE MANUFACTURERS' ASSOCIATION (VITAS). AN WILL
ACCOMPANY DEPUTY PRIME MINISTER DZUNG'S OFFICIAL
DELEGATION TO THE U.S. NEXT MONTH. DURING HIS TIME
THERE, AN WILL FORMALLY OPEN A VINATEX OFFICE IN NEW
YORK CITY, AS WELL AS SCOUT LOCATIONS FOR A VITAS
REPRESENTATIVE OFFICE IN LOS ANGELES. HE PLANS CALLS
ON SEVERAL AMERICAN CLOTHING RETAILERS, AND SAID HIS
"DREAM TRIP" WOULD BE ONE THAT RESULTED IN CONTRACTS
FOR VINATEX. END SUMMARY.

2. ON NOVEMBER 23, THE VIETNAM TEXTILE AND APPAREL
ASSOCIATION (VITAS) AND ITS CHAIRMAN, MR. LE QUOC AN,
HOSTED A DINNER TO INTRODUCE THE TEXTILE INDUSTRY,
WHICH HAS HIGH EXPECTATIONS FOR THE U.S. MARKET. AN
ALSO HEADS VINATEX, A STATE-OWNED CORPORATION
CONTROLLING 60 TEXTILE AND GARMENT COMPANIES IN WHICH
THE GVN HOLDS A MAJORITY STAKE.

3. AN WILL TRAVEL TO THE U.S. AS PART OF THE OFFICIAL
BUSINESS DELEGATION ACCOMPANYING DEPUTY PM DZUNG IN
DECEMBER, FOR THE EXCHANGE OF LETTERS IMPLEMENTING THE
BILATERAL TRADE AGREEMENT (BTA). AN WANTS THE VISIT TO
BE MUCH MORE THAN SYMBOLIC. WHILE IN THE U.S., HE WILL
OFFICIALLY OPEN A VINATEX REPRESENTATIVE OFFICE
(ALREADY UP AND RUNNING) IN NEW YORK CITY'S GARMENT
DISTRICT. IN LOS ANGELES, HE WILL SCOUT LOCATIONS TO
ESTABLISH A REPRESENTATIVE OFFICE FOR VITAS. AN WILL
ALSO MEET WITH U.S. CLOTHING RETAILERS -- INCLUDING THE
UNCLASSIFIED

PAGE 03 HO CHI 01345 291026Z
GAP, THE LIMITED, AND SEARS. THOUGH HE CHARACTERIZED
THE CALLS AS INTRODUCTORY, HE HOPES VINATEX CAN WALK
AWAY WITH CONTRACTS FROM THIS TRIP.
AN SAID VINATEX EVENTUALLY WANTS TO COMPETE IN THE
AMERICAN MARKET WITH HIGH-END PRODUCTS, FOR NOW THEY
WILL FOCUS ON MID-RANGE, READY-TO-WEAR APPAREL.

4. VINATEX AND THE GVN EXPECT THE GARMENT INDUSTRY TO
BENEFIT QUICKLY FROM THE BTA, WITH TARIFFS FALLING TO
AS LOW AS 5 TO 6 PERCENT FROM THE CURRENT 45 TO 50
PERCENT. LOCAL NEWS REPORTS STATE THAT THE GVN EXPECTS
GARMENT EXPORTS TO THE U.S. TO REACH US$200 MILLION IN
2002. THIS YEAR THEY SHOULD REACH US$50 MILLION, WITH
US$17 MILLION COMING FROM VINATEX ALONE.

5. ALSO AT THE DINNER WAS POPULAR FASHION DESIGNER MS.
MINH HANH, WHO STARTED WITH VINATEX, BUT NOW OPERATES
HER OWN BOUTIQUE AND WORKSHOP. SHE JOKINGLY - BUT
POINTEDLY - REMARKED THAT STATE ENTERPRISES DO "NOT PAY
LIVING WAGES," WHICH WAS WHY SHE BRANCHED OUT INTO
PRIVATE ENTERPRISE. PLUS, SHE WANTED MORE QUALITY
CONTROL OVER HER DESIGNS. SHE STILL DOES SOME WORK FOR
VINATEX, BUT KEEPS THE MORE SOPHISTICATED FASHIONS FOR
HER OTHER CLIENTS. MS. SAO KIM, DEPUTY EDITOR FOR
"MOT" FASHION MAGAZINE, AGREED WITH MINH HANH'S
CRITICISMS OF QUALITY CONTROL AND LOW SALARIES.

6. COMMENT: VIETNAM'S TEXTILE INDUSTRY --
CONCENTRATED PRIMARILY IN THE SOUTH -- HAS MOVED
AGGRESSIVELY TO PREPARE FOR BTA IMPLEMENTATION. VINATEX
AND OTHER LOCAL COMPANIES ARE LOOKING FOR NEW BUSINESS
UNCLASSIFIED

PAGE 04 HO CHI 01345 291026Z
- AND FAST. AN REPEATEDLY STRESSED THAT AS PART OF THE
VIETNAMESE DELEGATION, HE WOULD "REPRESENT ALL
GARMENT/TEXTILE MANUFACTURERS, NOT JUST THE STATE-OWNED
ENTERPRISES." IF - AND IT IS A BIG IF - THE VIETNAMESE
GARMENT INDUSTRY CAN MEET THE QUALITY EXPECTATIONS OF
AMERICAN BUYERS, THEN IT DOES APPEAR READY TO TAKE OFF
UNDER THE BTA. END COMMENT. YAMAUCHI

UNCLASSIFIED

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