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Cablegate: Vietnam: Follow Up to Sixth Wto Working Party

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

UNCLAS SECTION 01 OF 03 HANOI 001439

SIPDIS

SENSITIVE

STATE PASS USTR FOR EBRYAN
TREASURY FOR OASIA
USDA FOR FAS/ITP/SHIEKH AND HUYNH
USDOC FOR 6500 AND 4431/MAC/AP/OKSA/VLC/HPPHO

E.O. 12958: N/A
TAGS: ETRD VM WTO BTA
SUBJECT: VIETNAM: FOLLOW UP TO SIXTH WTO WORKING PARTY


SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY

1. (SBU) Summary: Vietnam heard a consistent message at
its Sixth WTO Working Party session in May regarding the
need to make a "quantum leap" in it's approach to WTO
accession but is interpreting that message in various ways.
Publicly, GVN officials gave themselves a big pat on the
back for the positive results of the WP6 and a number of
bilateral negotiations, which was distinctly different from
the readout of the Members States and the Secretariat.
Following the WP6, the World Bank sponsored a 4-day seminar
on Vietnam's WTO accession, which included speakers such as
the chief WTO Negotiators for China and Cambodia.
Privately, GVN officials have complained that the U.S.
statement was "harsh" and question whether the U.S.
administration is changing its position of supporting WTO
accession for Vietnam. Additionally, some GVN officials are
questioning whether the U.S. is "ready" to begin bilateral
talks. Embassy has reiterated to GVN that the timing of
Vietnam's WTO accession is completely in its own hands, the
U.S. position of support has not changed, and that the U.S.
will be ready for bilateral talks when Vietnam is ready to
table a serious proposal for discussion. Embassy is working
with other like-minded Embassy colleagues to host
roundtables with key GVN officials on priority accession
issues to help the Vietnamese better prepare themselves for
the next working party. End Summary.

2. (SBU) Following the Sixth WTO Working Party on Vietnam
Accession in Geneva in May, the GVN's public statements have
been routinely positive about the progress made by Vietnam
during the multilateral and bilateral talks. At a UNDP-
sponsored event at the end of May, Minister of Trade Tuyen
announced that the WP6 made progress. He said most Member
countries have praised Vietnam's preparation for the meeting
and most have accepted Vietnam's services offer, although
they have also asked for more progress on tariffs.
Responding to the Ambassador's question regarding provision
of an applied tariff schedule, Tuyen noted that there was no
such requirement in the WTO and regardless, Vietnam is in
the process of revising its tariff schedule so a final will
not be available until after the ASEAN/AFTA revisions are
finished sometime this summer.

3. (SBU) Regarding next steps, Tuyen said the GVN will
review the results of WP6 and identify next steps to ensure
accession by 2005. He noted that in order to achieve this
goal, Vietnam will not be able to have bilats with each
country that has requested them. Instead, Vietnam's
negotiators will focus on the "most important" countries and
perhaps combine some negotiations, for example, hold bilats
with New Zealand and Australia at the same time. (Note: The
Australian Ambassador was a bit surprised by that statement
and quickly discounted the notion.) Tuyen noted that
Vietnam had time for three more bilateral rounds and said
that Vietnam does not want to "multilateralize a bilateral
agreement" (read the U.S-Vietnam Bilateral Trade Agreement);
rather, countries will have to "negotiate up to it." (Note:
He didn't comment on the fact that the BTA is a floor for
the U.S. in this process, not a ceiling.) In a separate
conversation with our Australian, New Zealand and EU
colleagues, we heard a very different version of events of
the WP6, more along the lines of our read out. The
Australians in particular told us that they were so
dissatisfied with their services offer that they refused to
negotiate on it.

4. (SBU) Earlier this week, we met with Ministry of Finance
Dep. Director for International Cooperation Ha Huy Tuan, who
is now wearing two hats - a MOT hat for WTO accession and
then his full-time MOF hat. Tuan told us that the GVN was
concerned about the "harsh" tone of the U.S. statement in
Geneva and questioned whether there had been a change in the
Administration's position toward WTO membership for Vietnam.
Additionally, he noted that some GVN officials felt that the
U.S. was "not ready" to talk to Vietnam bilaterally about
WTO accession.

5. (SBU) Econoff noted that the U.S. had not said anything
in Geneva that we hadn't said to the GVN directly on
numerous occasions. Econ Counselor reiterated that the
Administration's position had not changed - we support
Vietnam's accession on commercial terms. She noted that it
appeared that Vietnam is still looking for a special deal on
accession but asked Tuan why should WTO members give a
special deal to Vietnam, when we did not do that for China
or Cambodia or any other applicant for membership. The U.S.
(as well as other members of the WTO) have been clear in
their support for Vietnam's WTO accession (and have spent
millions in technical assistance) but are not going to make
a "special case" in order to see that this happens.
Additionally, Econcouns noted that Vietnam should not
question the U.S. commitment to Vietnam; under the terms of
the BTA, Vietnam already has MFN access to the U.S. goods
market.

6. (SBU) Regarding bilateral talks, Econcouns noted she
could not commit for the U.S. WTO negotiator but thought
that the earliest the U.S. would be able to schedule talks
with Vietnam would be after the Cancun Ministerial, sometime
in fall/early winter, given time and budgetary constraints.
However, she noted that the U.S.'s ability to sit down will
be dependent on the GVN demonstrating it is ready to engage
in serious negotiations. For goods negotiations this would,
at an absolute minimum, require Vietnam to provide an
applied tariff schedule, which we had been requesting for
quite some time. For both goods and services, the U.S. has
been clear that we would be looking for BTA-Plus - that is,
more and better access than granted under the BTA. She noted
that it would be hard to consider anything less as a serious
offer from Vietnam.

7. (SBU) Tuan noted that the GVN is still struggling
internally to find a way to dedicate adequate resources
toward WTO negotiations without depleting key people from
its ministries. Most of the GVN's experienced negotiators -
the key people who worked on BTA negotiations - are
generally still in place (except at MOT which has undergone
substantial personnel changes over the last year or so).
However, the GVN cannot afford to have these people dedicate
themselves entirely to WTO accession; it would be
unrealistic given all the other issues the GVN is trying to
deal with, Tuan concluded.

8. (SBU) Finally, Tuan questioned slightly rhetorically if
the U.S. would rather Vietnam be able to actually implement
the commitments it makes or just make the commitments?
EconCouns agreed that was an important question but
cautioned that the GVN should be careful in using this
argument. While WTO members did not want a repeat of the
China situation, that did not mean that we would accept less
from subsequent accessions.

9. (SBU) Although the GVN may feel that the U.S. has taken
a harder tone, we are not the only ones speaking clearly on
what needs to be done. Following the Working Party meeting,
the World Bank and Vietnam's National Center for Social
Sciences and Humanities (a think tank under the Ministry of
Foreign Affairs) hosted a seminar on "Vietnam: Readiness
for WTO Accession" June 3-4 in Hanoi and 6-7 in HCMC.
(Note: the two days in Hanoi included heavy participation
at the Ministerial and Vice Ministerial level, the HCMC
version emphasized business sector participation.)

10. (SBU) The highlight of the conference were
presentations by WTO negotiators from China (Long Yongtu,
former chief negotiator for China's WTO accession) and
Cambodia (Sok Siphana, Secretary of State, Ministry of
Commerce of Cambodia). Both presenters were clearly "on
message" - making all the right points on how Vietnam should
approach WTO accession. Both officials emphasized that
strong high-level political support is critical to the
process. Long Yongtu encouraged Vietnam to view WTO
accession as a means for promoting its own domestic reform
agenda rather than an end in itself. Sok Siphana contrasted
the WTO with the UN and noted that countries acceding to the
WTO "won't find sympathy or apologies from existing members.
Acceding countries simply have to negotiate." Siphana
concluded that, at the end of the day, if Vietnam does not
make the commitments expected of it by WTO members, it just
will not accede.
11. In an effort to develop some post-Geneva momentum in
Hanoi, Embassy is working with other like-minded Embassy
colleagues to host a series of monthly roundtables with key
GVN officials on priority WTO accession issues. The
discussions will be small informal sessions - each dedicated
to a separate topic (e.g. SPS and TBT inquiry points, TRIPs,
trading rights). The ultimate objective is to help the
Vietnamese better prepare themselves for a (significantly
more substantive) seventh working party.
PORTER

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