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Cablegate: Vietnam: Wto Legislative Strategy Still Unclear

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





E.O. 12958: N/A
SUBJECT: VIETNAM: WTO Legislative Strategy Still Unclear


1. (SBU) Summary: During a visit to Hanoi January 28-31,
Deputy Assistant USTR for Southeast Asia and the Pacific,
Elena Bryan and USPTO Attorney-Advisor Jennie Ness told key
GVN officials and the National Assembly (NA) that timely
passage of legislation implementing WTO obligations is a
pressing issue for Vietnam's accession. DAUSTR Bryan also
reminded GVN counterparts that the GVN must submit draft
legislation to the WTO Working Party (WP) for review before
the NA finalizes the legislation. Additionally, Bryan
reminded GVN officials that a good record on implementation
of the U.S. - Vietnam Bilateral Trade Agreement (BTA) will
be an important element of Congressional consideration of
Permanent Normal Trade Relations (PNTR) for Vietnam. GVN
officials indicated they are still debating internally how
to complete all of the legislation required for WTO
accession. A Vice Chairman of the Law Committee of the NA
said he does not think the NA has enough time to pass all
the necessary legislation. The NA is considering using a
new Law on International Treaties to make some of the WTO
obligations self-executing. End Summary.

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2. (U) DAUSTR Bryan and Ms. Ness visited Hanoi January 28 to
January 31. The delegation, accompanied by Econoffs, met
with officials from the Ministry of Finance (MOF), the
National Office of Intellectual Property (NOIP), the
Economic Police Department (under the Ministry of Public
Security), the Ministry of Planning and Investment (MPI),
the Office of Literary and Artistic Copyright, the Law
Committee of the National Assembly (NA), the Ministry of
Trade (MOT), the Office of the Government (OOG) and the
Ministry of Justice (MOJ).

3. (SBU) DAUSTR Bryan and Ms. Ness emphasized throughout the
visit that one of the most pressing issues for Vietnam's WTO
accession bid is timely passage of legislation implementing
the WTO agreements. They also reminded GVN officials that
the WTO Working Party (WP) wants to review all draft
legislation related to Vietnam's accession before the
legislation is submitted to the National Assembly for
approval. It is important that Vietnam begin submitting
drafts as soon as possible, DAUSTR Bryan advised. WP
members need sufficient time to review draft legislation and
provide comments. Vietnam also needs time to make changes
before any legislation is finalized.

4. (SBU) It is important that WP members have legislation to
review as soon as possible and certainly not later than the
next WP meeting, DAUSTR Bryan said. There are only a few
months until the NA's next session and there is a lot to be
done. (Note: There will be two NA sessions in 2005, May
and November. End Note.) Vietnam needs to demonstrate that
its goal of accession in 2005 is realistic. The GVN can do
this by providing draft legislation to the WTO WP for review
soon. This will help build WP members' confidence that
Vietnam will be able to finalize all the necessary
legislation by the end of the year.

5. (SBU) For the United States in particular, it is
important that progress on both bilateral market access
negotiations and the passage of legislation proceed in
tandem. USTR cannot begin consultations with the U.S.
Congress until both pieces of Vietnam's accession are ready,
DAUSTR Bryan said. When the Congress begins examining the
details of Vietnam's accession agreement, it will want to
see not only the commitments Vietnam has made on market
access, but also the details on how Vietnam is implementing
WTO rules.

GVN Still undecided on Legislative Process

6. (SBU) Ha Huy Tuan, Deputy Director of MOF's International
Cooperation Department, noted the GVN is still discussing
internally how it will meet WTO legislative requirements.
At a meeting held after the 9th WP in December, Deputy Prime
Minister Vu Khoan assigned MOT and MOJ to take the lead on
drafting a legislative plan for the Prime Minister. The DPM
also instructed the ministries to work closely with the
National Assembly on the legislative schedule. According to
Tuan, the GVN is considering two options: it will either
closely follow the legislative action plan it has already
submitted to the WTO or it will construct a "package deal"
with the National Assembly (e.g. an omnibus bill that amends
multiple laws for compliance with WTO obligations). Tuan
said he believes an omnibus bill is "highly possible."
(Note: According to MOJ, the only other ministry to mention
use of an omnibus bill, the GVN is considering a project to
"further study" the idea. End note.)

7. (SBU) Tuan noted that one of the difficulties the GVN
faces in completing legislation is how to deal with details
that are still under negotiation. Although WTO rules are
clear, other issues such as market access are still open, he
said. DAUSTR Bryan suggested that the GVN could draft its
legislation to include authority for the Prime Minister to
implement final tariff levels and other market access
components based upon Vietnam's final WTO schedule. Tuan
responded he did not believe the GVN's system could
accommodate this method. Rather, he thought the GVN would
construct the legislation to allow Vietnam's international
agreements to supersede domestic law. With this method,
once the WTO agreement is in place, domestic law would be
adjusted automatically, he said. DAUSTR Bryan explained
that there should not be discrepancies between Vietnam's
international agreements and its domestic laws.

National Assembly on Different Track

8. (SBU) Dr. Phan Trung Ly, Vice Chairman of the National
Assembly Law Committee, told DAUSTR Bryan and Ms. Ness that
the NA is still "perplexed" about how to meet the
legislative requirements for WTO accession. Ly noted that
while the best method would be for the NA to pass specific
legislation implementing all of Vietnam's WTO obligations,
this would be a "huge job" for the NA and there is not
enough time to do it all. For this reason, the NA has
formulated its legislative agenda with a two-pronged
approach for meeting WTO obligations. The NA will continue
to pass new laws and revise existing laws as required for
WTO accession. However, Vietnam will also use its new Law
on International Treaties to implement some of its WTO
obligations. According to Dr. Ly, the International
Treaties Law, scheduled for approval by the NA in May,
elevates Vietnam's international obligations above domestic
law, in effect making Vietnam's international agreements
self-executing. The Law also contains a provision that
requires GVN ministries to draft implementing legislation
for any aspects of international agreements that are too
general for direct implementation.

9. (SBU) DAUSTR Bryan acknowledged the complexity of the
legislative issues Vietnam is facing, but expressed concern
about the National Assembly's approach to meeting WTO
requirements. The texts of many of the WTO agreements are
too general for direct implementation. For the most part,
the WTO agreements provide guidelines that must be
implemented in the domestic laws of the acceding countries;
they cannot be self-executing. WP members will want to
review drafts of the follow-on implementing regulations
before Vietnam can accede to the WTO. Lack of detailed
legislation will affect Vietnam's ability to join the WTO as
quickly as it has said it wants to.

Law on International Treaties not Primary Instrument
--------------------------------------------- -------

10. (SBU) After the NA meeting, DAUSTR Bryan expressed her
concerns regarding the NA's legislative plan in discussions
with officials from MOT, MOF, OOG and MOJ. She specifically
called attention to the fact that Vietnam needs to implement
specific WTO obligations in its domestic law and that use of
the Law on International Treaties may not accomplish that.
Mr. Hoang Phuc Hiep, Director of the International Law
Department at MOJ, clarified that the GVN would only use the
Law on International Treaties to implement WTO (and other
international obligations) in cases where domestic law does
not conflict with the WTO obligation and the WTO agreement
is specific. Hiep cited implementation of the WTO accession
protocol and dispute resolution as two possible examples
where the GVN might use this law to implement Vietnam's
obligations. DAUSTR Bryan cautioned Hiep that the GVN will
need to be very clear which WTO obligations it wants to
implement with the Law on International Treaties.

11. (SBU) Responding to DAUSTR Bryan's recommendation that
Vietnam begin submitting draft legislation to the WTO WP
soon, Hiep noted that the GVN is on track with its WTO
legislative action plan. GVN drafters are working with
international experts to prepare drafts for submission to
the WP and the NA. Most of the thirty laws included in the
plan will be submitted to the NA in May. However, Hiep
said, he was not clear whether legislation should be
submitted to the WP as each draft is finished or if all the
drafts should be submitted at once. DAUSTR Bryan advised
Hiep to submit the drafts as they are ready to ensure WP
members have time to review them.

IP Legislation - Draft possible in April

12. (SBU) Nguyen Dinh Chuong, Director of NOIP, told DAUSTR
Bryan and Ms. Ness that the NA plans to pass the new IPR Law
in November. NOIP will submit the draft law to the
Government for review soon. Once the Government releases
the draft for public comment, NOIP will send it to the WP
and bilateral partners. Chuong speculated the draft could
be submitted to the WP in April. DAUSTR Bryan noted the
importance of IPR for WTO accession and reiterated that it
is very important that the WP have time to review the draft
law. The WP will want to make sure the draft meets all WTO
requirements, including very specific obligations such as
protection of data exclusivity.


13. (SBU) The delegation also emphasized that the GVN must
remain committed to timely implementation of the BTA even as
Vietnam moves forward with WTO accession. Vietnam's record
on implementation of the BTA will be part of Congress'
consideration of Permanent Normal Trade Relations (PNTR).
Right now there are a couple of areas where BTA
implementation is lagging, DAUST Bryan noted. For example,
the GVN has not yet amended its regulations to allow U.S.
companies to establish joint ventures in value-added
telecommunications (this BTA obligation was due in December
2003), valued-added Internet services (December 2004) or
distribution services (December 2004).


14. (SBU) It is not yet possible to determine whether
Vietnam will be able to meet its own ambitious legislative
agenda in time for WTO accession in 2005. Although Vietnam
is receiving a great deal of technical assistance, capacity
and consensus building remain significant problems. Embassy
will continue to press the GVN to step up drafting schedules
and submit draft legislation to the WTO WP and to us for
review over the next few months.

15. (U) DAUSTR Bryan cleared this cable.


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