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Cablegate: New Minister of Industry and Trade Shares His Priorities

VZCZCXRO7333
RR RUEHHM
DE RUEHHI #1756/01 2781027
ZNR UUUUU ZZH
R 051027Z OCT 07
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 6475
INFO RUEHHM/AMCONSUL HO CHI MINH 3780
RUEHGV/USMISSION GENEVA 1212
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 03 HANOI 001756

SIPDIS

STATE FOR EAP/MLS
STATE PASS USTR FOR DBISBEE AND RBAE
COMMERCE FOR 4431/MAC/AP/OPB/VLC/HPPHO AND EMIKALIS
COMMERCE FOR IMPORT ADMINISTRATION SSU

SENSITIVE BUT UNCLASSIFIED
SIPDIS

E.O. 12958: N/A
TAGS: ETRD ECPS KTEX ECON WTRO KIPR VM
SUBJECT: NEW MINISTER OF INDUSTRY AND TRADE SHARES HIS PRIORITIES
WITH THE AMBASSADOR

REF: Hanoi 1731

1. (SBU) This cable contains biographical information for INR/B in
para 14.

2. (SBU) Summary: New Minister of Industry and Trade Vu Huy Hoang
and the Ambassador discussed ways to enhance bilateral trade and
investment, such as through a Bilateral Investment Treaty, GVN
approval for pending U.S. commercial deals, and implementation of
Vietnam's trade obligations. The Ambassador thanked Minister Hoang
for recent progress on several outstanding intellectual property
rights commitments and encouraged further dialogue on trading
rights. The Minister raised the U.S. apparel monitoring mechanism
and looked forward to holding a "frank and open" discussion with
visiting Assistant Secretary of Commerce David Spooner. After only
two months in his new position, the Minister demonstrated a firm
grasp of key bilateral issues and appears to be a willing and
engaged interlocutor for the U.S. Embassy. End Summary.

A TALE OF TWO MINISTRIES
------------------------

3. (SBU) In his initial courtesy call on September 25, the
Ambassador congratulated new Minister of Industry and Trade (MOIT)
Vu Huy Hoang on his appointment and solicited his views on the
merger of the former Ministries of Industry and Trade into one
organization. Minister Hoang commented that the two ministries were
merged in the 1950s, and since that time were split and have
undergone a series of organizational changes to respond to Vietnam's
needs at each stage of its economic development. The GVN decided to
combine them once again to align Vietnam's policy making with its
increasing integration into the global economy. The two former
ministries' responsibilities were closely tied to domestic
production and consumption, and through this merger MOIT can better
coordinate policy decisions in these areas while focusing
increasingly on governance issues, Hoang explained. He noted that
other ASEAN members and countries in the region have a similar
model.

THE MINISTER'S TOP PRIORITIES
-----------------------------

4. (U) The Minister stated that his top priorities in the new
position are: promoting investment, trade and industrial
development; facilitating domestic economic growth; ensuring that
the Consumer Price Index (CPI) does not rise too rapidly; focusing
additional efforts on economic integration through bilateral and
multilateral agreements; and, preparing for the restart of the World
Trade Organization's (WTO) Doha Round of negotiations. On the
latter issue, he said that Vietnam is currently reviewing two drafts
from the WTO Agriculture and Non-Agriculture Committees, and in
principle agrees with the content of each. Hoang also explained
that Vietnam hopes that long-established WTO members will not ask
new members like Vietnam to agree to commitments beyond those that
they negotiated in their own accession agreements. The Ambassador
responded that a successful conclusion to the Doha Round is
something we all hope to achieve soon.

BILATERAL INVESTMENT TIES
-------------------------

5. (SBU) Minister Hoang agreed with the Ambassador that our trade
and commercial relationship is very strong and he looks forward to
working with the Ambassador to broaden and deepen our ties.
Foremost among his bilateral priorities, the Minister said, is his
desire to see a "significant increase" in U.S. investment in
Vietnam. The Ambassador remarked that this will be important to
attract more capital, as well as to promote technology transfer and
create additional education and training opportunities.

6. (SBU) Hoang told the Ambassador that he discussed launching
exploratory talks for a Bilateral Investment Treaty (BIT) with U.S.
Trade Representative Susan Schwab during their meeting earlier in
September at the APEC Summit in Sydney. Deputy Prime
Minister/Foreign Minister Pham Gia Khiem also discussed this issue
in Sydney with Secretary Rice, he said. Hoang supports the launch
of talks to explore further investment promotion opportunities
between the two countries through a BIT.

INCREASING AND BALANCING BILATERAL TRADE
----------------------------------------

7. (U) The Ambassador pointed to the U.S.-Vietnam Bilateral Trade
Agreement (BTA), Vietnam's WTO accession, the granting of Permanent

HANOI 00001756 002 OF 003


Normal Trade Relations (PNTR) for Vietnam and the recently-signed
Trade and Investment Framework Agreement (TIFA) as signs of how
rapidly and successfully our trade relationship has developed in
recent years. Encouraging further improvement of Vietnam's
regulatory system and investment climate to broaden and deepen that
relationship is a top priority of his tenure, the Ambassador
remarked.

8. (SBU) While Vietnam has been very successful in exporting to the
United States, U.S. exports to Vietnam have been much lower, the
Ambassador said. He told the Minister that he will focus on
promoting U.S. goods and services exports during his tenure in an
effort to improve the balance in our trade relationship. One quick
and simple way to accomplish this, while also increasing U.S.
investment here, would be for Vietnam to buy Boeing aircraft and
approve licenses for U.S. companies such as AES, Gannon, Motorola
and Sikorsky, the Ambassador continued. Positive responses to these
companies' business proposals would also have social benefits for
Vietnam, including increased education and training opportunities.

9. (SBU) Minister Hoang responded that a number of Vietnamese firms
accompanied Prime Minister Dzung to New York this week in hopes of
negotiating and signing agreements with their U.S. counterparts. He
said that both governments should work to facilitate trade and
investment opportunities such as these by working mutually to remove
trade barriers and minimize burdensome regulations. Hoang noted
that in spite of the current trade imbalance, Vietnam's exports to
the United States were "small compared to other countries' exports
to the United States" and he hopes to see exports increase
significantly while he is Minister.

PROGRESS IN UPHOLDING ITS COMMITMENTS
-------------------------------------

10. (SBU) The United States is closely monitoring Vietnam's
implementation of its WTO commitments, the Ambassador said. He
thanked the Minister for his government's assistance in providing
the United States with a new draft circular on criminal remedies for
commercial scale intellectual property rights (IPR) violations. The
Office of the United States Trade Representative (USTR) is now
reviewing a translated version of the draft, he explained, and will
provide comments to the GVN drafters. The Ambassador also thanked
the GVN for its help in getting the state-owned digital terrestrial
television content provider VTC to cease illegally transmitting U.S.
broadcast content without a license. This is a "significant
achievement," he said.

11. (SBU) The Minister smiled knowingly as the Ambassador raised a
third issue - trading and distribution rights. The Ambassador
explained his understanding that USTR's Director for Southeast Asia
David Bisbee had productive discussions with MOIT officials during
his September 17-19 visit which helped provide a better
understanding of the regulation. He expressed the hope that this
dialogue will continue. Hoang reported that the Ministry has
received a number of comments from businesses and other interested
parties and is working with its GVN counterparts to take these
comments into "serious consideration."

APPAREL MONITORING MECHANISM
----------------------------

12. (SBU) The Minister raised the U.S. Department of Commerce's
apparel monitoring mechanism, referring to it as a "problem" in our
trade relationship that he hopes to see abolished. He commented
that he was looking forward to holding a "frank and open" discussion
with visiting Commerce Assistant Secretary for Import Administration
David Spooner during their September 26 meeting in Hanoi (see
Reftel). He hoped the exchange would help the two sides better
understand their respective positions on this issue. Commerce
Secretary Carlos Gutierrez's November visit will be another

SIPDIS
opportunity to discuss the mechanism, the Minister continued.

BIOGRAPHIC INFORMATION/COMMENT
------------------------------

13. (SBU) The new Minister spoke clear English in informal
conversations before and after the official meeting, but used
Vietnamese and relied on interpretation during the meeting. He
spent five years in East Germany, and speaks German well. Prior to
his appointment as Minister, Hoang served as Party General Secretary
in Lang Son Province. Before that he was Chairman of the People's
Committee in Ha Tay Province after serving as Vice Minister of
Planning and Investment. Some contacts were surprised to see Hoang
appointed as Minister because he has not worked in either the

HANOI 00001756 003 OF 003


Ministry of Trade or the Ministry of Industry. Nevertheless, the
new Minister is apparently a quick study as he demonstrated a firm
grasp of the key bilateral issues during the meeting. He has thus
far accepted all of the Embassy's meeting requests - three in the
last week - and appears to be a willing and engaged interlocutor on
bilateral trade and investment issues.

MICHALAK

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