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Cablegate: Garment Industry Relieved by Usdoc Monitoring Announcement

VZCZCXRO2874
OO RUEHDT RUEHPB
DE RUEHHM #1109 3031248
ZNR UUUUU ZZH
O P 301248Z OCT 07
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3293
RUCPDOC/USDOC WASHDC IMMEDIATE 0045
INFO RUEHHI/AMEMBASSY HANOI PRIORITY 2272
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE
RUEHHM/AMCONSUL HO CHI MINH CITY 3506

UNCLAS HO CHI MINH CITY 001109

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/MLS AND EEB/TPP/BTA/ANA
STATE PASS TO USTR DBISBEE
COMMERCE FOR 4431/MAC/AP/OPB/HPPO

E.O. 12958: N/A
TAGS: ECON EIND ETRD PREL VM
SUBJECT: GARMENT INDUSTRY RELIEVED BY USDOC MONITORING ANNOUNCEMENT
BUT CONCERNS REMAIN

REF: HCMC 995

1. (U) Summary. Vietnam's textile and garment industry
breathed a collective sigh of relief on October 27 at the
Department of Commerce's (DOC) announcement that there is no
evidence of Vietnamese garment dumping in the United States.
The Vietnamese media lauded the finding, bristling slightly that
the program will nevertheless continue. Manufacturers welcomed
the news and credited Assistant Secretary for Import
Administration David Spooner with listening to their concerns
during his September 24-26 visit to Vietnam. Buyers expressed
increasing confidence in Vietnam as a source of products but
called on the United States to narrow the number of lines under
review. End summary.

Media Plays it Straight
-----------------------------
2. (U) In Hanoi and HCMC the media was straight-forward in
conveying the October 26 decision with virtually every major
newspaper reporting the announcement and quoting the press
release verbatim -- "After a fair and objective analysis of the
data, Commerce found insufficient evidence of dumping from
Vietnam." The more elaborate reports repeated familiar
complaints that the monitoring process is inherently unfair and
discriminatory and called for an end to the monitoring
mechanism. Chairman of the Vietnam Textile and Apparel
Association (VITAS) Le Quoc An added that VITAS continues to
oppose the monitoring mechanism and ask the United States to
narrow the scale or end the monitoring mechanism. [Note: Press
clips will be sent separately by email to the Desk. End note.]

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Privately, Manufacturers Delighted
-------------------------------
3. (SBU) VITAS Director of Foreign Affairs Pham Gia Hung told
the Consulate that Vietnam's textile and garment industry warmly
welcomes the decision and thanked the United States Government
for the chance to provide input during Assistant Secretary
Spooner's September 24-25 visit to HCMC. The industry now feels
more confident about the investments they have made in
production capacity. A delegation of twenty buyers from the
International Apparel Federation told VITAS on October 29 that
the DOC announcement clarifies Vietnam's situation but they
stopped short increasing orders during this visit. All eyes now
turn to the planned visit of Secretary of Commerce Gutierrez,
with the industry hoping to press the Department to end the
monitoring program altogether.

Buyers Still Looking for More Clarity
--------------------------------
4. (SBU) U.S. buyers were more restrained, emphasizing that
the monitoring program will continue through the end of the
administration. The basic threat of a self-initiated
antidumping action remains and buyers would also like to see the
number of lines subject to monitoring narrow. As it stands, the
Government of Vietnam will need to continue to keep a close eye
on the rate of growth of garment exports to the United States
through the end of the administration. That will continue to
create uncertainty, the buyers tell us.

Comment:
------------
5. (SBU) Since it was announced last year, Vietnam has
insisted that the apparel import monitoring program is among the
biggest irritants in our bilateral trading relationship. The
October 26 announcement reduces tension but does not take the
issue off the table, so senior U.S. officials can expect to hear
more from their GVN interlocutors. We will watch closely in
coming months to see if this announcement leads to an increase
in orders or shift in export trends. End comment.

FAIRFAX

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