US embassy cable - 01HOCHIMINHCITY1221

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 001221 
 
SIPDIS 
 
USDOC FOR 3132/OIO/EAP/KELLEHER 
USDOC FOR 1431/MAC/AP/HPPHO 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, VN, BTA 
SUBJECT: VIETRADE HCMC CLAIMS SEPTEMBER 11 EVENTS HURT VIETNAM EXPORTS, WORRIES ABOUT VN COMPANIES IN US MARKET 
 
 
SUMMARY 
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                       UNCLASSIFIED 
 
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1.  IN AN OCTOBER 26 MEETING, VIETRADE HCMC DIRECTOR 
CITES DAMAGE FROM THE EVENTS OF SEPTEMBER 11 TO 
VIETNAM'S EXPORTS, NOTING THAT EXPORT GROWTH IS 
ESTIMATED AT 7% THIS YEAR, A DRAMATIC FALL FROM LAST 
YEAR'S 30% INCREASE.  ALTHOUGH LAUDING PASSAGE OF THE 
BTA, HE STATED THAT VIETNAMESE COMPANIES NEED MUCH MORE 
INFORMATION IF THEY WERE TO EXPAND INTO THE U.S. 
MARKET.  END SUMMARY 
 
EXPORTS HURT BY OSAMA BIN LADEN 
------------------------------- 
2.  IN A MEETING WITH DPO AND ECONOFF, MR. VO TA LUONG, 
THE DIRECTOR OF THE VIETNAM TRADE PROMOTION AGENCY FOR 
SOUTHERN VIETNAM, STATED THAT THE EVENTS OF SEPTEMBER 
11 HAD AN INDIRECT BUT DAMAGING IMPACT ON VIETNAM'S 
EXPORTS.  HE STATED THAT ALTHOUGH VIETNAM EXPORTED 
RELATIVELY LITTLE TO THE U.S., SHIPMENTS TO OTHER MAJOR 
MARKETS HAD BEEN AFFECTED.  HE NOTED THAT NATIONAL 
EXPORT GROWTH, WHICH HAD BEEN TARGETED AT 16% FOR THE 
YEAR, HAD, UNTIL A FEW WEEKS AGO, BEEN ESTIMATED AT 
10%.  NOW IT IS EXPECTED TO BE A MERE 7%.  THIS 
COMPARES TO LAST YEAR'S GROWTH RATE OF 30%.  ALTHOUGH 
SOME OF THIS DROP CAN BE ATTRIBUTED TO THE OVERALL 
SLOWDOWN IN THE WORLD ECONOMY, HE STATED THAT THE 
EVENTS OF SEPTEMBER 11, AND INCREASED SECURITY WORRIES 
WORLDWIDE, HAD CLEARLY MADE LIFE MORE DIFFICULT FOR 
VIETNAMESE EXPORTERS IN THE SOUTH. 
 
3.  MR. LUONG'S VIEW CORRESPONDS TO COMMENTS FROM OTHER 
OFFICIALS AND BUSINESS PEOPLE IN HCMC WHO NOTE THAT THE 
NUMBER OF TRAVELERS, TRADE MISSIONS, AND NEW BUSINESS 
                       UNCLASSIFIED 
 
PAGE 03        HO CHI  01221  01 OF 02  290950Z 
INITIATIVES IN THE HCMC AREA HAVE FALLEN NOTICEABLY 
OVER THE PAST FEW WEEKS.  ALTHOUGH VIETNAM IS CURRENTLY 
TRUMPETING ITS RATING FROM THE POLITICAL AND ECONOMIC 
RISK CONSULTANCY AS THE SAFEST PLACE TO DO BUSINESS IN 
ASIA (BASED ON A SURVEY CONDUCTED IN THE WAKE OF THE 
TERRORIST ACTS), THE EVENTS OF SEPTEMBER 11 HAVE 
CLEARLY HAD A NEGATIVE IMPACT HERE, AND LOCAL OFFICIALS 
AND BUSINESS PEOPLE KNOW IT. 
 
VIETRADE PROMOTES EXPORT AND INVESTMENT 
--------------------------------------- 
4.   THE VIETNAM TRADE PROMOTION AGENCY (VIETRADE) IS 
ONLY ABOUT A YEAR AND A HALF OLD. THE HO CHI MINH CITY 
OFFICE HAS A STAFF OF 10 PEOPLE AND IS RESPONSIBLE FOR 
MOST OF THE SOUTHERN REGION OF VIETNAM.  PART OF THE 
MINISTRY OF TRADE, IT IS RESPONSIBLE FOR STATE 
MANAGEMENT, COORDINATION, AND IMPLEMENTATION OF TRADE 
AND TRADE-RELATED INVESTMENT PROMOTION ACTIVITIES IN 
VIETNAM.  VIETRADE ORGANIZES SEMINARS, TRADE MISSIONS, 
AND ALL ASPECTS OF TRADE PROMOTION.  UNLIKE BUSINESS 
ORGANIZATIONS THAT FINANCE THROUGH FEE-BASED SERVICES 
OR MEMBERSHIP DUES, VIETRADE IS FUNDED BY THE NATIONAL 
BUDGET AND CAN DRAW UPON ITS BUDGET TO COVER THE COSTS 
OF SOME OF ITS EVENTS OR SUBSIDIZE PARTICIPATION OF 
VIETNAMESE COMPANIES. 
 
5. ITS WORK IS SIMILAR TO THE MYRIAD OF OTHER 
ORGANIZATIONS THAT ARE SET UP IN VIETNAM TO PROMOTE 
TRADE AND INVESTMENT FOR A PARTICULAR PROVINCE, CITY, 
INDUSTRIAL OR EXPORT ZONE, OR AMONG MEMBER COMPANIES. 
IT ALSO SERVES AS A GOVERNMENT-TO-GOVERNMENT CHANNEL 
                       UNCLASSIFIED 
 
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FOR FOREIGN GOVERNMENTS OR INTERNATIONAL ORGANIZATIONS 
TO WORK WITH THE GVN ON TRADE PROMOTION ACTIVITIES. 
FOR EXAMPLE, VIETRADE IS CURRENTLY WORKING WITH THE 
UNDP AND AN AGENCY OF THE SWISS GOVERNMENT ON A THREE- 
YEAR PROJECT ON DEVELOPING EXPORT MARKETS FOR SEAFOOD 
AND FOOTWEAR.  IT HAS ALSO WORKED CLOSELY WITH THE 
ASEAN-JAPAN CENTER, WHICH IS A JAPAN-FUNDED 
ORGANIZATION TO ASSIST ASEAN NATIONS IN ENTERING THE 
JAPAN MARKET. 
 
6.  VIETRADE ALSO SERVES AS AN INFORMATION RESOURCE 
WHICH GATHERS TRADE INFORMATION FROM A VARIETY OF 
SOURCES OVERSEAS AND IN VIETNAM.  LUONG NOTED TO 
CONOFFS THAT HE WOULD BE HAPPY TO FOLLOW UP DIRECTLY 
WITH ANY VIETNAMESE COMPANIES THAT CONOFFS ENCOUNTER 
WITH QUESTIONS ABOUT EXPORTING. 
 
HOW DO WE EXPORT TO THE U.S.? 
----------------------------- 
7.  LUONG STATED THAT WITH THE PASSAGE OF THE BTA THE 
VIETNAMESE BUSINESS COMMUNITY IS VERY INTERESTED IN 
INFORMATION AND ASSISTANCE ON HOW TO ENTER THE U.S. 
MARKET.  HE NOTES THAT, IN PARTICULAR, SMALL COMPANIES 
DO NOT HAVE THE EXPERTISE OR RESOURCES TO PARTICIPATE 
IN WHAT HE CHARACTERIZED AS "DISTANT U.S. MARKETS." 
CAN THE USG HELP? 
                       UNCLASSIFIED 
 
PAGE 02        HO CHI  01221  02 OF 02  290950Z 
----------------- 
8.  HE ASKED IF THE USG WOULD BE ABLE TO PROVIDE 
ASSISTANCE TO VIETNAMESE COMPANIES SEEKING TO ENTER THE 
U.S. MARKET.  DPO ADVISED THAT WHILE THE USG IS 
PLANNING TECHNICAL ASSISTANCE PROGRAMS FOR VIETNAM AND 
DIRECTLY ASSISTS U.S. EXPORTERS SEEKING TO DO BUSINESS 
WITH VIETNAM, THE GVN WOULD GENERALLY HAVE THE LEAD 
ROLE IN ASSISTING VIETNAMESE BUSINESSES HOPING TO 
EXPORT TO THE U.S.  AT THE SAME TIME, WE RECOGNIZE THE 
IMPORTANCE OF LOCAL COMPANIES BENEFITING FROM THE BTA 
AND A CLOSER U.S.-VIETNAM TRADE RELATIONSHIP.  IN THAT 
SPIRIT WE SHOULD TRY TO FIND CREATIVE WAYS TO SHARE 
INFORMATION, CONTACTS AND EXPERIENCE.  DPO POINTED TO 
THE PAST EXAMPLE OF CONGEN AND VIETRADE ORGANIZING A 
U.S. CUSTOMS SEMINAR WHICH INCLUDED PARTICIPATION OF 
VIETNAMESE COMPANIES. 
 
BIO NOTE 
-------- 
9.  MR. LUONG HAS WORKED FOR THE MINISTRY OF TRADE 
SINCE GRADUATING FROM UNIVERSITY IN MOSCOW IN 1980 WITH 
A DEGREE IN ENGLISH AND ECONOMICS.  HE HAS SERVED IN 
HCMC SINCE 1992 AND HAS HELD A LEADERSHIP POSITION FOR 
THE PAST THREE YEARS.  HE HAS HEADED UP THE HO CHI MINH 
CITY OFFICE OF VIETRADE SINCE IT WAS ESTABLISHED A YEAR 
AND A HALF AGO.  HE CONCURRENTLY HOLDS THE TITLE OF 
DEPUTY DIRECTOR GENERAL OF THE HCMC OFFICE OF THE 
MINISTRY OF TRADE.  MR. LUONG SPEAKS CONVERSATIONAL 
ENGLISH, AND EXCELLENT RUSSIAN.  HE HAS NEVER TRAVELED 
TO THE U.S. 
 
                       UNCLASSIFIED 
 
PAGE 03        HO CHI  01221  02 OF 02  290950Z 
COMMENT 
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10.  ALTHOUGH VIETRADE SEEMS FOCUSED ON MAJOR PROJECTS 
PARTNERING WITH FOREIGN FUNDERS, CONGEN WILL TRY TO 
FIND CREATIVE WAYS TO WORK WITH THE ORGANIZATION TO 
ENCOURAGE VIETNAMESE BUSINESS TO TAKE ADVANTAGE OF THE 
BTA. HIS CONCERNS ABOUT WHETHER OR NOT VIETNAMESE 
COMPANIES ARE READY TO COMPETE IN THE U.S. MARKET IS AN 
OFT HEARD REFRAIN HERE. 
 
YAMAUCHI 
 
                       UNCLASSIFIED