US embassy cable - 05HANOI568

UNCLAS SECTION 01 OF 03 HANOI 000568 
 
SIPDIS 
 
SENSITIVE 
 
STATE PLEASE PASS TO USTR EBRYAN, GHICKS 
STATE ALSO FOR E, EB AND EAP/BCLTV 
STATE PASS USAID FOR CHAPLIN/ANE 
USDOC FOR 4430/MAC/ASIA/OPB/VLC/HPPHO 
GENEVA FOR USTR 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, VM, Domestic Politics, WTO 
SUBJECT: Vietnam: STAR Experts Discuss GVN WTO Preparations 
 
 
1.  This cable contains sensitive information and should not 
be posted on the internet. 
 
2. (SBU) Summary:  On March 3, the Ambassador hosted a lunch 
with staff and consultants of the USAID-funded Support for 
Trade AcceleRation (STAR) Project and representatives of the 
European Union to discuss the status of GVN efforts to 
accede to the WTO.  Participants noted GVN officials may be 
trying to dampen public expectations regarding Vietnam's 
ability to accede in 2005; it remains difficult to assess 
what role the National Assembly will have in facilitating 
passage of WTO-related legislation; and an omnibus bill 
would provide a useful mechanism to fill in "gaps" not 
covered by legislation already on track to be approved in 
2005.  The Ambassador and EU Ambassador Markus Cornaro 
agreed to explore a coordinated approach to the GVN on the 
legislative requirements for WTO accession.  Septel will 
provide an update on the specific technical assistance STAR 
is providing on WTO-related legislation.  End Summary. 
 
 
3. (U) On March 3, the Ambassador hosted a lunch with staff 
and consultants of the USAID-funded Support for Trade 
AcceleRation (STAR) Project and representatives of the 
European Union to discuss the status of GVN efforts to 
accede to the WTO.  The EU Ambassador to Vietnam Markus 
Cornaro, EU Trade Counselor, Econ/C, USAID Country Manager 
and Econoff (notetaker) also attended the lunch. 
 
Internal Debate 
--------------- 
 
4. (SBU) Even as GVN officials push forward with WTO 
bilateral negotiations and passage of WTO-related 
legislation, GVN officials are taking steps to dampen public 
expectations regarding the possibility of accession in 2005. 
EU Ambassador Cornaro noted that the GVN has been very 
careful in recent public statements not to make accession in 
2005 a make or break issue for the Government.  GVN 
officials have tended to say that Vietnam will accede "soon" 
rather than "in 2005" in recent public statements.  More 
explicitly, on March 1, Minister of Trade Truong Dinh Tuyen 
was quoted in the press as saying that WTO negotiations have 
been "tougher than Vietnam expected" and accession by the 
end the year is "almost unattainable" for Vietnam. 
 
5. (SBU) According to to the STAR Project, the GVN and 
National Assembly (NA) leaders called a meeting on March 4 
specifically to discuss whether it is still feasible for the 
GVN to meet its December 2005 deadline for WTO accession, 
and if so, how to finish all of the necessary legislation. 
The hastily arranged meeting reflects the GVN's growing 
unease about its ability to accede in 2005 as well as its 
recognition of the need for greater coordination between the 
Government and the NA on passage of legislation.  (Note: 
MOT's chief WTO negotiator Tran Quoc Khanh had previously 
confirmed this meeting to Econ Counselor. Post will report 
septel on its outcome.  End Note.)  Ambassador Michael 
Samuels, President of Samuels Associates International and a 
former U.S. Ambassador to the GATT (and a STAR consultant), 
opined that, based on his discussions with GVN officials the 
last two weeks in Hanoi and HCMC, he believes accession in 
2005 is still "possible," but not "probable."  Political 
decisions still have to be made and this will be difficult 
for the GVN to do quickly, he explained. 
 
Role of the National Assembly 
----------------------------- 
 
6. (SBU) Ambassador Samuels emphasized that it is still not 
clear what impact an increasingly more "activist" NA will 
have on the passage of legislation.  The NA committees 
tasked with oversight of key WTO legislation appear more 
inclined than in the past to make significant changes to 
drafts submitted by GVN drafting teams, he noted. Recently 
the Law Committee made a number of changes to the draft 
Civil Code submitted by the Ministry of Justice (MOJ). 
These changes have weakened the draft of the law and STAR 
consultants and the MOJ drafters are seeking opportunities 
to reverse them.  In addition, coordination between 
individual NA committees can be "tricky," complicating 
efforts to ensure provisions on related laws overseen by 
different committees do not contradict each other.  For 
example, while the Law Committee is handling the Civil Code, 
the Committee on Economics and Budgetary Affairs (CEBA) is 
overseeing revisions to the Commercial Law.  Together these 
two laws will establish the framework for commercial 
transactions in Vietnam and it is important that the drafts 
complement each other.  STAR has worked to develop joint 
programs with these two committees to improve coordination 
on the drafts. 
 
7. (SBU) According to the STAR Project team, it is still not 
clear which NA committee will control the WTO legislative 
process.  The Committee on Foreign Affairs was critical for 
passage of the Bilateral Trade Agreement and will likely 
have a role in WTO as well.  (Note: This committee is 
overseeing passage of the new Law on International Treaties, 
which will govern how Vietnam ratifies WTO accession.  End 
Note.)  However, the Law Committee (one of the most 
conservative NA committees) is responsible for a number of 
key pieces of legislation and will clearly have an important 
role in the process. 
 
Need for Omnibus Bill 
--------------------- 
 
8. (SBU) As its self-imposed December 2005 deadline for 
accession grows closer, the GVN is struggling over how to 
make the legislative process more efficient.  Ambassador 
Samuels reported that he had advised the GVN to look at the 
situation "pragmatically."  Use of an omnibus bill could 
significantly streamline passage of necessary rules and 
regulations.  EU Ambassador Cornaro noted that he believed 
the WTO Working Party would prefer for Vietnam to accomplish 
as much as possible in individual legislation, rather than 
resort too quickly to the use of an omnibus bill.  The STAR 
team stressed that a significant number of laws already in 
process are slated for passage by the NA in 2005.  Progress 
on these laws is moving quickly and there is domestic 
pressure to complete the reforms.  An omnibus bill might 
only be necessary to "fill in the gaps," a STAR team member 
noted. 
 
9. (SBU) Fred Burke, Managing Partner at Baker & McKenzie 
(and a STAR consultant) pointed out that meeting WTO 
requirements is not just about having laws that "look good." 
The GVN also needs to put in place effective implementing 
regulations.  The question then becomes, should the WTO 
require Vietnam to have the implementing regulations 
finished prior to accession.  If so, it could be a long time 
before Vietnam is ready for WTO, Burke stressed. 
 
Drafts 
------- 
 
10. (SBU) Ambassador Samuels noted that STAR has been 
"bombarding" the GVN with the message that they need to 
begin sending drafts to the Working Party (WP) for review. 
However, he added, the decision to share early drafts with 
the WP invokes questions of sovereignty that the GVN is 
still struggling to resolve internally.  The STAR team 
pointed out that the GVN has posted many draft laws in 
Vietnamese on the Vietnam Chamber of Commerce and Industry's 
(VCCI) website for comment and that STAR has done unofficial 
translations of many of these.  However, the GVN does not 
appear to have formal translations of the laws ready for 
submission to the WP.  Participants in the luncheon agreed 
that a visit by WTO staff to Vietnam soon would be very 
useful to spur GVN efforts in this area. 
 
Diplomatic Efforts 
------------------ 
 
11. (SBU) Pondering the question of how WTO members could 
better help facilitate Vietnam's accession efforts, the 
Ambassador said that the proposed visit of a senior GVN 
official to the United States this summer would likely serve 
as a "catalyst" to accelerate Vietnam's accession.  However, 
although the GVN would like to conclude a bilateral 
agreement as a "deliverable" for the visit, there is a limit 
to how much leverage the visit will provide.  The Ambassador 
and EU Ambassador Cornaro both emphasized the need for a 
unified voice on WTO with the GVN.  Ambassador Cornaro said 
it would be better to coordinate the message as "friends of 
Vietnam."  The Ambassador noted that he wants to ensure that 
the GVN does not view the United States as the only obstacle 
to accession.  He and Ambassador Cornaro agreed to explore a 
coordinated approach to the GVN on the legislative 
requirements for WTO accession. 
 
MARINE