US embassy cable - 05HOCHIMINHCITY594

UNCLAS HO CHI MINH CITY 000594 
 
SIPDIS 
 
 
SENSITIVE 
 
STATE FOR EAP/BCLTV AND EB/TPP/BTA/ANA JBELLER 
STATE PASS USTR FOR EBRYAN AND GHICKS 
USDOC FOR 4430/MAC/ASIA/OPB/VLC/HPPHO 
GENEVA FOR USTR 
 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, PREL, PGOV, VM, WTRO, WTO 
SUBJECT: VIETNAM BUSINESS FORUM: WTO AND ENTERPRISE CONCERNS 
 
REF:  Hanoi 1285 
 
1. (SBU) SUMMARY: Vietnamese and foreign business leaders 
highlighted the continued need for infrastructure development and 
legal reform at the Vietnam Business Forum, the biannual meeting 
between the business community and the GVN.  Deputy Prime Minister 
Vu Khoan, who led the GVN's delegation to the Forum, appealed to 
members of the diplomatic corps and donor community to remember 
Vietnam is a poor country "at a low level of development" that 
seeks to enter the WTO as soon as possible.  The GVN has 
resurrected an old message in an attempt to accelerate its WTO 
bid.  END SUMMARY. 
 
2. (U) The 16th Vietnam Business Forum (VBF), organized by the 
Ministry of Planning and Investment (MPI) and the International 
Finance Corporation (IFC), was held in Ho Chi Minh City June 1. 
Participants in the half-day session discussed the climate for 
business in Vietnam, competitiveness, and new legislation, 
including updates on the Common Investment, Unified Enterprise, 
Competition, Anti-Corruption and Land Laws. 
 
3. (U) A key area of concern for both business and the GVN is 
infrastructure development, particularly power, ports and 
transportation and telecommunications.  DPM Vu Khoan in his 
opening remarks noted that power shortages resulting from drought 
in northern and central Vietnam were "acts of God" that could, 
among other factors, affect Vietnam's ability to reach its 2005 
target economic growth rate of 8.5 percent.  HCMC business leaders 
reported that the city's ports would reach capacity within the 
next two years, and they urged the GVN to accelerate plans to 
develop a deep-water port in neighboring Ba Ria-Vung Tau province. 
(septel) 
 
4.  (U) Business leaders also urged the GVN to make further 
progress on transparency and legal reform.  VBF working groups 
studying draft laws highlighted inconsistencies between the 
investment and enterprise laws and implementation problems with 
the new land law.  Several business representatives noted 
continued difficulties with Vietnam's cumbersome licensing and 
registration procedures, particularly the reliance on notary 
publics to evaluate business documents. 
 
5.  (SBU) In his opening and closing remarks, the DPM focused on 
Vietnam's accession to the WTO.  He made such a positive statement 
about progress in the U.S.-Vietnam bilateral market access 
negotiations that the European Trade Counselor asked ECON/C when 
the United States was closing out.  The DPM also asked for the 
international community's support for Vietnam's WTO bid, 
requesting diplomats and donors to "influence negotiators to be 
more flexible" in their meetings with Vietnam on WTO accession, 
since Vietnam was still a poor, developing nation. 
 
6. (SBU) COMMENT:  The VBF is the chief formal occasion in the 
year when the foreign and domestic business communities can raise 
issues of concern with a Deputy Prime Minister and other senior 
GVN officials present.  (As with all such events, it is the 
ongoing preparatory process made up of a series of joint GVN- 
business committees that does the real work of the Forum.)  While 
dialogue was rather stilted due to the large number of 
participants, the VBF was another opportunity to reinforce 
messages for the government on transparency, legal reform and 
business climate.  We were surprised to hear the DPM resurrect the 
"poor, developing country" card and seek leniency from negotiators 
vis--vis the WTO at the VBF and at a meeting with about 40 
members of the American Chamber of Commerce immediately afterward. 
This message was echoed to the Embassy almost simultaneously 
(reftel.) Ho Chi Minh City AmCham members did not endorse the 
DPM's request for sympathy.  One U.S. businessman told the DPM 
that without improved market access, more U.S. firms will not come 
to invest or trade with Vietnam. 
 
WINNICK 
 
 
NNNN