US embassy cable - 05HANOI2708

UNCLAS SECTION 01 OF 02 HANOI 002708 
 
SIPDIS 
 
STATE FOR EAP/MLS AND EAP/EP AND EB/TPP/BTA/ANA GOODMAN AND 
WICKMAN 
STATE PASS USTR ELENA BRYAN AND GREG HICKS 
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO 
TREASURY FOR OASIA 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON, EFIN, ETRD, EINV, VM, WTRO, APEC, WTO 
SUBJECT: APEC OFFICIAL MICHALAK'S MEETINGS AT THE MINISTRY 
OF FOREIGN AFFAIRS AND CUSTOMS BUREAU 
 
1.  (SBU) Summary:  On October 10 U.S. Senior Official for 
the Asia Pacific Economic Cooperation (APEC) Michael 
Michalak met separately with Ministry of Foreign Affairs 
(MOFA) Vice Minister Le Cong Phung and Vice General Director 
of the General Department of Customs (GDC) Vu Ngoc Anh to 
discuss bilateral issues, including World Trade Organization 
(WTO) negotiations, the upcoming export controls conference 
co-hosted by the United States and Vietnam, APEC 2005 agenda 
items, and the Government of Vietnam's (GVN) progress in 
planning for APEC 2006.  End Summary. 
 
MOFA: EXPORT CONTROLS 
--------------------- 
 
2. (SBU) Michalak began his meeting with Vice Minister Le 
Cong Phung by stating that Vietnam was a strong U.S. partner 
in export controls, and though there had been some 
difficulties in the conference organization, he looked 
forward to seeing the Vietnamese delegation in November and 
hoped they would deliver one of the keynote speeches. 
Phuong said he welcomed the opportunity to deliver a keynote 
speech and acknowledged that he personally would have liked 
to have hosted the conference in Hanoi.  He simply did not 
have enough time "to work the issue around" to the different 
ministries. 
 
MOFA: APEC PLANNING: A LITTLE SLOW 
---------------------------------- 
 
3. (SBU) Michalak moved on to the larger question of APEC 
2006, emphasizing what a great opportunity it was for 
Vietnam.  "We have a good agenda for 2005," said Michalak. 
He expressed hope that Vietnam and the United States can 
build on this agenda and can focus in 2006 on continuing 
support for greater trade facilitation, free trade 
agreements (FTAs), small and medium enterprise (SME) 
investment, export controls, anti-moneylaundering (AML), 
anti-corruption efforts, and energy cooperation as well as 
progress on the Doha Development Agenda (DDA), all of which 
are issues of great interest to most all APEC members. 
Michalak mentioned he had just come from a meeting of the 
Asia Pacific Council (APC) of American Chambers of Commerce, 
held in Thailand last week; the APC expressed strong 
interest in working with their counterparts in Vietnam to 
make APEC private sector events a big success.  He 
emphasized, again, the importance of knowing the limits of 
delegation size and the formal schedule and agenda as soon 
as possible. 
 
4. (SBU) Phung replied he recognized that Vietnam is indeed 
"a little late" in its planning.  He assured Michalak, 
however, that Vietnam attaches great importance to U.S. 
relations and cooperation on APEC and will work closely with 
us in the future on the agenda.  "We know we are the ones 
who suffer from not hurrying," he added.  The GVN is 
currently consulting with its leaders to finalize a list of 
themes.  Phung welcomed any suggestions from the United 
States and said he fully expected a final schedule and 
agenda to be issued very soon.  "Give us a little more 
time," he asked.  The proposed agenda, he assured Michalak, 
included U.S. business priorities. 
 
MOFA: DETAILED 2005 AGENDA QUESTIONS 
------------------------------------ 
 
5. (SBU) Michalak pressed Phung on the status of several 
items for the 2005 agenda, including signature on the 
International Atomic Energy Association (IAEA) additional 
protocol, comments on the MANPADS briefer, and feedback on 
the Radioactive Sources Initiative (RSI) now that the United 
States had replaced the word "agree" with "aim to" at 
Vietnam's request.  Phuong replied that the IAEA protocol 
was "not a problem" for Vietnam "because they are not a 
nuclear country," but that the GVN needed more time to 
discuss it.  RSI, he said, is now acceptable. 
 
MOFA: WTO 
--------- 
 
6. (SBU) When Phung raised the issue of an early conclusion 
to WTO negotiations, Michalak promised that the United 
States would do its best to conclude as soon as possible, 
but that Vietnam also needed to concentrate now on the 
Permanent Normalized Trade Relations (PNTR) vote that had to 
take place in the U.S. Congress after negotiations finish. 
He urged Vietnam to use the momentum of APEC, PNTR, WTO, and 
the President's visit next year to set a new framework in 
place to carry the bilateral relationship beyond 2006. 
Phung replied that he was looking forward to the results of 
the WTO talks, and while a number of issues remain for 
discussion, the negotiations needed efforts from both sides 
to reach a conclusion.  Phung added that he plans to travel 
to Washington, D.C. soon to talk with his counterparts and 
see how much they can help him. 
 
CUSTOMS: STRIKING THE RIGHT BALANCE IN TRADE 
-------------------------------------------- 
 
7. (SBU) In his meeting with Vice General Director of the 
GDC Vu Ngoc Anh, Michalak began by stating the importance of 
balance between trade security and trade facilitation. 
Supply chain security is a key part of strong trade 
relations, he added, and export controls a key part of trade 
security.  Michalak said he welcomed Customs' presentation 
at the November export control conference and asked whether 
Vietnam had selected its participants for the conference. 
Anh did not answer the question on participants, but said 
that the Vietnamese were very pleased to cosponsor the 
conference.  Vietnam shares the U.S. goal of balance in 
security and facilitation.  He noted that the recently 
amended customs laws they have put in place allow them to 
better coordinate customs information with APEC economies 
and customs agencies in the region.  Vietnam is also 
actively preparing to participate in supply chain security. 
Anh said he regularly meets with the APEC Southeast Asia 
coordinator to ensure cooperation on customs projects and 
documentation. 
 
CUSTOMS: COOPERATION WITH FEDERAL EXPRESS 
----------------------------------------- 
 
8. (SBU) At Anh's prompting, Michalak detailed his own 
experiences with the Shanghai customs project that had so 
dramatically improved that city's customs operations in 
2000.  As Michalak described the partnerships with private 
companies that Shanghai established, Anh interjected that 
Vietnam has also set up similar cooperative relationships, 
especially with Federal Express (FedEx).  FedEx has a 
customs office in its distribution center already and that 
both sides "are pleased with the results."  In fact, it is 
now the model that GDC, who ultimately reports to the 
Ministry of Foreign Affairs and the Ministry of Trade, will 
use in the future. 
 
9. (U) Mr. Michalak has cleared this cable. 
 
MARINE