US embassy cable - 03HANOI1439

UNCLAS SECTION 01 OF 03 HANOI 001439 
 
SIPDIS 
 
SENSITIVE 
 
STATE PASS USTR FOR EBRYAN 
TREASURY FOR OASIA 
USDA FOR FAS/ITP/SHIEKH AND HUYNH 
USDOC FOR 6500 AND 4431/MAC/AP/OKSA/VLC/HPPHO 
 
E.O. 12958: N/A 
TAGS: ETRD, VM, WTO, BTA 
SUBJECT: VIETNAM: FOLLOW UP TO SIXTH WTO WORKING PARTY 
 
 
SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY 
 
1.  (SBU) Summary:  Vietnam heard a consistent message at 
its Sixth WTO Working Party session in May regarding the 
need to make a "quantum leap" in it's approach to WTO 
accession but is interpreting that message in various ways. 
Publicly, GVN officials gave themselves a big pat on the 
back for the positive results of the WP6 and a number of 
bilateral negotiations, which was distinctly different from 
the readout of the Members States and the Secretariat. 
Following the WP6, the World Bank sponsored a 4-day seminar 
on Vietnam's WTO accession, which included speakers such as 
the chief WTO Negotiators for China and Cambodia. 
Privately, GVN officials have complained that the U.S. 
statement was "harsh" and question whether the U.S. 
administration is changing its position of supporting WTO 
accession for Vietnam.  Additionally, some GVN officials are 
questioning whether the U.S. is "ready" to begin bilateral 
talks. Embassy has reiterated to GVN that the timing of 
Vietnam's WTO accession is completely in its own hands, the 
U.S. position of support has not changed, and that the U.S. 
will be ready for bilateral talks when Vietnam is ready to 
table a serious proposal for discussion.  Embassy is working 
with other like-minded Embassy colleagues to host 
roundtables with key GVN officials on priority accession 
issues to help the Vietnamese better prepare themselves for 
the next working party.  End Summary. 
 
2.  (SBU) Following the Sixth WTO Working Party on Vietnam 
Accession in Geneva in May, the GVN's public statements have 
been routinely positive about the progress made by Vietnam 
during the multilateral and bilateral talks.  At a UNDP- 
sponsored event at the end of May, Minister of Trade Tuyen 
announced that the WP6 made progress.  He said most Member 
countries have praised Vietnam's preparation for the meeting 
and most have accepted Vietnam's services offer, although 
they have also asked for more progress on tariffs. 
Responding to the Ambassador's question regarding provision 
of an applied tariff schedule, Tuyen noted that there was no 
such requirement in the WTO and regardless, Vietnam is in 
the process of revising its tariff schedule so a final will 
not be available until after the ASEAN/AFTA revisions are 
finished sometime this summer. 
 
3.  (SBU)  Regarding next steps, Tuyen said the GVN will 
review the results of WP6 and identify next steps to ensure 
accession by 2005. He noted that in order to achieve this 
goal, Vietnam will not be able to have bilats with each 
country that has requested them.  Instead, Vietnam's 
negotiators will focus on the "most important" countries and 
perhaps combine some negotiations, for example, hold bilats 
with New Zealand and Australia at the same time. (Note:  The 
Australian Ambassador was a bit surprised by that statement 
and quickly discounted the notion.)   Tuyen noted that 
Vietnam had time for three more bilateral rounds and said 
that Vietnam does not want to "multilateralize a bilateral 
agreement" (read the U.S-Vietnam Bilateral Trade Agreement); 
rather, countries will have to "negotiate up to it."  (Note: 
He didn't comment on the fact that the BTA is a floor for 
the U.S. in this process, not a ceiling.)  In a separate 
conversation with our Australian, New Zealand and EU 
colleagues, we heard a very different version of events of 
the WP6, more along the lines of our read out.  The 
Australians in particular told us that they were so 
dissatisfied with their services offer that they refused to 
negotiate on it. 
 
4. (SBU) Earlier this week, we met with Ministry of Finance 
Dep. Director for International Cooperation Ha Huy Tuan, who 
is now wearing two hats - a MOT hat for WTO accession and 
then his full-time MOF hat. Tuan told us that the GVN was 
concerned about the "harsh" tone of the U.S. statement in 
Geneva and questioned whether there had been a change in the 
Administration's position toward WTO membership for Vietnam. 
Additionally, he noted that some GVN officials felt that the 
U.S. was "not ready" to talk to Vietnam bilaterally about 
WTO accession. 
 
5.  (SBU)  Econoff noted that the U.S. had not said anything 
in Geneva that we hadn't said to the GVN directly on 
numerous occasions.  Econ Counselor reiterated that the 
Administration's position had not changed - we support 
Vietnam's accession on commercial terms.  She noted that it 
appeared that Vietnam is still looking for a special deal on 
accession but asked Tuan why should WTO members give a 
special deal to Vietnam, when we did not do that for China 
or Cambodia or any other applicant for membership.  The U.S. 
(as well as other members of the WTO) have been clear in 
their support for Vietnam's WTO accession (and have spent 
millions in technical assistance) but are not going to make 
a "special case" in order to see that this happens. 
Additionally, Econcouns noted that Vietnam should not 
question the U.S. commitment to Vietnam; under the terms of 
the BTA, Vietnam already has MFN access to the U.S. goods 
market. 
 
6.  (SBU) Regarding bilateral talks, Econcouns noted she 
could not commit for the U.S. WTO negotiator but thought 
that the earliest the U.S. would be able to schedule talks 
with Vietnam would be after the Cancun Ministerial, sometime 
in fall/early winter, given time and budgetary constraints. 
However, she noted that the U.S.'s ability to sit down will 
be dependent on the GVN demonstrating it is ready to engage 
in serious negotiations.  For goods negotiations this would, 
at an absolute minimum, require Vietnam to provide an 
applied tariff schedule, which we had been requesting for 
quite some time.  For both goods and services, the U.S. has 
been clear that we would be looking for BTA-Plus - that is, 
more and better access than granted under the BTA. She noted 
that it would be hard to consider anything less as a serious 
offer from Vietnam. 
 
7.  (SBU) Tuan noted that the GVN is still struggling 
internally to find a way to dedicate adequate resources 
toward WTO negotiations without depleting key people from 
its ministries.  Most of the GVN's experienced negotiators - 
the key people who worked on BTA negotiations - are 
generally still in place (except at MOT which has undergone 
substantial personnel changes over the last year or so). 
However, the GVN cannot afford to have these people dedicate 
themselves entirely to WTO accession; it would be 
unrealistic given all the other issues the GVN is trying to 
deal with, Tuan concluded. 
 
8.  (SBU)  Finally, Tuan questioned slightly rhetorically if 
the U.S. would rather Vietnam be able to actually implement 
the commitments it makes or just make the commitments? 
EconCouns agreed that was an important question but 
cautioned that the GVN should be careful in using this 
argument.  While WTO members did not want a repeat of the 
China situation, that did not mean that we would accept less 
from subsequent accessions. 
 
9.  (SBU) Although the GVN may feel that the U.S. has taken 
a harder tone, we are not the only ones speaking clearly on 
what needs to be done.  Following the Working Party meeting, 
the World Bank and Vietnam's National Center for Social 
Sciences and Humanities (a think tank under the Ministry of 
Foreign Affairs) hosted a seminar on "Vietnam:  Readiness 
for WTO Accession" June 3-4 in Hanoi and 6-7 in HCMC. 
(Note:  the two days in Hanoi included heavy participation 
at the Ministerial and Vice Ministerial level, the HCMC 
version emphasized business sector participation.) 
 
10.  (SBU) The highlight of the conference were 
presentations by WTO negotiators from China (Long Yongtu, 
former chief negotiator for China's WTO accession) and 
Cambodia (Sok Siphana, Secretary of State, Ministry of 
Commerce of Cambodia).  Both presenters were clearly "on 
message" - making all the right points on how Vietnam should 
approach WTO accession.  Both officials emphasized that 
strong high-level political support is critical to the 
process.  Long Yongtu encouraged Vietnam to view WTO 
accession as a means for promoting its own domestic reform 
agenda rather than an end in itself.  Sok Siphana contrasted 
the WTO with the UN and noted that countries acceding to the 
WTO "won't find sympathy or apologies from existing members. 
Acceding countries simply have to negotiate."  Siphana 
concluded that, at the end of the day, if Vietnam does not 
make the commitments expected of it by WTO members, it just 
will not accede. 
11. In an effort to develop some post-Geneva momentum in 
Hanoi, Embassy is working with other like-minded Embassy 
colleagues to host a series of monthly roundtables with key 
GVN officials on priority WTO accession issues.   The 
discussions will be small informal sessions - each dedicated 
to a separate topic (e.g. SPS and TBT inquiry points, TRIPs, 
trading rights).  The ultimate objective is to help the 
Vietnamese better prepare themselves for a (significantly 
more substantive) seventh working party. 
PORTER