Cablegate: Trade Ministry Questions Pntr Deal On Textiles

VZCZCXRO4677
OO RUEHHM
DE RUEHHI #2513 2721129
ZNR UUUUU ZZH
O 291129Z SEP 06
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3572
INFO RUEHHM/AMCONSUL HO CHI MINH 1905
RUEHGV/USMISSION GENEVA 1125

UNCLAS HANOI 002513

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR S, E, EAP/MLS and EB/CIP RICH O'BRIEN
DEPT PASS TO USTR DAVID BISBEE AND JONATHAN MCHALE

E.O. 12958: N/A
TAGS: ECON ETRD WTRO VM
SUBJECT: TRADE MINISTRY QUESTIONS PNTR DEAL ON TEXTILES

SENSITIVE BUT UNCLASSIFIED. DO NOT POST ON THE INTERNET.

1. (SBU) Summary: Vietnamese Minister of Trade Truong Dinh Tuyen
convoked the Charge to seek information on an "arrangement"
concluded between USTR and Senators Dole and Graham on Vietnamese
textile imports to the United States. The "deal," as reportedly
described to him by U.S. textile importers, would create a
"WTO-inconsistent, discriminatory regime," which would be
unacceptable to Vietnam. Vietnam would rather not accede to the WTO
than to accept the new mechanism as described, Minister Tuyen
claimed. He asked for accurate information from the USG on an
urgent basis. End Summary.

2. (SBU) Minister of Trade Truong Dinh Tuyen summoned the Charge
late on the afternoon of September 29 to express concern and seek
information about "unofficial reports" from U.S. textile importers
of a deal that USTR has reportedly reached with Senators Dole and
Graham in order convince them to lift their holds and allow a vote
on PNTR for Vietnam. The MOT has been told that USTR has agreed to
apply a "special mechanism" to deal with imports of textiles from
Vietnam. This would require the close observation of U.S. imports
of textiles from Vietnam and would require the notification of
export prices of textiles from Vietnam in comparison to those of
third countries. It would also involve a unilateral application of
anti-dumping measures "without hearing the opinions or views of
importers."

3. (SBU) In the Minister's view, if these reports are true, the
United States would be setting up a WTO-inconsistent discriminatory
regime against Vietnamese textile products exported to the United
States. With this mechanism, U.S. importers will be denied
predictability of supply, creating uncertainty, disrupting plans,
and materially diminishing the benefits of WTO accession for
Vietnam.

4. (SBU) Vietnam could not accept such the imposition of a
mechanism, Minister Tuyen asserted. He claimed that Vietnam would
rather not accede to the WTO than to accept this mechanism.
Vietnam's "short-term incentive" to join the WTO has been the
removal of textile quotas. Why should Vietnam provide deep
concessions to the United States while being denied these benefits,
he asked rhetorically. Tuyen underscored how much Vietnam has done
already in order to join the WTO and to open its market.

4. (SBU) Minister Tuyen complained that he had not heard from USTR
directly about the deal. The Minister asked the charge to convey
his concern and request for information to USTR immediately.

5. (SBU) The Charge responded that he would convey the Minister's
message without delay. He cautioned the Minister to await
information from the USG before jumping to conclusions based on
informal comments.

6. (SBU) The Minister reiterated that his understanding of the "deal
reached with the Senate" is limited to the comments of U.S.
importers. He welcomes official information from "his good friends
at USTR."

ALOISI

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