Cablegate: Vietnam "Open for Business": Government and Businesses

VZCZCXRO8091
PP RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHHI #1950/01 3200900
ZNR UUUUU ZZH
P 160900Z NOV 07
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC PRIORITY 6723
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHHM/AMCONSUL HO CHI MINH 3951
RUEHZS/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 03 HANOI 001950

SIPDIS

SIPDIS
SENSITIVE

STATE FOR EAP/MLS
STATE PASS TO USTR DBISBEE
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO
EEB/TPP/BTA/ANA

E.O. 12958: N/A
TAGS: ECON EIND EINV ETRD BEXP KTEX OTRA OVIP KIPR VM
SUBJECT: VIETNAM "OPEN FOR BUSINESS": GOVERNMENT AND BUSINESSES
ENTHUSIASTICALLY WELCOME SECRETARY GUTIERREZ AND HIS BUSINESS
DEVELOPMENT TRADE MISSION
Ref: HCMC 1131

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1. (SBU) Summary: Secretary of Commerce Carlos Gutierrez led a
large-scale Department of Commerce Vietnam Business Development
Mission to Hanoi on November 5 and 6. This first Cabinet level
business development mission to Vietnam carried the theme of U.S.
business support for Vietnam's economic development, particularly in
key infrastructure sectors such as energy, mining and minerals,
transportation and telecommunications. The highest levels of
government and business enthusiastically received the Secretary and
the accompanying business delegation of 22 U.S. companies. The
Secretary advocated for key commercial transactions with the Prime

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Minister, the President and Ministers of Planning and Investment and
Information and Communications, while also raising key market access
issues including trading and distribution rights and intellectual
property rights protection. Companies made important new contacts
with potential business partners and with key government decision
makers throughout relevant ministries. Both new-to-market
delegation companies and companies with experience in Vietnam on the
delegation expressed their optimism with regard to the opportunities
opening up in the country, but also urged the USG to continue its
advocacy and market access lobbying efforts. End Summary.

Red Carpet Welcome
------------------

2. (SBU) Receiving the Secretary and his entire delegation in the
Cabinet Meeting Room at the White House, Prime Minister Nguyen Tan
Dung set a welcoming tone of openness and cooperation for the first
ever U.S. cabinet-level-led trade mission to Vietnam by personally
greeting representatives of each of the 22 companies and noting the
significant improvement in the U.S.-Vietnamese trading relationship
since implementation of the U.S.-Vietnam Bilateral Trade Agreement
(BTA). The Secretary used the occasion to brief the Prime Minister
on each company, noting their ambitions to find new trading partners
and expand their presence in Vietnam, and asked for the Prime
Minister's assistance in resolving as soon as possible outstanding
issues several of the companies were experiencing in finalizing
commercial contracts. Dung reassured the Secretary and the
delegation that it is the consistent policy of the Vietnamese
Government to promote the commercial relationship between our two
countries, and that in addition to being Vietnam's largest trading
partner, he hoped that the United States would also soon become the
largest investor in Vietnam. In a separate bilateral meeting with
the Prime Minister, the Secretary advocated for closure of key U.S.
commercial deals, including the purchase of twelve 787 Boeing
Dreamliners by Vietnam Airlines, completion of power plant deals by
AES Corporation and Gannon, and an equity investment by GE Money in
Vietcombank. The Secretary further encouraged continued progress on
key BTA/WTO implementation issues, including trading and
distribution rights for foreign firms and intellectual property
rights protection.

3. (SBU) President Nguyen Minh Triet echoed PM Dung's welcoming
tone later in the morning by telling the Secretary and the business
delegation that Vietnam was "open for business" in the halls of the
Presidential Palace. The President noted that he was deeply
impressed by his official trip to Washington earlier in the year,
particularly by the keen interest expressed by U.S. companies
planning to do business with Vietnam. He thanked the Secretary for
the Department of Commerce's announcement on October 26 that the
Department's analysis of the first six months of textile import data
did not warrant self-initiation of an antidumping duty
investigation, and expressed his trust that this was a harbinger for
continued commercial cooperation. Secretary Gutierrez congratulated
the President on Vietnam's unprecedented economic progress and
expressed his confidence that the companies in his trade delegation
are well equipped to assist the country in its upward path to
prosperity. Companies laid out specific plans to build key
infrastructure sectors such as minerals and mining,
telecommunications and information and communications technologies
(ICT), energy and transportation; and to increase U.S. exports to
Vietnam in sectors ranging from enterprise software to environmental
products. President Triet wished the delegation success in finding
businesses partners in Vietnam, and noted the importance of trade
with the United States in assisting Vietnam to attain and maintain
middle-income country status by 2010.

Heavy Lifting at the Ministries
-------------------------------

4. (SBU) In a closed-door session, AmCham Hanoi's Board of
Governors (BOG) advised Secretary Gutierrez of the key issues
impeding American companies currently doing business in Vietnam.

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Chief among these are implementation by the Vietnamese Government of
key WTO commitments. Specifically, BOG members charged that the
Ministry of Industry and Trade's recently issued Circular 9 on
trading rights is inconsistent with article 147 of the Working Party
Report of Vietnam's WTO accession, and that the Ministry is also
applying "retail" restrictions to industrial buyers, not just
consumers. BOG members further noted that key infrastructure sales
(mostly to State-Owned Enterprises), such as Boeing's pending sale
to Vietnam Airlines, are a political, not a "free-market," process
and continue to require strong advocacy by the USG. Select BOG
members echoed these sentiments to the business delegates during a
business panel luncheon, advising new U.S. companies that it is
critical to maintain a presence in country in order to be
successful, and to be prepared to advocate to the Government of
Vietnam for favorable policy change toward fulfillment of WTO
obligations when setting up shop in Vietnam.

5. (SBU) In meetings with Minister of Planning and Investment Vo
Hong Phuc, Minister of Information and Communications Le Doan Hop,
Deputy Prime Minister and Foreign Minister Pham Gia Khiem and later
with Minister of Industry and Trade Vu Huy Hoang in Ho Chi Minh City
(reftel), the Secretary privately raised these specific market
access issues and concerns about individual commercial deals.
During the portion of the meetings attended by all company
representatives, delegation companies expressed their interest to
the Ministers for individual projects and asked specific regulatory
questions relevant to their business sectors. The ministers
addressed each inquiry, answering questions directly or providing
guidance to the individual companies on how to proceed in finding
suitable answers. The ministers offered their on-going support to
the companies in completing individual business transactions, and
Minister Hop pointed to the recent commencement of the Vietnam-U.S.
ICT Dialogue as a positive forum to address ICT related issues or
concerns. Minister Phuc noted strong commercial cooperation between
our countries on recent U.S. commercial deals such as Vietnam's
purchase of the Vinasat Satellite from Lockheed Martin and Intel's
ongoing project to build a chip testing and packaging facility in
southern Vietnam. He articulated his trust that many more
transactions will soon follow, and expressed his Government's keen
interest in soon finalizing a bilateral investment treaty with the
United States.

Commercial Cooperation: The Engine of Growth
---------------------------------------------

6. (SBU) Secretary Gutierrez topped off the Hanoi leg of the
Business Development Mission by addressing a capacity crowd at the
"Vietnam -U.S. Relations: A New Dynamic Development Phase"
conference hosted by the Ministry of Foreign Affairs, the Vietnam
Chamber of Commerce and Industry and the USA - Vietnam Friendship
Society. He pointed to United States - Vietnam economic cooperation
as "the engine of growth" for the bilateral relationship, resulting
in measurable economic benefits to both of our societies, and called
for continued progress in good governance and transparency in the
Vietnamese commercial environment. Vietnamese counterparts should
expect American companies to be good neighbors, he further stated,
as exemplified by the local corporate citizenship efforts of Ford,
Cargill, Conoco Phillips and many other U.S. companies currently
doing business in Vietnam.

7. (SBU) Celebrating the U.S. corporate citizenship theme at a
festive motorbike helmet donation ceremony at the Dich Vong A
primary school in Hanoi, the Secretary applauded the efforts of the
U.S.-founded Asia Injury Prevention Foundation in utilizing the
latest U.S. technology to produce high quality, affordable helmets
at its non-profit Protec helmet factory in Hanoi. Accompanied by
the entire business delegation, the Secretary's participation in the
ceremony underscored the message that corporate social
responsibility is key to development, because it recognizes the
needs of society as a whole.

Media Coverage: Extensive and Positive
---------------------------------------

8. (U) Secretary of Commerce Gutierrez's visit to Hanoi received
intense media attention and garnered extensive and positive
coverage. All major newspapers, national and local television,
online news outlets and national radio, as well as several major
international media outlets, carried frequent in-depth reports in
advance of and throughout his two-day visit.

9. (U) Press coverage began with an Op-Ed from Secretary Gutierrez,

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which ran in its entirety in the popular daily Tuoi Tre just days
before his arrival. Media then enthusiastically followed the
Secretary and business delegation through their official meetings

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with the Vietnamese President and Prime Minister, as well as at
other Ministerial-level calls. At a press conference on November 5,
the Secretary fielded questions from Vietnamese and international
journalists on a wide range of business and trade issues,
reiterating his message that this Trade Mission reflected the
growing interest of American business in the Vietnamese market, and
the strengthening bilateral relationship between our two countries.

10. (U) The Secretary's major policy speech on November 6 at the
"Vietnam -U.S. Relations: A New Dynamic Development Phase"
conference, in which the Ministers of Foreign Affairs and Planning
and Investment also participated, was covered widely in both
Vietnamese and international outlets as well, with several dailies
carrying the full text of his remarks. Secretary Gutierrez' final
Hanoi event was a sentimental favorite of delegates and the press,
however. Coverage of the Secretary and Ambassador Michalak
presenting helmets to over 400 six year olds at a local elementary
school was covered extensively and several journalists plan to write
follow up stories about Protec and Vietnam's coming helmet laws.

Comment
-------

8. (U) After having participated in over one hundred individual
business meetings with government decision-makers and potential
business partners, business delegation members departed Hanoi for Ho
Chi Minh City on November 6 with a deeper understanding of the
marketplace and of the government's role in Vietnam's economy.
Business participants uniformly congratulated the Secretary, the
Department of Commerce, the Trade Promotion Coordinating Committee
and U.S. Embassy Hanoi for delivering a timely and highly relevant
Business Development mission. One U.S. manufacturer summed up the
attitude of several of the delegation members by noting, "We now
realize that staying out of Vietnam is no longer an option."

MICHALAK

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