International Commercial Law & Trade Policy Program
Technical Assistance
Daniel M. Price and Virginia B. Foote
November 16 - 21, 1998
Sponsored by the U.S. Agency for International Development and
The American International Group
Trip Report
The U.S.-Vietnam Forum, conducted its first technical assistance program on International Commercial Law & Trade Policy November 16 - 21, 1998. Led by Mr. Daniel M. Price, Attorney at Powell, Goldstein, Frazer & Murphy, and Virginia B. Foote, President, U.S.-Vietnam Trade Council, the one week trip focused on providing technical assistance to Vietnam’s negotiating team on the bilateral trade agreement with the U.S., while integrating commitments relating to Vietnam’s WTO accession. The consultative sessions looked closely at the chapters of investment and services, and addressed issues raised by teams from the Ministry of Trade, Ministry of Planning & Investment, and the Ministry of Finance. Mr. Price and Ms. Foote also met with senior leadership from the Ministry of Trade and Ministry of Finance, as well as the Prime Minister’s Advisory Group and other think tanks involved in overall economic management.
Meeting with Minister of Trade Truong Dinh Tuyen, November 20
Minister Tuyen reported positively on Deputy Prime Minister Nguyen Manh Cam’s meeting with US Trade Representative Charlene Barshefsky at APEC in Kuala Lumpur. He made the following point:
· Minister Cam told Ambassador Barshefsky that the U.S. proposal was too high, that the EU was more reasonable and that the EU is a big enough market for Vietnam for now. They would like to sell into the U.S. market, but the U.S. was asking for too much. He reiterated the importance of more technical assistance.
· Ambassador Barshefsky responded by saying that if they accepted the principles in the draft agreement then the U.S. would be able to be more flexible on the time frame.
· Ambassador Barshefsky added that when the Vietnamese were finished with a response to the U.S.’ recent letter, (Joe Damond’s twenty page letter sent to the Vietnamese the first week of November) the U.S. would be prepared to schedule another round of talks.
Technical Assistance Sessions
The program focused on technical assistance for Ministries responsible for putting together commitments, schedules and exemptions listed in the annexes of the bilateral.
Mr. Price delivered the following points to the Vietnamese:
· Vietnam needs to separate technical issues from policy decisions. The technical issues could then be separated into 1) those commitments which can be dealt with by establishing the principles and committing to draft future legislation to meet those principles; 2) those commitments for which they will request a specified phase-in period; 3) those commitments they will request exemptions for; 4) those commitments they are prepared to implement immediately.
· When considering which sectors or items to protect, the Vietnamese government should consider the possible interests of the foreign companies hoping to be involved in that sector, the Vietnamese companies requesting protection, the Vietnamese companies whose interests could be indirectly involved through a multiplier effect and the Vietnamese consumers.
· Consider the multiplier effects of a decision in evaluating whether to protect a sector. For example, a closed banking system means higher capital costs and lower formation overall which affects the growth of the entire economy, not just the banking sector. The situation is the same for the financial services sector and the telecommunications sector.
Findings and Conclusions
The following conclusions and recommendations have been made on the prospects and strategy for completing the bilateral trade agreement:
Timing:
· Mr. Price is convinced that the agreement can be finished within the current time frame goals of early fall next year. He was impressed with the overall caliber of the Vietnamese and found them to be open, receptive to his explanations and creative in their thinking.
· It is increasingly clear that the Vietnamese leadership has decided politically the priority of a trade agreement with the U.S. This is perhaps begging to help them focus on how to liberalize their economy. There is a growing awareness that the agreement needs to be completed by early fall next year if we are to get it through our Congress before the Presidential campaign session is in full force. The bilateral trade agreement can therefore provide the structure and time frame against which crucial policy decisions are made.
Work Plan and Strategy:
· The Forum has identified a plan for overall technical assistance focusing on technical assistance for the negotiators of the bilateral and WTO; a more general outreach program for Vietnamese economic policy coordinators; and a program to help identify and provide assistance for what specific legislation is needed, how to structure inter-agency work, and help overall capacity building for implementation of reforms.
· Our strategy will consist of a concentrated effort on technical assistance over the next 6 - 9 months. Mr. Price has identified a team of trade experts that could work closely with the Vietnamese on individual topics such as agriculture, non-trade barriers, telecommunications, and intellectually property etc. He will draw from the vast experience of individuals who have negotiated bilateral investment treaties and worked on the accession of other transitional economies to WTO. The team will go over line-item by line-item with Vietnamese counterparts, explaining the origin of the language and helping the Vietnamese formulate solutions to technical problems, in addition to helping them structure answers and arguments on policy issues that can then be presented to the leadership.
· Senator Kerry will work to bring both sides closer -- bring the U.S. side down and encourage the Vietnamese side to come up -- the during a visit to Hanoi in mid-December. He will also indicate that Congress will be ready for the agreement upon his conclusion, but it is imperative that it reached Congress no later than the fall of 1999. Because Vietnam is a Jackson-Vanik country, Congress must vote up or down on MFN within 90 days of the request coming in from the Administration. Therefore, unlike the Laos trade agreement, it cannot languish in Congress. A Jackson-Vanik agreement will also not be affected by the lack of fast track legislation.