GSL TRADE MINISTER TO REQUEST FTA DURING DC VISIT

UNCLAS SECTION 01 OF 02 COLOMBO 000960

SIPDIS

SENSITIVE

DEPARTMENT FOR SA/INS; DEPARTMENT PASS TO USTR - JROSENBAUM
AND AWILLS; COMMERCE FOR ARI BENAISSA

E.O. 12958: N/A
TAGS: ECON CE ERTD USTR ECONOMICS
SUBJECT: GSL TRADE MINISTER TO REQUEST FTA DURING DC VISIT

REF: E.O. 12958: N/A

Sensitive but unclassified, please handle accordingly.

1.(SBU) Summary: Ambassador met with Commerce Minister
Fernandopulle on the eve of the Minister,s departure for the
UNCTAD conference in Brazil and a visit to Washington.
Fernandopulle listened intently, but was non-committal, to US
request to delete references to Doha in the UNCTAD text.
Regarding meetings in Washington, he urged the US to consider
Sri Lanka,s request for an FTA and asked the Ambassador to
request that representatives from the garment industry who
will accompany the Minister to Washington be allowed to sit
in on his meetings with USTR and others. Post believes
allowing one representative from the garment sector to sit in
on the meeting with USTR Zoellick, and perhaps a separate
meeting for the garment delegation with AUSTR Wills, would be
appropriate and useful for providing perspective for the
business sector on the US position vis--vis an FTA. End
Summary.


2. (SBU) This cable contains an action request, para 4.
During a June 8 meeting with the Ambassador, Commerce and
Consumer Affairs Minister Jeyeraj Fernandopulle was upbeat
about the UPFA,s prospects for securing a majority in
Parliament, saying they were close to the 113 seats needed to
form an absolute majority. Fernandopulle had also been
appointed chief whip and was pleased with his selection to
that post. When the Ambassador turned the meeting to the
Minister,s upcoming visits to Brazil and Washington,
Fernandopulle listened intently as the Ambassador discussed
US concerns about reopening sensitive Doha Round related
topics during the UNCTAD meetings in Brazil. Fernandopulle
gave no indication of support but promised to take the matter
under consideration. Ambassador reviewed arguments related
to Sri Lanka,s continuing interest in securing a more
liberal trade environment worldwide. He said that the
previous government had cooperated with the U.S. in the WTO,
not because it was trying to curry favor with the U.S., but
because it assessed that was the best way to advance Sri
Lanka's own trading interests, which were not coincident with
those of the G-20.

3.(SBU) Fernandopulle indicated that while in Washington he
would tell USTR Zoellick that Sri Lanka wants to pursue a
Free Trade Agreement (FTA) with the US. Ambassador reviewed
constraints that make beginning negotiations on an FTA this
year difficult. Fernandopulle acknowledged US difficulties
but indicated that for political reasons he needed to be seen
as doing all he could. The manufacturing sector in general,
and the garment sector in particular, viewed the US as
aligned with the recently defeated UNP Government, and the
lack of progress on an FTA as US punishment against the new
UPFA Government.


4. (SBU) Ambassador assured Fernandopulle that this was
untrue but reviewed FTA complexities and realities of
election year politics in the US and other factors, including
the number of FTA's awaiting congressional approval or being
negotiated. In this vein, Fernandopulle said he had invited
a small delegation of garment manufacturers (note: by far the
most vocal proponents of an FTA in Sri Lanka) to accompany
him on his trip to Washington. In a moment of candor,
Fernandopulle indicated they had been included in order to
"see that I am trying to do something on the FTA." He said
the Sri Lankan Embassy in Washington had suggested it would
be difficult to arrange for the visiting delegation to
accompany him to meetings with USTR, but he hoped the
Ambassador could make an appeal on his behalf. Fernandopulle
is planning to bring several of the major garment
manufacturer executives during his visit. Post believes it
would be in the US interest to allow at least one of them to
accompany Fernandopulle during his meeting with USTR Zoellick
and that perhaps a separate meeting with AUSTR Wills for this
delegation be arranged.


5. (SBU) Comment: Fernandopulle was far more confident and
much better briefed than during the Ambassador,s initial
courtesy call. While we hope he will take on board Sri
Lanka,s natural interests in supporting an open trade regime
and support US positions in the UNCTAD conference, the new
Government is still feeling its way on certain aspects of
economic policy. Fernandopulle is to be accompanied to
Brazil by Ambassador K.J. Weerasinghe, Sri Lanka,s former
WTO permrep, who is familiar with and favorably disposed
toward US positions in the international trade arena. The
business representatives Fernandopulle is bringing to
Washington are well and favorably known to the Embassy, and
we urge some accommodations be made to include some or all of
them in meetings wherever possible and appropriate. End
comment.
LUNSTEAD