AMBASSADOR'S CALL ON PM LEE HSIEN LOONG

UNCLAS SECTION 01 OF 02 SINGAPORE 003618 SIPDIS SENSITIVE E.O. 12958: N/A TAGS: PGOV PREL ECON ETRD EFIN PTER SN SUBJECT: AMBASSADOR'S CALL ON PM LEE HSIEN LOONG ¶1. (SBU) Summary. During the Ambassador's introductory call, the Ambassador and Prime Minister Lee Hsien Loong concurred that U.S.-Singapore relations were very strong and agreed to work together to help the relationship blossom further. The Prime Minister expressed his commitment to resolving outstanding issues such as the beef ban and his hope that the two countries would conclude a Double Taxation Agreement and Mutual Legal Assistance Treaty. The Ambassador emphasized the importance of working together on issues such as non-proliferation and anti-money laundering/counter-terrorist financing, particularly as Singapore moved toward licensing casinos. The Ambassador noted the importance to the United States of Singapore's continuing support in the Middle East, particularly as we enter a new phase of drawing down U.S. troops in Iraq. The Prime Minister responded that terrorism was a global issue and that Singapore had to do its part. He urged the United States to remain engaged in Asia. End summary. ¶2. (U) On December 29, immediately after presenting her credentials to President S. R. Nathan, Ambassador Herbold paid her introductory call upon Prime Minister Lee Hsien Loong. Mr. Herbold and the DCM accompanied the Ambassador; the PM's Principal Private Secretary, Lawrence Wong, and Ministry of Foreign Affairs officer Aaron Maniam accompanied the PM. Bilateral Relations -------------- ¶3. (SBU) After welcoming Ambassador Herbold and Mr. Herbold to Singapore, the Prime Minister stated that the relations between Singapore and the United States were excellent, as the conclusion of the Strategic Framework Agreement (SFA) in July and the conclusion of the Free Trade Agreement (FTA) almost two years ago testified. The United States and Singapore see eye-to-eye on many issues, such as the war on terrorism and the WTO trade negotiations, and should continue to cooperate closely in these areas. He expressed his desire that the relationship blossom further. ¶4. (SBU) The Ambassador agreed that relations are very strong. We were doing particularly well in the trade and security areas, she continued. She hoped that remaining issues such as Singapore's ban on the import of U.S. beef could be resolved and that we could make progress in new areas such as a Mutual Legal Assistance Treaty (MLAT). PM Lee noted that Japan had opened its market recently and remarked, "we cannot be more unreasonable than Japan. We will look at the issues constructively." On an MLAT, the PM expressed his understanding that we had made some progress in this area. He expressed confidence that the United States and Singapore would conclude a Double Taxation Agreement and that reaching an MLAT would be part of the process of improving our cooperation. ¶5. (SBU) In response to the Ambassador's inquiry about financial sector reform, the PM stated that Singapore's financial sector is among the most open in Asia. The reforms, begun in 1997, had resulted in rationalization and consolidation of the sector. PM Lee, who is also Minister for Finance, commented that the FTA had brought U.S. banks additional privileges. International Cooperation -------------- ¶6. (SBU) The Ambassador expressed the United States' deep appreciation for Singapore's contributions to the Coalition in Iraq and support in Afghanistan. Looking forward, it would be very important to continue to have Singapore at our side. The Prime Minister enumerated Singapore's contributions of KC-135s, LSTs, and police trainer support. "We believe we ought to do our part. It is a global problem - we cannot solve it just in Singapore." The Ambassador noted that we have excellent cooperation here as well, and pointed to the early-2006 inauguration of the Megaports pilot project as an excellent example. U.S. Engagement -------------- ¶7. (SBU) The PM took the opportunity to encourage the United States to remain engaged in Asia. The United States needs to be part of what is going on in the region. People and investment flows bring influence. China is very dexterous at deploying "soft power," he observed. ASEAN has dozens of forums each year, and China shows up at 25-27 of them. Each time, it presents a little "gift" such as a training offer or an exchange program -- not extensive, but showing that it has thought about what the recipient needs. While China is winning friends, the United States needs to keep its links strong. PM Lee commented that there is a reservoir of good will right now towards the United States. Fifteen years ago, when Singapore and the United States signed the MOU allowing U.S. forces to lease facilities in Singapore, others in the region kept quiet or complained. It is different now, argued the PM. When we signed the SFA, they knew that the United States was a friend who could be useful. PM Lee urged the United States to take advantage of this. ¶8. (SBU) The PM expressed his pleasure that U.S. relations with Indonesia were improving. It was excellent that the USG had finally restored ties with the Indonesian Armed Forces. The United States has a friend in President Yudhoyono. Similarly, we have a friend in Malaysia's new leader, PM Lee added. Casinos -------------- ¶9. (SBU) Noting her prior service on the Washington State Gambling Commission, the Ambassador engaged the PM in a discussion of the issue of problem gamblers. The PM noted that, had there been a referendum on the casinos issue, he thought 60 to 70 percent of voters would have approved. While the most conservative Christians would have opposed, most Muslims (while officially opposed) did not feel that strongly. In terms of the market for Singapore's future casinos, the PM explained measures to be taken to minimize problem gambling by Singaporeans. The main foreign market would be China. ¶10. (SBU) The Ambassador encouraged further cooperation between our two countries on the anti-money laundering/countering the financing of terrorism (AML/CFT) issue. Reporting on his own study tour to Las Vegas in July, the PM said Singapore had studied how the United States had cleaned up its gaming sector. Singapore was committed to a strong AML/CFT regime, but he commented, "we will have to learn as we go as we do not have the expertise." Moving Relations to the Next Stage -------------- ¶11. (SBU) In closing, the Ambassador and PM Lee pledged to work together to enhance our strong trade and security ties and to continue moving forward on law enforcement and non-proliferation cooperation. HERBOLD