AMBASSADOR'S FAREWELL DISCUSSIONS WITH FOREIGN

C O N F I D E N T I A L SECTION 01 OF 02 KUALA LUMPUR 001375 SIPDIS SIPDIS E.O. 12958: DECL: 09/10/2027 TAGS: PREL PHUM ETRD KNNP KISL ASEAN IR BU MY SUBJECT: AMBASSADOR'S FAREWELL DISCUSSIONS WITH FOREIGN MINISTER SYED HAMID ALBAR Classified By: Ambassador Christopher J. LaFleur, reasons 1.4 (b and d) . Summary -------------- ¶1. (C) The Ambassador and Malaysian Foreign Minister Syed Hamid Albar, in farewell discussions September 3-4, agreed that U.S.-Malaysia bilateral relations had strengthened over the past three years. The Ambassador raised Iran, export controls, trafficking in persons (TIP)),Free Trade Agreement (FTA) talks, Burma, and Malaysia's role in dialogue with the Muslim world. FM Hamid agree that Iran should not develop nuclear weapons, but recognized Iran's right to peaceful nuclear technology. Malaysia believed negotiations, not sanctions, should be pursued with Iran, including direct U.S.-Iran talks. The Minister said there was no reason for concern over export controls and that Malaysia intended to have adequate legal instruments in place. The U.S. TIP report had been "unfair" to Malaysia, which was taking steps in line with international norms. The FTA talks had moved "better than expected," but convincing the public and the media remained a challenge. The Ambassador hoped the U.S. and Malaysia could continue senior dialogue on Muslim world issues and the Minister noted PM Abdullah remained keen to engage U.S. leaders in this regard. Hamid described Burma's National Convention process as fairly "broad-based." He supported engagement with the Burmese regime through ASEAN and UN Special Envoy Gambari. Hamid said ASEAN members would meet on the margins of UNGA to iron out important remaining issues in the draft ASEAN Charter. End Summary. Improved Bilateral Relations -------------- ¶2. (C) The Ambassador paid a farewell call on FM Hamid on September 3, while the Minister hosted the Ambassador for a lunch together with senior Foreign Ministry officials on September 4. In their farewell discussions, the Ambassador said U.S.-Malaysia relations had grown more supportive and mutually cooperative over the past three years. FM Hamid agreed, stating that bilateral relations had "warmed up considerably" and now exhibited "more maturity." At a personal level, too, relations between the respective leaders were "very good," including the personal rapport between President Bush and PM Abdullah. The Foreign Minister expressed his appreciation for President Bush's very positive statement on the occasion of Malaysia's 50th independence anniversary. Iran -------------- ¶3. (C) The Ambassador raised our serious concerns over Iran's continued nuclear enrichment activities and Iran's failure to address UNSCR stipulations. Hamid said Malaysia agreed Iran should not develop nuclear weapons, but Iran also had a right to develop peaceful nuclear technology. He supported dialogue and negotiations to reach an "amicable solution that preserved the dignity of all parties." "Punishing Iran will make the situation more difficult." Hamid hoped the IAEA would be the vehicle to resolve the issue. The Minister recommended direct U.S.-Iran contact. He thought that U.S. progress on the North Korean nuclear issue represented a good model. Export Controls -------------- ¶4. (C) Related to Iran, the Ambassador urged the GOM to move quickly to implement an export control regime, noting that Malaysia had been used by others in the past for nuclear proliferation. FM Hamid responded that there was "some disagreement on the facts" in this area, and that Malaysia was "very transparent." "We are moving toward (the goal of improved export controls),there's no reason for concern." The GOM was in the process of getting all necessary legal instruments in place, and appreciated related U.S. technical assistance. Trafficking in Persons -------------- ¶5. (C) The Ambassador informed the Minister that President Bush would provide a report to Congress in mid-September regarding Tier 3 countries and sanctions related to trafficking in persons. He noted Malaysia's passage of a comprehensive anti-trafficking law as a positive development. KUALA LUMP 00001375 002 OF 002 Malaysia's implementation of the law would be very important, along with the anticipated opening of victims' shelters later in September. FM Hamid said the latest U.S. report had been "unfair" to Malaysia because it did not take into account the drafting of the new law and steps to open shelters. "We don't want to receive surprises (like the June TIP report)," Hamid said. The report "affects our country's reputation and dignity." The Ambassador urged the GOM to accelerate its anti-trafficking efforts, while Hamid asked rather that the U.S. take into account Malaysia's efforts to date. FTA --- ¶6. (C) The Ambassador said the U.S. side was prepared to intensify work on an FTA and hoped to make progress following Malaysia's pending national elections. The Ambassador reinforced our desire for transparency in GOM large-scale procurement and contracting. The public perception that the U.S. sought to dismantle Malay preference policies was erroneous. Hamid said the U.S. must convince Malaysian consumer associations, other civil society groups and the local press that an FTA would be beneficial. During earlier negotiations, "the media was totally against us" and concluding an agreement in such an environment "would have caused us a lot of problems." Hamid said transparency would be no stumbling block, as the Malaysian public also wanted this. He called for more U.S. assurances in the areas of bio-products, services and procurement. "The Cabinet has not said 'no'" to an FTA, and Malaysia would continue with discussions. Minister Rafidah Aziz would remain as the GOM negotiator, even after the next elections. Muslim World Dialogue -------------- ¶7. (C) President Bush and Secretary Rice's dialogue with PM Abdullah on Muslim world issues has been beneficial, the Ambassador said, and U.S. leaders wish to continue such exchanges. The U.S. hopes that Malaysia will continue to play a leadership role in Islamic forums, even after Malaysia completes its tenure as OIC chair. FM Hamid said the Prime Minister remained committed to his "developmental agenda" within OIC. "The Prime Minister is keen to work with the U.S." on Muslim world issues, and dialogue and "finding the middle ground" constitute essential components. Burma -------------- ¶8. (C) On Burma, the Ambassador stated that countries should not publicly welcome the conclusion of the sham National Convention. Hamid responded that he viewed the National Convention as fairly "broad based," with the exception of ASSK's lack of participation. He went on to remark that Burma is a human rights concern, but not a security threat to the region. ASEAN should be at the fore in the approach to Burma. Earlier efforts to take the Burma issue to the UNSC had inadvertently strengthened China and India's leverage at the expense of ASEAN. UN Special Envoy Gambari currently enjoyed the best access within Burma of anyone. Singapore treated Burma with care at this juncture because it did not want the Burma issue to complicate the November ASEAN summit, which Singapore will host. FM Hamid argued that sanctions against Burma would not bring about positive change, in part because of Burma's natural resources and because China, India and Russia acted to relieve pressure on Rangoon. Instead, the international community should engage Burma, noting that IO's like ILO were once again able to operate. ASEAN Charter -------------- ¶9. (C) In response to the Ambassador's question, FM Hamid said it was not certain that the draft ASEAN Charter would be ready by the time of the November ASEAN summit. Several issues remained to be resolved, including exact modalities of majority versus consensus decision-making. Senior officials from ASEAN countries would meet on the margins of UNGA to attempt to reach agreement on important outstanding Charter issues. LAFLEUR