FTA IMPLEMENTATION ON DAUSTR BELL'S AGENDA

UNCLAS SECTION 01 OF 03 SINGAPORE 001833

SIPDIS

SIPDIS
SENSITIVE

STATE PASS USTR FOR BWEISEL, DBELL, JMCHALE, MLINSCOTT, VESPINEL,
AND AMATTICE
COMMERCE FOR JBAKER

E.O. 12958: N/A
TAGS: ETRD EFIN EINV ECPS SENV KIPR ECON SN
SUBJECT: FTA IMPLEMENTATION ON DAUSTR BELL'S AGENDA

REFS: A) Singapore 996 B) Singapore 1134 C) Singapore 1167


1. (SBU) Summary: In meetings to discuss implementation progress
under the U.S.-Singapore Free Trade Agreement (FTA),Deputy
Assistant U.S. Trade Representative Doug Bell cited Singapore's
failure to fulfill its telecom commitments as our top concern. GOS
officials agreed that additional flexibility is needed to resolve
this longstanding issue. On IPR protection, Singapore said it is
still considering the merits of signing the Anti-Counterfeiting
Trade Agreement (ACTA). In response to a request to join a regional
dialogue on illegal logging, GOS officials said they are "perplexed"
about how Singapore can play a role as an intermediary transshipment
point. DAUSTR Bell also raised FTA-related issues related to the
energy sector, financial services, and regional trade liberalization
initiatives. End summary.


2. (U) DAUSTR Bell focused on implementation of the FTA and
regional trade issues during his initial visit to Singapore
September 11-12. In addition to his discussions with GOS officials
from the Ministry for Trade and Industry (MTI),the Ministry for
Environment and Water Resources (MEWR),the Infocomm Development
Authority (IDA),and the Energy Market Authority (EMA),he also met
with Verizon Business, Island Power (Intergen),Citibank, Hewlett
Packard, United Parcel Service, the Singapore Association of
Pharmaceutical Industries (SAPI),the American Chamber of Commerce,
and representatives from intellectual property business
associations. DAUSTR Bell's discussions on ASEAN are reported
septel.

Telecom - Tandem Access
--------------


3. (SBU) DAUSTR Bell told IDA Acting Director (International)
Hanafiah Muhammed (and MTI Director for Trade Lionel Yeo separately)
that Singapore's failure to fulfill its telecom commitments remains
our top FTA implementation concern. He underscored that offering
high-speed tandem access (i.e., access to dominant carrier SingTel's
leased lines at economically efficient points of aggregation) is
consistent with Singapore's FTA obligations; tandem access stands
out as the best solution to ensure that telecom providers receive
fair and equitable treatment. DAUSTR Bell emphasized that the USG
takes little comfort in GOS officials' recent statements that the
access issue will "go away" after Singapore deploys its "Next
Generation" and "Intelligent Nation 2015" (iN2015) broadband and
infocomm networks. Singapore still needs to meet its current FTA
obligations and the government's track record on telecom to date
casts doubt on how effectively it will address access issues in the
future, he said. Director Muhd asserted that Singapore's obligation
under the FTA is to provide "reasonable" but not tandem access. He
defined "reasonable" as encompassing areas such as regulated rates
and groomed circuits. DAUSTR Bell countered that this obligation
also implied that it make available the same type of access for all
telecom players. Singapore providers in the United States, for
example, enjoy a tandem access option.

Telecom - Local Exchange Closures
--------------


4. (SBU) DAUSTR Bell expressed his appreciation for Singapore's
recent decision to extend the notification period for SingTel to
inform IDA about planned local exchange closures. But he questioned
why SingTel continues to remain silent on its planned consolidation,
first announced in June 2006 (ref B). Director Muhammed said that
SingTel has not yet communicated its intentions to IDA. He wondered
whether, as a regulator, IDA might be able to require SingTel to
provide a guarantee that it would not close a certain local exchange
as a way to ensure some certainty of access and availability to
other telecom providers. DAUSTR Bell welcomed further discussions
of this kind, noting that it is important for both sides to seek
solutions that conform to all FTA commitments.

Telecom - Multilateral Cooperation
--------------


5. (SBU) Director Muhammed asked for USTR's advice on how best to
use platforms like the ASEAN Telecom, Telecom Council, and IT annual
meetings to improve regional telecom regulators' knowledge of trade
rules and regulations. DAUSTR Bell said he would follow up with a
response in the next several weeks. Muhammed cautioned that some

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resistance to the USG's efforts under the ASEAN-U.S. Enhanced
Partnership exists, especially among Malaysia, Thailand, and
Vietnam. He suggested that the USG seek more input from ASEAN
members before developing a full proposal. Singapore can play a
role in encouraging other countries to support such initiatives, he
offered.

Information Technology Agreement
--------------


6. (SBU) DAUSTR Bell expressed concern that the European Union is
unwilling to back down from its plan to pursue changes in the
Information Technology Agreement (ITA). He noted that the EU
proposal would result in tariff increases from zero to fourteen
percent -- affecting approximately US$200 million of Singapore's
exports to the EU. He said that USTR is likely to ask for WTO
consultations and hopes that Singapore will join the United States
in this process. MTI Senior Assistant Director (Trade) Alpana Roy
noted that MTI Minister LIM Hng Kiang recently told USTR Schwab that
Singapore is willing to engage the EU on this issue.

Intellectual Property
--------------


7. (SBU) DAUSTR Bell urged the GOS to proceed with a planned
digital video conference to discuss intellectual property rights
(IPR) issues raised during the FTA review in May, in particular our
desire for Singapore to join the Anti-Counterfeiting Trade Agreement
(ACTA) and to clarify Singapore's law governing Internet
rebroadcasts (i.e., simulcasts). Senior Assistant Director Roy said
that the Ministry of Law is still evaluating the ACTA proposal;
MinLaw was particularly interested in receiving a read-out of the
USG's recent ACTA discussions with Japan.

Regional Illegal Logging Initiative
--------------


8. (SBU) DAUSTR Bell asked Singapore to join a regional dialogue on
illegal logging and associated trade and delivered a nonpaper
formalizing this request. Building on the bilateral initiative
between the United States and Indonesia, as well as discussions with
Malaysia, the Philippines, and China, the USG believes that a
multilateral approach will be more effective to combat illegal
logging, he said. Director Yeo noted that Singapore is concerned
about illegal logging, but more from an environmental protection
perspective. Singapore feels "powerless" to control the trade in
timber since this is an issue that must be addressed at points of
origin and points of demand, not at an intermediary port, he
claimed. Singapore will enforce its laws, but it remains
"perplexed" about how it can play a role in this process. DAUSTR
Bell said that it is important that countries involved at all
aspects of the timber trade come together to discuss their
respective competencies and to exchange ideas about possible
solutions. Director Yeo did not make any commitments, but said MTI
will consider the regional dialogue proposal.

Energy - Island Power
--------------


9. (SBU) DAUSTR Bell expressed his hope that the Energy Market
Authority (EMA) can move quickly to clear the remaining obstacles
that continue to prevent Island Power -- a subsidiary of Intergen, a
U.S. company -- from bringing its multimillion dollar power
generation investment to fruition. An EMA representative said that,
although Parliament had passed the Gas Act in May, the approval
process for Island Power must proceed slowly to allow sufficient
time for the new legislation to be implemented (ref C).

Credit Cards and ATMs
--------------


10. (SBU) DAUSTR Bell told Director Yeo that USTR has received
inquiries from industry about ATM access for individuals using
credit cards issued locally by foreign banks. Although the issue
might not raise FTA-specific questions, he suggested that the GOS
consider additional outreach to address consumer and provider
uncertainties. The USG also may want to consider a more formal
Financial Services Committee process facilitated by Treasury to
discuss a broad range of technical sectoral issues and follow up on

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financial services consultations agreed to in the FTA. Director Yeo
said he would convey industry's concerns to Monetary Authority of
Singapore officials and provide an appropriate point of contact.

Regional FTA Initiatives
--------------


11. (SBU) DAUSTR Bell raised the possibility of holding exploratory
talks in Washington in October on regional liberalization
initiatives and possible U.S. involvement in the P-4 Agreement
between Singapore, Brunei, New Zealand, and Chile. Director Yeo
said that Singapore welcomes such discussions.


12. (U) DAUSTR Bell cleared this message.

SHIELDS