Identifier
Created
Classification
Origin
07SINGAPORE206
2007-01-30 08:59:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Singapore
Cable title:  

AMBASSADOR MICHALAK HIGHLIGHTS USG APEC AND ASEAN

Tags:  APEC ETRD ECON EINV USTR TBIO KFLU SN 
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DE RUEHGP #0206/01 0300859
ZNR UUUUU ZZH
R 300859Z JAN 07
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 2342
INFO RUEHBY/AMEMBASSY CANBERRA 1808
RUEHBJ/AMEMBASSY BEIJING 2401
RUEHKO/AMEMBASSY TOKYO 5554
RUCPDOC/DEPT OF COMMERCE WASHDC
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHIN/AIT TAIPEI 6393
UNCLAS SECTION 01 OF 04 SINGAPORE 000206 

SIPDIS

SENSITIVE
SIPDIS

STATE FOR AMBASSADOR MICHALAK AND RPOLLARD
USTR FOR AUSTR WEISEL

E.O. 12958: N/A
TAGS: APEC ETRD ECON EINV USTR TBIO KFLU SN
SUBJECT: AMBASSADOR MICHALAK HIGHLIGHTS USG APEC AND ASEAN
INITIATIVES


UNCLAS SECTION 01 OF 04 SINGAPORE 000206

SIPDIS

SENSITIVE
SIPDIS

STATE FOR AMBASSADOR MICHALAK AND RPOLLARD
USTR FOR AUSTR WEISEL

E.O. 12958: N/A
TAGS: APEC ETRD ECON EINV USTR TBIO KFLU SN
SUBJECT: AMBASSADOR MICHALAK HIGHLIGHTS USG APEC AND ASEAN
INITIATIVES



1. (SBU) Summary. Senior U.S. Official to APEC Ambassador
Michael Michalak told Singapore officials that APEC members
needed to fulfill certain action items this year in order
to keep the momentum going for a Free Trade Area of the
Asia Pacific (FTAAP). He also sought their opinions on how
to get ASEAN Senior Economic Officials to quickly endorse
USG initiatives under the U.S.-ASEAN Enhanced Partnership.
Singapore officials cited China's uneasiness with the FTAAP
as the reason behind its side meeting with what it hoped
would be like-minded Southeast Asian countries during the
APEC Senior Officials Meeting (SOM) in Canberra. The GOS
said that concluding the ASEAN-China free trade agreement
(FTA) was a top priority for ASEAN, ahead of the ASEAN + 3
and ASEAN + 6 negotiations. Ambassador Michalak encouraged
ASEAN to stay focused on its own integration in order to
compete effectively with its trading partners. End
Summary.


2. (U) During his January 23-27 visit to Singapore,
Ambassador Michael Michalak discussed developments related
to his January 15-22 participation in the APEC SOM in
Canberra. He also sought opinions about how best to
maximize his discussions on the U.S.-ASEAN Enhanced
Partnership during the upcoming ASEAN Senior Economic
Officials Meeting (SEOM) being held in Kuala Lumpur January
29-31. Office of Bilateral Trade Affairs (EB/TPP/BTA)
Director Robert Pollard accompanied Ambassador Michalak for
part of his visit. Ambassador Michalak met separately with
Ministry of Foreign Affairs (MFA) Deputy Secretary HO Cheok
Sun; MFA Director (ASEAN Directorate) Jacky FOO Kong Seng;
Ministry of Trade and Industry (MTI) Senior Deputy Director
(ASEAN) Ms. Sulaimah Mahmood (also Singapore's SEOM
representative for ASEAN); Ministry of Health (MOH) Deputy
Secretary GOH Aik Guan and REDI Center Executive Director

SIPDIS
Dr. Rodney Hoff. Ambassador Michalak also gave interviews

to the Straits Times and Zaobao (Singapore's largest
Chinese language newspaper),met with the American Chamber
of Commerce and, over lunch, with Singapore-based academics
and business representatives.

FTAAP
--------------


3. (SBU) Ambassador Michalak told GOS officials that,
although creation of an FTAAP was a long-term goal, APEC
members needed to reach consensus this year on certain
immediate action items in order to keep the momentum from
the SOM going; this was especially important to bolster
public support for an FTAAP. MTI Deputy Director (APEC and
Americas) Mary Elizabeth Chelliah said that a good starting
point might be to catalogue and compare the terms and
conditions of each APEC members' FTAs.


4. (SBU) In considering the possible mechanics for an
FTAAP, Ambassador Michalak expressed doubts about a
pathfinder approach (whereby certain member economies can
accede first to an agreement and others follow when ready)
that would rely on APEC's standard consensus methodology.
Deputy Director Chelliah suggested an alternative, WTO-
based approach in which initial APEC signatories to an
FTAAP agreement could dictate the rules of accession for
future participants. Key to this process would be China's
buy-in as a founding member, she said. Alternatively, the
existing text of the P4 "Trans-Pacific Strategic Economic
Partnership Agreement" that Brunei, Chile, New Zealand, and
Singapore signed in June 2005 could serve as a model,
Chelliah said. Each new member would be able to recommend
changes and enhancements to the original text, she
explained. Ambassador Michalak said that these approaches
merited further consideration and called for their
inclusion among the FTAAP-related recommendations the APEC
SOM had agreed to begin drafting.

China's "Anti-FTAAP" Meeting
--------------


5. (SBU) Chelliah told Ambassador Michalak that China had
organized a meeting on the sidelines of the SOM to discuss
its concerns with the FTAAP because it was uncomfortable
with being the only economy opposed to the FTAAP and was
looking for like-minded supporters. Invitees included
Indonesia, Malaysia, the Philippines, Thailand, Brunei, and

SINGAPORE 00000206 002 OF 004


possibly Vietnam (which did not attend). China did not
invite Singapore, but GOS representatives managed to "sneak
in," she said. During the meeting, China raised concerns
about the "exclusiveness" of the FTAAP process and stressed
the need for it to feed back into the SOM process.
Ambassador Michalak commented that China was concerned
about Taiwan's participation in an FTAAP.

ASEAN Gives Top Priority to FTA with China
--------------


6. (SBU) In response to Ambassador Michalak's skepticism
about the prospects for a successful ASEAN + 3 or ASEAN + 6
FTA, MFA Deputy Secretary HO said that an ASEAN + 3 FTA
(involving China, Japan, and South Korea) was "doable,"
with the trade-in-goods chapters already negotiated, but
that an ASEAN + 6 FTA was not. Deputy Director Chelliah
explained that ASEAN had decided to finish its ASEAN + 1
FTA negotiations before committing more resources to these
larger FTAs. Being the furthest along, the ASEAN-China FTA
was a top priority; she conceded that the ASEAN-Japan
agreement had stalled. Chelliah noted that ASEAN needed to
improve its own ASEAN Framework Agreement on Services
(AFAS) if it were to build support within the business
community for services negotiations with other trading
partners.

ASEAN Economic Community by 2015?
--------------


7. (SBU) Although concluding a series of FTAs factored
into the ASEAN leaders' vision of an ASEAN Economic
Community by 2015, MFA Director Foo said that some
officials questioned why ASEAN was pursuing greater trade
liberalization with its trading partners than with other
ASEAN members. However, he was confident that the ASEAN
Charter's recommendation to adopt a system of binding
agreements should help ASEAN move towards full integration.
Ambassador Michalak agreed, noting that economic
integration should be ASEAN's top priority to ensure its
ability to compete with the United States, China, Japan,
and India.

APECQASEAN Cooperation
--------------


8. (SBU) Ambassador Michalak expressed his hope that the
development of a Single Window to facilitate customs
harmonization under the ASEAN-US Trade and Investment
Arrangement (TIFA) would be expanded to eventually include
APEC economies. Similarly, APEC was building on a World
Intellectual Property Organization (WIPO) initiative to
design a common patent application form that might make
sense to start in ASEAN, he said. Ambassador Michalak
highlighted other synergies between APEC and ASEAN.
Existing collaborative projects such as those on clean
energy and a farmer-to-farmer initiative helped maximize
limited budget resources, he said. MTI Senior Deputy
Director Mahmood agreed that cooperation was good, but
advised against overemphasizing ASEAN-APEC linkages since
some ASEAN economies were not members of APEC and resisted
making official associations between the two organizations.

De-conflicting the Enhanced Partnership and TIFA
-------------- ---


9. (SBU) Ambassador Michalak told Director Foo that the
ASEAN-US Enhanced Partnership, signed in July 2006, was off
to a good start, as was cooperation under the TIFA, signed
in August 2006. He assured GOS officials that U.S.
initiatives under the Enhanced Partnership and under the
TIFA were complementary. He noted that some ASEAN
officials remained confused about the delineation of
responsibilities within the USG, i.e., USTR oversees the
TIFA and State leads on the Enhanced Partnership. He
stressed, however, that there had been close U.S.
interagency coordination in formulating the initiatives.
Director Foo explained that, while the ASEAN SEOM was
accustomed to dealing with USTR, it also handled a broad
range of economic issues and that this might have resulted
in some misunderstandings.


SINGAPORE 00000206 003 OF 004



10. (SBU) Director Pollard thanked Director Foo for
Singapore's remarks on the draft Plan of Action (POA) under
the Enhanced Partnership. He noted that this year's
thirtieth anniversary of U.S.-ASEAN relations provided a
unique opportunity to make substantive progress on the
Enhanced Partnership. Director Foo agreed that both sides
needed to redouble their efforts and suggested that ASEAN
and the USG package various POA initiatives under specific
headings to help guide their implementation. He cited the
"Improving the Overall Business Environment" theme adopted
by the ASEAN Standards Committee (ASC) as an example. Foo
said that he was Singapore's point of contact for the POA
and that as a member of the ASC, he would ensure that
action items got passed to the appropriate ASEAN offices.

SEOM's Formal Commitment "Unlikely"
--------------


11. (SBU) Pollard asked if it would be possible for the
USG to obtain a formal commitment on specific Enhanced
Partnership programs from the SEOM during its Kuala Lumpur
meetings. Foo said that this was unlikely. Senior Deputy
Director Mahmood thought that the SEOM might be willing to
provide an endorsement in principle. Although it was best
to make proposals before the beginning of a SEOM-year,
Mahmood explained that discussions were underway to stagger
the timing of project-related meetings in order to allow
greater flexibility in prioritizing objectives. She
expressed confidence that progress would be made on the
four proposals to be presented at the SEOM relating to
standards, business facilitation, IPR, and transportation.
In addition to action plans under the TIFA and the POA, the
SEOM would also consider deliverables in support of ASEAN
integration, she said.

REDI Center and Avian Influenza
--------------


12. (SBU) In a joint meeting with MOH Deputy Secretary Goh
and REDI Center Executive Director Hoff, Ambassador
Michalak said that APEC played a positive and useful role
in combating a possible Avian Influenza pandemic.
Ambassador Michalak said that Asia was far ahead of other
parts of the world in terms of AI preparedness, recent
outbreaks in Japan and South Korea notwithstanding, and
cited APEC economies' participation in the International
Partnership on Avian and Pandemic Influenza (IPAPI) as
evidence.


13. (SBU) Dr. Hoff told Ambassador Michalak that with
increased funding from the USG and the GOS, REDI was hiring
additional staff to beef up its training and support
activities. In particular, REDI would be able to
strengthen its participation in the U.S.-Singapore-
Indonesia trilateral project to create an AI-free zone in
Indonesia's Tangerang district, he said. Deputy Secretary
Goh noted that REDI's international organization status
allowed it to fund activities that would be more difficult
to accomplish on a government-to-government basis.
Ambassador Michalak encouraged Goh and Hoff to consider
approaching organizations like the Gates Foundation to
diversify REDI's sources of funding and to enhance its
overall competitiveness for grants.


14. (SBU) Ambassador Michalak asked Deputy Secretary Goh
for a status report on Singapore's obligation under our
bilateral REDI Agreement (signed November 22, 2005) to
establish an accession mechanism for other APEC economies.
Deputy Secretary Goh claimed that REDI's Executive Board
was not anxious to begin this process. It preferred to
give REDI more time to establish a track record as an
organization jointly funded and operated by the United
States and Singapore. He highlighted the risk of
politicizing REDI, noting that Taiwan had been the first
economy to inquire about participation. (Note: Although
not a formal APEC institution, REDI's creation was
announced on the sidelines of the 2003 APEC Leaders'
Meeting by President Bush and Singapore's Prime Minister
Goh Chok Tong. APEC served as the model for REDI's
international organization structure. End note.)


15. (U) Ambassador Michalak and Robert Pollard cleared

SINGAPORE 00000206 004 OF 004


this cable.