CHINA NOT YIELDING ON CERTIFICATION SCHEME

UNCLAS SECTION 01 OF 02 BEIJING 002909 State for EAP/CM JYamomoto, PSecor State also for EB/CIP DGross, WWitteman USTR for JMcHale, TWineland, TStratford USDOC for ITA IKasoff USDOC for ITA JEstrada GENEVA PASS USTR SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECPS ETRD PREL EINV WTRO ECON CH SUBJECT: CHINA NOT YIELDING ON CERTIFICATION SCHEME FOR IT PRODUCTS ¶1. (SBU) Summary: In a July 18 meeting with the National Certification and Accreditation Administration (CNCA), United States Trade Representative (USTR) Chief Legal Counsel Warren Maruyama, Assistant USTR Tim Stratford, Deputy Assistant USTR Tim Wineland, USTR Director for China and Taiwan David Katz, Department of Commerce Deputy Assistant Secretary (DAS) for Asia Ira Kasoff, Rebecca Karnak from Market Access and Compliance, and Embassy officers raised United States concerns over China's proposed unprecedented, mandatory certification requirements for 13 categories of information technology products. End Summary. ¶2. (SBU) USTR Chief Legal Counsel Maruyama summarized USG and industry's concerns regarding China's August 2007 notifications of proposed regulations mandating China Compulsory Certification requirements for 13 categories of information technology products, emphasizing that China would be the only country in the world to require certification of such products for commercial use, as opposed to government procurement for national security use. ¶3. (SBU) CNCA Chief Administrator Sun Dawei acknowledged that he was aware of USG and industry concerns. He pointed out that CNCA has participated in a series of meetings and discussions regarding the notifications, which he said are a way of managing the assurance of product quality, and are the result of discussions among various Chinese government agencies. One of China's objectives, Sun indicated, was to establish a single set of standards, one certification, and one mark for the affected products. Sun also mentioned that there is a workshop scheduled with industry on July 30 to further discuss certifications and information security. ¶4. (SBU) USTR's Maruyama explained that industry has questions regarding the purpose of the notifications and how they would be implemented, adding that the products in question involved some of the United States' largest technology companies and several billion dollars in trade. United States industry's concern, he said, is that the announcement of implementing rules (originally scheduled to be released in May 2008) would lead to high-level politicization of this issue, in light of the serious concerns of the USG and United States companies. The USG core request is for CNCA to postpone any announcement of the rules so that experts can discuss the best way to regulate information security in a manner consistent with international practice. ¶5. (SBU) Sun said that the assessment of information security products is the responsibility of CNCA, and that it believes a unified system of assessment would reduce duplication in testing. He emphasized that the promulgation of the certification requirements was the result of coordination among several Chinese government agencies, and that consultations with industry has caused them to postpone the original announcement of implementing rules. ¶6. (SBU) USTR's Maruyama expressed his appreciation for CNCA's willingness to hold discussions with industry and the United States Government. He said that in an effort to strike a balance between security and innovation, the United States normally favors the innovation side of the equation. A wrong policy might lead China to greater isolation, as in Japan after its government pursued policies to pick national champions and domestic standards. ¶7. (SBU) When asked by Murayama whether there would be a new date for the promulgation of the rules, Sun BEIJING 00002909 002 OF 002 answered that there was no change and no new date. He expressed his hope that the industry participants at the July 30 workshop will take the opportunity seriously, adding that China's current policy is in line with international practices. Sun added that CNCA cannot indefinitely continue to discuss the proposed rules, and that industry should attach great importance to the July 30 workshop. USTR's Maruyama indicated he would relay Sun's views to industry, but that industry during the workshop would likely stress its core concern, i.e., that mandating such a certification regime for products in the commercial sector would go considerably beyond international practice. ¶8. (SBU) Comment: Sun's comment that CNCA will not delay the implementation date of the certification requirements suggests that May 1, 2009 will remain the deadline for compliance with the as yet unpublished regulation. This is despite the fact that the Chinese government has until now delayed the publication of implementing guidelines, originally expected on May 1, ¶2008. In addition, Sun's repeated emphasis on the July 30 workshop with industry seemed to be an expression of growing impatience with the United States' objections to the proposed regulations, and possibly a warning that there may not be any further opportunity for discussion before final implementing regulations are published. End Comment. RANDT