PAKISTANI OFFICIALS, ACTING AUSTR, AND U.S.

C O N F I D E N T I A L SECTION 01 OF 02 ISLAMABAD 002801

SIPDIS

E.O. 12958: DECL: 08/22/2018
TAGS: ECON ETRD IP PREL PGOV PK
SUBJECT: PAKISTANI OFFICIALS, ACTING AUSTR, AND U.S.
COMMERCE OFFICIAL DISCUSS ROZ, IPR, AND PRIVATIZATION

Classified By: ANNE W. PATTERSON, REASONS 1.4 (B),(D)


1. (C) Summary: On August 13, Acting Assistant U.S. Trade
Representative (USTR) Claudio Lilienfeld and Department of
Commerce South Asia and Oceania Director Linda Droker met
with Pakistani officials in the Ministries of Commerce and
Health, the Privatization Commission, and the Intellectual
Property Organization. At the Ministry of Commerce,
discussion centered around Reconstruction Opportunity Zone
(ROZ) legislation. Health Secretary Khushnood Akhtar Lashari
told USG officials that draft intellectual property rights
(IPR) legislation was currently being reviewed by relevant
GOP ministries and would soon be forwarded to local industry
for comments, but he predicted that domestic pharmaceutical
producers would continue to oppose this legislation. He said
there was still no agreement on the definition of "new
chemical entity" and the duration of pharmaceutical patents,
but the United States and Pakistan agreed to hold a digital
video conference soon to discuss this issue. The
Privatization Commission noted that privatization efforts in
FY07-08 had stalled but painted a better picture for
privatization in FY08-09. The Intellectual Property
Organization (IPO) claimed to have made significant headway
in convincing Pakistanis of the value of IPR protection and
expressed frustration over Pakistan remaining on the Special
301 priority watch list despite customs and law enforcement
actions against IPR violators. IPO pledged to work with the
USG in drafting data protection legislation. End Summary.


2. (SBU) At the Ministry of Commerce, discussion focused
primarily on Reconstruction Opportunity Zone (ROZ)
legislation. Joint Secretary of Commerce Jamshed Khan
inquired about how Reconstruction Opportunity Zones would be
designated. Acting AUSTR Lilienfeld noted that Pakistani
initiative would be one way to garner greater Congressional
support for ROZ legislation, and in this regard, he suggested
the GOP develop a proposal outlining potential ROZ areas and
pass it to the USG by the end of August. Lilienfeld said
that, once the USG received this initial GOP proposal, we
would together review the list and decide which areas would
make the final cut. He also noted U.S. desire for greater
interaction vis--vis our Trade and Investment Framework
Agreement and stressed that intellectual property protections
and a Bilateral Investment Treaty would help encourage
greater U.S. investment in Pakistan.


3. (C) Health Secretary Khushnood Akhtar Lashari reported
that draft IPR protection legislation was currently being
reviewed by relevant GOP ministries and would soon be
forwarded to local industry for comment. He predicted that
domestic pharmaceutical producers would reject this
legislation on the grounds that data protection was already
covered under the Data Secrecy Act. Lashari confirmed there
continued to be disagreement over the definition of a "new
chemical entity" and the duration of pharmaceutical patents.
Lashari and Acting AUSTR Lilienfeld agreed to hold a digital
video conference on these issue in the near future.


4. (SBU) At the Privatization Commission, Secretary Ahmad
Jawad told U.S. officials that Pakistan's privatization
efforts stalled in FY07-08, in part due to exogenous factors
in world markets, such as the U.S. sub-prime mortgage crisis
and rising world fuel costs. Plans to privatize a number of
state-owned banks had been put on hold in FY07-08, and even
this year, he said, there are sectors that are conspicuously
absent from the FY08-09 project list, energy being one of
them. Still, Jawad described the list of FY08-09 projects -
so far 16 valued at USD 800 million - as "robust". Among the
projects on tap in the near future are privatization of a
fertilizer plant, an electrical complex that produces power
transformers, the Small and Medium Size Enterprises Bank, and
the National Power Construction Fund.


5. (C) Intellectual Property Organization (IPO) Director
General (DG) Yasin Tahir reviewed steps the IPO had taken to
improve IPR protections. Claiming to have "won the battle of
mindset," Tahir credited IPO with convincing both local
industry and Pakistani citizens that IPR protection was in
Pakistan's best interest. He expressed frustration that
Pakistan remained on the Special 301 priority watch list,
despite customs and law enforcement moves to shut down
copyright infringers and IPR violators. As examples of the
GOP's willingness to tackle the issue, he pointed to a May

ISLAMABAD 00002801 002 OF 002


2008 raid of six optical disk manufacturers and noted there
had been more than 3,000 raids since May 2005. DG Tahir
pledged to work with USG agencies on draft data protection
legislation, but he was unable to provide a concrete timeline
for the approval of such legislation. Acting AUSTR
Lilienfeld thanked the GOP for its actions to date and
reiterated U.S. desires to continue to cooperate on remaining
Special 301 issues of concern.
PATTERSON