GOP SEEKS TIFA DELIVERABLES

UNCLAS SECTION 01 OF 02 ISLAMABAD 000787

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EINV ETRD PREL PK
SUBJECT: GOP SEEKS TIFA DELIVERABLES


1. (SBU) Summary: The GOP hopes to bring progress on IPR issues and
on the long-standing Siemens-Westinghouse investment dispute to the
Trade and Investment Framework Agreement (TIFA) talks on April 27.
They are willing to discuss regional trade issues on the sidelines,
but do not wish them to be part of the official agenda, as they are
not bilateral issues. They continue to have issues with the items
covered in the draft ROZ legislation, but do not appear to have done
much preparation on labor monitoring and customs harmonization. No
decision has been made on the BIT, although the Commerce and
Investment Ministers will discuss this on April 13. End Summary.


2. (U) In a meeting with DCM and ECON Counselor April 10, Ministry
of Commerce (MoC) Secretary Salman Ghani and his staff stressed
their serious intent to generate concrete deliverables from the
April 27 TIFA talks in Washington. The GOP delegation will be
small: Minister of Commerce Fahim, Secretary Ghani, Senior Joint
Secretary Foreign Trade Shahid Bashir, and Deputy Secretary Abdul
Memon Qadir from Commerce, as well as Muhammad Afzal Bhatti, Member
(Customs),Federal Board of Revenue (FBR). Commerce will decide
April 13 whether anyone from the Investment Ministry will accompany.
Both Bashir and Ghani would appreciate clarification whether USTR
Kirk would be available for the TIFA.

Possible Progress on IPR...


3. (SBU) Ghani stressed the GOP's strong desire to see Pakistan
removed from the Special 301 Priority Watch List, and the Commerce
Ministry would like an announcement that Pakistan's status has
improved in time for TIFA. Joint Secretary Bashir quoted from the
International Intellectual Property Association's report from 2009
stating that losses in 2008 were only $77 million, compared with
nearly double that amount in 2007. Ghani and Joint Secretary Bashir
both indicated that the GOP was ready to introduce long-stalled data
protection legislation. Ghani, who had previously been the Health
Secretary, said he was pushing that Ministry to establish a Drug
Control Authority and to address pricing issues. The Health
Ministry is developing a full health policy, including revised price
schedules, which he hoped would be ready by the end of the fiscal
year (June 30). DCM welcomed any steps the GOP would take on IPR
protection, noting that the U.S. has been frustrated by the lack of
recent progress, particularly on pharmaceuticals. He indicated
that, while this year's assessment is largely complete, the Embassy
would support a statement acknowledging at the TIFA any concrete
progress by Pakistan.

...and Closing the Books on the Siemens-Westinghouse Dispute


4. (SBU) Ghani said he believed that final resolution of the
decade-old Siemens-Westinghouse dispute would be an excellent
deliverable for TIFA. DCM briefed Ghani on USG efforts to urge the
parties - whose attorneys have verbally agreed on a negotiated
settlement - to sign off on paperwork that will bring the issue to a
close. The last step is to secure the signature of Investment
Minister Waqar Khan, albeit in his private capacity as a
representative of the Pakistani firm involved in the suit. Ghani
said the issue had been raised with the Prime Minister and that his
office would become involved if necessary to bring this issue to a
conclusion.

Transit Trade/SAFTA to be Discussed Unofficially


5. (SBU) Commerce officials have mentioned several times that they
feel that the regional trade issues items should not be part of the
formal agenda as they are not bilateral in nature. They are willing
to brief the U.S. side on the margins of the talks, however.

ROZ's


6. (SBU) Secretary Ghani expressed long-standing GOP concern that
many of the items on the list to be included in the proposed ROZ
legislation would not be that advantageous to Pakistan, stating that
the purpose of the ROZ's was to improve Pakistan's overall export
volume. He referred to a recent U.S Pakistan Business Council
report advocating wider ROZ coverage. As the economy was quite
integrated, he said, any slowdown in trade would affect the border
areas as well, noting that the Waziris and the Masoods control 60-70
percent of the transportation sector. Ghani also mentioned that ROZ

ISLAMABAD 00000787 002 OF 002


coverage of only 100 miles from the border would disadvantage areas
in Balochistan such as Lasbela and Gwadar. In answer to our
question about which entities could be partners in improving labor
monitoring, Ghani, who was previously Labor Secretary in the NWFP
government, suggested the labor welfare boards, at both the federal
and provincial levels.

Comment


7. (SBU) Although we tried to lower expectations that there was
still time to modify this year's Special 301 report, Post would
support recognizing any meaningful GOP efforts at the TIFA -
provided Commerce can actually deliver. A follow-up conversation at
the Ministry of Health to assess any movement on the stalled
pharmaceutical legislation was not encouraging; that being said, if
the Commerce Ministry can succeed in introducing legislation into
the National Assembly, this would be the first progress we have seen
in over two years. Even if it is insufficient to warrant changing
Pakistan's status on the Watch List, it would be worthy of
high-level encouragement.

PATTERSON