This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 BANGKOK 001170 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT PASS USTR FOR BWEISEL AND TPOSNER 
COMMERCE FOR ITA/JBENDER AND JKELLY 
 
E.O. 12958: N/A 
TAGS: EINV ETRD TH US FTA
SUBJECT: THAI PM APPROVES "INTERIM" RESUMPTION OF 
AER-COVERED SERVICES INVESTMENTS 
 
 ¶1.  (SBU)  Summary.  MFA informed the Ambassador that Thai 
PM Thaksin has agreed to resume AER-covered services 
investments in exchange for US willingness to renegotiate the 
language in the proposed State/MFA exchange of letters.  The 
renegotiation aims to provide the RTG with greater "legal 
comfort" in the event of a WTO challenge.  Resumption of 
AER-covered approvals will be for three months, renewable for 
additional 3-month periods.  The RTG stresses that the 
renewal of approvals will be governed by the perception that 
the US is willing to "join hands . . . to fend off any threat 
of Thailand being subject to litigation at the WTO." 
Commerce must now implement this decision -- septel will 
detail the RTG's intentions in this regard.  End Summary. 
 
¶2.  (SBU)  On February 24 the Ambassador (accompanied by 
Embassy Economic Counselor) met with MFA PermSec Krit 
Garnjana to be briefed on the RTG's proposed approach on the 
Treaty of Amity and Economic Relations (AER).  Krit was 
accompanied by MFA Americas D-G Nongnuth Phetcharatana and 
MFA Legal Affairs Director Virachai Plasai. 
 
¶3.  (SBU)  Krit reported that the Prime Minister's "Kitchen 
Cabinet" had discussed this issue in its February 23 meeting 
and had agreed on an approach to the AER issue.  Krit 
provided us with the following points: 
 
Begin RTG Paper 
 
-- A small group meeting with the Prime Minister regarding 
the AER on 23 February 2006 has produced quite a positive 
outcome. 
 
-- Overarching concept:  The Prime Minister underlined that 
Thailand join hands with the US to fend off any threat of 
Thailand being subject to litigation at the WTO.  Working 
assumption on this is one of Thailand and the US being on the 
same side -- not on opposite sides. 
 
-- The Prime Minister endorsed the following package 
consisting of three elements: 
 
        1)  Thailand is ready to undertake interim measure to 
resume granting benefits under 
             the AER to US persons; 
 
        2) A renegotiation of the Exchange of Notes such that 
adequate legal comfort is 
            provided for Thailand vis a vis possible WTO 
litigation; 
 
        3) Interim measure will be in force for renewable 
periods of three months duration. 
 
-- We need to set a timeframe for the interim measure because 
a new, previously uncontemplated factor has emerged, that is, 
the possibility of FTA negotiations being left pending for an 
open-ended period, which in turn entails an equally 
open-ended prolonged exposure of Thailand to the risk of 
being litigated against at the WTO. 
 
-- We would like to stress that the above safeguard action 
will be governed solely by considerations related to our 
quest for adequate cover against exposure to litigation at 
the WTO. 
 
End RTG Paper 
 
¶4.  (SBU)  Krit stressed that, for the PM, the "overarching 
concept" would guide the RTG's actions, that is, as long as 
Thailand and the US were working together toward the same 
goal (helping Thailand fend off a WTO challenge), Thailand 
would be forthcoming on maintenance of the interim measure. 
Krit added that Thailand is encouraged by the fact that, by 
its actions thus far, the US has displayed this common 
interest.  "Your willingness to the exchange of notes is a 
sign of this," he said. 
 
¶5.  (SBU)  The PermSec stated that the AER is being treated 
separately from the FTA.  "This is not a negotiating gambit," 
he said.  "Mixing this with the FTA will result in crossed 
wires and a short circuit." 
 
¶6.  (SBU)  Krit conceded that the current actual threat of a 
WTO challenge has diminished.  "A year ago," he said, "the 
threat was greater -- the FTA with Japan was not completed." 
He appealed for the US to exhibit an attitude consistent with 
the "overarching concept."  "Let's try to find a soft 
landing," he said.  Alluding to certain Cabinet members who 
may previously have used the AER issue as a possible 
negotiating lever in the FTA talks, or may have taken a hard 
line for other reasons, he said, "We need to find a graceful 
exit for the Cabinet; we hope to find a ladder for the 
Cabinet to use to climb down (from previous positions)."  We 
expect the RTG to provide us with proposed alternate language 
for the exchange of letters shortly. 
 
Next Steps 
¶7.  (SBU)  Krit made it clear that the interim measure can be 
effected immediately, i.e., it is not conditional on 
agreement on the exchange of letters language.  Authority to 
resume AER-covered services investments now rests with 
Commerce PermSec Karun Kittisataporn.  (Note:  We are not 100 
percent clear on the legal status of "Kitchen Cabinet" 
decisions -- it may be necessary for the full Cabinet to 
authorize sending a note to Karun that endorses the "Kitchen 
Cabinet" decision (this possibility was alluded to by Krit). 
The full Cabinet is expected to meet on February 28.)  We are 
meeting with Karun on February 27 and will report on how he 
intends to proceed, specifically, when approvals will resume. 
BOYCE