VZCZCXRO9399
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #0277/01 0330305
ZNR UUUUU ZZH
R 020305Z FEB 06
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 8626
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/USDA FAS WASHDC
RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS SECTION 01 OF 02 SINGAPORE 000277 
 
SIPDIS 
 
SENSITIVE, SIPDIS 
 
STATE PASS USTR FOR AUSTR BWEISEL, EBRYAN, AND 
JMCHALE 
COMMERCE FOR CPETERS 
 
E.O. 12356: N/A 
TAGS: ETRD ECON EINV ETTC ECPS EPET EAGR KIPR SN
 
SUBJECT: AMBASSADOR'S CALL ON TRADE AND INDUSTRY MINISTER 
LIM HNG KIANG 
 
 
¶1.  (SBU) Summary: The Ambassador told Minister for Trade 
and Industry LIM Hng Kiang that, short of an immediate 
solution, the United States would again raise Singapore's 
fulfillment of its telecom-related commitments at the 
upcoming second annual review of our bilateral Free Trade 
Agreement (FTA).  During her January 27 courtesy call, the 
Ambassador noted progress in other trade-related areas since 
last year's FTA Review, including Singapore's recent 
reopening of its market to U.S. beef and copyright-related 
enhancements to its intellectual property regime.  Minister 
Lim said that Singapore was committed to creating a 
competitive energy and gas sector, but that progress had 
been slowed by the need for several rounds of public 
consultations on draft laws and regulations, and ongoing 
arbitration proceedings between certain government-linked 
corporations (GLCs).  On casinos, Minister Lim asserted that 
Singapore's financial sector was well prepared for any 
increase in gambling-related money laundering and that such 
activities would not be allowed to take root here.  End 
Summary. 
 
FTA Review Progress and Outstanding Issues 
------------------------------------------ 
 
¶2.  (U) Reflecting on progress made on trade issues since 
the FTA's first annual review in February 2005, the 
Ambassador thanked Minister Lim for Singapore's recent 
lifting of its ban on U.S. beef, and for publicly confirming 
that its position remained unchanged despite Japan's January 
20 decision to again close its market.  She cited 
Singapore's additional amendments to its Copyright Law in 
2005 to comply with its FTA obligations as another step 
forward. 
 
¶2.  (SBU) The Ambassador expressed concern, however, that 
Singapore's implementation of telecom-related FTA 
commitments related to mandatory wholesale pricing for 
"tail" local leased circuits remained unresolved after more 
than two years.  She advised Minister Lim that, short of an 
immediate solution, USTR would again be compelled to raise 
this issue at the upcoming FTA Review tentatively scheduled 
for early March.  Minister Lim said that he would convey our 
concerns to Singapore's telecom regulator, the Infocomm 
Development Authority.  He suggested that all telecom 
regulators in liberalizing markets, including the United 
States, had to grapple with similar competing interests 
among dominant and non-dominant carriers. 
 
¶3.  (SBU) Minister Lim said that Singapore also had raised 
outstanding issues at last year's FTA Review, including 
requests related to the acceleration of certain tariffs and 
changes in textile quotas.  He explained that, during the 
negotiation phase, when the GOS was promoting the FTA to 
Singapore businesses, textile manufacturers were 
disappointed when actual market access enhancements fell 
short of their initial expectations. 
 
Energy and Gas Market Deregulation 
---------------------------------- 
 
¶4.  (SBU) The Ambassador asked about Singapore's attempts to 
deregulate the energy sector, in particular efforts to 
resolve problems with third-party access to the Sumatra-to- 
Singapore Pipeline.  MTI Permanent Secretary Peter Ong, who 
accompanied Minister Lim, said that Singapore was committed 
to opening the energy market; the GOS was planning to seek 
public comment on draft legislation in this regard, 
including amendments to the 2001 Gas Act.  Minister Lim 
noted that the GOS had held several rounds of consultations 
with industry representatives, particularly on the Gas 
Network Code, but that the entire process had taken longer 
than anticipated.  He claimed that U.S. and Singapore 
interests converged on the goal of achieving a competitive 
gas market.  He cautioned, however, that current arbitration 
between two of the sector's GLCs - PowerGas and Gas Supply - 
- had to run its course. 
 
Casinos: Moving Beyond "OB Markers" 
----------------------------------- 
 
¶5.  (SBU) Turning to Singapore's decision announced in April 
2005 to build two multi-billion dollar casinos, Minister Lim 
praised the excellent dialogue between the GOS and U.S. 
 
SINGAPORE 00000277  002 OF 002 
 
 
casino operators bidding on the Marina Bay project.  He 
observed that the process of legalizing, regulating, and 
seeking bids on the casinos had been a "good learning 
experience" for the nation; previously, any discussion about 
allowing casinos in Singapore had been "out-of-bounds."  It 
was a great comfort to have three top Las Vegas casino 
operators among the four bidding finalists, Minister Lim 
said; their participation lent credibility to the 
government's decision to allow casinos. 
 
¶6.  (SBU) Highlighting her prior experience on the 
Washington State Gambling Commission, the Ambassador said 
that she was pleased that Singapore was addressing early on 
casino-related issues such as gambling addiction and the 
potential for increased money laundering activities. 
Minister Lim explained that Singapore's role as a key 
financial sector factored into the government's earlier 
resistance to legalizing casinos.  The sector was now more 
mature and prepared to cope with any side-effects, he 
asserted, emphasizing that Singapore would not allow money 
laundering activities to take root. 
 
Herbold