VZCZCXRO0081
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #0945/01 0830612
ZNR UUUUU ZZH
R 240612Z MAR 06
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 9299
INFO RUEHGV/USMISSION GENEVA 0836
RUEHUL/AMEMBASSY SEOUL 3830
RUEHBJ/AMEMBASSY BEIJING 2144
RUEHKO/AMEMBASSY TOKYO 5298
RUESLE/AMCONSUL SHANGHAI 1080
RUEHHK/AMCONSUL HONG KONG 5969
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS SECTION 01 OF 02 SINGAPORE 000945 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
USTR FOR DUSTR BHATIA AND RDEHAAN 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EINV USTR PGOV SN
SUBJECT: DUSTR BHATIA'S MEETING WITH MTI MINISTER LIM 
 
 
¶1.  (SBU) Summary.  Singapore Minister for Trade and 
Industry LIM Hng Kiang told Deputy U.S. Trade Representative 
Karan Bhatia during a March 18 meeting that the WTO's "big 
four" economies needed to work together to finalize a 
package that could be sold to other more resistant member 
economies.  He argued that, although progress on Doha had 
been limited, overall positive dynamics among key 
negotiating teams boded well for achieving consensus. 
Minister Lim advocated pursuit of a sectoral approach at the 
upcoming April APEC meetings, and pushed for greater 
emphasis on customs facilitation.  He welcomed U.S. efforts 
to pursue free trade agreements (FTAs) with South Korea and 
Malaysia, observing that the determination and negotiating 
skills of South Korean Trade Minister Kim and Malaysian 
Trade Minister Rafidah would prove essential in the face of 
anticipated domestic resistance.  He voiced optimism on 
Indonesia, noting recent efforts by the GOI and GOS to 
resolve investor disputes.  In terms of dealing with the 
rise of China and India, Minister Lim observed that the key 
challenge for Southeast Asia was how to implement the 
reforms necessary to take full advantage of shifting trade 
and investment flows.  End Summary. 
 
Doha Agenda 
----------- 
 
¶2.  (SBU) Noting that the March 10-11 WTO meetings in London 
had yielded limited results, DUSTR Bhatia said that the USG 
valued Singapore's continued support of WTO objectives and its 
role as a key proponent of the Doha Round in the region.  He 
lamented Asia's lack of engagement relative to the weight of 
some of its economies, especially China and India.  Minister 
Lim said it was imperative that the "big four" WTO economies 
(United States, EU, Japan, and Canada) work together to 
finalize a package that could then be "sold" to more reluctant 
members.  Lim noted that the broad strategy for Doha was still 
viable and that Singapore had its hopes pinned on the upcoming 
April meetings designed to move forward the negotiations. 
 
¶3.  (SBU) Minister Lim voiced optimism based on how WTO 
Director General Pascal Lamy had handled the December 2005 Hong 
Kong negotiations despite their minimal progress.  He suggested 
that recent dynamics of the "green room" boded well for 
achieving consensus.  DUSTR Bhatia noted that USTR Portman 
thought the APEC Statement issued in conjunction with the Hong 
Kong ministerial meetings had been helpful, and that we wanted 
to pursue something similar linked to the April meetings. 
 
¶4.  (SBU) Minister Lim agreed with DUSTR Bhatia that recent 
efforts to incorporate actual numbers into modeling simulations 
were yielding positive results.  DUSTR Bhatia cautioned, 
however, that some countries like Brazil and India were 
resistant to non-agricultural market access (NAMA) initiatives. 
He also expressed concern that, without progress on 
agriculture, increasing protectionist sentiment in Washington 
could circumscribe the USG's own maneuverability. 
 
APEC 
---- 
 
¶5.  (U) Minister Lim said that business groups were urging 
Singapore to support a sectoral approach at the April APEC 
meetings in Vietnam.  He suggested building momentum in this 
direction by adopting a strategy similar to that used 
previously for the information technology sector.  DUSTR Bhatia 
noted that while there was some support for a sectoral approach 
in Geneva, this was not the case in most Asian countries; 
Singapore was an exception.  He pointed out that part of the 
problem was a lack of awareness among certain trade ministries. 
Minister Lim said that APEC should target customs facilitation 
as a priority; DUSTR Bhatia agreed.  He explained that these 
efforts dovetailed with ASEAN's efforts to develop uniform 
customs standards. 
 
U.S. Regional Trade Initiatives 
------------------------------- 
 
¶6.  (U) Minister Lim said that Singapore welcomed U.S. efforts 
to enter into FTA negotiations with South Korea and Malaysia, 
noting that this was a step in the right direction for both 
APEC and ASEAN.  DUSTR Bhatia explained that the Administration 
 
SINGAPORE 00000945  002 OF 002 
 
 
believed more focus needed to be given to Asia on trade issues; 
the expiration to the President's Trade Promotion Authority in 
July 2007 would require a concerted effort on both sides to 
conclude agreements before this deadline. 
 
South Korea FTA 
--------------- 
 
¶7.  (SBU) Minister Lim said that he was pleased that South 
Korea, through FTA negotiations with the United States as well 
as with ASEAN, was attempting to reduce its growing dependence 
on the Japanese and Chinese economies.  He praised South Korean 
Trade Minister Kim Hyun Chong for pursuing free trade 
objectives despite considerable domestic resistance. 
 
Malaysia FTA 
------------ 
 
¶8.  (SBU) With regard to Malaysia, Minister Lim emphasized that 
Singapore strongly supported any ASEAN partner that entered 
into FTA negotiations.  He commented that Trade Minister 
Rafidah Aziz was an excellent negotiator and that she would 
prove essential to a successful outcome.  Asked if Prime 
Minister Badawi would allow Minister Rafidah to be the key 
decision maker, Minister Lim replied that it would depend on 
the scope of the FTA: if the United States insisted on a "gold 
standard" FTA comparable to the the U.S.-Singapore FTA, PM 
Badawi would need to intervene to push through required (and 
controversial) legal and regulatory reforms in areas such as 
bumiputra (ethnic Malay) ownership and labor requirements, 
automobiles, and government procurement. 
 
Indonesia 
--------- 
 
¶9.  (U) Minister Lim said that he was upbeat about Indonesia. 
Vice President Jusuf Kalla and Singapore Foreign Minister 
George Yeo had recently met in Batam to resolve investor 
difficulties that were symptomatic of problems faced by 
investors elsewhere in Indonesia, he said.  The GOI understood 
that it needed to change its tax, investor and labor laws if it 
were to generate the 2.5 million new jobs it needed annually. 
 
China 
----- 
 
¶10.  (U) Minister Lim commented that implementation of the 
China-ASEAN FTA agreement on goods was proceeding smoothly. 
Trade negotiators would meet the week of March 20 to further 
discuss the services component.  He noted that China was 
Singapore's top investment destination, and trade was growing 
by approximately 25 percent annually.  Asked for his assessment 
of China's push to develop its more remote western provinces, 
Minister Lim said that Singapore investors were doing well in 
these provinces and that benefits were beginning to trickle 
down to the smaller cities and townships.  Although Minister 
Lim admitted some concern about the large flow of foreign 
direct investment (FDI) to China and India relative to ASEAN, 
he emphasized that FDI flows were not a zero-sum game; ASEAN's 
growing links to both economies would ensure increasing 
integration and new jobs growth.  Minister Lim concluded that 
the challenge for Southeast Asia was how best to implement 
reforms to take full advantage of evolving regional trade and 
investment flows. 
 
¶11.  (U) DUSTR Bhatia cleared this message. 
 
HERBOLD