VZCZCXRO4069
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #1119/01 0960822
ZNR UUUUU ZZH
R 060822Z APR 06
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 9471
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEHRC/USDA FAS WASHDC
RUEAORC/US CUSTOMS AND BORDER PRO WASHINGTON DC
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 2156
RUEHBY/AMEMBASSY CANBERRA 1625

UNCLAS SECTION 01 OF 05 SINGAPORE 001119 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE PASS USTR FOR AUSTR BWEISEL, EBRYAN, JJENSEN, JMCHALE, 
VESPINEL AND DBISBEE 
COMMERCE FOR JBAKER 
FWS FOR TVANNORMAN AND PTHOMAS 
USDA/FSIS FOR EALEXANDER 
LIBRARY OF CONGRESS FOR STEPP 
 
E.O. 12958: N/A 
TAGS: ETRD EFIN EINV ECPS SENV EAGR KTEX KIPR ETTC SN
SUBJECT: FTA - JOINT COMMITTEE CONCLUDES SECOND ANNUAL REVIEW 
 
REFS:  A) Singapore 946  B) Singapore 1046 
 
¶1.  (SBU)  Summary.  Representatives from the USG and GOS (the 
"Joint Committee") met in Washington March 30 for the second 
annual review of the U.S.-Singapore Free Trade Agreement (FTA). 
The review agenda (individual items noted below) focused both on 
implementation of the current agreement and possible future 
programs, including telecom, environment, media, market access 
(tariff acceleration, harmonized system changes, rules of origin, 
textiles, etc.), financial services, intellectual property, 
pharmaceuticals (parallel imports), trade secrets, and 
whistleblower protections.  AUSTR Barbara Weisel led the U.S. 
delegation; Ministry of Trade and Industry Deputy Secretary LOH 
Wai Keong led the Singapore delegation.  The Joint Committee 
agreed to following: 
 
-- Telecom: the Joint Committee agreed that its respective 
regulatory experts would convene a digital video conference to 
discuss telecom (local leased circuit or "last mile") 
implementation and obligations concerning technical 
specifications and pricing. 
 
-- Transparency in the Appeals Process and Rule-Making: the GOS 
agreed to review its appeals and rule-making processes as they 
applied to the telecom and media sectors, respectively, to 
determine how it might make them more transparent. 
 
-- Review of Environmental Cooperation: the Joint Committee 
reviewed activities to date under the Memorandum of Intent (MOI) 
on Cooperation in Environmental Matters, and agreed that relevant 
officials will hold a biennial meeting before the end of 2006 to 
review the status of cooperation under the MOI. 
 
-- Arowana Dragonfish: the Joint Committee agreed to explore how 
the FTA's environmental cooperation mechanism might be used to 
open a "new track" for discussions related to Singapore's export 
request, in particular by supporting work to conserve Arowana in 
the wild. 
 
-- Ramin Timber: the Joint Committee agreed to continue 
discussions on how to increase bilateral efforts, and support 
regional initiatives, to combat illegal logging and to screen 
transshipped cargo.  In particular, they agreed that relevant 
officials would hold meetings (scheduled for late April) to 
explore ways to increase joint efforts in the Asia-Pacific region 
to combat illegal logging. 
 
-- Tariff Acceleration: the Joint Committee agreed to launch the 
tariff acceleration process, as provided in Article 2.2.3 of the 
FTA.  The USG explained its domestic process, which begins with a 
Federal Register notice seeking product proposals.  Singapore 
indicated its interest in accelerated tariff elimination for 
certain polycarbonates, and increased Tariff Rate Quotas (TRQs) 
for nutritionals and peanuts.  The USG made no commitment on 
products that might be included in the process, but noted its 
practice of not changing the arrangements for TRQ products, which 
are by definition sensitive. 
 
-- Textiles: The USG noted that Singapore's request for changes 
to its textiles Tariff Preference Level (TPL) required 
Congressional approval.  The USG agreed to follow-up on 
Singapore's second "short supply" request (the first request is 
currently undergoing Congressional review).  The USG agreed to 
consider (but was disinclined to approve) Singapore's request for 
fewer on-site inspections of its textiles and apparel goods 
manufacturers. 
 
-- Rules of Origin (ROO): The USG agreed to consider Singapore's 
proposed request to change the ROO on photocopiers, but made no 
commitments. 
 
-- Credit Bureau Access: the USG agreed to provide the GOS with 
information concerning our law governing access to confi-dential 
financial information. 
 
-- Intellectual Property: the GOS agreed to monitor whether the 
discrepancy in maximum penalties for different types of copyright 
 
SINGAPORE 00001119  002 OF 005 
 
 
infringement created enforcement-related difficulties.  The GOS 
agreed to review the overall level of resources dedicated to the 
IPR Branch of the Singapore Police. 
 
-- Trade Secrets Protections: the USG agreed to provide specific 
industry examples (if available publicly) for the GOS to review 
as part of its assessment of whether existing protections were 
inadequate. 
 
-- Dispute Settlement Procedures: the Joint Committee accepted 
the proposed procedures. 
 
-- Annex 8 Provisions: the Joint Committee accepted the proposed 
provisions concerning U.S. and Singapore services market access 
reservations. 
 
-- Medical Products Working Group: the USG and GOS agreed to 
follow up with the Food and Drug Administration and the Health 
Sciences Authority, respectively, for an update on the activities 
of the Medical Products Working Group. 
 
End summary. 
 
FTA Benefits 
------------ 
 
¶2.  (U) USG and GOS representatives affirmed that overall FTA 
implementation had proceeded smoothly, with a minimum of issues. 
AUSTR Barbara Weisel noted that two-way trade had increased more 
than 12 percent since the FTA came into effect January 1, 2004, 
including a substantial increase in services, especially for 
Singapore.  Most recent data showed U.S. accumulated foreign 
direct investment (FDI) in Singapore had increased 13 percent and 
that Singapore's FDI in the United States had increased 24 
percent (based on respective accounting methods), she said. 
 
Telecom 
------- 
 
-- Arrangements for LLCs, including pricing (USG) 
-- Transparency of the appeals process (USG) 
 
¶3.  (SBU) With respect to Singapore's failure thus far to 
implement its commitments to offer "tail" local-leased circuits 
(LLCs) at "reasonable (wholesale) rates" using open standard 
technical specifications, the USG and GOS agreed to convene a 
digital video conference for their respective regulatory and 
technical experts (Note: representatives from the Infocomm 
Development Authority (IDA), Singapore's telecom regulator, were 
unavailable to participate in the Joint Committee proceedings. 
End note.) 
 
¶4.  (SBU) The USG raised the lack of transparency in the appeals 
process (SingTel, Singapore's dominant and government-linked 
carrier, has repeatedly stalled implementation of revised LLC 
regulations by privately appealing IDA's decisions to the 
Minister for Information, Communications and the Arts (MICA); 
MICA has excluded industry and other interested parties from this 
process.)  The GOS agreed to review the appeals process and to 
explore how it might be remedied.  Both sides acknowledged that 
Singapore law and the FTA currently allowed private (and non- 
transparent) appeals.  AUSTR Weisel underscored the need for 
greater transparency, noting that during the FTA negotiations, 
both Congress and industry were particularly concerned about the 
lack of transparency among Singapore's government-linked 
companies (GLCs).  She emphasized that this issue would continue 
to receive close scrutiny. 
 
Media 
----- 
 
-- Pay TV: Transparency in rule-making (USG) 
 
¶5.  (SBU) The GOS said that the Media Development Authority (MDA) 
was reviewing the benefits of exclusive carriage arrangements 
following MICA's recent decision to set aside MDA's imposition of 
"ex ante" reviews of television licenses (ref A).  The GOS 
 
SINGAPORE 00001119  003 OF 005 
 
 
acknowledged that MDA could improve its public consultation and 
rule-making methods.  AUSTR Weisel noted that several U.S. 
companies were following this issue carefully and that the United 
States had considerable expertise in this area that it would be 
willing to make available to the GOS. 
 
Environmental Cooperation 
------------------------- 
 
-- Activating the cooperation mechanism 
-- Preparations for the first biennial review of the FTA 
-- CITES: Arowana Dragonfish (GOS request); Ramin (USG request) 
 
¶6.  (SBU) The Joint Committee reviewed progress under the Plan of 
Action for Environmental Cooperation concluded in September 2005 
in accordance with the MOI on Cooperation in Environmental 
Matters.  They noted seven distinct activities undertaken during 
the past year, including bilateral collaboration on vessel 
pollution, the ASEAN sustainable cities initiative, the ASEAN 
wildlife enforcement network (WEN), the ASEAN enforcement 
network, consultations in Singapore by a U.S. environmental 
prosecutor, and endangered species interdiction training for 
Singapore airport officials.  Both sides agreed to establish a 
date for the biennial review of environmental cooperation 
mandated under the MOI.  The USG suggested that we hold the 
review before the end of 2006, possibly in November. 
 
¶7.  (SBU) The USG discussed the requirements that Singapore would 
have to meet in order to export Arowana Dragonfish, an endangered 
species, to the United States.  The Joint Committee agreed to 
explore how the FTA's environmental cooperation mechanism might 
be used to make progress on this issue, in particular by 
supporting work to conserve Arowana in the wild.  (Note: 
Singapore's Arowana Dragonfish for export are farm-raised; 
however, under the U.S. Endangered Species Act, before the United 
States can approve any request for a permit to import the 
species, a determination must be made that the import will 
enhance the survival of the species in the wild.  There is no 
precedent for allowing commercial trade in endangered species. 
End note.) 
 
¶8.  (SBU) On Ramin timber, both sides committed to continue 
discussions on how to increase bilateral efforts, and support 
regional initiatives, to combat illegal trade in Ramin timber and 
to screen transshipped cargo.  In particular, they agreed to 
follow-up meetings (scheduled for late April) designed to 
increase joint efforts in the Asia-Pacific region to combat 
illegal logging. (Note: Singapore's amended Endangered Species 
Import and Export Act, which came into effect March 1, empowers 
authorities to search transshipped and transit cargo (ref B).  No 
CITES experts accompanied Singapore's delegation, which was 
unaware of the new provisions.  End note.) 
 
Market Access 
------------- 
 
-- Tariff acceleration process: polycarbonates, peanuts, and 
   nutritionals (GOS) 
-- HS2007 changes (GOS) 
-- ROO changes for photocopiers (GOS) 
-- Textiles issues (GOS) 
   - request for improved TPL 
   - status of "short supply" requests 
   - request for reduction in number of on-site inspections of 
     registered textiles and apparel goods enterprises without 
     prior notice 
 
¶9.  (SBU) The Joint Committee agreed to formally launch the 
tariff acceleration process as provided in Article 2.2.3 of the 
FTA.  Singapore explained its interest in the accelerated 
elimination of tariffs on certain polycarbonates (HS3907.40.00), 
and increases in Tariff Rate Quotas (TRQs) for nutritionals 
(HS1901.10), and peanuts (HS2008.11); Deputy AUSTR Bryan said 
that the U.S. approval process was considerably more complicated 
than Singapore's.  She explained that, given the sensitivities 
associated with the specific products, the United States had yet 
to approve any TRQ increases of tariff accelerations on these 
 
SINGAPORE 00001119  004 OF 005 
 
 
products in the context of an FTA. 
 
¶10.  (SBU) The Joint Committee discussed what would be required 
to update the harmonized system that comes into effect January 1, 
2007 ("HS2007"); the USG declined to discuss specific products. 
The USG explained that, under the U.S. system, a key objective 
would be to keep proposed changes simple to avoid the time- 
consuming process of writing and seeking approval for new rules. 
 
¶11.  (SBU) With regard to Singapore's request for a change to the 
rules of origin (ROO) for photocopiers (HS9009.1200), the USG 
said that it could put the request forward, but made no 
commitments. 
 
¶12.  (SBU) Concerning Singapore's proposed increase of its 
textile tariff preference level (TPL), the USG noted that 
Singapore was underutilizing the current TPL, which would make it 
difficult to justify any request for changes; support of our 
domestic textile industry (which was unlikely) would also be 
required.  The USG explained that any changes to the FTA, 
including Singapore's request to change its TPL, would require 
the approval of the U.S. Congress. 
 
¶13.  (SBU) With regard to Singapore's two textile short-supply 
requests, the USG confirmed that the consultation and layover 
period for the first request was expected to end the week of 
April 10; USTR said that it would move forward on next steps 
regarding Singapore's second request.  It noted that the entire 
process, taking into account an International Trade Commission 
(ITC) investigation and congressional review, would take 
approximately six months, with implementation of approved changes 
to the FTA rules of origin before the end of this year. 
 
¶14.  (SBU) In accordance with FTA Article 5.3.4, the USG said it 
would consider -- but was disinclined to approve -- Singapore's 
request for fewer on-site inspections of its textile and apparel 
goods enterprises without prior notice.  U.S. Customs and Border 
Protection noted that these inspections provided valuable 
intelligence related to the increased illegal transshipment of 
textile and apparel goods originating in China, particularly in 
items under China-specific textile safeguards and those products 
covered under the November 2005 United States-China Memorandum of 
Understanding Concerning Trade in Textile and Apparel Products. 
The GOS expressed its hope that its request would remain an open 
option should the number of illegal shipments decrease. 
 
Financial Services 
------------------ 
 
-- Access to ATM networks (USG) 
-- Non-banking credit services (USG) 
 
¶15.  (SBU) On access for U.S. qualified full service banks to 
Singapore's local ATM network, the USG stressed the benefits that 
would be derived in terms of enhanced competition, a greater 
variety of products, and lower costs to consumers.  The GOS said 
that the Monetary Authority of Singapore (MAS) was considering 
the possibility of allowing non-bank financial institutions to 
also apply for access to the local ATM network.  It did not 
anticipate any implementation difficulties with the existing FTA 
provision for full service banks that comes into effect July 1, 
¶2006. 
 
¶16.  (SBU) In response to questions about the benefits of broader 
access to credit services, the USG agreed to provide information 
on our legal requirements concerning financial information.  The 
USG stressed that, in addition to expanding access, Singapore's 
credit bureaus needed to begin collecting positive as well as 
negative information to enhance the lending effectiveness of 
financial institutions. 
 
Intellectual Property 
--------------------- 
 
-- Penalties for Copyright Act (136.3A) violations (USG) 
-- Inadequate resources for Singapore Police IPR Branch (USG) 
 
 
SINGAPORE 00001119  005 OF 005 
 
 
¶17.  (SBU) Noting that provisions under Singapore's amended 
Copyright Act had come into effect only recently (January and 
August 2005), the GOS agreed to monitor whether the discrepancy 
in maximum penalties for different types of copyright 
infringement created enforcement-related difficulties in the 
future (Note: Section 136(3A) of the Copyright Act covering 
copyright infringements for "any other purpose" provides for a 
fine not exceeding S$20,000 (US$12,270) or to imprisonment not 
exceeding six months or both; in the case of a second or 
subsequent offense, the fine cap increases to S$50,000 
(US$30,675) and the jail term to a maximum of three years. 
Penalties and jail terms for other offenses covered by the 
Copyright Act are generally much higher.  End note.)  The GOS 
agreed to review the overall level of resources dedicated to the 
IPR Branch of the Singapore Police, but asserted that they were 
adequate for the IPR Branch's focus on larger-scale offenders. 
 
Parallel Imports of Pharmaceuticals 
----------------------------------- 
 
-- Safety considerations and IPR (USG) 
 
¶18.  (U) The USG raised industry concerns that, by allowing 
parallel imports of pharmaceuticals (as provided for in the FTA), 
it would be increasingly difficult to control imports of 
counterfeit drugs.  The GOS noted that it had not previously 
identified this as an area of concern, in large part due to 
Singapore's strict health and safety, IPR, and import 
regulations. 
 
Trade Secrets and Whistleblower Protections 
------------------------------------------- 
 
-- Lack of trade secrets protections (USG) 
-- Inadequate whistleblower legislation (USG) 
 
¶19.  (U) In response to USG concerns about inadequate trade 
secrets protections, the GOS argued that its common law system 
 
SIPDIS 
provided adequate safeguards.  It requested that the USG provide 
specific industry examples for its review to help assess whether 
regulatory and legal enhancements were in fact necessary.  With 
regard to inadequate whistleblower protections, the GOS said 
that, although the local media had focused on the issue over the 
past several months, the government had not taken an official 
position. 
 
¶20.  (U) Members of the U.S. delegation cleared this message. 
 
HERBOLD