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RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #0206/01 0300859
ZNR UUUUU ZZH
R 300859Z JAN 07
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 2342
INFO RUEHBY/AMEMBASSY CANBERRA 1808
RUEHBJ/AMEMBASSY BEIJING 2401
RUEHKO/AMEMBASSY TOKYO 5554
RUCPDOC/DEPT OF COMMERCE WASHDC
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHIN/AIT TAIPEI 6393

UNCLAS SECTION 01 OF 04 SINGAPORE 000206 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR AMBASSADOR MICHALAK AND RPOLLARD 
USTR FOR AUSTR WEISEL 
 
E.O. 12958: N/A 
TAGS: APEC ETRD ECON EINV USTR TBIO KFLU SN
SUBJECT: AMBASSADOR MICHALAK HIGHLIGHTS USG APEC AND ASEAN 
INITIATIVES 
 
 
¶1.  (SBU) Summary.  Senior U.S. Official to APEC Ambassador 
Michael Michalak told Singapore officials that APEC members 
needed to fulfill certain action items this year in order 
to keep the momentum going for a Free Trade Area of the 
Asia Pacific (FTAAP).  He also sought their opinions on how 
to get ASEAN Senior Economic Officials to quickly endorse 
USG initiatives under the U.S.-ASEAN Enhanced Partnership. 
Singapore officials cited China's uneasiness with the FTAAP 
as the reason behind its side meeting with what it hoped 
would be like-minded Southeast Asian countries during the 
APEC Senior Officials Meeting (SOM) in Canberra.  The GOS 
said that concluding the ASEAN-China free trade agreement 
(FTA) was a top priority for ASEAN, ahead of the ASEAN + 3 
and ASEAN + 6 negotiations.  Ambassador Michalak encouraged 
ASEAN to stay focused on its own integration in order to 
compete effectively with its trading partners.  End 
Summary. 
 
¶2.  (U) During his January 23-27 visit to Singapore, 
Ambassador Michael Michalak discussed developments related 
to his January 15-22 participation in the APEC SOM in 
Canberra.  He also sought opinions about how best to 
maximize his discussions on the U.S.-ASEAN Enhanced 
Partnership during the upcoming ASEAN Senior Economic 
Officials Meeting (SEOM) being held in Kuala Lumpur January 
29-31.  Office of Bilateral Trade Affairs (EB/TPP/BTA) 
Director Robert Pollard accompanied Ambassador Michalak for 
part of his visit.  Ambassador Michalak met separately with 
Ministry of Foreign Affairs (MFA) Deputy Secretary HO Cheok 
Sun; MFA Director (ASEAN Directorate) Jacky FOO Kong Seng; 
Ministry of Trade and Industry (MTI) Senior Deputy Director 
(ASEAN) Ms. Sulaimah Mahmood (also Singapore's SEOM 
representative for ASEAN); Ministry of Health (MOH) Deputy 
Secretary GOH Aik Guan and REDI Center Executive Director 
 
SIPDIS 
Dr. Rodney Hoff.  Ambassador Michalak also gave interviews 
to the Straits Times and Zaobao (Singapore's largest 
Chinese language newspaper), met with the American Chamber 
of Commerce and, over lunch, with Singapore-based academics 
and business representatives. 
 
FTAAP 
----- 
 
¶3.  (SBU) Ambassador Michalak told GOS officials that, 
although creation of an FTAAP was a long-term goal, APEC 
members needed to reach consensus this year on certain 
immediate action items in order to keep the momentum from 
the SOM going; this was especially important to bolster 
public support for an FTAAP.  MTI Deputy Director (APEC and 
Americas) Mary Elizabeth Chelliah said that a good starting 
point might be to catalogue and compare the terms and 
conditions of each APEC members' FTAs. 
 
¶4.  (SBU) In considering the possible mechanics for an 
FTAAP, Ambassador Michalak expressed doubts about a 
pathfinder approach (whereby certain member economies can 
accede first to an agreement and others follow when ready) 
that would rely on APEC's standard consensus methodology. 
Deputy Director Chelliah suggested an alternative, WTO- 
based approach in which initial APEC signatories to an 
FTAAP agreement could dictate the rules of accession for 
future participants.  Key to this process would be China's 
buy-in as a founding member, she said.  Alternatively, the 
existing text of the P4 "Trans-Pacific Strategic Economic 
Partnership Agreement" that Brunei, Chile, New Zealand, and 
Singapore signed in June 2005 could serve as a model, 
Chelliah said.  Each new member would be able to recommend 
changes and enhancements to the original text, she 
explained.  Ambassador Michalak said that these approaches 
merited further consideration and called for their 
inclusion among the FTAAP-related recommendations the APEC 
SOM had agreed to begin drafting. 
 
China's "Anti-FTAAP" Meeting 
---------------------------- 
 
¶5.  (SBU) Chelliah told Ambassador Michalak that China had 
organized a meeting on the sidelines of the SOM to discuss 
its concerns with the FTAAP because it was uncomfortable 
with being the only economy opposed to the FTAAP and was 
looking for like-minded supporters.  Invitees included 
Indonesia, Malaysia, the Philippines, Thailand, Brunei, and 
 
SINGAPORE 00000206  002 OF 004 
 
 
possibly Vietnam (which did not attend).  China did not 
invite Singapore, but GOS representatives managed to "sneak 
in," she said.  During the meeting, China raised concerns 
about the "exclusiveness" of the FTAAP process and stressed 
the need for it to feed back into the SOM process. 
Ambassador Michalak commented that China was concerned 
about Taiwan's participation in an FTAAP. 
 
ASEAN Gives Top Priority to FTA with China 
------------------------------------------ 
 
¶6.  (SBU) In response to Ambassador Michalak's skepticism 
about the prospects for a successful ASEAN + 3 or ASEAN + 6 
FTA, MFA Deputy Secretary HO said that an ASEAN + 3 FTA 
(involving China, Japan, and South Korea) was "doable," 
with the trade-in-goods chapters already negotiated, but 
that an ASEAN + 6 FTA was not.  Deputy Director Chelliah 
explained that ASEAN had decided to finish its ASEAN + 1 
FTA negotiations before committing more resources to these 
larger FTAs.  Being the furthest along, the ASEAN-China FTA 
was a top priority; she conceded that the ASEAN-Japan 
agreement had stalled.  Chelliah noted that ASEAN needed to 
improve its own ASEAN Framework Agreement on Services 
(AFAS) if it were to build support within the business 
community for services negotiations with other trading 
partners. 
 
ASEAN Economic Community by 2015? 
--------------------------------- 
 
¶7.  (SBU) Although concluding a series of FTAs factored 
into the ASEAN leaders' vision of an ASEAN Economic 
Community by 2015, MFA Director Foo said that some 
officials questioned why ASEAN was pursuing greater trade 
liberalization with its trading partners than with other 
ASEAN members.  However, he was confident that the ASEAN 
Charter's recommendation to adopt a system of binding 
agreements should help ASEAN move towards full integration. 
Ambassador Michalak agreed, noting that economic 
integration should be ASEAN's top priority to ensure its 
ability to compete with the United States, China, Japan, 
and India. 
 
APECQASEAN Cooperation 
---------------------- 
 
¶8.  (SBU) Ambassador Michalak expressed his hope that the 
development of a Single Window to facilitate customs 
harmonization under the ASEAN-US Trade and Investment 
Arrangement (TIFA) would be expanded to eventually include 
APEC economies.  Similarly, APEC was building on a World 
Intellectual Property Organization (WIPO) initiative to 
design a common patent application form that might make 
sense to start in ASEAN, he said.  Ambassador Michalak 
highlighted other synergies between APEC and ASEAN. 
Existing collaborative projects such as those on clean 
energy and a farmer-to-farmer initiative helped maximize 
limited budget resources, he said.  MTI Senior Deputy 
Director Mahmood agreed that cooperation was good, but 
advised against overemphasizing ASEAN-APEC linkages since 
some ASEAN economies were not members of APEC and resisted 
making official associations between the two organizations. 
 
De-conflicting the Enhanced Partnership and TIFA 
--------------------------------------------- --- 
 
¶9. (SBU)  Ambassador Michalak told Director Foo that the 
ASEAN-US Enhanced Partnership, signed in July 2006, was off 
to a good start, as was cooperation under the TIFA, signed 
in August 2006.  He assured GOS officials that U.S. 
initiatives under the Enhanced Partnership and under the 
TIFA were complementary.  He noted that some ASEAN 
officials remained confused about the delineation of 
responsibilities within the USG, i.e., USTR oversees the 
TIFA and State leads on the Enhanced Partnership.  He 
stressed, however, that there had been close U.S. 
interagency coordination in formulating the initiatives. 
Director Foo explained that, while the ASEAN SEOM was 
accustomed to dealing with USTR, it also handled a broad 
range of economic issues and that this might have resulted 
in some misunderstandings. 
 
 
SINGAPORE 00000206  003 OF 004 
 
 
¶10.  (SBU) Director Pollard thanked Director Foo for 
Singapore's remarks on the draft Plan of Action (POA) under 
the Enhanced Partnership.  He noted that this year's 
thirtieth anniversary of U.S.-ASEAN relations provided a 
unique opportunity to make substantive progress on the 
Enhanced Partnership.  Director Foo agreed that both sides 
needed to redouble their efforts and suggested that ASEAN 
and the USG package various POA initiatives under specific 
headings to help guide their implementation.  He cited the 
"Improving the Overall Business Environment" theme adopted 
by the ASEAN Standards Committee (ASC) as an example.  Foo 
said that he was Singapore's point of contact for the POA 
and that as a member of the ASC, he would ensure that 
action items got passed to the appropriate ASEAN offices. 
 
SEOM's Formal Commitment "Unlikely" 
----------------------------------- 
 
¶11.  (SBU) Pollard asked if it would be possible for the 
USG to obtain a formal commitment on specific Enhanced 
Partnership programs from the SEOM during its Kuala Lumpur 
meetings.  Foo said that this was unlikely.  Senior Deputy 
Director Mahmood thought that the SEOM might be willing to 
provide an endorsement in principle.  Although it was best 
to make proposals before the beginning of a SEOM-year, 
Mahmood explained that discussions were underway to stagger 
the timing of project-related meetings in order to allow 
greater flexibility in prioritizing objectives.  She 
expressed confidence that progress would be made on the 
four proposals to be presented at the SEOM relating to 
standards, business facilitation, IPR, and transportation. 
In addition to action plans under the TIFA and the POA, the 
SEOM would also consider deliverables in support of ASEAN 
integration, she said. 
 
REDI Center and Avian Influenza 
------------------------------- 
 
¶12.  (SBU) In a joint meeting with MOH Deputy Secretary Goh 
and REDI Center Executive Director Hoff, Ambassador 
Michalak said that APEC played a positive and useful role 
in combating a possible Avian Influenza pandemic. 
Ambassador Michalak said that Asia was far ahead of other 
parts of the world in terms of AI preparedness, recent 
outbreaks in Japan and South Korea notwithstanding, and 
cited APEC economies' participation in the International 
Partnership on Avian and Pandemic Influenza (IPAPI) as 
evidence. 
 
¶13.  (SBU) Dr. Hoff told Ambassador Michalak that with 
increased funding from the USG and the GOS, REDI was hiring 
additional staff to beef up its training and support 
activities.  In particular, REDI would be able to 
strengthen its participation in the U.S.-Singapore- 
Indonesia trilateral project to create an AI-free zone in 
Indonesia's Tangerang district, he said.  Deputy Secretary 
Goh noted that REDI's international organization status 
allowed it to fund activities that would be more difficult 
to accomplish on a government-to-government basis. 
Ambassador Michalak encouraged Goh and Hoff to consider 
approaching organizations like the Gates Foundation to 
diversify REDI's sources of funding and to enhance its 
overall competitiveness for grants. 
 
¶14. (SBU) Ambassador Michalak asked Deputy Secretary Goh 
for a status report on Singapore's obligation under our 
bilateral REDI Agreement (signed November 22, 2005) to 
establish an accession mechanism for other APEC economies. 
Deputy Secretary Goh claimed that REDI's Executive Board 
was not anxious to begin this process.  It preferred to 
give REDI more time to establish a track record as an 
organization jointly funded and operated by the United 
States and Singapore.  He highlighted the risk of 
politicizing REDI, noting that Taiwan had been the first 
economy to inquire about participation.  (Note:  Although 
not a formal APEC institution, REDI's creation was 
announced on the sidelines of the 2003 APEC Leaders' 
Meeting by President Bush and Singapore's Prime Minister 
Goh Chok Tong.  APEC served as the model for REDI's 
international organization structure.  End note.) 
 
¶15.  (U) Ambassador Michalak and Robert Pollard cleared 
 
SINGAPORE 00000206  004 OF 004 
 
 
this cable.