VZCZCXRO5073
OO RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0668/01 1350405
ZNR UUUUU ZZH
O 150405Z MAY 07
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8421
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHHM/AMCONSUL HO CHI MINH 0092
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0685
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 PHNOM PENH 000668 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EAP/MLS AND EB 
DEPARTMENT PASS USTR 
BANGKOK ALSO FOR FCS 
 
E.O. 12958: N/A 
TAGS: ETRD EINV CB
SUBJECT: CAMBODIA:  SUCCESSFUL VISIT BY U.S.-ASEAN BUSINESS 
COUNCIL 
 
REF: A. PHNOM PENH 0345 
 
     ¶B. PHNOM PENH 0531 
 
PHNOM PENH 00000668  001.2 OF 002 
 
 
¶1.  (SBU) Summary. In the latest of a series of trade and 
investment related visits to Cambodia, a delegation from the 
U.S.-ASEAN Business Council met May 9 with senior Cambodian 
government (RGC) officials, including the Ministers of 
Commerce, Finance and Health.  ConocoPhillips representatives 
urged the RGC to resolve the dispute with Thailand on the 
Overlapping Claims Area in the Gulf of Thailand.  RGC 
officials believed resolution would have to await elections 
and a new Thai government.  The Ambassador and the head of 
the Council's delegation, Frances Zwenig, urged Cambodia to 
sign the bilateral debt agreement.  The U.S.-ASEAN Business 
Council's visit was another step toward greater American 
commercial involvement in Cambodia and another indication of 
the growing interest of U.S. business firms in establishing a 
presence here. 
 
¶2.  (U) Building on the success of the first U.S.-Cambodia 
meeting under the Trade and Investment Framework Agreement 
and the April visit of a business mission of American firms 
based in the region (Refs), the U.S.-ASEAN Business Council 
met with senior Cambodian government (RGC) officials on May 9 
to explore opportunities for trade and investment.  Led by 
Frances Zwenig, Counselor of the U.S.-ASEAN Business Council, 
the delegation consisted of representatives of ConocoPhillips 
Petroleum, Oracle, General Electric (GE), FedEx and ITT 
Defense.  They met with former Ambassador to the U.S. Roland 
Eng and Minister of Transport and Public Works Sun Chanthol, 
the Ambassador, and had office calls on Minister of Post and 
Telecommunications So Khun, Minister of Commerce Cham 
Prasidh, Finance Minister Keat Chhon, Health Minister Nuth 
Sokhom and MFA Secretary of State Kao Kim Hourn. 
 
¶3.  (SBU) In each of the meetings, the ConocoPhillips 
representatives urged the RGC to resolve the dispute with 
Thailand over the Overlapping Claims Area in the Gulf of 
Thailand.  Noting that their firm has held a contract for 
exploitation of the area for nearly ten years, they asked 
that enthusiasm for Chevron's petroleum discovery not be 
allowed to lessen the urgency of resolving the dispute.  Kao 
Kim Hourn told them that the two governments had come very 
close to settling the dispute just prior to the fall of the 
Thaksin government in Thailand.  He said they had agreed on a 
formula for dividing the revenue:  80% for Thailand and 20% 
for Cambodia in the tier nearest Thailand, 50%-50% in the 
middle and 20% for Thailand and 80% for Cambodia in the area 
closest to Cambodia.  He thought that an additional six 
months of negotiations would have settled the matter. 
However, in Thailand's current disarray, he said, there could 
be no resolution until after Thailand's elections and the 
formation of a new government.  Other interlocutors, 
including Cham Prasidh and Keat Chhon, agreed that nothing 
could be accomplished until a new government was formed in 
Thailand. 
 
¶4.  (U) GE announced to the Health Minister that it would 
open an office in Phnom Penh in the coming months.  The 
office would focus on the sales and repair of diagnostic 
equipment in the health field.  The GE representatives 
briefed the Minister on GE's program to sell refurbished 
equipment in developing countries and asked that Cambodia 
consider participating.   They noted that GE's office could 
be used as a launching point for GE in other sectors in which 
GE is involved, such as energy. 
 
¶5.  (U) FedEx expressed appreciation to the Minister of Post 
and Telecommunications for his flexibility in compromising on 
regulations governing the courier service industry.  The 
revisions accepted by the Ministry had allowed the courier 
service industry to remain operational in Cambodia.  The 
firms in the industry have all registered, they said, and 
were functioning without problems.  The FedEx representatives 
also thanked Commerce Minister Cham Prasidh for his role in 
convincing Minister So Khun to compromise. 
 
¶6.  (U) Showing signs that he was still recovering from a 
heart procedure that he underwent in Paris in April, Prasidh 
provided the delegation with an overview of the trade and 
investment climate in Cambodia.  Reviewing the establishment 
of the garment industry, Prasidh stressed the need for 
Cambodia to outperform its neighbors in order to remain 
competitive.  He explained the private sector forum that 
 
PHNOM PENH 00000668  002.2 OF 002 
 
 
brought the private sector together with government in order 
to resolve policies and problems that inhibited business.  In 
response to a suggestion that Cambodia could use the latest 
technology to computerize its "One Stop" investment service, 
Prasidh said that other ASEANs were more technically advanced 
than Cambodia.  At best, Cambodia could become a model for 
the second tier of developing countries in ASEAN like Laos 
and Burma. 
 
¶7.  (SBU) Frances Zwenig asked Finance Minister Keat Chhon 
for an update on the status of negotiations on the bilateral 
debt.  The Ambassador urged Keat Chhon to move forward and 
accept the agreement as it now stood.  Further discussions 
were unlikely to get Cambodia a better deal.  Keat Chhon 
responded that the RGC had been considering sending a team to 
Washington or inviting the USG to have a team visit from 
Washington. 
 
¶8.  (U) Comment:  Coming on the heels of the successful first 
TIFA meeting in February and the American Business Mission in 
April, the visit of the U.S.-ASEAN Business Council was 
another step forward toward greater U.S. commercial 
involvement in Cambodia.  It was also another indication of 
the growing U.S. business interest in Cambodia.  Increasing 
numbers of American firms are beginning to sense that 
Cambodia has real potential. 
MUSSOMELI