VZCZCXYZ0000
RR RUEHWEB

DE RUEHBK #1452/01 1340311
ZNR UUUUU ZZH
R 130311Z MAY 08
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 3002
RUCPDOC/USDOC WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHRC/USDA FAS WASHDC

UNCLAS BANGKOK 001452 
 
SENSITIVE 
 
SIPDIS 
 
STATE PASS USTR 
USDOC FOR 4430/EAP/MAC/OKSA 
 
E.O. 12958:N/A 
TAGS: ECON ETRD KIPR EINV TH
 
SUBJECT:  U/S PADILLA PUSHES RENEWED ECONOMIC RELATIONSHIP WITH 
THAILAND 
 
¶1.  (SBU) Summary:  Under Secretary of Commerce for International 
Trade Christopher Padilla held a productive visit to Bangkok on 
April 28, underscoring with Thai government officials, private 
sector groups, and the press that the United States fully supports 
Thailand's democratically-elected government and is eager to 
re-energize the economic and commercial relationship.  U/S Padilla 
was in Thailand to celebrate the 175th anniversary of U.S.-Thai 
relations and discuss bilateral trade and investment issues.  During 
meetings with the Prime Minister, Foreign Minister, Finance 
Minister, Trade Minister, and Transport Minister, U/S Padilla 
proposed that the United States and Thailand begin a formal dialogue 
to develop a Joint Action Plan to improve intellectual property 
rights (IPR) protection in Thailand and joined with the Ambassador 
to advocate on behalf of Engine Alliance (GA), which is seeking to 
provide U.S.-made engines for Thai Airway's Airbus A380.  Under 
Secretary Padilla also raised U.S. concerns related to the Doha 
Round, investment, and customs valuation for alcoholic beverages. 
Thai officials welcomed U.S. support for the new government and 
expressed serious interest in beginning a formal dialogue on IPR 
issues.  End Summary. 
 
¶2.  (SBU) Together with the Foreign Minister, the Prime Minister and 
Ambassador John, Under Secretary Padilla opened the Business Summit 
on April 28 celebrating U.S.-Thai partnerships and the 175th 
Anniversary of U.S.-Thai relations.  The Business Summit was 
co-sponsored by the Ministry of Foreign Affairs, the U.S.-ASEAN 
Business Council, the American Chamber of Commerce in Thailand and 
the U.S. Embassy.  In his remarks, U/S Padilla noted the close 
economic ties between the United States and Thailand, underscored 
America's support for the democratically-elected government, and 
called for both sides to re-energize the economic and trade 
relationship.  He urged Thailand to allow greater foreign investment 
in communications, transportation, financial services, and 
agribusiness.  He also noted Thailand's efforts to improve IPR 
protection in 2007 and proposed a formal dialogue to discuss IPR 
issues and develop a Joint Action Plan to address them.  Foreign 
Minister Noppadon complained that the U.S. Trade Representative 
should have downgraded Thailand to the Special 301 Watch List for 
IPR violations, rather than continuing its placement on the Priority 
Watch List (PWL) for another year.  The Prime Minister promised no 
new restrictions on foreign investment and offered consideration for 
more flexibility on investment in services. 
 
¶3. (SBU) In an ensuing meeting with PM Samak, U/S Padilla 
congratulated Thailand on its return to democracy and reiterated 
America's support for the democratically-elected government. 
Padilla explained the USG's recent decision to keep Thailand on the 
PWL, and reiterated his proposal for the creation of a formal 
bilateral dialogue to develop a joint action plan or roadmap for 
improving IPR protection.  In a wide-ranging discussion in which the 
Prime Minister discussed at length the history of aviation, U/S 
Padilla and the Ambassador advocated for the Engine Alliance (EA) 
bid to provide U.S.-manufactured engines for the new A380.  U/S 
Padilla noted that the EA engines were more fuel-efficient, and that 
the bid had been accepted by Thai Airways on technical merits.  A 
positive decision by Thailand would send an important message to 
other companies participating in Thai procurements and would further 
reinforce bilateral trade ties.  Although the Prime Minister 
admitted that he did not have all the background on this matter, he 
appeared receptive to EA's bid and agreed that the decision should 
be based on the facts. 
 
Commerce Minister shows interest in IPR, WTO 
-------------------------------------------- 
 
¶4.  (SBU) U/S Padilla later met with Commerce Minister Mingkwan and 
explained more in-depth his proposal for a Joint Action Plan on IPR 
to address Thailand's inclusion on the Priority Watch List (PWL). 
He noted that the Prime Minister had expressed his support for the 
idea.  The action plan would address a wide range of IPR issues, 
including copyright protection, unsafe counterfeit products, and the 
need for deterrent sentencing by Thailand's Intellectual Property 
Court.  With respect to Thailand's policy of compulsory licensing of 
patented pharmaceuticals, the Under Secretary noted that he had 
discussed industry's proposal for a Joint Committee with the Prime 
Minister as a cooperative approach to address this sensitive issue. 
The Joint Committee would bring together key Thai Ministries and 
industry to discuss solutions to health care problems.  The Under 
Secretary recommended that the Joint Committee meet soon, in May or 
early June. 
 
¶5.  (SBU) U/S Padilla told the Commerce Minister that he welcomed 
the Prime Minister's remarks at the Business Summit, including his 
promise that there would be no new restrictions on foreign 
 
investment.  He encouraged the Minister to consider amending the 
list of restricted sectors in the Foreign Business Act (FBA) to open 
up the transportation sector for U.S. express delivery companies. 
The Minister said that a revision of the Act's List Two, which 
restricts foreign participation in inland transportation, is under 
consideration. 
 
¶6.  (SBU) U/S Padilla also raised the WTO Doha Round and noted that 
Thailand had made a positive contribution on industrial tariffs.  He 
asked that the RTG give more thought to improving its services offer 
to help ensure a successful deal.  Commerce Minister Mingkwan at 
first did not appear to be familiar with the current status of the 
Doha round, but after conferring with his staff agreed to consider 
the Under Secretary's request. 
 
¶7.  (SBU) In response to a question from the Commerce Minister 
regarding an administrative review of anti-dumping duties on Thai 
shrimp exports, U/S Padilla explained that the Department of 
Commerce is taking the Thai Government's request regarding major 
exporter Thai Union seriously and would announce its decision in 
July. 
 
Finance Minister on services, customs 
------------------------------------- 
 
¶8.  (SBU) In his meeting with Finance Minister Surapong, U/S Padilla 
encouraged the Thai government to open new sectors to foreign 
investment, including infrastructure, telecommunications, and 
financial services.  With respect to the Doha Round, he encouraged 
the RTG to consider making a more ambitious offer on services and 
described the next few months as a narrow window of opportunity for 
progress, with a possible upcoming Ministerial meeting in June.  The 
Finance Minister responded that, in general, any opening of sectors 
would be carefully considered and implemented on a step-by-step 
basis. 
 
¶9.  (SBU) The Under Secretary expressed his interest in continued 
progress towards the resolution of the customs valuation issue 
involving alcoholic beverages as already agreed. He noted the 
interest of the United States in concluding a written agreement with 
the Thai Customs Department to confirm the resolution of this 
matter.  U/S Padilla also advocated on behalf of EA's bid to sqpply 
angines for Airbus A380s. 
 
Foreign Minister welcomes IPR proposal 
-------------------------------------- 
 
¶10.  (SBU) During his meeting with Foreign Minister Noppadon, U/S 
Padilla reiterated America's support for the new 
democratically-elected government and the desire to reenergize 
economic relations.  With respect to the compulsory licensing issue, 
he expressed his appreciation to Noppadon for his Ministry's 
participation in the Joint Committee and urged that this Committee 
meet soon.  The Foreign Minister said that he would convey these 
concerns to the Health Minister. 
 
¶11.  (SBU) The Foreign Minister asked that the United States 
reconsider the placement of Thailand on the Special 301 Priority 
Watch List, but welcomed the U.S. proposal for a formal dialogue on 
IPR issues and the development of a Joint Action Plan.  Ambassador 
John suggested that both governments could consider adding an IPR 
discussion to the Strategic Dialogue planned for early June in 
Washington. 
 
¶12.  (SBU) In response to a question from the Foreign Minister on 
benefits under the Generalized System of Preferences (GSP) program 
for gold jewelry, Under Secretary Padilla explained that under 
current legislation, restoration of GSP benefits for this product 
would be based on future export levels for the product. 
 
Transport Minister wavers on engine advocacy 
-------------------------------------------- 
 
¶13.  (SBU) Under Secretary Padilla and Minister Santi discussed the 
bid by Engine Alliance to supply engines for the Airbus A380s 
purchased by Thai Airways.  The Under Secretary noted that he had 
already raised the issue with PM Samak.  He described the superior 
fuel efficiency of the engines from EA and the Trade and Development 
Agency (TDA) grant to provide training to Thai Airways staff.  The 
Transport Minister indicated that he would welcome a meeting with EA 
to further discuss its offer.  However, the Minister noted that 
Rolls Royce had met with him and offered to open a maintenance 
facility in Thailand that would employ several hundred people.  He 
asked whether the EA bid included any such offer.  Ambassador John 
 
promised to convey this question to EA and facilitate a meeting with 
the ministry as soon as possible.  FCS Bangkok arranged a meeting on 
May 1 for EA representatives with Minister Santi to promote their 
bid. 
 
U.S. business community shows support 
------------------------------------- 
 
¶14.  (SBU) During a breakfast roundtable, members of the American 
Chamber of Commerce in Thailand expressed their support for U/S 
Padilla's message to the RTG, particularly reengagement on economic 
issues.  They agreed with the Under Secretary that initial steps 
taken by the RTG such as the removal of capital controls are 
positive ones.  Financial sector representatives emphasized the need 
for liberalization of the financial sector, but acknowledged 
significant challenges would be faced in any such effort.  The Under 
Secretary also met with the members of the U.S.-ASEAN Business 
Council visiting Bangkok.  Council members raised concerns regarding 
the need for Thailand and Cambodia to resolve overlapping claims, 
Thai policies on biotechnology, compulsory licensing, and investment 
in services not cvered by the bilateral Treaty of Amity and 
Economc Relations. 
 
¶15.  (SBU) Under Secretary Padillawas joined in his Ministerial 
meetings by Ambassdor John, Deputy Assistant Secretary for Asia Ira 
Kasoff, Chief of Staff to the Under Secretary Micael DiPaula-Coyle, 
SCO Bacher, and Jean Kelly, Comerce Thailand Desk Officer. 
JOHN