VZCZCXRO8103
RR RUEHCHI RUEHCN RUEHDT RUEHGH RUEHHM RUEHVC
DE RUEHHK #0754/01 1141033
ZNR UUUUU ZZH
R 241033Z APR 09
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC 7467
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 HONG KONG 000754 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM AND EEB/IPE, USPTO FOR TIM BROWNING, USTR 
FOR LEWIS KARESH 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ETRD HK CH
SUBJECT: RENEWED PUSH IN HONG KONG TOWARD LEGISLATED 
PROTECTION OF INTELLECTUAL PROPERTY RIGHTS IN DIGITAL REALM 
 
REF: 08 HONG KONG 2121 
 
¶1. (SBU) Summary: USTR Assistant U.S. Trade Representative 
for China Affairs Timothy Stratford reassured Hong Kong-based 
business executives that the Obama administration will seek 
to maintain a bipartisan consensus in favor of free trade. 
During the April 4 discussion, Stratford described the 
potential benefits for China-U.S. trade resulting from the 
newly expanded bilateral Strategic and Economic Dialogue. 
The Hong Kong head of the Motion Picture Association of 
America (MPAA) said participants in the HKG-led "Tripartite 
Forum" (TF) agreed to abandon the TF's efforts toward a 
voluntary framework governing IPR protection in the digital 
realm; TF participants will instead petition the HKG to 
resume efforts toward legislated amendments to Hong Kong's 
existing Copyright Ordinance.  Stratford listened to 
criticisms of the U.S. Consumer Product Safety Improvement 
Act (CPSIA) of 2008, and said he had heard that the U.S. 
Congress is examining technical amendments to improve the 
law.  End summary. 
 
¶2. (SBU) Comment: Post supports efforts by TF participants to 
request near-term legislated amendments that will establish a 
formal IPR protection framework for the digital realm in Hong 
Kong.  The TF's contentious meetings over the past several 
months highlighted impasses among Internet service providers 
(ISPs)/online service providers (OSPs), content providers and 
content users that will likely not be resolved through 
memoranda of understanding or other "voluntary" solutions 
(reftel).  End comment. 
 
Stratford Discusses U.S. Trade Policy 
------------------------------------- 
 
¶3. (SBU) USTR Assistant U.S. Trade Representative for China 
Affairs Timothy Stratford met on April 4 with private sector 
executives in Hong Kong to discuss trade-related issues 
including: IPR protection, local market access for U.S. beef, 
and the CPSIA's effects on local and regional companies.  In 
introductory remarks, Stratford said the Obama administration 
is committed to maintain a bipartisan consensus in support of 
free trade.  He said U.S. Trade Representative Ron Kirk 
envisions spending "much time on Capitol Hill" to understand 
the trade-related concerns of both political parties. 
 
¶4. (SBU) Stratford told his interlocutors that China 
recognizes the importance of free trade, generally supports 
the integrity of the World Trade Organization (WTO), and 
appreciates the value of WTO rules to help prevent 
protectionism, which would surely hurt China's exporters.  At 
the same time, China faced protectionist pressures 
internally, and USTR is monitoring the situation closely.  He 
said Chinese leaders are "more pragmatic than ideological" 
regarding trade issues, and the new Strategic and Economic 
Dialogue with China represents an opportunity to improve the 
bilateral political relationship, with positive spillover 
effects into discussions on economic issues.  The JCCT would 
also continue as an important mechanism for resolving trade 
issues. 
 
Protection of IPR in Digital Realm 
---------------------------------- 
 
¶5. (SBU) MPAA Director Sam Ho described the HKG-led 
Tripartite Forum (TF) among ISPs/OSPs, content providers and 
content users.  Established in late 2008 to design a 
voluntary code of conduct governing electronic copying and 
transmission of copyrighted content, the TF has failed to 
generate consensus among its participants.  Ho described an 
April 3 meeting among TF members that included the MPAA, the 
International Federation Against Copyright Theft, the Hong 
Kong ISP Association, the Hong Kong Internet Society (a 
content user association), and Yahoo Asia - at which they 
decided to abandon the TF's efforts toward a voluntary 
framework.  They agreed to jointly ask the HKG to restart its 
earlier substantial efforts toward legislation-backed 
regulations that will protect copyright owners in the digital 
realm.  The amendments would also clarify ISP/OSP compliance 
requirements, and further define penalties for illicit use of 
protected content. 
 
U.S. Beef Exports to Hong Kong 
------------------------------ 
 
¶6. (SBU) Asia Pacific Senior Vice President for the U.S. Meat 
Export Federation Joel Haggard asked Stratford about possible 
 
HONG KONG 00000754  002 OF 002 
 
 
USTR assistance to further open Hong Kong's market to beef 
exports from the United States.  (Note: Hong Kong partially 
lifted its ban on U.S. beef in December 2005.  The HKG now 
allows entry of U.S. boneless beef from cattle under 30 
months of age.  Bone-in beef and beef offals from the United 
States remain banned.  Prior to the ban, Hong Kong annually 
imported almost USD 109 million of U.S. beef and offals. 
2008 imports totaled only USD 55 million.  End note.) 
Stratford described the USG's recent beef export agreement 
with Korea and said USTR would concentrate next on reaching a 
beef agreement with Taiwan, with Hng Kong-related 
discussions to follow. 
 
CPSIA n "Effective Trade Barrier?" 
---------------------------------- 
 
¶7. (SBU) Andrew Schroth, partne at U.S. law firm Grunfeld 
Desiderio, said the CPIA's rapid implementation timeframe, 
product labling requirements and severely tightned 
restrictions on phthalates and lead have had a "devastating" 
impact on Hong Kong-based manufacturers operating in China's 
Guangdong province.  He told Stratford that uncertainties 
about the U.S. Consumer Products Safety Commission's (CPSC) 
new CPSIA-related regulations and expedited implementation 
timeframes have "created an effective trade barrier" for 
Chinese manufacturers.  Stratford responded that he had heard 
that meember of Congress are examining technical amendments 
to the CPSIA to clarify the law and provide some relief to 
U.S. importers and global manufacturers, while maintaining 
the fundamental consumer product safety protections provided 
under the law. 
DONOVAN