VZCZCXRO9113
PP RUEHLH RUEHPW
DE RUEHIL #0787/01 1041042
ZNR UUUUU ZZH
P 141042Z APR 09
FM AMEMBASSY ISLAMABAD
TO RUEHC/SECSTATE WASHDC PRIORITY 2271
INFO RUEHBUL/AMEMBASSY KABUL 0114
RUEHNE/AMEMBASSY NEW DELHI 4732
RUEHLO/AMEMBASSY LONDON 0066
RUEHKP/AMCONSUL KARACHI 1438
RUEHLH/AMCONSUL LAHORE 7054
RUEHPW/AMCONSUL PESHAWAR 5984
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEHRC/USDA FAS WASHDC 4307
RHMFISS/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ISLAMABAD 000787 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EINV ETRD PREL PK
SUBJECT: GOP SEEKS TIFA DELIVERABLES 
 
¶1. (SBU) Summary:  The GOP hopes to bring progress on IPR issues and 
on the long-standing Siemens-Westinghouse investment dispute to the 
Trade and Investment Framework Agreement (TIFA) talks on April 27. 
They are willing to discuss regional trade issues on the sidelines, 
but do not wish them to be part of the official agenda, as they are 
not bilateral issues.  They continue to have issues with the items 
covered in the draft ROZ legislation, but do not appear to have done 
much preparation on labor monitoring and customs harmonization.  No 
decision has been made on the BIT, although the Commerce and 
Investment Ministers will discuss this on April 13.  End Summary. 
 
¶2.  (U) In a meeting with DCM and ECON Counselor April 10, Ministry 
of Commerce (MoC) Secretary Salman Ghani and his staff stressed 
their serious intent to generate concrete deliverables from the 
April 27 TIFA talks in Washington.  The GOP delegation will be 
small:  Minister of Commerce Fahim, Secretary Ghani, Senior Joint 
Secretary Foreign Trade Shahid Bashir, and Deputy Secretary Abdul 
Memon Qadir from Commerce, as well as Muhammad Afzal Bhatti, Member 
(Customs), Federal Board of Revenue (FBR).  Commerce will decide 
April 13 whether anyone from the Investment Ministry will accompany. 
 Both Bashir and Ghani would appreciate clarification whether USTR 
Kirk would be available for the TIFA. 
 
Possible Progress on IPR... 
 
¶3.  (SBU) Ghani stressed the GOP's strong desire to see Pakistan 
removed from the Special 301 Priority Watch List, and the Commerce 
Ministry would like an announcement that Pakistan's status has 
improved in time for TIFA.  Joint Secretary Bashir quoted from the 
International Intellectual Property Association's report from 2009 
stating that losses in 2008 were only $77 million, compared with 
nearly double that amount in 2007.  Ghani and Joint Secretary Bashir 
both indicated that the GOP was ready to introduce long-stalled data 
protection legislation.  Ghani, who had previously been the Health 
Secretary, said he was pushing that Ministry to establish a Drug 
Control Authority and to address pricing issues.  The Health 
Ministry is developing a full health policy, including revised price 
schedules, which he hoped would be ready by the end of the fiscal 
year (June 30).  DCM welcomed any steps the GOP would take on IPR 
protection, noting that the U.S. has been frustrated by the lack of 
recent progress, particularly on pharmaceuticals.  He indicated 
that, while this year's assessment is largely complete, the Embassy 
would support a statement acknowledging at the TIFA any concrete 
progress by Pakistan. 
 
...and Closing the Books on the Siemens-Westinghouse Dispute 
 
¶4.  (SBU) Ghani said he believed that final resolution of the 
decade-old Siemens-Westinghouse dispute would be an excellent 
deliverable for TIFA.  DCM briefed Ghani on USG efforts to urge the 
parties - whose attorneys have verbally agreed on a negotiated 
settlement - to sign off on paperwork that will bring the issue to a 
close.  The last step is to secure the signature of Investment 
Minister Waqar Khan, albeit in his private capacity as a 
representative of the Pakistani firm involved in the suit.  Ghani 
said the issue had been raised with the Prime Minister and that his 
office would become involved if necessary to bring this issue to a 
conclusion. 
 
Transit Trade/SAFTA to be Discussed Unofficially 
 
¶5.  (SBU)  Commerce officials have mentioned several times that they 
feel that the regional trade issues items should not be part of the 
formal agenda as they are not bilateral in nature.  They are willing 
to brief the U.S. side on the margins of the talks, however. 
 
ROZ's 
 
¶6.  (SBU)  Secretary Ghani expressed long-standing GOP concern that 
many of the items on the list to be included in the proposed ROZ 
legislation would not be that advantageous to Pakistan, stating that 
the purpose of the ROZ's was to improve Pakistan's overall export 
volume.  He referred to a recent U.S Pakistan Business Council 
report advocating wider ROZ coverage.  As the economy was quite 
integrated, he said, any slowdown in trade would affect the border 
areas as well, noting that the Waziris and the Masoods control 60-70 
percent of the transportation sector.  Ghani also mentioned that ROZ 
 
ISLAMABAD 00000787  002 OF 002 
 
 
coverage of only 100 miles from the border would disadvantage areas 
in Balochistan such as Lasbela and Gwadar.  In answer to our 
question about which entities could be partners in improving labor 
monitoring, Ghani, who was previously Labor Secretary in the NWFP 
government, suggested the labor welfare boards, at both the federal 
and provincial levels. 
 
Comment 
 
¶7.  (SBU)  Although we tried to lower expectations that there was 
still time to modify this year's Special 301 report, Post would 
support recognizing any meaningful GOP efforts at the TIFA - 
provided Commerce can actually deliver.  A follow-up conversation at 
the Ministry of Health to assess any movement on the stalled 
pharmaceutical legislation was not encouraging; that being said, if 
the Commerce Ministry can succeed in introducing legislation into 
the National Assembly, this would be the first progress we have seen 
in over two years.  Even if it is insufficient to warrant changing 
Pakistan's status on the Watch List, it would be worthy of 
high-level encouragement. 
 
PATTERSON