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INFO AMCONSUL HO CHI MINH CITY

UNCLAS STATE 065718 
 
 
E.O. 12958: N/A 
TAGS: OTRA ETRD
SUBJECT: ASEAN-U.S. TIFA WORK PLAN PROPOSALS. 
 
SUMMARY 
 
1.Attached are new ASEAN-U.S. Trade and Investment 
Framework Arrangement (TIFA) work plan proposals 
for the coming year.  USTR officials plan to 
formally present these proposals to our ASEAN 
counterparts at the ASEAN-U.S. Senior Economic 
Officials Meeting (SEOM) on July 14, 2009 in Manila 
and are providing them to Posts to preview with 
relevant officials covering ASEAN economic affairs. 
 
ACTION ITEM 
 
2.We request that Post meet with relevant government 
officials responsible for ASEAN affairs in the next 
week in order to present these proposals to them. 
Suggested talking points provided in para 8 below. 
It is our hope that by providing them with the 
opportunity to review these proposals, they will be 
prepared to give us detailed feedback at the July 
14 ASEAN-United States SEOM meeting.  We also would 
be interested in advance notice of any proposals 
they may be preparing to table at this meeting. 
Please provide confirmation and readout of meeting 
to USTR contact point identified in para 10. 
 
Background 
 
3.We are seeking to advance work under the ASEAN-U.S. 
TIFA.  The development of new work plan items for 
the coming year is an important process under the 
TIFA, and we are looking forward to feedback from 
our counterparts on our proposals as well as 
welcoming new proposals from them.  To date, the 
ASEAN countries have not made any work plan 
proposals under the TIFA. 
 
4.The new U.S. work plan proposals for this year are 
intended to support ASEAN integration and further 
build our trade and investment relations with the 
region.  The proposals are focused largely on trade 
facilitation-related work, but also include 
proposals for dialogues of mutual interest, 
including on trade and environment and between U.S. 
and ASEAN government officials and business 
leaders.  These proposals are also designed to 
advance established ASEAN priorities under the 
ASEAN Roadmap and to dovetail with initiatives that 
are being pursued in other fora, including under 
the U.S.-ASEAN Enhanced Partnership and in APEC. 
 
5.The new proposals include: 
-Bilateral customs/trade facilitation agreements 
with interested ASEAN countries. 
-Bilateral agreements on logistics services that 
would extend intra-ASEAN liberalization in this 
sector. 
-Bilateral agreements on digital economy that 
would promote and extend ASEAN efforts under the 
e-ASEAN Framework Agreement to liberalize this 
service sector. 
-Trade finance dialogue to explore additional 
cooperation with the U.S. Export-Import Bank, 
which supports the financing of U.S. exports of 
goods and services to international markets. 
-Trade and environment dialogue on a broad range 
of issues leading to further cooperative work. 
-Support for development of ASEAN trade repository 
to enhance transparency of legal and regulatory 
measures. 
-U.S.-ASEAN dialogue between senior government 
officials-senior business leaders. 
 
6.The proposals for agreements are being offered to 
all ASEAN members, but would be negotiated 
bilaterally rather than as regional agreements. 
Doing so will allow us to deal with the Burma 
question, while advancing trade and investment 
issues of mutual interest. 
 
7.The ASEAN-U.S. TIFA was concluded in August 2006. 
Under the TIFA, the United States and ASEAN 
countries agreed to jointly develop annual work 
plans that include priority initiatives that would 
help further build ASEAN-U.S. trade and investment. 
Solid progress was made on SPS and trade 
facilitation issues in the initial work plan under 
the TIFA.  Progress in the last year has been 
limited, however, with ASEAN countries lacking 
interest and unwilling to dedicate the resources to 
advance the work plan proposals.  We hope the new 
initiatives will reinvigorate our efforts under the 
TIFA. 
 
8.Suggested talking points: 
-Our new work plan proposals under the ASEAN-U.S. 
TIFA for this year are intended to support ASEAN 
integration and further build our trade and 
investment relations with the region. 
-The proposals are focused largely on trade 
facilitation-related work, but also include 
proposals for dialogues on mutual interest, 
including on trade and environment and between U.S. 
and ASEAN government officials and business 
leaders.  The proposals include: 
-Bilateral customs/trade facilitation agreements 
with interested ASEAN countries. 
-Bilateral agreements on logistics services that 
would extend intra-ASEAN liberalization in this 
sector. 
-Bilateral agreements on digital economy that 
would promote and extend ASEAN efforts under the 
e-ASEAN Framework Agreement to liberalize this 
service sector. 
-Trade finance dialogue to explore additional 
cooperation with the U.S. Export-Import Bank, 
which supports the financing of U.S. exports of 
goods and services to international markets. 
-Trade and environment dialogue on a broad range 
of issues leading to further cooperative work. 
-Support for development of ASEAN trade repository 
to enhance transparency of legal and regulatory 
measures. 
oU.S.-ASEAN dialogue between senior government 
officials and senior business leaders. 
-We also want to continue the important work on 
standards that ASEAN and the United States have 
been doing. 
-In addition, we hope to continue to make progress 
on our current work plan agenda items, including 
relating to the ASEAN Single Window and 
harmonization of pharmaceutical regulatory 
approvals. 
-We are looking forward to feedback from you on our 
new proposals at the upcoming ASEAN-U.S. Senior 
Economic Officials meeting in Manila on July 14. 
-We would welcome and look forward to any new 
proposals from you as well. 
 
 
 
9.Full text of proposals follows. 
 
ASEAN-U.S. Trade and Investment Framework Arrangement 
(TIFA) 
New Work Plan Proposals 
 
The United States proposes the following items for 
consideration as part of the work plan under the ASEAN- 
U.S. TIFA.  These proposals are intended to support 
ASEAN integration and help further build ASEAN-U.S. 
trade and investment relations.  They are focused 
largely on trade facilitation-related work, but also 
include proposals for dialogues of mutual interest, 
including on trade and environment and between 
governments and business. 
 
Trade Facilitation Agreement 
 
Improved trade facilitation is a key step toward ASEAN 
trade liberalization and economic integration. 
According to some academic estimates, each day the 
transit time for shipment of goods decreases, trade 
increases by 1 percent.  By improving trade 
facilitation, we also could support ASEAN economic 
integration, enhance trade and investment between ASEAN 
and its trading partners, and help ASEAN countries 
address governance issues. 
 
Agreements on trade facilitation between ASEAN countries 
and the United States would enhance transparency, 
simplify customs procedures and the treatment of goods 
in transit, and harmonize procedures and formalities, 
especially in customs valuation and tariff 
classification.  Such agreements also would support the 
modernization of trade facilitation brought about by 
advances in technology. 
 
For ASEAN countries, an agreement on trade facilitation 
would help promote the ASEAN goal of full economic 
integration by 2015.  It also would build on the work 
ASEAN has already accomplished in the customs area, 
including moving toward an ASEAN Single Window.  In 
addition, while ASEAN endorsed the APEC model in trade 
facilitation in 2005, an agreement between ASEAN 
countries and the United States on trade facilitation 
would provide ASEAN countries the opportunity to move 
beyond the model measures to concrete commitments in 
this area. 
 
We would propose an agreement modeled closely on the 
customs administration and trade facilitation chapter in 
recent U.S. FTAs, which aims to achieve the following 
broad objectives: 
-Set rules and procedures to facilitate expeditious 
processing and release of goods at the border; 
-Provide for customs operations that are 
transparent, efficient and predictable and seek the 
elimination of unwarranted customs procedural 
obstacles to international trade; and 
-Provide for cooperative efforts on enforcement of 
customs-related issues. 
 
Logistics Services Protocol 
 
Liberalization of logistics services offers a key step 
toward ASEAN trade liberalization and economic 
integration.  Logistics costs are a particularly heavy 
burden for developing countries, especially small, 
island, and landlocked economies, where cost 
differentials can exceed tariff levels and undermine 
comparative advantage in the production of goods.  By 
contrast, access to efficient freight logistics 
infrastructure and services is an important factor in 
attracting inward investment in manufacturing. 
Liberalization of logistics services therefore would 
support ASEAN economic integration, encourage foreign 
investment in the region, and enhance the economic 
efficiency and competitiveness of ASEAN countries. 
 
U.S. protocols on logistics services with ASEAN 
countries would further these objectives by encouraging 
parties to provide access to important services markets 
like third-party logistics, distribution, express 
delivery, and other services included in the ASEAN 
Roadmap; leading to improved efficiencies and reduced 
costs for the movement of freight.  The specific 
provisions of the protocol would be drawn from common 
principles and best practices found in trade agreements 
or other instruments (e.g., those developed in APEC) and 
adapted to meet the interests of the parties. 
 
Digital Economy Protocol 
 
The digital economy is playing an expanding role in 
international trade, creating new opportunities for 
companies of all sizes to compete successfully in global 
markets.  ASEAN member countries are well positioned to 
take advantage of this opportunity based on their 
ongoing investment in education and information and 
communication technology (ICT) infrastructure.  The 
digital economy presents opportunities to expand 
exports, to develop and access advanced business 
services that are essential to a competitive economy, 
and to promote the ASEAN goals of accelerating economic 
growth, social progress and cultural development 
throughout the region. 
 
With innovative services increasingly incorporating and 
dependent on information technology, agreements on 
digital economy between the United States and ASEAN 
countries could enhance access to advanced information 
technology services and electronic commerce.  Bilateral 
protocols between the United States and ASEAN countries 
would promote the objectives of the e-ASEAN Framework 
Agreement, including that the people of ASEAN should 
benefit from the opportunities generated by ICT and 
electronic commerce and gain access to these new 
technologies, and that the protocols should facilitate 
cross border trade and electronic transactions.  Such 
protocols also could encourage the availability of a 
range of IT-enabled services in ASEAN countries to 
foster additional productivity enhancements, enable 
green business models, and create a more modern 
services infrastructure.  In addition to enhancing 
access for this new form of commerce, both within the 
region and with external trading partners, protocols 
between the United States and ASEAN countries also could 
help to attract foreign investment by demonstrating 
leadership and a commitment to openness to the new 
knowledge economy. 
 
The proposed protocols would seek to encourage enhanced 
access to the markets for computer and 
telecommunications services along with the market for 
services supplied over ICT networks, while also 
promoting nondiscrimination of digital products and the 
free flow of data and electronic transmissions.  The 
specific provisions of the protocols would be drawn from 
common principles and best practices found in trade 
agreements or other instruments (e.g., those developed 
in APEC) and adapted to meet the interests of the 
parties. 
 
Trade Finance Dialogue 
 
ASEAN countries have indicated an interest in enhancing 
trade finance to support the expansion of trade between 
the United States and ASEAN, especially in the current 
economic slowdown.  As a result of this slowdown, trade 
between the United States and ASEAN has slowed for the 
first time in many years.  Through the first quarter of 
2009, U.S. imports from ASEAN were down 24 percent 
compared to the same period a year ago and were at their 
lowest first quarter level since 2004.  Similarly, U.S. 
exports to ASEAN were down in the first quarter of 2009 
by 34 percent compared to the same period in 2008 and 
were at their lowest first quarter level since 2003. 
Trade finance can potentially help counter this slowdown 
and revive trade between the United States and ASEAN 
countries. 
 
Trade finance institutions provide access to financial 
resources to facilitate international trade transactions 
that might not otherwise occur.  By providing the means 
for buyers in one country to purchase the products they 
need from sellers in another country, trade finance 
institutions help to promote trade and support 
development. 
 
We propose the launch of a dialogue on trade finance. 
Initially, we would envision a discussion of U.S. trade 
finance institutions, including the Export-Import Bank 
of the United States, to understand better how U.S. 
trade finance programs work and to explore opportunities 
to partner with these institutions.  We also would see 
the dialogue as an opportunity to exchange information 
between U.S. and ASEAN trade finance institutions to 
help facilitate trade.  As appropriate, the United 
States also would consider technical assistance to help 
ASEAN nations establish their own trade finance 
institutions. 
 
Enhanced Trade and Environment Dialogue 
 
Consultation on matters related to the interaction 
between trade and environment is a natural element of an 
enhanced trade and investment dialogue between ASEAN and 
the United States.  For more than 20 years, ASEAN has 
developed joint environmental programs and action plans 
designed to promote environmental sustainability and 
sustainable natural resource management.  Both the 
United States and ASEAN members recognize the importance 
of promoting international efforts to achieve shared 
environmental objectives, as well as the need to pursue 
trade and environmental policies that are mutually 
supportive.  Trade-related environmental concerns, as 
well as opportunities for trade-related environmental 
dialogue are regular topics during U.S. bilateral trade 
consultations with ASEAN members.  Therefore, the ASEAN- 
U.S. TIFA provides an opportunity to build on these 
efforts to establish a regular dialogue on trade and 
environment between the United States and ASEAN. 
 
We would propose that the dialogue begin as an informal 
exchange designed to identify a variety of potential 
topics and issues of shared interest.  Eventually, the 
dialogue could be institutionalized through an agreement 
under the TIFA that provides structure and outlines 
broad objectives. 
 
Possible initial topics for the dialogue include: 
 
-     Wildlife trade, including CITES; 
-     Trade in marine products; 
-     Trade in environmental technologies and services; and 
-     Trade in recyclable materials and remanufactured goods. 
 
Trade Repository 
 
Enhanced transparency will help reduce costs to 
companies of doing business.  Currently, no single 
source exists for companies to review and compare trade 
information, such as tariffs, preference programs, and 
other regulatory requirements in ASEAN countries.  The 
ASEAN Trade in Goods Agreement (ATIGA) calls for the 
establishment of an ASEAN Trade Repository that shall be 
made accessible to the public through the Internet.  The 
purpose of such a repository is to provide transparency 
in the form of easily accessible information for traders 
to make sound business decisions.  As ASEAN is currently 
considering how to establish such a repository, we 
propose a dialogue to consider specific ways that the 
United States could support this important effort. 
 
Government-Business Dialogue 
 
U.S. and ASEAN business have expressed a strong interest 
in deepening the government-business dialogue to 
identify and address issues and concerns, improve 
communication and establish partnerships.  We would 
propose an annual senior government officials-senior 
business leaders dialogue under the TIFA.  The U.S. 
business community already is proposing to conduct an 
ASEAN investment survey, the results of which could be 
discussed in a meeting under this government-business 
dialogue.  We also would welcome ideas from ASEAN 
countries and the business community of other issues 
appropriate for discussion in such a dialogue. 
 
Continued Cooperation on Standards 
 
Product standards affect an estimated 80 percent of 
trade.  Trade is facilitated when companies do not need 
to manufacture and test their products to different 
requirements in different markets.  Standards work, 
including advancing the principles of international 
standards development such as openness, transparency, 
consensus, and impartiality, is therefore crucial to 
ASEAN integration efforts and to further increasing 
ASEAN-U.S. trade and investment.  To this end, the 
United States proposes continuing this important work 
with ASEAN. 
 
10.Response to USTR can either be e-mailed or cabled 
to: USTR Falan Yinug (202-395-6142, 
falan(underscore)yinug@ustr.eop.gov).  USTR is 
available to answer any questions.  Thank you for 
your assistance. 
 
 
CLINTON