VZCZCXRO7359
RR RUEHCN RUEHGH
DE RUEHHK #0290/01 0500353
ZNY CCCCC ZZH
R 190353Z FEB 10 ZDK MULTI REQ
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC 9656
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHEHNSC/NSC WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 HONG KONG 000290 
 
SIPDIS 
 
STATE FOR EAP/CM, EAP/EP, EAP/RSP, EAP/FO FOR PATEL AND S/P 
FOR GREEN, NSC FOR BADER 
 
E.O. 12958: DECL: 02/11/2025 
TAGS: ECIN PREL APECO ECON HK
SUBJECT: REGIONAL ARCHITECTURE: HK VIEWS APEC AS "DEFINING 
REGIONAL ORGANIZATION" 
 
REF: A. STATE 2965 
     ¶B. 09 STATE 128770 
 
HONG KONG 00000290  001.2 OF 002 
 
 
Classified By: Acting Consul General Christopher Marut, Reasons 1.4 (b/ 
d) 
 
¶1.  (C) Summary and Comment: A senior Hong Kong official 
welcomed Secretary Clinton's January 12 speech on U.S. views 
toward Asia Pacific Regional Architecture and applauded clear 
administration statements on the importance of U.S. 
commitments in Asia.  Despite its status as a Special 
Administrative Region (SAR) of China, Hong Kong protects its 
policy independence in numerous multilateral organizations 
that do not require sovereignty as a condition of membership. 
 APEC's broad membership and cooperative nature make it Hong 
Kong's organization of choice for regional economic 
engagement.  Recent proposals to create other large regional 
groupings are interesting to Hong Kong, but are unlikely to 
get much support until questions about membership, 
obligations, and focus are answered.  Asian multilateral 
organizations' diverse membership makes achieving concrete 
results difficult, but Hong Kong officials believe any forum 
without active U.S. participation would be unlikely to 
produce meaningful outcomes.  Hong Kong's own APEC 
priorities, trade facilitation and support for Small and 
Medium Enterprises (SMEs), are a good fit with U.S. APEC 
goals.  Hong Kong's expertise in health and pandemic 
preparedness, as well as concerns about food and product 
safety, could make it a potential APEC partner for the U.S. 
on these issues.  End summary and comment. 
 
¶2.  (C)  Econ Unit Chief met with Trade and Industry 
Department (TID) Deputy Director General (DDG) Leonia Tai 
Shuk-yiu February 10 to discuss Hong Kong's agenda in those 
multilateral organizations in which it is a member and hear 
her views on Secretary Clinton's January 12 speech at the 
East West Center in Honolulu.  DDG Tai oversees the offices 
that support Hong Kong's participation in trade-oriented 
multilateral organizations, including APEC, the OECD and the 
WTO, and reports directly to Hong Kong's APEC Senior 
Official, TID Director General Maria Kwan Sik-ning. 
 
============================================= ====== 
Hong Kong an Independent Actor in Multilateral Fora 
============================================= ====== 
 
¶3.  (C) Although the U.S. and Hong Kong cooperate bilaterally 
on a very wide range of issues, Hong Kong's SAR status limits 
its participation in multilateral organizations to those that 
do not require sovereignty as a condition of membership and 
those that do not deal with national security issues.  These 
restrictions, however, do not prevent Hong Kong from being an 
active and independent member of numerous international 
organizations including the WTO, APEC, the OECD, the 
Financial Stability Board, the Financial Action Task Force, 
and many others.  In other organizations that are limited to 
sovereign states, Hong Kong may participate as an observer or 
as part of the PRC delegation.  Tai lamented that Hong Kong 
officials often had to combat the misperception that they 
took their marching orders from Beijing.  In fact, she said, 
Hong Kong TID officials rarely met their PRC counterparts 
outside of official meetings and did not coordinate policy 
positions in APEC and the WTO with them.  (Note: Other Hong 
Kong Government departments that participate in international 
fora tell us they meet their PRC counterparts more 
frequently, but Hong Kong officials insist they do not 
coordinate policy positions with Beijing in organizations in 
which Hong Kong is an independent member.  End Note.) 
 
¶4.  (C) Hong Kong leaders appreciated the United States' 
important economic and security role in the region, said Tai. 
 Secretary Clinton's January 12 speech and regular visits to 
the region were a welcome indication of the level of 
attention Asia would receive from the Obama administration. 
For Hong Kong, APEC was the defining vehicle for regional 
economic cooperation.  Hong Kong shared U.S. views on the 
need to promote prosperity in the region, she said, a goal 
best met through facilitating trade.  APEC's broad membership 
and cooperative structure made it best placed among existing 
regional organizations to achieve that aim.  She acknowledged 
that APEC's inability to enforce compliance with proposed 
rules allowed critics to dismiss it as a "talk shop" but 
argued that APEC's model allowed a wide range of economies 
with different political and economic systems to participate. 
 She pointed to successful efforts to lower tariff and 
non-tariff barriers in the region as concrete results of APEC 
initiatives. 
 
 
HONG KONG 00000290  002 OF 002 
 
 
============================================= ====== 
Asian Multilateralism Values Consensus over Results 
============================================= ====== 
 
¶5.  (C) Efforts to re-orient existing regional groups to 
focus on results would be a serious challenge, said Tai. 
ASEAN   1 and ASEAN   3 demonstrated the difficulty of 
marshaling large groups to achieve concrete collective action 
in Asia.  The China/ASEAN Free Trade Agreement was supposed 
to go into effect this year, but some members were already 
looking for ways to back out of agreed commitments in order 
to protect domestic industry from Chinese competition, she 
said.  Large new proposed bodies like the East Asia Community 
(EAC) or Asia Pacific Community (APC) were interesting but 
were unlikely get much support until questions about 
membership, mission, and obligations were answered.  Asian 
multilateral organizations with broad membership had not 
traditionally had results-driven cultures, said Tai. 
 
¶6.  (C) It would be difficult for many Asian economies to 
agree to a proposal to create an Asian Free Trade Area (AFTA) 
that would codify obligations and set penalties, said Tai. 
Different political systems and levels of economic 
development argued for smaller and more focused agreements. 
The Trans-Pacific Partnership  (TPP) was a step in the right 
direction, but Vietnam's bid to join the group could make it 
unworkable, she predicted, given that other TPP signatories 
are at a significantly higher level of economic development. 
Hong Kong might consider applying to join the TPP in the 
future, said Tai, but the SAR currently had little experience 
with bilateral or regional trade agreements.  Hong Kong had 
only one Free Trade Agreement (FTA), the Closer Economic 
Partnership Arrangement (CEPA) with the PRC, although it 
finished negotiations with New Zealand on its first 
international FTA in November 2009.  The Hong Kong-New 
Zealand FTA should be approved and go into effect early in 
2010, said Tai.  TID was also in negotiations with the 
European Free Trade Association (EFTA members are Iceland, 
Liechtenstein, Norway, and Switzerland) with an agreement 
expected this year, she offered. 
 
=================================== 
APEC: Hong Kong Supports SMEs, 
 Possibly Health and Product Safety 
=================================== 
 
¶7.  (C) Hong Kong's own multilateral priorities and liberal 
economic philosophy made it a natural partner for some U.S. 
initiatives in APEC.  Trade facilitation, particularly for 
SMEs, was a key objective for Hong Kong and the SAR would be 
willing to support U.S. proposals that promoted greater 
access to international markets for SMEs, said Tai.  Hong 
Kong had a world-class pandemic preparedness regime and might 
also be a useful partner in health-related initiatives. 
Finally, Hong Kong-based companies with factories in mainland 
China have been at the forefront of product safety compliance 
efforts.  This experience might also make Hong Kong an ally 
on U.S.-sponsored food and product safety initiatives. 
MARUT