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Cablegate: Funding Request for Fy2008 Biotechnology Outreach And

VZCZCXYZ0005
PP RUEHWEB

DE RUEHHK #0186/01 0290741
ZNR UUUUU ZZH
P 290741Z JAN 08
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC 4018
INFO RUEHRC/USDA FAS WASHDC PRIORITY 1396
RUEHBJ/AMEMBASSY BEIJING PRIORITY 1856
RUEHUL/AMEMBASSY SEOUL PRIORITY 3244
RUEHKO/AMEMBASSY TOKYO PRIORITY 4857
RUEHGZ/AMCONSUL GUANGZHOU PRIORITY 1045
RUEHIN/AIT TAIPEI PRIORITY 4817

UNCLAS HONG KONG 000186

SIPDIS

SIPDIS

STATE FOR EAP/CM
STATE FOR EEB/TPP/ABT/BTT FINN
USDA FOR FAS/OSTA/MHENNEY/AROBERTS/ARUDE
USDA FOR FAS/OCRA/ABRANSON
BEIJING FOR FAS AND ECON
TOKYO FOR FAS
SEOUL FOR FAS
AIT FOR FAS/HALLMAN, ECON/OCONNOR

E.O. 12958: N/A
TAGS: EAGR ECON ETRD TBIO KPAO HK
SUBJECT: FUNDING REQUEST FOR FY2008 BIOTECHNOLOGY OUTREACH AND
CAPACITY BUILDING IN HONG KONG

Ref: 07 STATE 160639

1. This is an action request. See paragraphs 2 and 9.

2. Summary and Action Request: Hong Kong is on the brink of
initiating the formal process for establishing mandatory labeling
for biotech foods. This step could seriously undermine sales to
this 8th-largest market for U.S. value-added agricultural products,
which amounted to about USD$710 million in 2007. Consulate General
Hong Kong requests resources in the amount of $20,000 for outreach
and capacity building activities, including work with educators and
institutions as outlined in para 9. Mandatory biotech labeling is a
high-priority issue for FAS posts throughout the region and
coordination with other posts is welcome. End summary and action
request.

3. If Hong Kong initiates mandatory labeling for biotech foods, U.S.
products will be severely impacted because of the cost of labeling,
if exporters choose to continue to sell to this market. Retailers
fear negative consumer reaction and a reduction in consumer choice
for food products in Hong Kong. The Hong Kong Government (HKG)
released a set of guidelines on voluntary labeling for biotech foods
in July 2006. While the HKG has not publicly announced its decision
to implement a mandatory labeling scheme, pressure from some
legislators has led officials to state they will formally introduce
mandatory GM labeling in the coming year. Presently, Hong Kong does
not have any specific regulation regarding biotech foods. Given the
lack of public concern over GM foods, post believes that by taking a
proactive approach to educate HKG officials, legislators, and media
on the science-based principles and consumer benefits of
biotechnology, post would be successful in keeping biotech labeling
voluntary. Post believes work in this area would have influential
spillover effects in both Taiwan and the PRC. Mandatory biotech
labeling is a high priority issue for FAS posts throughout the
region, and coordination with other posts is welcome and likely.
Consulate General Hong Kong requests resources in the amount of
$20,000 to carry out outreach and capacity building activities,
including work with educators and institutions as outlined in para
9.

BACKGROUND

Biotechnology Trade and Production
----------------------------------
4. U.S. exports of agricultural and food products to Hong Kong
totaled approximately $1.26 billion in 2007, ranking it as the
15th-largest U.S. export market. Of the $1.26 billion of exports,
$710 million were consumer-oriented products and nearly $13 million
were made up of corn and soybeans. If a mandatory biotech labeling
law goes into effect, most of these products would be affected. The
voluntary guidelines that were introduced in 2006 have not
negatively affected U.S. exports to Hong Kong. The HKG currently
makes no distinction between conventional and biotech foods; all are
subject to the same food safety regulation.

5. Farming in Hong Kong is an insignificant industry with very
limited future prospects. Hong Kong itself does not commercially
produce any biotechnology crops, nor does it conduct field trials.
Except for research on biotech rice at the Chinese University of
Hong Kong, all field trials are conducted in Mainland China. In
2003, the HKG announced a program for voluntary labeling for
pre-packaged food and mandatory pre-market safety assessment
requirements for all food products. While the HKG has not set a
date for the implementation of the mandatory pre-market safety
assessment, it released the guidelines for voluntary labeling of
biotech foods in order to answer the public call concerning
consumers' right to make an informed choice on these products.

6. The guidelines for the voluntary labeling program were formulated
by a working group established under the Hong Kong Center for Food
Safety. Its members come from various sectors including
manufacturing, wholesale, retail, consumer groups and government
departments. These guidelines are advisory in nature and do not
have any legal weight. Adoption is entirely voluntary and not
binding. As such, U.S. food exports should not be affected if they
choose not to have any biotech labeling. Since Hong Kong does not
maintain a list of approved biotechnology crops, biotech crops can

be imported into Hong Kong as conventional crops and are subject to
the same legislation.

HK to Review Its Biotech Policy in 2008
----------------------------------------
7. Government sources revealed that the HKG will review its policy
on the labeling of biotech pre-packaged foods and drinks over the
coming year. While the government has not announced its decision to
implement a mandatory labeling scheme, industry sources have
expressed certainty that the HKG is moving in this direction.

Post Efforts to Steer HKG to an Interim
Voluntary Labeling Scheme
----------------------------------------
8. In 2000, in view of the mounting pressure of establishing a
mandatory labeling policy in Hong Kong, the American Consulate
General, Agricultural Trade Office (ATO) Hong Kong organized a
series of activities including a video conference and a range of
workshops targeting different audience groups clarifying the myths
of biotech foods. Distinguished subject-matter speakers from the
U.S. were invited to take part in the workshops and video
conference. Upon concluding the outreach activities, HKG announced
an interim voluntary labeling policy. It will review that policy
this year, and thus, Post believes now is the best time to stage
another round of education. Meanwhile, the HKG is closely
monitoring the development of implementation details of the
Cartagena Protocol. Therefore, it is desirable to alert the
government to the possible adverse impact implementation of the
Protocol will bring.

Proposed Capacity Building and Outreach Programs
--------------------------------------------- ---
9. The proposed outreach programs are designed to provide
stakeholders with facts of biotechnology using a science-based
approach. Stakeholders would include key HKG regulators and
officials who will work on the review and proposed adoption of a
mandatory labeling law for Hong Kong. In addition public outreach
would be extended to educators, trade/industry, and other government
officials based in Hong Kong, as well as the press and media.

A. Biotechnology Outreach & Capacity Building Workshop (one-day):
$9,000; requested resources would cover the expenses for an
agricultural biotech expert and spokesperson from the United States
to travel to Hong Kong. Aim of activity - to educate stakeholders
about the science-based facts surrounding biotechnology, benefits it
offers to farmers, manufacturers, and ultimately consumers. The
Workshop will also provide insight into other voluntary labeling
schemes around the globe and the positive affect it has had on
consumer choice. Post would work to coordinate special press
interviews with the visiting expert and possibly participants to
ensure maximum exposure of the program.

B. Hong Kong University Panel Discussion on the Benefits of
Biotechnology (1/2 day): $1,000; requested funds would cover costs
of materials, invitations and logistics for the discussion session;
Aim of activity - To provide educators and the U.S. biotech expert
will hold a panel discussion at Hong Kong University and China
University in Hong Kong on the application of biotechnology,
science-based regulations, and benefits/consumer choice. Post will
work with the University to coordinate press coverage of the event
and provide press points on the benefits of biotechnology for food
products.

C. Hong Kong Government Regulatory Officials Training in the United
States (1 person): $10,000; Aim of activity - one HKG official
would travel to the United States to meet with USDA regulatory
officials and other agencies to better understand the U.S.
approaches related to voluntary labeling, biotech regulatory policy
and the positive impact on consumers as well as heath safety.
Official would also attend a special "Short Course" on biotechnology
at Michigan State University to learn about the science behind
biotechnology, applications, benefits, as well as meet with industry
leaders in this field.

STAKEHOLDER POINTS OF VIEW

HKG Stance on Cartagena Protocol on Biosafety

---------------------------------------------
10. The Hong Kong Government's Environment Bureau takes the lead on
the implementation of the Cartagena Protocol on Biosafety. While it
is a policy bureau, the technical responsibility lies with the
Agriculture, Fisheries and Conservation Department (AFCD). AFCD is
primarily responsible to provide infrastructure support services to
promote agricultural production and sustainable development of
agriculture and fisheries in Hong Kong. In 2002, AFCD created a
division called Biodiversity Conservation Division. Among other
duties, its role is to prepare Hong Kong to implement the Cartagena
Protocol. Hong Kong at present is not a party of the Convention on
Biological Diversity and the Cartagena Protocol on Biosafety. The
application of international agreements to the Hong Kong Special
Administrative Region, in this case, is handled by the People's
Republic of China.

Green Groups and Consumer Organizations
------------------------------------------
11. The green groups and consumer organizations are key parties in
Hong Kong advocating mandatory labeling of biotech foods. Their
rationale is based on consumers' right to know. The safety issue is
not their major argument. The request of green groups and consumer
organizations has gained support of certain Legislative Council
(Legco) members. In January 2000, Legco adopted a motion to "draw
on the experience of most member states of the European Union and
expeditiously legislate for a labeling system" and to "conduct
strict examinations and tests" on biotech foods. On June 2003,
Legco passed a motion calling on the government to expeditiously
establish a "voluntary first, and then mandatory" approach to a
labeling system for biotech foods.

Food Industry/Trade
-------------------
12. In general, food industry groups are opposed to mandatory
labeling of biotech foods on the grounds that it would limit the
choices of consumers, reduce variety of food supplies to Hong Kong
and add burden to consumers and the industry alike.

13. Post responsible officer is Anita Katial at
anita.katial@usda.gov.

CUNNINGHAM

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