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Cablegate: Demarche to China On Taft Goods Proposal

VZCZCXRO9315
PP RUEHAG RUEHAP RUEHCHI RUEHCN RUEHDE RUEHDF RUEHDT RUEHGH RUEHGI
RUEHHM RUEHLZ RUEHMA RUEHMR RUEHNH RUEHPA RUEHPB RUEHRN RUEHVC
DE RUEHBJ #0548 0461057
ZNR UUUUU ZZH
P 151057Z FEB 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 5046
RUCPDOC/USDOC WASHDC PRIORITY
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHXQ/ALL EUROPEAN UNION POST COLLECTIVE
RUCNWTO/WORLD TRADE ORGANIZATION COLLECTIVE
RUEHGV/USMISSION GENEVA 2107
RUEHBS/USEU BRUSSELS
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS BEIJING 000548

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/CM, EBB/TPP/MTA/RHEE AND SCHEIBE
STATE PASS USTR NORTON/WEISS/STRATFORD/WINTER/MAIN
USDOC FOR BRZYTWA

E.O. 12958: N/A
TAGS: ETRD WTRO ECON CH
SUBJECT: DEMARCHE TO CHINA ON TAFT GOODS PROPOSAL

REF: STATE 12905

1. (SBU) On February 15, Econ M/C together with EU's
Counselor for Trade and Investment Olivier Micol, jointly
demarched China on labeling for textile, apparel, footwear,
and travel (TAFT) goods (reftel) through China's Ministry
of Commerce (MOFCOM) WTO Director General Zhang Xiangchen.
Zhang's response was that, he could see some benefits in
this kind of proposal, and would like to see China co-
sponsor the TAFT Proposal provided two of China's specific
concerns could be addressed. First, China wants to make
sure it would still be able to add Chinese required
information relating to size on permanent labels. Second,
China was concerned that countries would be able to add
unlimited requirements to non-permanent labels.

----------------
Size Does Matter
----------------

2. (SBU) Zhang said that MOFCOM officials are familiar with
the text of the TAFT Proposal and that this is not a new
topic for them. He shared the U.S./EC objective that
technical barriers to trade (TBT) resulting from labeling
requirements should be reduced. He said MOFCOM had
discussed this issue with Administration for Quality
Supervision, Inspection and Quarantine (AQSIQ), which was
concerned that the current U.S./EC Proposal would prohibit
China from complying with its own domestic regulations that
require manufacturers to include size specific information
based on Chinese standards on labels. He noted that maybe
one way to accommodate this concern would be to expand the
"legitimate objectives" under Article 2.2 of the WTO
Agreement on Technical Barriers to Trade (TBT).

------------------
Labeling Loophole?
------------------

3. (SBU) Second, China was concerned that the U.S./EC
Proposal was too broad with respect to what may actually
result in the creation of more rather than fewer technical
barriers to trade with respect to labeling. His concern
stemmed from the fact that there was no clear limitation on
what could be included on non-permanent labels. He
specifically mentioned concerns that the U.S./EC Proposal
may not prevent countries from requiring environmental and
labor standards on non-permanent labels. Econ M/C and EU
Counselor explained that Article 3 on non-permanent labels
would not change the application of the TBT Agreement
Article 2.2 to all requirements other than those listed in
Article 2, and that the intent of the TAFT Proposal was to
restrict not expand the use of TBTs.

4. (SBU) Zhang said that, if these two concerns could be
addressed, MOFCOM would like China to join as co-sponsor of
the U.S./EC TAFT Proposal. He indicated he would discuss
this again with AQSIQ and get back to us.

5. (SBU) Comment: It was apparent in the course of the
demarche that MOFCOM is very familiar with the text of the
TAFT Proposal and would be more willing to consider joining
as co-sponsor if the above concerns are addressed. End
Comment.

PICCUTA

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