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Cablegate: U/S Padilla Pushes for Legislative Transparency

VZCZCXRO2995
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #2837/01 2040830
ZNR UUUUU ZZH
P 220830Z JUL 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 8703
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHOO/CHINA POSTS COLLECTIVE

UNCLAS SECTION 01 OF 02 BEIJING 002837

SENSITIVE
SIPDIS

STATE FOR EAP/CM SECOR/YAMAMOTO
STATE PASS USTR STRATFORD/MARUYAMA/KATZ
USDOC FOR ITA/PADILLA
USDOC FOR OGC/CLAFFEE/BLANK
USDOC FOR ITA/MAC/KASOFF/MELCHER/KARNAK

E.O. 12958: N/A
TAGS: ETRD EINV EFIN CH
SUBJECT: U/S PADILLA PUSHES FOR LEGISLATIVE TRANSPARENCY

THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED. PLEASE HANDLE
ACCORDINGLY. NOT FOR DISTRIBUTION OUTSIDE USG CHANNELS.

1. (SBU) Summary. United States Department of Commerce
(DOC) Under Secretary (U/S) Christopher Padilla and USTR
General Counsel (GC) Warren Maruyama met with State Council
Legislative Affairs Office (SCLAO) Vice Minister Zhang
Qiong on July 16 to discuss SED 4 transparency initiatives
and raise concerns over issues pertaining to China's
release of draft postal, patent and telecom laws. VM Zhang
agreed to a proposal by U/S Padilla and GC Maruyama that
experts from the two sides hold technical discussions over
the United States's concerns with each of the draft laws.
VM Zhang also welcomed a United States proposal to
reconvene the Intellectual Property Rights (IPR) Working
Group under the Joint Commission on Commerce and Trade
(JCCT) prior to the next JCCT in mid-September. Noting the
complexity of issues with China's draft telecom law, VM
Zhang said it would be difficult to move the law forward to
the National People's Congress (NPC) anytime soon. VM
Zhang also inquired about dates for the next United States-
China Legal Exchange to discuss transparency issues and
thanked the United States side for adding valuable input
into drafting China's Antimonopoly Law (AML). End Summary.

-------------------------------------------
Implementing SED 4 Transparency Initiatives
-------------------------------------------

2. (SBU) VM Zhang opened by stating SCLAO plans to hold
several meetings on transparency in preparation for the
next United States-China Joint Legal Exchange and would
follow through on commitments made at SED 4, but did not
specifically mention which commitments. Since returning
from SED 4, Zhang said SCLAO sent a circular to Chinese
ministries instructing them to submit draft ministerial
rules for publication on the SCLAO website which would
contain a direct link to the respective ministries legal
departments in an effort to improve regulatory transparency.
VM Zhang stated much work remains in implementing
transparency initiatives, however, and welcomed further
exchanges on effective methods for responding to the
various public comments on recently released draft
regulations. U/S Padilla and GC Maruyama thanked VM Zhang
for his efforts to improve regulatory transparency and
stated China should expect more comments on draft
regulations from the United States side as more regulations
are publicized on Chinese government websites.

-----------------------------------------
The Draft Postal, Patent and Telecom Laws
-----------------------------------------

3. (SBU) U/S Padilla requested further clarification
regarding China's draft Postal Law, particularly potential
provisions that might exclude foreign freight forwarders
from delivering documents within China. U/S Padilla and GC
Maruyama both emphasized that, should such a provision be
included in the Postal Law, it could raise serious
questions over China's commitment to national treatment in
its WTO accession agreement. In addition, such a provision
would seem to be inconsistent with former Vice-Premier Wu
Yi's previous JCCT commitments on express delivery. VM
Zhang insisted that China's draft Postal Law is consistent
with China's WTO commitments, stressing that express
delivery would remain open to foreign firms, but that mail
delivery would be subject to a monopoly, as it is in the
United States and most other countries. When pressed by
U/S Padilla and GC Maruyama on the details and on
distinctions between letter and document delivery, Zhang
said that such questions would need to be addressed by
experts. He agreed to a suggestion that a discussion
between United States and Chinese experts on these issues
be arranged soon. Stressing the importance of having such
an exchange before the SCLAO forwards the draft law to the
NPC, U/S Padilla said the United States side would provide
a letter to Zhang as soon as possible outlining the United
States's specific concerns so that China's experts would be
prepared for a discussion.

4. (SBU) VM Zhang welcomed both the idea of reconvening the
JCCT IPR Working Group prior to the next JCCT meeting in
mid-September and incorporating discussions on China's
draft Patent Law within that IPR Working Group. U/S

BEIJING 00002837 002 OF 002


Padilla thanked Zhang for responding to Under Secretary of
Commerce and Director of the United States Patent and
Trademark Office Jon Dudas' letter on the draft Patent Law
and emphasized the need for further exchanges on the Patent
Law prior to the draft Patent Law being passed to the NPC.
U/S Padilla also conveyed Ambassador Randt's regards and
expressed hope that VM Zhang would participate in the
Ambassador's annual IPR Roundtable scheduled for later this
fall.

5. (SBU) In response to U/S Padilla's question about how
the draft Telecom Law would lower capitalization
requirements for establishing telecommunication companies,
VM Zhang noted that the Telecom Law was extraordinarily
complicated, involving everything from Internet, broadcast
and television, to publishing. Even though it had already
been in the works for several years, much more interagency
coordination and consultation would be needed before it
would be ready to be forwarded to the NPC. Zhang noted
that the United States has over 100 years experience in the
area of telecommunicaton, compared with China's several
years exeriene, hence China would need more time to
ormulate a telecom law acceptable to all parties

----------------------------------
United States-China Legal Exchange
----------------------------------

6. (SBU) Zhang praised previous United States-China legal
exchanges and inquired as to when the Department of
Commerce-led United States-China Joint Legal Exchange would
next be held. U/S Padilla said the dates for such an
exchange were not yet confirmed. He also suggested that
when the next round is held, he would be happy to
facilitate meetings between VM Zhang and other relevant
United States authorities within the Department of Commerce,
United States Trade Representative, and the Office of
Management and Budget to explain how the United States
ensures legislative and regulatory transparency and discuss
ways China can implement transparency initiatives. Zhang
praised the Joint Legal Exchange as an effective means to
further cooperation and welcomed the opportunity to
participate. He also thanked the United States side for
adding valuable input into drafting China's Antimonopoly
Law.

7. (U) U/S Padilla and GC Maruyama were accompanied by
AUSTR for China Tim Stratford and DOC Deputy Assistant
Secretary Ira Kasoff. VM Zhang was accompanied by SCLAO
Director-General of Foreign Affairs Wu Hao, Deputy
Director-General of Industry, Communication, and Commerce
(ICC) Guo Qiwen, Division Director of ICC Zhang Yaobo, and
Division Director of the General Office Hu Zhenjin.

8. This cable has not yet been cleared by U/S Padilla or GC
Maruyama.

#Randt

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