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Cablegate: Consul General's Introductory Meeting with Hong Kong

VZCZCXRO3215
RR RUEHCN RUEHGH RUEHHM
DE RUEHHK #2223/01 3460015
ZNR UUUUU ZZH
R 110015Z DEC 08
FM AMCONSUL HONG KONG
TO RUEHRC/USDA FAS WASHDC 1421
RUEHC/SECSTATE WASHDC 6427
INFO RUEHBJ/AMEMBASSY BEIJING 2762
RUEHHI/AMEMBASSY HANOI 3896
RUEHPF/AMEMBASSY PHNOM PENH 0831
RUEHVN/AMEMBASSY VIENTIANE 9701
RUEHHM/AMCONSUL HO CHI MINH CITY 0399
RUEHCN/AMCONSUL CHENGDU 1374
RUEHSH/AMCONSUL SHENYANG 3816
RUEHGH/AMCONSUL SHANGHAI
RUEHGZ/AMCONSUL GUANGZHOU 0038
RUEHIN/AIT TAIPEI 0130

UNCLAS SECTION 01 OF 02 HONG KONG 002223

TOFAS 14
SIPDIS

FAS/OA YOST, MILLER
FAS/OCRA/ABRANSON
FAS/OFSO/AO/NORTH ASIA/BREHM
FAS/OTP
USDA/APHIS
USDA/FSIS
BEIJING FOR AG MINISTER-COUNSELOR
CHENGDU FOR AG ATTACHE
SHENYENG FOR ATO DIRECTOR
SHANGHAI FOR ATO DIRECTOR
GUANGZHOU FOR ATO DIRECTOR
TAIPEI FOR AG CHIEF

E.O. 12958: N/A
TAGS: ETRD EAGR HK CH

SUBJECT: CONSUL GENERAL'S INTRODUCTORY MEETING WITH HONG KONG
SECRETARY OF FOOD AND HEALTH

REF: HONG KONG 2208

1. (U) Summary: Secretary for Food and Health York Chow discussed
with the Consul General restrictions on U.S. beef, the threat to
U.S. exports of packaged foods posed by Hong Kong's new nutritional
labeling law, and shared food safety concerns regarding imports from
the Mainland, during an introductory call December 4. Avian
Influenza and Hong Kong's health care challenges were also discussed
(reftel). The Consul General noted that Hong Kong continues to
allow only boneless beef under 30 months for import, despite the
unanimous finding by the World Organization for Animal Health that
all U.S. beef products certified for export may be safely traded.
In response, Secretary Chow repeated Hong Kong's position that it
would be willing to promptly open the market to bone-in rib cuts
following some plant inspections, but that it wanted to see a feed
ban and animal ID system similar to Canada's before fully opening
the market to U.S. beef. Secretary Chow defended the government's
actions on nutrition labeling. Responding to the CG, Secretary Chow
said he thought it would be very difficult to formally amend the law
in Hong Kong's Legislative Council at this stage. The two also
discussed the shared challenge of ensuring the safety of food
products from Mainland China. End Summary.

2. (U) Consul General Donovan held an introductory meeting with
Secretary for Food and Health York Chow on December 4. Secretary
Chow holds the portfolio for most matters relating to human health,
including Hong Kong's health care system, drug and food safety
regulations and inspection. The powerful Food and Health Bureau
retains most of the combined regulatory authorities of USDA, FDA,
and HHS.

3. (U) Secretary Chow, a medical doctor who was the Chief Executive
of two different public hospitals before his appointment in 2004,
focused on Hong Kong's health care challenges and accomplishments
(reftel). This included Hong Kong's swift reaction to the discovery
of melamine in Chinese infant formula, and its leading role in
establishing a tolerance level which many countries have embraced.

Chow Reiterates HKG Position on Beef
------------------------------------
4. (U) On agricultural import issues, the Consul General raised
Hong Kong's trade impediments to U.S. beef and to U.S. packaged food
products. The Consul General noted that, despite the unanimous
finding by the World Organization for Animal Health that all U.S.
beef products certified for export may be safely traded, Hong Kong
continues to allow in only boneless beef under 30 months, and only
from certified U.S. processing facilities operating under some of
the world's most stringent conditions. In 2003, prior to the
discovery of BSE in the U.S., American beef comprised roughly 45% of
the market and achieved sales exceeding US $80 million. Despite
significant recovery since Hong Kong opened the market to boneless
beef in 2005, U.S. beef exports to Hong Kong are projected at just
over $30 million, with a 14% market share.

5. (U) Secretary Chow responded as in past meetings with U.S.
officials, stating Hong Kong would like to open the market, but must
take a phased approach as they do with all other countries. He
noted Hong Kong would be willing to promptly open the market to
bone-in rib cuts following some plant inspections, but that they
wanted to see a feed ban and animal ID system similar to Canada's
before fully opening the market to U.S. beef. Consulate officers
responded that Hong Kong's lack of technical justification for the
time periods combined with its unwillingness to set specific time
frames for each phase made this a difficult position for the U.S. to
accept. We also noted the U.S. was in the process of implementing a
feed ban, and that the traceability system for U.S. beef shipped to

HONG KONG 00002223 002 OF 002


Hong Kong was equivalent to Canada's. Secretary Chow said he looked
forward to the resolution of this issue.

Legislative Amendments on Nutritional Labeling Unlikely
--------------------------------------------- ----------
6. (U) Turning to nutritional labeling, CG Donovan expressed
concern that HK's nutritional labeling law passed in May 2008 will
constrain imports of U.S. packaged food products in general, and
especially those healthier products that carry nutritional claims.
Hong Kong is the seventh largest and third fastest growing market
for U.S. packaged foods and beverages. Secretary Chow defended the
government's actions, noting it had consulted extensively with
interested consulates and the trade, and had made significant
changes to the original proposal as a result. He cited specifically
the addition of a "small volumes exemption," (SVE) and noted that
the two-year grace period before the legislation takes effect should
give the trade adequate time to bring the products into compliance.


7. (U) CG Donovan thanked Secretary Chow for the flexibilities that
had been introduced, and for his last minute effort, albeit
unsuccessful, to include foods making nutritional claims as part of
the SVE. The CG reported that the trade has said the significant
financial and administrative costs of complying with the regulation
will be borne by consumers. He said he had heard retailers were
planning to blacken out nutritional claims, and that this could
result in consumers paying more for less information. In response
to the CG's question on whether the government was considering
submitting any other amendments on the law, Secretary Chow said he
thought it would be very difficult to formally amend the law in
Legco at this stage, and that any changes would have to be
administrative.

8. (U) The CG and Secretary Chow also discussed the shared
challenge and concern of ensuring the safety of food products from
the Mainland. Secretary Chow noted the widely held view that the
Central Government had the will to resolve any problems, but that
"some difficulties" remained with enforcement at the provincial
level. Secretary Chow spoke of the close cooperation his office had
with Beijing, as exemplified by a food safety "hot line" and
memorandum of understanding. The CG identified the added difficulty
of Beijing administering a more rigorous set of food safety
standards for exported products versus those meant for domestic
consumption.

DONOVAN

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