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Cablegate: Dustr Meeting with Sri Lankan Presidential Advisor

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 COLOMBO 001856

SIPDIS

DEPT PASS TO USTR; COMMERCE FOR ARI BENAISSA; TREASURY FOR ROY
ADKINS

SENSITIVE

E.O. 12958: N/A
TAGS: ECON ETRD PREL CE ECONOMICS
SUBJECT: DUSTR MEETING WITH SRI LANKAN PRESIDENTIAL ADVISOR
KADIRGAMAR

1. (U) THIS TELEGRAM IS SENSITIVE BUT UNCLASSIFIED; PLEASE
HANDLE ACCORDINGLY.

2. (SBU) Summary: During a meeting with Presidential Advisor
Lakshman Kadirgamar, a senior opposition MP and former Foreign
Minister, DUSTR Shiner outlined her TIFA talks with the GSL and
her discussions with businesses and members of civil society.
Kadirgamar appeared to support the GSL's desire for an FTA with
the United States, and was pleased that Ambassador Shiner
reached out to a broad cross section of Sri Lankan society on
opportunities to expand and diversify bilateral trade during
her visit. However, he made it clear that the Peoples'
Alliance's continued support for any future FTA would depend on
regular consultations with opposition leaders by GSL and U.S.
officials. If the United States and Sri Lanka agree to pursue
an FTA such consultations could serve more than political ends.
For example, a better understanding of tools the United States
has used to address agriculture sensitivities in FTAs helped
ally fears Kadirgamar expressed about the impact of free trade
on Sri Lankan farmers. End Summary.

3. (SBU) DUSTR Josette Shiner met with former Sri Lankan
Foreign Minister and presidential advisor Lakshman Kadirgamar
at his residence on October 14, following the third US-Sri
Lanka Trade and Investment Framework Agreement Joint Council
Talks. DUSTR Shiner met with Kadirgamar in lieu of a meeting
with President Kumarantunga, who was out of the country. The
discussion revolved around the US FTA vetting process, Sri
Lanka's capacity to implement a potential FTA and its
components and Kadirgamar's interest in ensuring that
sufficient information about the value and content of an FTA is
presented to civil society.

4. (SBU) DUSTR Shiner briefed Kadirgamar on the TIFA talks and
her meeting with representatives from the business community
and civil society. Kadirgamar asked how civil society viewed
the FTA process, as he perceived a lack of information among
the public. Shiner said she had met many groups, including
labor, NGOs, think tanks and business groups. Many indicated
an FTA was necessary and that Sri Lanka's only hope for future
economic expansion was to embrace globalization and trade
liberalization.

5. (SBU) Kadirgamar then asked what criteria the US used to
judge the worthiness of an FTA partner. He was concerned that
Sri Lanka's smaller market might make it seem less attractive
than it is. Ambassador Lunstead pointed out that small
populations did not necessarily mean a small trading partner.
He cited the example of Malaysia, which has a similar sized
population to Sri Lanka (roughly 20 million people), but is the
US's 12th largest trading partner. DUSTR expanded on this
point by indicating that Sri Lanka is valued for more than just
the domestic market, but also as a potential gateway to South
Asia and beyond.

6. (SBU) Kadirgamar said he understood there were some concerns
about the agriculture sector and its prognosis under an FTA.
In particular, he thought there was a fear that small farmers
would be displaced. Farming is the "psyche of the nation" and
therefore was a particularly sensitive topic (Note: Major crops
in Sri Lanka include tea, coconuts, rice, chilies and onions.
End Note). DUSTR Shiner assured Kadirgamar the US would work
with the GSL to enhance understanding of the FTA process and
its benefits if it proved feasible to move forward with
negotiations. Agriculture is generally an extremely sensitive
area and she explained provisions in the Singapore and Chile
FTAs to alleviate the shocks that could accompany reduction in
tariffs. The US also considers capacity building
opportunities, in an effort to promote "win-win" solutions.

7. (SBU) Kadirgamar then turned the conversation to IPR (note:
Kadirgamar has considerable experience and expertise in the IPR
field; he has worked for WIPO and continues to consult with the
organization. End note). DUSTR Shiner noted that IPR
enforcement was a challenge in all countries, including the US.
Sri Lanka has the opportunity to put a regime in place and
establish a working group that could address ongoing concerns
and problems. Kadirgamar then referred to the recently passed
IPR legislation, complaining that the GSL had submitted the
bill for a vote without consulting with the opposition. This
led to a Supreme Court challenge and delay in implementation of
the legislation.

8. (SBU) AUSTR Wills asked if Sri Lanka could establish a legal
framework that would meet a demanding international standard
and also enforce it. Kadirgamar said the legislation was not a
problem, but that enforcement remains a challenge throughout
South Asia. He then offered his personal views on several
countries, including China, which had good laws but poor
enforcement and Singapore, which did not implement legislation
until it had a structure in place to enforce the law.

9. (SBU) Whether there is an FTA or not, DUSTR Shiner urged
that Sri Lanka look at the example of Jordan, which has adopted
the philosophy that it can attract more money and investment as
an IPR protector than violator. This has led to outsourcing of
pharmaceutical processing, IT processes and other benefits.
Econoff noted that Sri Lanka faced a "perfect timing"
situation, with new legislation, an opportunity to put key
enforcement regimes in place, and the interest of the
international community and the industry to help build
capacity. DUSTR Shiner argued that countries that got out in
front on IPR enforcement would have a strong competitive
advantage, particularly in the knowledge and services sectors.

10. (SBU) DUSTR Shiner asked Kadirgamar, who is Tamil, about
the views of Sri Lanka's Tamil population with regard to the
US-Sri Lanka relationship. Kadirgamar said Tamils were a
pragmatic, enterprising people who would see value to the
relationship. A continuation of the peace process would
continue to open up the Tamil areas in the north and east and
allow more Tamils to understand the problems of the system they
are under (note: referring to LTTE control of portions of the
north and east. End note).

11. (SBU) In closing, Kadirgamar suggested a continued dialogue
with civil society, casting a wide net to gain as much of a
cross-section of society as possible. DUSTR Shiner agreed this
was good advice and hoped to be able to continue the dialogue
with the GSL and Sri Lankan society.

12. (SBU) Comment: Kadirgamar was engaging and seemed positive
overall on a potential FTA, though he clearly indicated to the
US that agriculture issues could be sensitive. He asked the US
to help persuade the GSL to use a more collegial approach to
dealing with these issues with the opposition (Note: President
Kumaratunga's participation in the World Economic Forum in
Singapore precluded her meeting with Amb. Shiner. During her
speech to the World Economic Forum on October 14, Kumaratunga
criticized the WTO and called for a renegotiation of the world
trade agenda. In subsequent comments to the press, however, she
commented favorably on the GSL's desire for bilateral FTAs with
the US and other countries. End note). End Comment.

13. (U) DUSTR Shiner cleared this cable.
ENTWISTLE

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