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Cablegate: Singapore Fta Review Reveals Progress in Some Areas, Dead

VZCZCXRO6098
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #1245/01 3620603
ZNR UUUUU ZZH
R 280603Z DEC 09
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 7587
RUCNASE/ASEAN MEMBER COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEHRC/USDA FAS WASHDC

UNCLAS SECTION 01 OF 06 SINGAPORE 001245

STATE PASS USTR FOR AUSTR WEISEL, DBISBEE, JMCHALE
COMMERCE FOR MHOGGE

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ETRD ECON EFIN EINV ECPS SENV EAGR KTEX KIPR SN

SUBJECT: SINGAPORE FTA REVIEW REVEALS PROGRESS IN SOME AREAS, DEAD
STOPS IN OTHERS

REF: 08 SINGAPORE 1168 (2008 FTA Review)

1. (SBU) Summary: Singapore and U.S. trade officials noted
progress in resolving outstanding trade issues during an annual
review of the 2004 U.S.-Singapore Free Trade Agreement (FTA). The
review saw positive developments in the processing of two textile
short supply requests, initiatives under the FTA's environmental
plan of action, and the final resolution of one intellectual
property rights issue. The review also covered new ground with a
proposal to collaborate on labor issues, and discussion of a new
barrier to providing educational services in Singapore. Discussions
foundered on customs record keeping requirements and rules of origin
issues as they related to optical components as their resolution
would require fully reopening the agreement. The review also
clarified questions regarding Singapore's broadband initiative and
agriculture policy toward market access for U.S. beef. End
Summary.

2. (SBU) U.S. and Singapore trade officials conducted the fifth
annual review of the U.S.-Singapore Free Trade Agreement (FTA)
December 4 (December 3 Washington time) via digital videoconference.
Assistant U.S. Trade Representative Barbara Weisel led the
discussion for the U.S. side, with Deputy Secretary KOH Lin-Net of
the Ministry of Trade and Industry leading for Singapore. Ms.
Weisel said she was pleased that there had been movement toward
resolving some longstanding issues related to the FTA in the past
year.

Textiles
--------

-- Short Supply Requests (GOS)
-- Tariff Preference Level (TPL) proposed changes (GOS)
-- Customs and Border Protection (CBP) proposed changes (GOS)

4. (SBU) Gail Strickler, Assistant USTR for Textiles said that USTR
had signed off November 24 on Singapore's second short supply
request for textile imports made since the FTA went into effect.
She expected that after a 60-day consultation and layover period
USTR would be able to implement the changes, barring any objections
raised during the process.

5. (SBU) On a third short supply request, Ms. Strickler said that
USTR was moving ahead, but noted complicating factors in that a
number of items identified in Singapore's request were not
recognized as such in the Harmonized Tariff System (HTS). The U.S.
does not differentiate fabrics made from bamboo and recycled
polyester when the final product cannot be considered distinct from
similar fabrics. Strickler emphasized the complexity of the request
procedure, and the amount of work and interagency coordination
necessary to approve a request. She conveyed her hope that
Singapore's short supply requests were important for Singapore's
textile exporters, noting that Singapore had yet to use any of the
additional export benefits from its first short supply request. Mr.
ANG Kin Leong, MTI Senior Assistant Director, said the third request
was meant to be forward-looking as Singapore textile manufacturers
were looking to use more environmentally-friendly fabrics in the
future.

6. (SBU) DepSec Koh brought up Singapore's long-standing request to
increase tariff preference levels included in the FTA, reiterating
the importance to the commercial viability of Singapore's textile
manufacturers. She said that Singapore's industry was small and
accounted for only a little more than one percent of U.S. imports.
She asked USTR to convey its concerns to the U.S. textile industry
and request their support.

7. (SBU) Regarding CBP's proposed rulings on two textile matters
that may affect Singapore, Strickler said that USTR had passed all
technical information to CBP and hoped to see a decision soon. She
emphasized that CBP is an independent agency with its own
procedures.

Government Procurement
----------------------

-- Implementation of Buy American provisions (GOS)

8. (SBU) DepSec Koh said that Buy American provisions in the
American Recovery and Reinvestment Act (ARRA) had impacted Singapore
companies doing business in the United States. Koh said that
dealing with government procurement at the state level was already
difficult and that adding in the Buy American provisions made it
even more complex. She mentioned a Singapore company called Terrace

SINGAPORE 00001245 002 OF 006


Global that had bid on a project in Phoenix, AZ, that was delayed
for two months due to uncertainty over how the Buy American
provisions would affect the investment. She requested a list of
contacts at the state level to facilitate participation in
procurements, and offered to give a list of priority states where
Singapore companies were most interested. Jean Grier, USTR Senior
Procurement Negotiator, responded that the United States had been
careful in the drafting of the ARRA to ensure we abided by our
international commitments. Grier provided the website
www.naspo.org, the website of the National Association of State
Procurement Officers, which provides contact information for each
state. She said USTR could consider developing a list of state
contacts for government procurement, but in the meantime Singapore
officials could contact USTR for any assistance with individual
states.

Education Services
------------------

-- Private Education regulatory changes (USG)

9. (SBU) Amanda Horan, USTR Director for Services and Investment,
explained U.S. concerns over new registration criteria for private
education providers in Singapore. While noting that the United
States does not object to Singapore's efforts to raise educational
quality standards through the new registration criteria, Horan
expressed concern at the lack of transparency in how the new
criteria were being applied. Singapore's Ministry of Education
(MOE) had denied applications from two U.S. universities to extend
educational services in Singapore but had not explained what the
universities had lacked nor what they would need to improve in order
to qualify. YAH Shze Min, MTI Senior Assistant Director, explained
that in recent years the education landscape in Singapore had
expanded rapidly resulting in a wide variation in standards. She
countered that the criteria for approving private education
providers was clear and provided online at www.moe.gov.sg/events/
private-education-public-consultation/. Yah asserted that the MOE
considered a number of factors including the status of the foreign
university, its track record in providing services in other
countries, national rankings, GMAT scores, and graduation rates.
She insisted the criteria were applied transparently and objectively
to all universities, including Singapore schools. Horan explained
that while the criteria themselves may be clear, the specific
reasons why MOE rejected the two schools remained unclear despite
several requests to MOE for clarification. The two universities in
question had been providing services in Singapore for ten to fifteen
years respectively without complaint. The two sides agreed to
continue to discuss U.S. concerns.

Environmental Cooperation
-------------------------

-- Arowana Dragonfish market access (GOS)
-- Review of activities completed in 2009 (USG/GOS)

10. (SBU) Singapore reiterated its request for market access for
Singapore's farm-raised Arowana Dragonfish whose exports to the
United States are restricted under the Endangered Species Act.
David Brooks, USTR Director for Environment Affairs affirmed that
progress had been made to find a means to support Singapore's
efforts to meet the standard in the Endangered Species Act that
allows imports of endangered species only if it serves to assist in
the conservation of that species. Dr. Roddy Gable, Chief of the
Division of Management Authority at the U.S. Fish and Wildlife
Service (FWS) International Affairs office, stated that Conservation
International, a non-profit organization soon to open an office in
Singapore, could facilitate linking Arowana producers in Singapore
with wild Arowana conservation programs in the region. (Note: There
are no wild Arowana in Singapore and no local conservation
opportunities.) Singapore will provide a point of contact to USTR
that can be forwarded to FWS and Conservation International to begin
discussing how to incorporate Singapore in regional conservation
efforts.

11. (SBU) On environmental cooperation, Alan Lowther from the State
Department Office of Environmental Policy read a statement
previously agreed by Singapore and the United States outlining
environment cooperation activities completed in 2009. Completed
activities included: a March digital video conference between the
Environmental Protection Agency (EPA) and the Singapore National
Environment Agency (NEA) regarding energy efficient laboratory
initiatives (Labs 21); an NEA study visit to the United States
regarding terrain decontamination, air quality management and
hazardous waste management; and Singapore participation in a

SINGAPORE 00001245 003 OF 006


regional dialogue on trade in wood products that was held in Jakarta
in September. The United States plans to continue the regional
dialogue on trade in wood products and would likely organize another
event in April or May 2010, USTR's Brooks stated. NEA is interested
in expanding cooperation on air quality management to include
sending an NEA official on a temporary detail to a U.S. facility.
NEA also intends to provide EPA with its proposal for Labs 21
cooperation in the first quarter of 2010, said LEE Choon Phua,
Assistant Director at the Ministry of Environment and Water
Resources.

12. (SBU) Singapore and the United States continue to discuss
opportunities to arrange training seminars in Singapore on wildlife
crime investigations and responding to marine pollution caused by
ships. The United States and Singapore will hold the biennial
review of the 2008-2010 environment Plan of Action in 2010 and will
revise and update the Plan of Action to take effect 2011-2012.
Subsequent biennial reviews will be held each even-numbered year.

Labor
-----

13. (SBU) Carlos Romero, Deputy Assistant USTR for Labor Affairs,
said that the United States and Singapore had had little cause for
interaction on labor issues in the past, but saw the bilateral
cooperation on environmental issues under the FTA as a model for
discussing labor issues. There are opportunities to learn from each
other on handling labor issues, Romero said. More importantly,
Singapore, the United States and other countries with similar views
on labor could speak with one voice in multilateral fora to other
countries with lesser developed labor regimes on labor issues as
they relate to trade. Susan Hahn of the Department of Labor offered
to meet with Ministry of Manpower counterparts on areas of mutual
interest. SIM Li Chuan, Head of International Labor at the Ministry
of Manpower, said he looked forward to any cooperative activities
between the two Departments.

Intellectual Property Rights (IPR)
---------------------------------

-- "Simulcasting" issue resolution (USG)
-- Deterrent penalties for IPR violations (USG)
-- Collaboration between IPRB and IPR rights holders (USG)
-- Pre-discovery process for authorized agents (USG)
-- Cooperation from ISPs in addressing Internet piracy (USG)
-- Anti-camcording legislation (USG)

14. (SBU) Simulcasting: Rachel Bae, USTR Director for Intellectual
Property Rights, praised the successful conclusion of "simulcasting"
fee negotiations between the recording industry and MediaCorp,
Singapore's dominant radio broadcaster. MediaCorp became the first
Singapore broadcaster to conclude a licensing agreement with the
recording industry to simultaneously broadcast radio transmissions
over the Internet, bringing to a close a long-standing FTA issue.

15. (SBU) Deterrent Penalties: USTR conveyed long-standing
industry concerns that penalties for end-user piracy are
insufficient to deter copyright infringers, which is inconsistent
with FTA obligations. Bae cited the outcome of the PP v PDM case,
in which the maximum fine faced by Singapore firm PDM was S$40,000
while the value of their copies of infringing software was more than
S$78,000. Maximum fines for copyright violations should be
increased and brought in line with penalties for other forms of IPR
violations (e.g., trademark infringement), Bae said. Senior
Assistant Director at the Intellectual Property Rights Office of
Singapore (IPOS) Kelvin Sum disagreed that Singapore does not set
high enough penalties for end-user piracy and asserted that the
fines in that specific case did not indicate a trend and were
determined by mitigating factors, such as PDM's cooperation with the
investigation.

16. (SBU) Bae said that according to industry, the Attorney
General's Chambers (AGC) has dismissed other similar end-user piracy
cases, so there is no way to determine a trend. Daren Tang of the
AGC said that prosecution of such cases depends on the evidence
presented and that the GOS does not, as a policy, choose not to
prosecute. Bae requested more information about why the AGC
dismissed end-user piracy cases against Singapore firms Boonty and
Wang & EF Tan Associates. IPOS and AGC agreed to try to provide
additional information, but said it was unlikely they could provide
more details because of client confidentiality issues.

17. (SBU) Collaboration: The Intellectual Property Rights Branch
(IPRB) of the Singapore Police Force has been conducting raids and

SINGAPORE 00001245 004 OF 006


collaborating with industry on IPR cases, Sum stated. Sum disagreed
with statements by industry that IPRB does not have enough resources
to actively pursue IPR cases. Industry has said that IPRB is
rejecting cases, even after industry has conducted its own
investigation and provided IPRB with evidence of infringement. Bae
noted that the collaborative enforcement model that Singapore
advocates puts the onus on rights holders to investigate and develop
cases, which is inconsistent with the FTA, which states that
non-criminal actions are not the primary means to enforce IPR laws.
Sum said that as with any government agency in Singapore, IPRB is
very busy and that IPRB and the AGC use prosecutorial discretion to
determine which cases to prioritize. Bae suggested that the issue
of enforcement might be best covered in a separate follow-on DVC
focused entirely on IPR issues. IPOS indicated they supported the
DVC suggestion.

18. (SBU) Pre-Discovery Process: Bae sought clarification
regarding the ability of authorized agents acting on behalf of
rights holders to apply for pre-action discovery in cases of
Internet piracy. Bae cited the case of Odex Pte Ltd v Pacific
Internet Ltd, in which Singapore courts denied an authorized agent's
request and said the judge's decision highlighted a possible
deficiency in Singapore law. Sum and Tang stated that Singapore has
a pre-established process that does not allow authorized agents to
apply for pre-action discovery in their own name. However, they
said that if the agent in the Odex case had requested pre-action
discovery and sued in the name of the principals, the copyright
holders, their request probably would have been granted. Bae said
USTR would inform industry of Singapore's policy as stated in the
review.

19. (SBU) Internet Piracy: Bae also raised concerns that internet
service providers (ISPs) in Singapore are not responding to
infringement notifications submitted by the recording industry.
USTR and the GOS agreed that this is an issue between commercial
parties, but Bae noted that the recording industry is seeking
assistance through the FTA process because they must maintain a
positive working relationship with ISPs, and for that reason are
reluctant to initiate lawsuits as a means to force the ISPs to
respond. Sum said that IPOS might be able to consider some way to
encourage collaboration between ISPs and rights holders, but
suggested that IPOS and USTR might discuss it further in later
conversations or the follow-on DVC.

20. (SBU) Anti-Camcording: Bae inquired whether Singapore would
consider enacting anti-camcording legislation, noting that
neighboring countries like Thailand are moving forward with laws to
address unauthorized camcording in movie theaters and other public
venues. Singapore lacks legislation that deals with unauthorized
camcording or persons caught camcording. Sum stated that the two or
three cases of camcording in Singapore do not indicate a trend.
Singapore will study the camcording laws in other countries before
considering its own legislation. Singapore already has laws that
address other violations, such as reproduction and distribution of
pirated films, Sum added.

Standard Drug List
------------------

21. (SBU) Assistant USTR Weisel said that she understood that the
Singapore Ministry of Health was working with industry to have
fuller discussions on the means by which the Ministry chooses
pharmaceutical products to include on its Standard Drug List (SDL)
of drugs considered effective and should be made affordable to
patients through subsidies. She said the newly instituted annual
review of the SDL was a welcome step and encouraged the Ministry to
continue to engage in dialogue with industry stakeholders. Suwarin
Chaturapit, Director at the Health Sciences Authority, said that the
Ministry would continue to review the SDL. She noted that health
care professionals had the key role in promoting drugs to be
included on the list, and recommended that companies speak to health
professionals about the benefits of their products to encourage
consideration of their inclusion on the SDL.

Telecommunications
------------------

22. (SBU) Rachelle Lee, Assistant Manager in the Infocomm
Development Authority, gave an update on the rollout of Singapore's
next generation broadband network. She relayed that the operating
company, Nucleus Connect, would begin to deploy services during the
first half of 2010 with all universal service obligations completed
by 2013. The broadband provider would offer last-mile access at
between 100 mps and one gigabit/second, virtual private networks and

SINGAPORE 00001245 005 OF 006


virtual leased lines. Jonathan McHale, Deputy Assistant USTR for
Services, requested a copy of IDA's economic analysis that
recommended the use of government subsidies to support development
of the new network.

Agriculture
-----------

-- Market access for U.S. beef

23. (SBU) David Bisbee, Deputy Assistant USTR for Southeast Asia
and the Pacific, noted that at the 2008 FTA review Singapore
officials had said they were conducting a risk assessment of U.S.
beef and beef products. According to the World Organization of
Animal Health (OIE) U.S. beef is considered safe; any restriction on
its import must be accompanied by a scientifically-based risk
assessment that justifies stricter standards. Oscar Ferrera,
International Trade Specialist at the U.S. Department of Agriculture
(USDA), said he had seen no information on Singapore's risk
assessment in the past year and offered any assistance necessary to
help complete it. With a risk assessment in hand, USDA could better
address Singapore's concerns. Adrian Goh, Senior Assistant Director
at MTI, said that as a food importer Singapore had no interest in
suspending imports any longer than necessary, but that Singapore's
Agri-Food and Veterinary Authority (AVA) had to ensure the safety of
the country's food supply. He said that Singapore had already
reopened the market to boneless beef from cows less than 30 months
of age, but has not seen sufficient evidence that bone-in beef is of
no additional risk and therefore continued to block imports. AVA
was not present at the FTA review, but DepSec Koh said that
Singapore could not commit to a timeline to complete the assessment.
Koh agreed that AVA and USDA should hold discussions on the topic.

Dispute Settlement
------------------

24. (SBU) Derek Loh, State Counsel in Singapore's Attorney
General's Chambers, thanked USTR for its proposal to establish a
list of panelists for a five-person dispute settlement panel. Under
the proposal, each side would nominate five panelists, then meet to
review and narrow the list to only five total. Both sides would
regularly review the panel.

Customs
-------

-- Record Keeping Requirement

25. (SBU) TAY Chng Yeow, Director (FTA) at the Ministry of Finance,
pitched a change in CBP record keeping requirements of importation
records from five to three years. He explained that the requirement
was a particular burden on small and medium-sized enterprises.
DepSec Koh said most of Singapore's FTAs included only a three year
requirement, and said that other countries, including members of the
TPP Agreement, also had three year record keeping requirements.
Deputy AUSTR Bisbee said that USTR had consulted CBP and Treasury
regarding the requirement, but both agencies reiterated that the
five-year requirement has been an important component of U.S. FTAs
and should stand as is. Given that the requirement had been agreed
upon at the original FTA negotiations, USTR was not inclined to
reopen the agreement to grant Singapore's request.

Rules of Origin
---------------

-- Optical Components

26. (SBU) Deputy AUSTR Bisbee said USTR had examined Singapore's
proposal to change the rules of origin for imports of optical
components from Singapore, but that the rules of origin in the FTA
had been carefully crafted and represented an integral part of the
overall balance of the agreement. The process for changing rules of
origin was a lengthy and complicated one and not one that USTR would
embark on lightly. DepSec Koh said that although Singapore had
agreed to the rules of origin for these products, Singapore industry
now found the rules onerous and was unable to export with the
current rules in place. The U.S. took note of these views, but
maintained that the U.S. is not in a position to consider revising
the rules of origin at this time. Singapore was invited to provide
additional information to USTR regarding any changes in the industry
that might have a bearing on this issue.

27. (U) USTR cleared this cable.


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