US embassy cable - 03COLOMBO1704

C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 001704 
 
SIPDIS 
 
DEPT PLEASE PASS TO E, EB, SA/INS, SA/RA, DRL 
DEPT ALSO PASS TO USAID FOR BERNADETTE BUNDY - ANE/SA 
TREASURY FOR JERRY ADKINS 
DOL FOR SUDHA HALEY 
NSC FOR ELIZABETH MILLARD 
DEPT ALSO PASS TO USTR FOR AUSTR WILLS 
COMMERCE FOR ARIADNE BENAISSA 
 
E.O. 12958: DECL: 9/30/13 
TAGS: ECON, ETRD, KIPR, PREL, CE 
SUBJECT: GSL PERSPECTIVES ON CANCUN, FTA: AMBASSADOR'S 
COURTESY CALL ON COMMERCE MINISTER 
 
Ref: Colombo 1689 
 
1. (U) Classified by Amb. Jeffrey J. Lunstead for reasons 
1.5 B and D. 
 
2. (C) Summary: During his initial courtesy call on GSL 
Minister for Commerce and Consumer Affairs Ravi 
Karunanayake, Ambassador noted that Sri Lanka had taken a 
strong stand that was in its own interest at the recent WTO 
Ministerial.  He cautioned the GSL that there had been no 
US decision for a US-SL FTA however.  Karunanayake said the 
USG had come to Cancun prepared to work through important 
issues but many others, especially the EU, had not.  The G- 
23 will probably begin to dissipate slowly.  A US-SL FTA is 
critical to Sri Lanka and the GSL looks forward to hosting 
the next round of TIFA talks on October 14 and 15.  We have 
heard that Karunanayake's role in future US-SL talks may be 
under review by the PM, but his mannerisms today did not 
indicate any concerns about his current or future role. 
End Summary 
 
3. (C) The Ambassador paid an introductory courtesy call 
on GSL Commerce and Consumer Affairs Minister Ravi 
Karunanayake on September 30.  During the meeting, the 
Ambassador thanked Karunanayake for his Ministry's 
responsiveness and cooperation with US initiatives, 
particularly the Minister's supportive position during the 
recent WTO Ministerial in Cancun.  While the US remains 
appreciative of GSL efforts, however, no decision has been 
made on whether to pursue a bilateral FTA.  The upcoming 
TIFA talks will give the GSL an opportunity to review their 
recent analysis of the Singapore and Chile FTA agreements 
with the USG. 
 
Readout from WTO 
---------------- 
4. (C) Karunanayake welcomed the Ambassador to Sri Lanka 
and said that Sri Lanka was forward-looking with regard to 
its trade policy, much more so than many developing 
countries.  On the recent WTO Ministerial, he suggested 
that the American delegation had a clear idea of what it 
wanted to accomplish and came to Cancun prepared to 
negotiate.  The EU, on the other hand, was not prepared and 
offered too little, too late to get the talks back on 
track.  The potential for progress on agriculture was real, 
but the shift to the "Singapore issues" crashed the talks. 
 
5. (C) Karunanayake thought the G-23 would not stick 
together.  While some issues, particularly in agriculture, 
will remain important, the G-23 will probably dissipate 
slowly and steadily, particularly as bilateral FTAs become 
more prolific.  In an interesting side note, Karunanayake 
said he had apprised the Indian delegation in Cancun of Sri 
Lanka's positions and their unwillingness to support the G- 
23.  His Indian counterpart understood and noted that the 
short term loss of good will with the G-23 could be a long 
term gain for Sri Lanka. 
 
POTENTIAL US-SL FTA 
------------------- 
6. (C) On a potential US-SL FTA, Karunanayake indicated 
that 900,000 jobs in Sri Lanka are dependent, directly and 
indirectly, on the garment industry.  The 2005 expiration 
of the Multi-Fiber Agreement was going to cause major 
problems without a bilateral agreement on trade.  The GSL 
has been reviewing the Singapore and Chile FTAs and with 
regard to the Singapore language in particular, has found 
it to be an acceptable framework.  (Reftel gives a readout 
from a World Bank consultant who has been conducting the 
analysis and told us much the same thing.)  There would be 
certain difficult areas, including agriculture, but the GSL 
was prepared to work with the US to overcome any 
difficulties. 
 
7. (C) Karunanayake noted that the US seemed to be 
selecting small countries for FTA negotiations, in order to 
ensure viable agreements with quick, successful outcomes. 
Sri Lanka could fill just such a role.  He also felt that a 
US-SL FTA would have important implications for Sri Lanka 
in the region.  Failure to reach an accord would be a mark 
against it in its neighbors' eyes, making it more difficult 
to pursue bilateral arrangements in the region. 
 
8. (C) Karunanayake asked about any "patterns" for moving 
from TIFAs to FTAs.  The Ambassador indicated that no 
"pattern" exists and that TIFAs are merely agreements to 
talk.  Many countries may have TIFAs with the US but never 
move toward FTAs. 
 
IPR Enforcement 
--------------- 
9. (C) Karunanayake then raised IPR and immediately hit 
upon a favorite idea of his: US law enforcement coming to 
Sri Lanka to form a regional IPR enforcement hub.  The 
Ambassador reminded Karunanayake that it was important for 
Sri Lanka to prove its intentions and capabilities before 
any such idea could be considered.  The implementation of 
the new IPR law, and concrete enforcement actions were 
critical.  Further, industry groups are anxious to work 
with governments that enforce IPR laws and they can provide 
training and other assistance.  GSL cooperation in these 
efforts would garner considerable good will and show 
seriousness of purpose.  Karunanayake turned and instructed 
his staff to ensure that these issues were put into 
practice.  He then indicated that the new IPR law would be 
signed by the Speaker of Parliament (the final step that 
brings the law into force) on October 6. 
 
10. (C) Comment: The Minister was his usual energetic self 
with regard to discussions on TIFA and a potential FTA.  We 
are hearing, however, that his role in future trade-related 
negotiations with the US may be under review.  His 
mannerisms and enthusiasm at this meeting, however, did not 
belie any concern of a shift in role or responsibilities. 
End Comment 
LUNSTEAD