Cablegate: Letter From Ambassador Hume to Ustr Schwab

VZCZCXYZ0001
PP RUEHWEB

DE RUEHJA #3000 2990835
ZNR UUUUU ZZH
P 260835Z OCT 07
FM AMEMBASSY JAKARTA
TO SECSTATE WASHDC PRIORITY 6818

UNCLAS JAKARTA 003000

SIPDIS

SENSITIVE
SIPDIS

DEPT PASS TO USTR SUSAN SCHWAB FROM AMBASSADOR HUME
DEPT FOR EAP/MTS

E.O. 12958: N/A
TAGS: OVIP ETRD SENV EAID ID
SUBJECT: LETTER FROM AMBASSADOR HUME TO USTR SCHWAB

1. (SBU) I wanted to thank you for agreeing to attend the Trade
Ministers dialogue attached to the 13th Conference of Parties of the
United Nations Framework of Convention on Climate Change (UNFCCC) in
Bali, Indonesia on December 8th and 9th. I want you to know we will
do everything we can to make sure your visit is a success. USTR's
anti-illegal logging MOU with Indonesia is part of our forest
conservation package for the conference.

2. (SBU) I understand that your preliminary travel plans have you
flying directly into Bali. If that is the case, we recommend a
meeting for you with Minister of Trade Mari Pangestu where you could
discuss bilateral trade issues -- including Indonesia's concerns on
negotiating a Bilateral Investment Treaty (BIT); how progress on
intellectual property rights directly affects foreign direct
investment; and desired outcomes from our Trade and Investment
Framework Agreement (TIFA) dialogue. You could also discuss
multilateral issues such as the WTO Doha Round and the U.S.-ASEAN
TIFA.

3. (SBU) I recommend additional meetings in Jakarta if possible. A
number of high-profile investment disputes involving U.S. companies
are harming the investment climate and deterring foreign investment.
Prominent U.S. companies -- including Intel, Times Inc, Mars, Nike,
Microsoft and others -- have expressed concerns about the pace and
progress of investment climate reforms. Continuing issues with rule
of law and corruption coupled with Indonesia's new "negative list"
of closed sectors aggravate these concerns. Chairman Muhammed Lutfi
and his staff at the Investment Coordinating Board (BKPM) have been
proactive in working with us to address investor issues. I think it
would be useful for you to meet with Lutfi to discuss ways in which
Indonesia can continue to improve the investment climate. Meeting
with Lutfi would also present an opportunity to press for
negotiating a new OPIC agreement with Indonesia. In addition, I
recommend meeting with the Ministry of Agriculture to address
Indonesia's continued refusal to allow importation of U.S. beef.

4. (SBU) I would also suggest speaking with members of Indonesia's
Chamber of Commerce (KADIN). KADIN is comprised of a dynamic group
of Indonesian businesspeople and entrepreneurs, and is growing more
forceful and influential in its role in promoting economic reform. I
see KADIN as a valuable ally in strengthening our trade and
investment ties with Indonesia. Meeting with KADIN's members would
send a strong signal of support of their efforts to promote reform.

5. (SBU) Thank you again for your upcoming visit. I look forward
to welcoming you to Indonesia.

HUME

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