Cablegate: (Sbu) Ustr Proposes Delay in Tifa Signing

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




E.O. 12958: N/A

B. 2004 KUWAIT 5801
C. 2003 KUWAIT 5625
D. 2003 KUWAIT 5344
E. 2003 KUWAIT 5138
F. 2003 KUWAIT 5103
G. 2003 KUWAIT 4842
H. 2003 STATE 285162
I. 2003 KUWAIT 3316

1. (U) Comment and Action Request at para 9.

2. (U) Sensitive but unclassified; please protect

3. (SBU) Summary. Embassy requests Department intervene
with USTR to maintain the scheduled 10 February TIFA signing
and economic reform discussions with GOK in Washington, even
if USTR Zoellick is unavailable. At our urging, the GOK and
Kuwait private sector have gone to great lengths to organize
a three-nation trip, UK-US-Italy, which is in jeopardy if the
U.S. centerpiece should fall through. End Summary.

4. (SBU) On 10 January 2004, USTR informed Embassy (Ref A)
that the signing ceremony for a Trade and Investment
Framework Agreement (TIFA) and the substantive trade
discussions that may commence only after the TIFA has been
signed, should be rescheduled. We understand that a change
in the travel plans of USTR Ambassador Zoellick would cancel
the USG-GOK agreed-to 10 February 2004 ceremony date. USTR
suggests rescheduling this critical bi-lateral economic
initiative to some yet-to-be determined date in the Spring.

5. (SBU) At Embassy urging, GOK at the senior level has
engaged actively in preparations for the TIFA signing and
follow on trade discussions in Washington (Ref D). The run
up to agreeing on the 10 February signing was a complicated
process on both sides. However, when USTR requested that
date on 15 December 2003, GOK immediately agreed and began
detailed preparations for the trip to Washington.

6. (SBU) Kuwait sees the TIFA signing and Washington trade
meetings as integral to GOK's much-hoped-for private sector
participation in Iraq development programs and the eventual
signing of a Middle East Free Trade Agreement. The TIFA
signing has been incorporated as the political linchpin stop
in a 2-13 February London-Washington-Rome GOK road show to
present Kuwait's advantages as a "Service Hub" for the
region. For example, the TIFA and the idea of Kuwait as a
natural economic gateway to Iraq were discussed favorably
with U.S. Department of Commerce A/S William Lash during his
9 December call on Minister of Commerce and Industry H.E.
Abdul Rahman al-Taweel (Ref C).

7. (SBU) The Higher Committee for Economic Development and
Reform, headed by Minister of Foreign Affairs H.E. Shaykh Dr.
Mohammed Sabah al-Salem al-Sabah, is Kuwait's signal reform
organization (Ref I). GOK has assigned the Committee
stewardship of next month's three-nation road show program.
Embassy has worked with the Committee's government and
private sector membership closely both to secure GOK's
agreement to enter into a TIFA and in preparing for the
follow on regulatory and legal reform negotiations work of
the Council to be established subsequent to TIFA signing (Ref

8. (SBU) The Committee is fielding a senior, preponderantly
Ministries of Finance and Commerce delegation for the
Washington portion of the trip. These officials, led by the
Minister of Commerce and Industry -- who is second only to
Dr. Mohammed as a proponent of economic reform -- are said
prepared to immediately engage on important bi-lateral trade
irritants that Embassy has clarified for Kuwait. USG
reservations, especially regarding IPR enforcement and equal
tax treatments are high on the GOK's reform agenda and some
are being addressed formally here already (Ref B). The
Committee's delegation is rounded out with senior private
sector executives, some of whom have established significant
investment funds targeted for infrastructure,
telecommunications and leisure facility development in Iraq
(Ref F). GOK sees the three-nation road show and the TIFA
signing as flowing naturally from the Reconstruct Iraq
Exhibition that Kuwait hosts 19-23 January 2004. Some 1100
international firms, including 25 U.S. companies, will have a
presence at the Exhibition; CPA, Exim and OPIC will
participate as well.

9. (SBU) Comment and Action Request. It is too late in the
game for USTR to propose further delay in this significant
bi-lateral event. Moreover, we doubt it even possible for
the GOK -- with but three weeks remaining before their
interagency team leaves for London -- to reschedule this
major undertaking involving three Coalition capitals.
Economic reform is the primary pillar and basis for our
relationship with Kuwait going forward after the Gulf War.
We see it as part and parcel of the larger social reform
program that the government is committed to carrying out.
There is, nevertheless, massive opposition among the more
conservative Islamic elements in the Parliament and Embassy
is loath to give this opposition time to build coalitions
against the reform program. We believe it is critical that
the meetings go forward as scheduled. Embassy requests
Department's immediate intervention with USTR. Participation
by AUSTR Novelli would be perfectly adequate for the purposes
of a TIFA signing, and could jump-start the reform process
while laying the ground work for future high-level meetings
with USTR Zoellick. End Comment and Action Request.

10. (U) Baghdad minimize considered.


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