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Cablegate: Rousing Reception of Fta Round One in Bahrain

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 MANAMA 000203

SIPDIS

DEPT FOR NEA/FO FOR PDAS LAROCCO AND DAS DIBBLE
DEPT FOR EB FOR PDAS DONNELLY
DEPT FOR NEA/REA, NEA/PI AND NEA/ARP
DEPT FOR EB/TPP/BTA, EB/TPP/MTA, EB, TPP/ATT, OES AND DRL/IL
DEPT PASS USTR JASON BUNTIN
CAIRO FOR STEVE BONDY

E.O. 12958: N/A
TAGS: ETRD ECON KPAO KMPI
SUBJECT: ROUSING RECEPTION OF FTA ROUND ONE IN BAHRAIN


1. SUMMARY: The United States and Bahrain held round one of
Free Trade Agreement negotiations in Manama, January 26-30.
Government of Bahrain (GOB) officials across the board are
thrilled with the progress the negotiating teams made during
the first round, and this enthusiasm was echoed in the press.
Momentum going into round two is high, with many negotiators
hoping to finish in two rounds. However, the Bahraini
business community still seems puzzled about how the FTA can
benefit them, and how their individual companies can take
advantage of the upcoming trade regime changes. We need to
expand outreach efforts to risk-averse Bahrainis to get them
to engage with U.S. companies and capitalize on the FTA's
potential. END SUMMARY

-------------------------------
GOVERNMENT OF BAHRAIN ECSTATIC
-------------------------------

2. GOB officials, from lead negotiator Minister of Finance
and National Economy Saif to negotiating group leaders,
participants, observers and coordinators, expressed
exuberance at the progress and positive tenor of round one of
FTA negotiations in Manama, January 26-30. Several
negotiating groups concluded or nearly concluded their work
in the first round. Despite the Eid holiday immediately
following the round and the fact that many key players are
currently in Washington with the Crown Prince's delegation,
momentum toward round two is high. Numerous Bahraini lead
negotiators told ECONOFF after the round that they intend to
conclude their chapters during round two, March 1-4 in
Washington. Services, Environment and IPR negotiators told
ECONOFF at the end of the round that MEPI-funded technical
assistance prior to negotiations helped them achieve fast
results. Likewise, the Environment lead told ECONOFF that
working with Embassy Science Fellows in Fall 2003 helped them
to better understand and articulate their technical
assistance needs and thus to come to quick agreement on the
substance of the proposed Environment MOU.

--------------
PRESS POSITIVE
--------------

3. The press put an overwhelmingly positive spin on FTA
negotiations, and accuracy in reporting superseded the norm.
In the two weeks following negotiations, only one editorial
criticized FTA, hinting that the USG should not be trusted.

4. Embassy paved the way for accurate reporting. A week
prior to negotiations, PAO and POL/ECON invited journalists
to a roundtable discussion to provide background and answer
questions about FTA. Embassy provided journalists with an
FTA factsheet and English/Arabic press release, both of which
were widely quoted in press reports. Optimistic soundbites
by lead negotiators and the palpably warm and upbeat tenor
surrounding negotiations combined with AUSTR Novelli's
frequent and candid engagement with the press during the
negotiations may have affirmed to the media that the
information they had been given by the Embassy was reliable
and that FTA would stimulate the economy. EMBOFFS and
Novelli were careful not to overpromise, using statistics
from the experience in Jordan. The media appreciated the
honesty and large amount of information provided prior to and
during the negotiations. The result: widespread and
accurate, in-depth coverage.

-------------------------------------
BAHRAINI BUSINESS COMMUNITY CAUTIOUS
-------------------------------------

5. The Bahraini business community has repeatedly heard from
the GOB and the Embassy the message that FTA is primarily for
their benefit. Embassy has regularly and frequently sat with
or addressed the Bahrain Chamber of Commerce and Industry
regarding the business opportunities an FTA might create for
them. Despite this outreach, DCM in Eid calls on three
prominent business families February 1-2 found them curious
about the FTA but puzzled about what they might do to
capitalize on it. Similarly, during the one business week
since the round, businessmen from the Bahraini as well as the
local U.S. business community met with ECONOFF to ask how the
FTA will help their tourism, shipping, insurance and textile
businesses, and, in very pragmatic terms, what to do next.

-------
COMMENT
-------

6. GOB negotiators will continue to push the fast pace of
negotiations in round two. MEPI-funded assistance was
instrumental in creating this level of readiness. We need
now to formulate a plan to actualize the potential--in terms
of trade, investment and jobs--this FTA can offer.
7. As we have seen with Iraq reconstruction, the business
community in Bahrain is curious about opportunities, but
somewhat risk-averse. They will need to be guided quite
directly to see opportunities FTA offers them and to learn
how to capitalize on them. Bahrainis would be receptive to
advice from Jordanians who have made FTA work for them. This
might be one avenue to achieving FTA-generated business
successes. However, we will need to be somewhat creative
with resources, since Bahrain is not eligible to receive
USAID funding.
FORD

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