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Cablegate: Gob Forges Ahead to Help Fta Dream Become A

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 000969

SIPDIS

DEPT FOR NEA/ARP
DEPT PASS USTR JBUNTIN
USDOC FOR CLOUSTAUNAU
CAIRO FOR SBONDY

E.O. 12958: N/A
TAGS: ETRD BEXP ECON BA
SUBJECT: GOB FORGES AHEAD TO HELP FTA DREAM BECOME A
BUSINESS REALITY

1. SUMMARY: Bahrain's government and business community are
actively pursuing ways to make the Free Trade Agreement (FTA)
with the United States become a powerhouse for the economy,
as responsibility begins to shift from the givernment to the
private sector. Seeking to strengthen commercial ties with
the United States, whether through support of an AmCham in
Bahrain or by sending to and receiving from the United States
business delegations, the GoB is in strong support of
business objectives. The business community, too, is
beginning to look outside its borders to benefit from the
Jordanian FTA experience, to learn from it and to replicate
its success. Interministerial and government to business
dialog are boosting Bahraini business confidence that FTA is
a good thing that can work for them if they decide to take
responsibility for its success. END SUMMARY

------------
COMMERCE MINISTER PLEDGES PARTNERSHIP WITH CHARGE
--------------

2. In his initial meeting with CDA on June 16, Commerce
Minister Ali Saleh Al Saleh noted that we have much work
ahead to make the dream of the "era of FTA" a reality for
business. The Commerce ministry, he stressed, will exert
every effort to help the private sector achieve success.
Saleh said that he wants to see Bahrain become a model for
the region and the economic envy of its neighbors. Making
Bahrain the regional base for American companies and
investors, he emphasized, is one way to accomplish this goal.
The Minister agreed with the CDA regarding the importance of
establishing an American Chamber of Commerce as a mechanism
for U.S. business to learn about Bahrain and to penetrate the
region. To strengthen an AMCHAM Bahrain's chances for
success, the Minister noted that he had facilitated an
unprecedented cabinet decision to authorize registration of
the AMCHAM with the Ministry of Commerce rather than the
Ministry of Labor.

3. Minister Saleh noted that the office of Assistant
Undersecretary of Foreign Trade Relations Shaikh Daij Al
Khalifa is charged with creating a post-FTA five year plan
for the Ministry of Commerce to help Bahrain capitalize on
the FTA. Shaikh Daij added that the GOB made public in a
June 15 press conference that it would establish permanent
contact with the private sector on FTA. Further, an
interministerial committee under Ministry of Finance
leadership is creating an action plan to follow up on FTA
implementation.

4. The Minister noted that he had reserved E-commerce and
entrepreneurship as the Commerce Ministry's areas of
responsibility for post-FTA promotion. He highlighted that
Microsoft has joined with the GOB to develop e-government and
is working on a five year plan to boost the commercial IT
sector, but Saleh said he would like to see more assistance
and cooperation in this arena. Further, working together
with the Bahrain Chamber of Commerce and Industry, and in the
future hopefully with AmCham membership as well, the Minister
envisions young people creating companies, not just jobs.
Capitalizing on U.S. entrepreneurial spirit and expertise,
the Minister hopes to send a specialized delegation to the
United States to discover how to promote these issues and
encourage these new developments.

-------------------------------------------
PRIME MINISTER MAKES FTA SUCCESS A PRIORITY
-------------------------------------------

5. Upon his return to Bahrain, Prime Minister Shaikh Khalifa
bin Salman Al Khalifa publicly praised the FTA and urged
Bahraini businesses to exert every effort to make the
agreement a success. Bahrain Chamber of Commerce and
Industry (BCCI) Chairman Khalid Kanoo told POL/ECON Chief on
June 10 that the Prime Minister had reiterated his public
message in a private meeting with the BCCI board of
directors. Kanoo pledged that BCCI would aggressively
develop post-FTA business promotion.

-----------------------------------
BCCI LOOKS TO JORDAN FOR FTA ADVICE
-----------------------------------

6. BCCI invited Jordanian trade expert Rasim Samih Abdul
Rahim to address the BCCI membership June 7 on methods for
the private sector to benefit from the Free Trade Agreement
(FTA) with the United States. Abdul Rahim served as an
advisor for the FTA Unit in the Support and Developing
Business Environment program in Jordan. He is also working as
an International Advisor to the International Trade
Organization and UNCTAD and is a member of several
specialized professional international associations. Abdul
Rahim noted that all countries have benefited from an FTA
with the United States. The agreement's effectiveness, he
continued, will depend on how businesses take advantage of
the agreement, which sets up a framework to develop
investment opportunities between the two countries. Like the
FTA with Jordan, the economic goal of Bahrain's FTA with the
US, he said, was to establish clear trade regulations to
promote mutual trade and to encourage innovation. This would
strengthen friendly ties, improve the country,s economic
relationship with the US, improve the standard of living in
Bahrain, facilitate investment opportunities, and achieve
sustainable development. Abdul Rahim highlighted the
exemption of custom duties on consumer products, and
industrial, agriculture, and electronic goods, including the
protection of intellectual property rights and labor rights
along with commitments to protect the environment.

7. Abdul Rahim stated that the US-Jordan FTA had produced a
huge increase in Jordan,s exports to the US following the
signing of the agreement. To duplicate that outcome in
Bahrain, Abdul Rahim stressed the responsibility of the
business community in implementing the FTA. The private
sector, he noted, must examine the provisions of the
agreement in order to facilitate access into the
international market and to realize the best investment
opportunities presented by the agreement. Other countries'
experience could provide useful lessons. He recommended that
Bahrain's private sector establish a strong commercial
presence in US markets. Jordanian companies that had opened
branches in the US had achieved much success. Abdul Rahim
highlighted the role of the Jordanian Chamber of Commerce and
Industry in studying anticipated commercial and investment
opportunities. He called upon Bahrain's business community to
strengthen their relationship with the Chamber of Commerce,
and to participate in their efforts to inform citizens about
business opportunities opened by the FTA. He also stressed
the importance of cooperation between the public and private
sectors for identifying and exploiting new business
relationships.

8. BCCI Vice Chairman Chairman of the BCCI FTA Steering
Committee Essam Fakhro commented that once the agreement is
signed, responsibility for its success will be transferred
from the government to the private sector. Increased
competition will bring new challenges to the private sector.
Fakhro stressed that BCCI is conducting a comprehensive
program conducted to inform Bahrain's business community of
the opportunities the FTA presents.

-----------
COMMENT:
---------

9. FTA negotiations have begun a remarkable development in
Bahrain: Ministries have started coordinating and cooperating
to achieve ends that are beneficial to Bahrain as a whole.
The creation of an interministerial committee to follow up on
FTA implementation would not have been possible as little as
two years ago. Further, the Government and business
communities are talking frequently, and the Government is
showing business its strong support. The business community
is also beginning to look independently for ways to make the
FTA work for them, and as a first step toward broadening this
horizon, have opened up to the Jordanian business community,
to profit from their experience. If Bahrain's business
community continues on this trajectory and continues to
receive the support and encourageent it clearly needs from
government officials, they will make FTA a success for
Bahrain. END COMMENT

WILLIAMSON

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