Cablegate: Yemen: Royg Asks for More U.S. Flexibility On Wto

VZCZCXRO9113
PP RUEHDE RUEHDH RUEHDIR
DE RUEHYN #1576/01 2351244
ZNR UUUUU ZZH
P 231244Z AUG 09
FM AMEMBASSY SANAA
TO RUEHC/SECSTATE WASHDC PRIORITY 2644
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHGV/USMISSION GENEVA 0301

UNCLAS SECTION 01 OF 02 SANAA 001576

SIPDIS

USTR FOR JASON BUNTIN
USAID FOR CHRIS KISCO

E.O. 12958: N/A
TAGS: ECON ETRD EAID ECIN PREL PGOV KMCA KMPI YM
SUBJECT: YEMEN: ROYG ASKS FOR MORE U.S. FLEXIBILITY ON WTO
ACCESSION REFORMS

REF: 06 SANAA 2063

1. SUMMARY: The ROYG continues to balk at what it claims are
unfair U.S. demands regarding WTO accession, even as it
insists it is still willing to make a good faith effort in
ongoing negotiations. The WTO accession team at the Ministry
of Industry and Trade (MOIT) recognizes that Yemen needs to
make progress on bilateral market-access negotiations and to
finalize WTO rules issues. Yemen, which has been in
negotiations for WTO accession since 2002, would like to open
another Trade and Investment Framework Agreement (TIFA)
meeting with the USG. The ROYG may be more amenable to
conceding in bilateral negotiations on sticky issues
regarding market access and rules ) whether through a TIFA
meeting or not - than initially apparent on the surface. END
SUMMARY.

TRADE MINISTRY PRIORITIZING WTO ACCESSION
-----------------------------------------

2. In a meeting with the Ambassador on August 18, Dr. Yahya
al-Mutawakel, the Minister of Industry and Trade, said that
there needs to be more collaboration between the Ministry of
Industry and Trade (MOIT) and the USG on WTO accession, which
he acknowledged was essential in order to create more jobs
and investment in Yemen. Gentling chiding his own
government, he suggested that the ROYG is de-emphasizing
economic planning in the face of tremendous political
challenges, and failing to recognize that the flailing
economy is inherently linked to the political crisis. He
suggested that a recent focus on governance by donor
countries has left economic development by the wayside.
Mutawakel indicated that a holistic approach involving both
the public and private sectors is critical to sustainable
development and economic reform in the long-term, and
believes that WTO accession is crucial.

RESERVATIONS HINDERING NEGOTIATIONS
-----------------------------------

3. When pressed by the Ambassador, the WTO accession team at
the Ministry of Industry and Trade (MOIT) recognized that
Yemen needs to make progress on bilateral market access
negotiations and to finalize WTO rules issues. Dr. Hamoud
Ali al-Najar, Chief of Communication and Coordination Office
with the WTO, said that the ROYG has a number of reservations
about the negotiation process. Najar specifically requested
greater U.S. flexibility on agricultural-related negotiations
and sensitive products. According to Najar, the concessions
Yemen seeks are comparable to those granted to other Least
Developed Countries (LDCs) that gained WTO accession
recently, specifically identifying Nepal, Cambodia, and Cape
Verde. Still, the team remains optimistic about accession
and is hoping to wrap up negotiations by the end of the year.
(Note: Yemen has closed multilateral negotiations with the
European Commission (EC) and, according to Ministry
officials, is near to closing bilateral negotiations with
Australia and Japan. End Note.)

ROYG PRESSING FOR U.S.-YEMEN TIFA
---------------------------------

4. The MOIT, which has been in negotiations for WTO
accession since 2002, would like to open another Trade and
Investment Framework Agreement (TIFA) meeting with the USG as
soon as possible. According to the WTO accession team at the
MOIT, a U.S.-Yemen TIFA would raise confidence within the
ROYG about the accession process. It would also lay the
groundwork for the WTO ministerial meeting and a working
party meeting, both of which will take place in December 2009
in Geneva. (Comment: The MOIT insists that the last
U.S.-Yemen TIFA, which took place in Washington in November
2004, achieved considerable progress in the negotiations, and
that another TIFA can do the same. End Comment.)
Nevertheless, given the USG position that progress on
outstanding issues must be made before another TIFA is
scheduled, Mutawakel indicated that the MOIT would be willing
to extend the deadline for the TIFA meeting, while building
consensus through additional video-teleconferences (VTCs).
Mutawakel's position suggests that the WTO accession team may
be willing to extend discussion on outstanding issues such as
market access and WTO rules.

5. COMMENT: Yemen's interest in opening another (and final)
TIFA meeting with the U.S. appears to be connected to its
desire to close bilateral negotiations with the USG and

SANAA 00001576 002 OF 002

proceed with WTO accession. While the WTO accession team
continues to insist that Yemen already has made significant
concessions, Minister Mutawakel seems more flexible in
lengthening the negotiations process. The ROYG may be more
amenable to conceding in bilateral negotiations on sticky
issues such as market access and rules ) whether through a
TIFA meeting or not - than initially apparent on the surface.
END COMMENT.

SECHE

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