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Cablegate: Wto Accession Steps Unlikely Before January

VZCZCXYZ0000
RR RUEHWEB

DE RUEHGB #2374/01 2461019
ZNR UUUUU ZZH
R 031019Z SEP 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 4562
INFO RUCNRAQ/IRAQ COLLECTIVE
RUEHGV/USMISSION GENEVA 0335

UNCLAS BAGHDAD 002374

SIPDIS
SENSITIVE

USTR FOR DAWN SHACKLEFORD

E.O. 12958: N/A
TAGS: ETRD PGOV EAID WTO ECON EINV IZ
SUBJECT: WTO ACCESSION STEPS UNLIKELY BEFORE JANUARY
ELECTIONS

REF: A. BAGHDAD 1233
B. BAGHDAD 636

1. (SBU) Summary: The GOI seems unlikely to make the sound
economic but tough political decisions that would move Iraq
closer to World Trade Organization (WTO) accession before
Iraqi national elections in January 2010. Although Iraq has
completed the requisites for the next round of accession
talks, the GOI's inter-ministerial WTO committee will likely
delay submitting its WTO package to Geneva. As of September
1, the GOI has: 1) completed a goods offer and tariff
schedule, 2) updated its legislative action plan, and, 3)
finalized draft laws on intellectual property rights (IPR)
and technical barriers to trade (TBT). In our discussions
with Ministry of Trade officials, we have noted that WTO
accession will be discussed -- either positively or
negatively -- at October 19 Dialogue on Economic Cooperation
(DEC) and could draw unwanted attention at the October 20-21
U.S.-Iraq Business and Investment Conference. In response,
the MOT's senior advisor said he is seeking a solution that
balances political concerns with a genuine interest in
demonstrating tangible progress ahead of the Washington
meetings. End Summary.

------------------------------------------
Progress Likely to Slow Ahead of Elections
------------------------------------------

2. (SBU) In a meeting with Ministry of Trade Senior Advisor
and SFA JCC Trade and Investment Working Group co-chair Dr.
Abdulhadi al-Hamiri on August 26 at the MOT, al-Hamiri said
that the GOI would take few, if any, concrete steps on key
economic issues -- specifically WTO accession -- before Iraqi
national elections scheduled for January 2010. Acting Trade
Minister Safaa al-Safee is facing "significant pressures" to
balance reforms such as those required for WTO accession with
political concerns for his government's re-election,
al-Hamiri said. He stated that, in general, public views
about WTO accession were negative and, in the absence of a
public information campaign, would not change in the short
term. The result is an aversion to opening debate on
contentious policy issues and a reluctance to make tough
decisions in advance of elections. "Timing is bad," according
to al-Hamiri. (Comment: In our discussions with the MOT, we
have recommended that the MOT lead a GOI public information
campaign and we will continue to deliver that point. We are
currently exploring options to help the GOI start a campaign.
End comment.)

--------------------------------------------
Status of World Trade Organization Accession
--------------------------------------------

3. (SBU) Al-Hamiri chaired an August 20 GOI inter-ministerial
working group (the "National WTO Accession Committee")
meeting to address three significant milestones to WTO
accession: 1) submission of the GOI's initial goods offer;
2) submission of the GOI's initial services offer; and, 3)
submission of draft legislation that conforms Iraq's
intellectual property rights regime to the provisions of the
WTO Agreement on Trade Related Aspects of Intellectual
Property Rights (TRIPS). As of September 3, MOT WTO Division
Director Tharwat Salman, was assembling the GOI's planned WTO
package, which, according to Salman, will include:

- Iraq's initial goods offer (including bound tariff
schedule, a proposed agricultural subsidy offer, and a
schedule of commitments on provisions of the GATT and WTO
agreements on trade in goods);

- final ACC4 (data on the status of Iraq's agricultural
subsidy regime);

- updated legislative action plan;
Q- updated legislative action plan;

- final draft intellectual property law; and,

- final draft technical barriers to trade law.

Salman would not commit to a submission timeline beyond
noting that the package had not been forwarded yet to Acting
Trade Minister Safaa al-Safee for approval. Press reports
following the August 20 committee meeting were less specific,
but noted that the GOI intended to submit a package for the
next round of WTO negotiations.

------------------------------------------
Despite Political Concerns, Work Continues

------------------------------------------

4. (SBU) Al-Hamiri stated that the WTO Accession Committee
had determined that submitting initial goods and services
offers required notification to, but not prior approval by,
the Council of Ministers (COM) and Council of Representatives
(COR). This is a departure from previous practice and could
speed the accession process significantly (ref B), but likely
only if the same government remains in power after the
January elections. (Comment: We have repeatedly reminded
our GOI interlocutors that submitting offers to Geneva marks
the beginning -- not the end -- of accession negotiations,
and that COM or COR approval for each step of the negotiation
process would result in unnecessary delays. End comment.)
The committee has also considered a version of the GOI's
initial services offer that includes positions on five
services sectors (100 of 155 sub sectors): tourism, finance,
telecommunications, computers and research and development,
and transportation. According to al-Hamiri, there was some
"difference of opinion among the Ministries" on the services
offer that al-Hamiri has tasked committee members to "work
out." Al-Hamiri said the GOI is considering whether to
submit the initial services offer with five sectors completed
or wait until the entire package is completed. We urged the
former.

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

5. (SBU) The upcoming U.S.-Iraq Dialogue on Economic
Cooperation and the Business and Investment Conference have
created some leverage for us, which we will continue to use
to urge quiet steps forward on WTO accession. We stressed to
Dr. al-Hamiri that, in the context of the Washington
conference, potential investors would only look to concrete,
demonstrable progress (measured, in part, by steps forward on
WTO accession) that Iraq is opening for business. Al-Hamiri
sees increased trade and investment as political talking
points for the elections, and understands that improvements
to Iraq's business and investment climate are critical to
attract foreign deals. Both views give us traction -- which
we will continue to use in our discussions with the GOI in
the run-up to the October Conference and beyond.
HILL

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