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Cablegate: Commerce Minister Shahrani - Good Trip to Washington, Now

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PP RUEHDBU RUEHPW RUEHSL
DE RUEHBUL #3306/01 2901237
ZNR UUUUU ZZH
P 171237Z OCT 09 ZDK
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 2214
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0914
RUCNAFG/AFGHANISTAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/USDA FAS WASHDC

UNCLAS SECTION 01 OF 02 KABUL 003306

SENSITIVE
SIPDIS

DEPT FOR S/SRAP STAFF, SCA/FO, SCA/RA, SCA/A, EEB/TPP/BTA
DEPT PASS AID/ASIA SCAA
DEPT FOR H
DEPT PASS USTR FOR DELANEY AND DEANGELIS
TREASURY FOR MHIRSON, ABAUKOL, AWELLER, AND MNUGENT
COMMERCE FOR HAMROCK-MANN, DEES, AND FONOVICH

E.O.12958: N/A
TAGS: ETRD BEXP PREL PGOV AF PK
SUBJECT: COMMERCE MINISTER SHAHRANI - GOOD TRIP TO WASHINGTON, NOW
BACK WORKING ON TRANSIT TRADE

REF: KABUL 3176

1. (SBU) Summary. Minister of Commerce and Industries Shahrani
reported on his October 4 - 8 trip to Washington, including
take-aways from the U.S./Afghanistan trade and investment framework
agreement (TIFA) talks and his participation in the TIFA meeting
with the Central Asian countries. He shared with Coordinating
Director Wayne his appreciation for USG support for Afghanistan's
bid for WTO membership and discussed at length the talks with
Pakistan on a transit trade agreement. On the transit trade
agreement talks with Pakistan, Shahrani said that he had worked out
a way ahead with Foreign Minister Spanta and that the Foreign
Ministry was formally inviting Pakistan to send its delegation to
Kabul in November to continue the negotiations. However, the
Commerce Ministry has picked up signs that Islamabad prefers to wait
until the post-election picture in Kabul is clarified.
Nevertheless, Shahrani stated his team's willingness to redouble
efforts to complete the agreement by the end of the year. End
summary.

TIFA and Other Washington Meetings
----------------------------------

2. (U) Minister of Commerce and Industries (MOCI) Wahidullah
Shahrani told Coordinating Director for Development and Economic
Affairs (CDDEA), Ambassador E. Anthony Wayne, October 13 that he
found his discussions the previous week in Washington useful and
that he was focusing on follow-up. (Shahrani's views on the Afghan
political situation were reported septel.) Shahrani expressed
appreciation for meetings with Deputy Secretary of State Lew,
Commerce Secretary Locke, the U.S. Trade Representative, D/USTR
Marantis, SRAP Holbrooke, USAID Acting Administrator Fulgham, and
five members of Congress. One takeaway from his talks with Sen.
Bond, Rep. Van Hollen, and others was the importance of bringing
visiting members out to USAID and other assistance projects to see
the positive impacts in livelihoods, incomes, and employment in
Afghanistan resulting from U.S. assistance.

3. (U) On his direct participation in the annual U.S. Afghanistan
Trade and Investment Framework Agreement (TIFA) talks and his
participation as an invited observer in the TIFA talks with the
Central Asian countries, Shahrani noted the importance of the
Defense Department's Northern Distribution Networks (NDNs)
initiative. The initiative stems from a Congressional waiver that
allows for the purchase of goods and services from the region.
Minister Shahrani said he will mobilize Afghan private sector firms
that can meet the standards set for the initiative.

Border Crossing
---------------

4. (U) Also as a result of his Washington discussions, Shahrani told
Ambassador Wayne he is looking to facilitate efforts by
international forces to receive their supplies without delays,
particularly at Heiratan and Sher Kan Bandar (SKB) border crossings
in the north. Sharani noted ISAF IJC Commander LTG Rodriguez'
interest in improving the situation at SKB and Hairatan and said he
was looking to step up Ministry staff at those crossings, adding he
had talked to the Finance Minister and Central Bank Governor about
other steps GIRoA might take. The Minister also said that in
Hairatan and Torygundy, where the Commerce Ministry runs the Fuel
Liquid Gas Enterprise (FLGE), a state-owned fuel distribution
company, he has achieved 24 hour/seven days a week operations. He
said he is engaging the Central Bank and Finance Ministry to end the
practice at these two crossing points where, reportedly, officials
have worked only eight hours a day, even though trucks continuously
crossed in from Uzbekistan and Tajikistan. Shahrani was pleased his
efforts had meant Afghan officials, unlike in past years, had worked
at the crossing points during the Eid holidays.

WTO
---

5. (SBU) With regard to progress on WTO, Minister Shahrani expressed
thanks for Ambassador Kirk's support for Afghanistan's WTO
membership. Shahrani noted MOCI's submission of the Memorandum of
Foreign Trade Regime (MFTR) in March 2009 and the establishment of a
WTO Unit within the Ministry as signs of the progress the Afghan
Government is making. To advance Afghanistan's WTO application
further, Shahrani said he would leave the next day for Tanzania and
a conference for Least Developed Countries (LDCs) and the WTO where

KABUL 00003306 002 OF 002


he would also meet WTO Director General Lamy. Shahrani added he
thought USTR Kirk had helped arrange the Lamy meeting and that he
appreciated the USG's help.

Reconstruction Opportunity Zones/
Boosting Afghan Prosperity
---------------------------------

6. (U) The status and importance of the reconstruction opportunity
zone (ROZ) legislation was the chief focus of Commerce Minister
Shahrani's meetings with senators and congressmen. While noting
passage is delayed in the Senate, Minister Shahrani said he would
use this time to initiate feasibility studies of six to eight
locations likely suitable for ROZs. The studies will focus on
product, labor availability, and access to markets. USAID's planned
Trade & Accession Facilitation for Afghanistan (TAFA) will also
provide support.

7. (U) Further on boosting Afghanistan's economic growth, Ambassador
Wayne noted a recent phone call with Ambassador Verveer regarding
women and entrepreneurship and said the Embassy wanted to expand
efforts in this area. Minister Shahrani and USAID agreed to meet to
discuss efforts further to strengthen the opportunities for firms
owned by Afghan women to supply U.S. firms. Minister Shahrani added
that Afghan women traditionally worked in producing carpets, shawls,
and cashmere.

Afghanistan/Pakistan Transit Trade Agreement (APPTA)
--------------------------------------------- -------

8. (SBU) Minister Shahrani expressed appreciation for his
discussions with Deputy Secretary Lew and SRAP Holbrooke on the
transit trade negotiations. He noted the confusion that existed in
Kabul, i.e., with the Foreign Ministry, over the provision for a
study on re-exports/smuggling. He added that some had suggested the
two Ministries of Interior needed to be brought into the process
since they are responsible for the borders. The reality, however,
is that neither side is able to control the border, and so, Shahrani
continued, it is best to continue focusing on the trade.

9. (SBU) Since returning to Kabul, Shahrani met with Foreign
Minister Spanta to brief him on the talks and the importance of
proceeding with the study on re-exports. Shahrani said he thought
he had reached an understanding with Spanta on a way ahead which he
thought Pakistan's Government might accept. He said Spanta had not
been properly briefed on the terms of reference for the re-export
study. Shahrani said the Foreign Affairs Ministry's First Political
Department would issue an official letter that day to invite the
Pakistani delegation from to the next negotiating round November
10-11. Moreover, the Afghan side is offering to hold several
negotiation rounds per month to conclude the agreement by the end of
the year deadline. The Commerce Minister noted, however, that the
Pakistani side may hold back due to the political situation in
Afghanistan resulting from the results of the August elections. The
Afghan MFA, he continued, is also uncertain as to the level of
commitment in Pakistan's Government to successful transit trade
talks. [Note: A senior Commerce Ministry official subsequently told
emboffs Pakistan's Embassy in Kabul informed MOCI that Islamabad
does not think talks should proceed until the political situation in
Kabul is clarified. End note.]

10. (SBU) Focusing on the re-export study, Shahrani stated the
assessment will go in a "parallel way," so as to coincide with, but
not be integrated into APTTA negotiations, reflecting on Spanta's
concern. The study will take 6 - 12 months, providing sufficient
time to understand the impact -- positive and negative -- on the
border areas. The Minister said he expects international experts,
provided through USAID's TAFA program, to guide the study, but that
Afghans could participate as needed, for example, in conducting
field work. He offered to introduce possible staff who could
support this effort. The Minister also suggested forming a joint
committee to explore implementing the study's recommendations and to
further information sharing. Shahrani stated blocking the trade
would negatively affect 40% of Pakistan's tribal areas, who are
largely dependent upon this trade for their livelihoods. Ambassador
Wayne said it was good that the Minister was thinking about the
talks, maintaining a strategic sense of their value and how to
advance them. Maintaining such a perspective is important to
ensuring the talks' success.

EIKENBERRY

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