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Cablegate: Tunisia Wants to Revive Tifa Talks, Gives Mixed

VZCZCXYZ0001
PP RUEHWEB

DE RUEHTU #0829/01 3170620
ZNR UUUUU ZZH
P 130620Z NOV 09
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 6971
INFO RUCNMGH/MAGHREB COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS TUNIS 000829

SENSITIVE
SIPDIS

STATE FOR EEB/IFD/OMA, EEB/EPPD, AND NEA/MAG
STATE PASS USTR (BURKHEAD)
USDOC FOR ITA/MAC/ONE (MASON), ADVOCACY CTR (TABINE), AND
CLDP (TEJTEL AND MCMANUS)
USDOC PASS USPTO (ADAMS, BROWN AND MARSHALL)
CASABLANCA FOR FCS (KITSON)

E.O. 12958: N/A
TAGS: ETRD EAIR EINV ECON EIPR TS
SUBJECT: TUNISIA WANTS TO REVIVE TIFA TALKS, GIVES MIXED
SIGNALS ON OPEN SKIES

REF: TUNIS 783

Sensitive but unclassified, please treat accordingly.

-------
Summary
-------

1. (SBU) After Minister of Development and International
Cooperation (MDIC) Jouini expressed interest in reviving the
Trade Investment Framework Agreement (TIFA) process (stalled
since March 2008,) Tunisia Country Officer Molly Hayes and
Emboffs met with the Americas Desk representatives of the
MDIC and MFA on November 10. Although the meeting was billed
as "unofficial," the MDIC representative delved into
specifics of the agreement and even suggested a January 2010
meeting between relevant GOT ministries and the Embassy.
When asked about Open Skies, our GOT interlocutors said it
would happen, reiterated their wish for a direct flight to
the United States, but provided no specifics. Meanwhile,
Tunisair's website is announcing direct flights by 2013. End
summary.

-------------------
Re-engaging on TIFA
-------------------

2. (SBU) Following the suggestion of Minister of Development
and International Cooperation (MDIC) Jouini to the Ambassador
on October 19 (reftel), MDIC and MFA representatives met with
visiting country officer Hayes and Emboffs to discuss
reviving the Trade Investment Framework Agreement (TIFA)
process. The meeting, described by the MDIC as "unofficial,"
was an opportunity to review progress on the TIFA process
since the last working group met in March 2008. (Note: The
GOT stopped engaging on TIFA after the March 2008 visit by
then-AUSTR Donnelly. In an August 2009 meeting with a
congressional delegation led by Representative Meeks, Jouini
claimed the inaction was due to U.S. trade policy changes and
the expiration of Trade Promotion Authority in U.S. Congress.
End note.)

3. (SBU) Emboffs met with Ikbel Fekkih Ahmed, who covers the
Americas portfolio at the MDIC (she is new to the portfolio).
Mourad Bel Hassen, Deputy Director of the MFA Americas Desk,
was also in attendance. Ahmed was well-organized, pragmatic,
and forward-leaning in discussing the working group's
objectives and Government of Tunisia (GOT) reforms since
then. Ahmed began by outlining both President Ben Ali's
campaign plan and the 2007-2011 National Development Plan --
described as complementary plans with the same overall goals.
She stated some 2011 targets, such as a seven percent growth
rate, a rise in GDP per capita to 5763 TND ($4486,) up from
4064 TND, ($3163 currently), a two percent increase in
foreign direct investment (to 25 percent of GDP, versus 23
percent currently), a reduction of the unemployment rate to
13.4 percent (down from 14.3 percent currently) and
reinforcement of export promotion and human resources
development policies. TIFA, Ahmed said, would be part of
this plan.

--------------------------------------------
Investment, Services, Market Access, and IPR
--------------------------------------------

4. (SBU) The TIFA discussion centered on the four main areas
covered by the last working group: investment, services,
market access, and intellectual property rights (IPR). On
investment, Ahmed said foreign direct investment (FDI) had
grown in the last years thanks to Tunisia's reforms and
policies, specifically taxation laws. She also raised
concerns about Tunisian investors facing obstacles in
obtaining residency permits in the United States. She also
said she was aware of the issues facing major U.S. investors
in Tunisia, such as the restriction on the number of
expatriate employees per company. She said the GOT was
willing to look at this on a case by case basis.

5. (SBU) Ahmed noted many of the reforms Tunisia is
undertaking as part of the EU Association Agreement and
ongoing negotiations on services and agriculture are in line
with TIFA working group issues. (Note: Ahmed said a
Tunisian delegation was currently in Brussels for the next EU

negotiating round. End note.) Market access reform, she
said, had already taken place in key sectors such as
financial services, insurance and telecom. Ahmed asked for
further information on services legislation in the United
States and information on U.S. policy regarding rules of
origin, customs procedures, Food and Drug Administration
regulations for imports, and sector specific policies
(textiles, shoes, leather good, agriculture and fisheries).

6. (SBU) On IPR, Ahmed did not delve into specifics on the
Tunisian position and admitted she did not have detailed
knowledge of new legislation in this field. She did,
however, note that she wanted information on patent
legislation in the United States and was interested in
knowing the U.S. position on geographical indicators, an
issue important to the Tunisian government.

-------------------------
Nothing new on Open Skies
-------------------------

7. (SBU) Emboffs asked the MDIC and MFA reps about the status
of an Open Skies Agreement. Bel Hassen said "it is going to
happen" but that it is a question of timing. He asked if
there had been any interest by U.S. airlines in a direct
flight, saying this would be a key deliverable for the GOT.
He noted Tunisair had purchased new planes that could be used
for this route. On the sidelines, he also urged Emboffs to
send the model Open Skies text directly to the MDIC and as
many other ministries as possible in order to get a response
from the GOT. Meanwhile, Tunisair (the state-owned airline)
announced via press release on their website that direct
flights were planned for 2013.

----------------------------------
Next Steps: GOT Interagency Group
----------------------------------

8. (SBU) To the surprise of Emboffs, it was Ahmed herself
that suggested a January meeting between representatives of
relevant GOT ministries and the Embassy to move forward on
TIFA. She suggested Ministry of Health, Commerce, Culture,
Finance, and Foreign Affairs, among others. She noted the
group could meet periodically in preparation for another
official TIFA Working Group meeting down the line.

-------
Comment
-------

9. (SBU) The MDIC's enthusiasm about reviving the TIFA
process seems genuine, especially given that it recommended a
follow-up meeting with wider GOT participation. Some GOT
reforms in the last 18 months, such as telecom liberalization
(the GOT awarded a third telecom tender) and the new
franchising law (whose implementation decree is still
pending) are positive steps toward achieving the working
group's goals. The Embassy is looking forward to engaging
with the GOT on this issue, and will provide the MDIC with
requested information. On Open Skies, the ball is still in
Tunisia's court, and we remain in standby mode awaiting a
response to our draft text. End comment.
GRAY

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