US embassy cable - 04MANAMA203

UNCLAS SECTION 01 OF 02 MANAMA 000203 
 
SIPDIS 
 
DEPT FOR NEA/FO FOR PDAS LAROCCO AND DAS DIBBLE 
DEPT FOR EB FOR PDAS DONNELLY 
DEPT FOR NEA/REA, NEA/PI AND NEA/ARP 
DEPT FOR EB/TPP/BTA, EB/TPP/MTA, EB, TPP/ATT, OES AND DRL/IL 
DEPT PASS USTR JASON BUNTIN 
CAIRO FOR STEVE BONDY 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, KPAO, KMPI 
SUBJECT: ROUSING RECEPTION OF FTA ROUND ONE IN BAHRAIN 
 
 
1. SUMMARY: The United States and Bahrain held round one of 
Free Trade Agreement negotiations in Manama, January 26-30. 
Government of Bahrain (GOB) officials across the board are 
thrilled with the progress the negotiating teams made during 
the first round, and this enthusiasm was echoed in the press. 
Momentum going into round two is high, with many negotiators 
hoping to finish in two rounds.  However, the Bahraini 
business community still seems puzzled about how the FTA can 
benefit them, and how their individual companies can take 
advantage of the upcoming trade regime changes.  We need to 
expand outreach efforts to risk-averse Bahrainis to get them 
to engage with U.S. companies and capitalize on the FTA's 
potential.  END SUMMARY 
 
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GOVERNMENT OF BAHRAIN ECSTATIC 
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2. GOB officials, from lead negotiator Minister of Finance 
and National Economy Saif to negotiating group leaders, 
participants, observers and coordinators, expressed 
exuberance at the progress and positive tenor of round one of 
FTA negotiations in Manama, January 26-30.  Several 
negotiating groups concluded or nearly concluded their work 
in the first round.  Despite the Eid holiday immediately 
following the round and the fact that many key players are 
currently in Washington with the Crown Prince's delegation, 
momentum toward round two is high.  Numerous Bahraini lead 
negotiators told ECONOFF after the round that they intend to 
conclude their chapters during round two, March 1-4 in 
Washington.  Services, Environment and IPR negotiators told 
ECONOFF at the end of the round that MEPI-funded technical 
assistance prior to negotiations helped them achieve fast 
results.  Likewise, the Environment lead told ECONOFF that 
working with Embassy Science Fellows in Fall 2003 helped them 
to better understand and articulate their technical 
assistance needs and thus to come to quick agreement on the 
substance of the proposed Environment MOU. 
 
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PRESS POSITIVE 
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3. The press put an overwhelmingly positive spin on FTA 
negotiations, and accuracy in reporting superseded the norm. 
In the two weeks following negotiations, only one editorial 
criticized FTA, hinting that the USG should not be trusted. 
 
4. Embassy paved the way for accurate reporting.  A week 
prior to negotiations, PAO and POL/ECON invited journalists 
to a roundtable discussion to provide background and answer 
questions about FTA.  Embassy provided journalists with an 
FTA factsheet and English/Arabic press release, both of which 
were widely quoted in press reports.  Optimistic soundbites 
by lead negotiators and the palpably warm and upbeat tenor 
surrounding negotiations combined with AUSTR Novelli's 
frequent and candid engagement with the press during the 
negotiations may have affirmed to the media that the 
information they had been given by the Embassy was reliable 
and that FTA would stimulate the economy.  EMBOFFS and 
Novelli were careful not to overpromise, using statistics 
from the experience in Jordan.  The media appreciated the 
honesty and large amount of information provided prior to and 
during the negotiations.  The result: widespread and 
accurate, in-depth coverage. 
 
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BAHRAINI BUSINESS COMMUNITY CAUTIOUS 
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5. The Bahraini business community has repeatedly heard from 
the GOB and the Embassy the message that FTA is primarily for 
their benefit. Embassy has regularly and frequently sat with 
or addressed the Bahrain Chamber of Commerce and Industry 
regarding the business opportunities an FTA might create for 
them.  Despite this outreach, DCM in Eid calls on three 
prominent business families February 1-2 found them curious 
about the FTA but puzzled about what they might do to 
capitalize on it.  Similarly, during the one business week 
since the round, businessmen from the Bahraini as well as the 
local U.S. business community met with ECONOFF to ask how the 
FTA will help their tourism, shipping, insurance and textile 
businesses, and, in very pragmatic terms, what to do next. 
 
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COMMENT 
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6. GOB negotiators will continue to push the fast pace of 
negotiations in round two. MEPI-funded assistance was 
instrumental in creating this level of readiness.  We need 
now to formulate a plan to actualize the potential--in terms 
of trade, investment and jobs--this FTA can offer. 
7. As we have seen with Iraq reconstruction, the business 
community in Bahrain is curious about opportunities, but 
somewhat risk-averse.  They will need to be guided quite 
directly to see opportunities FTA offers them and to learn 
how to capitalize on them.  Bahrainis would be receptive to 
advice from Jordanians who have made FTA work for them.  This 
might be one avenue to achieving FTA-generated business 
successes.  However, we will need to be somewhat creative 
with resources, since Bahrain is not eligible to receive 
USAID funding. 
FORD