US embassy cable - 04KUWAIT4554

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004554 
 
SIPDIS 
 
STATE PLEASE PASS TO USTR JFENNERTY 
 
E.O. 12958: DECL: 12/29/2014 
TAGS: ETRD, PREL, ECON, KIPR, KU 
SUBJECT: TOO MUCH STICK, NOT ENOUGH CARROT: KUWAIT EMBASSY 
REPS COMMENT ON TIFA PROCESS 
 
 
Classified By: Ambassador Richard LeBaron, reasons 1.4(b) and (d) 
 
1.  (C) Summary and Comment.  Econoffs met with 
representatives from the Kuwaiti Embassy in Washington on 
December 21 to discuss the TIFA process and prospects for a 
second TIFA Council meeting.  They echoed the comments made 
by senior Ministry of Commerce officials that Kuwait is 
"jealous" that Oman and UAE are moving toward free trade 
agreement (FTA) negotiations even while Kuwait has had only 
one TIFA Council meeting.  Econoffs said that without serious 
progress on IPR protection and enforcement and movement 
toward eliminating the International Certification Conformity 
Program (ICCP), the TIFA process was likely to remain 
stalled.  The Kuwaitis acknowledged that the GOK has fallen 
short on IPR protection, but said that Kuwait's TIFA 
committee chair and the Kuwaiti Ambassador to Washington are 
pushing the Ministry of Information to improve.  The Kuwaitis 
blamed the U.S. side for not clearly articulating that the 
ICCP had to be removed rather than modified, saying the U.S. 
had missed two opportunities to kill the program.  Econoffs 
reiterated that because it is a technical barrier to trade, 
the ICCP must be eliminated.  Al-Budaiwi said the GOK 
generally feels like it is "just seeing the stick and no 
carrots" in TIFA negotations, and that the GOK needs 
"encouragement and support" Specifically, the GOK would like 
to have more feedback, as well as videoconferences, 
conference calls or other types of direct, live interaction 
to help work out some of the difficulties among all concerned 
parties. 
 
2.  (C) Comment.  In post's view, video- or teleconferences 
would be an extremely useful method of moving forward.  The 
Government of Kuwait is not terribly "wired," and many 
ministries lack email (even officers at the Kuwaiti Embassy 
in Washington use internet email accounts because they do not 
have government accounts).  As a result, email communication 
is of somewhat limited utility.  A further advantage of 
video- and/or teleconferencing is that it would allow all of 
the interested experts on both sides to hash out problems 
simultaneously, to avoid any further misunderstanding about 
the prerequisites for positive progress toward a second TIFA 
Council meeting.  End Comment. 
 
-------------------------- 
Whither the U.S.-Kuwait TIFA 
-------------------------- 
 
3.  (C) Econoffs met with two representatives from the 
Kuwaiti Embassy in Washington, Jasem Al-Budaiwi and Zeyad 
Al-Mashan, on December 21 to discuss the U.S.-Kuwait Trade 
and Investment Framework Agreement (TIFA) process. 
Al-Budaiwi and Al-Mashan, both of whom are responsible for 
monitoring U.S.-Kuwait trade relations, sought the meeting 
during their holiday in Kuwait to assess where Kuwait stands 
and when the second TIFA council meeting might be scheduled. 
Al-Budaiwi said that the GOK has received no positive signs 
from the U.S. about the prospects for a second meeting, 
adding that there had been few responses from the USG to 
anything that the GOK had done.  He echoed the comments made 
by senior Ministry of Commerce officials that Kuwait is 
"jealous" that Oman and UAE are moving toward free trade 
agreement (FTA) negotiations even while Kuwait, which signed 
a TIFA before both Oman and UAE, has only had one TIFA 
Council meeting.  Al-Budaiwi remarked that GOK officials were 
telling him that they are more committed and serious than UAE 
or Oman, that they have better laws on the books than either 
country, and that they cannot understand why there has been 
no forward progress. 
 
4.  (C) Noting the frankness of Al-Budaiwi's comments, 
Econoffs responded that without serious progress on 
intellectual property rights (IPR) protection and enforcement 
and movement toward the removal of the International 
Certification Conformity Program (or ICCP, which the US 
considers a technical barrier to trade), the TIFA process was 
likely to remain stalled.  Econoff noted that the US is 
looking at these two issues particularly closely to determine 
Kuwait's commitment to liberalizing its trade regime, and 
that moving ahead with the second TIFA council meeting, while 
a USTR decision, is contingent upon Kuwait making significant 
changes in these areas.  While commending the efforts of 
Kuwait Customs and the Ministry of Commerce on IPR 
enforcement, Econoff pointed out that the Ministry of 
Information continues to shirk its statutory role as the 
protector of intellectual property rights. 
 
----------------- 
IPR:  We Hear You 
----------------- 
 
5.  (C) Al-Budaiwi and Al-Mashan acknowledged that the GOK 
has fallen short on IPR protection, and that the Ministry of 
Information is especially weak.  They reported that Ministry 
of Commerce Assistant Secretary for International Trade 
Affairs Hamid Al-Ghanam, who is the working chair of Kuwait's 
TIFA committee, met with the Ministry of Information's 
undersecretary to stress the importance of IPR protection to 
TIFA/FTA talks.  "We know it is a problem, and we know what 
the problem is," said Al-Budaiwi, citing inconsistent 
enforcement, spotty prosecution, and insufficiently strong 
penalties for proven violators.  He added that the Kuwaiti 
Ambassador to Washington is a "great friend" of Minister of 
Information Muhammad Abulhassan (NOTE.  The Ambassador worked 
for Abulhassan when the latter was Kuwait's permanent 
representative to the UN.  END NOTE.), and would call the 
Minister to emphasize the necessity of better IPR laws and 
enforcement.  Al-Budaiwi suggested that the various American 
and Kuwaiti IPR experts hold a video conference or conference 
call to discuss Kuwait's progress, continued shortcomings, 
and suggested ways forward.  (Note.  The Minister of 
Information is currently experiencing some serious political 
difficulties with the National Assembly.  His tenure is 
uncertain.  End Note.) 
 
----------------------------- 
ICCP:  Failure to Communicate 
----------------------------- 
 
6.  (C) With regard to the ICCP, Al-Budaiwi averred that 
although the Kuwaiti Embassy now understood that the ICCP 
needed to be eliminated, there had been serious 
miscommunication between the US and Kuwaiti teams about 
whether the program could be salvaged.  He said that the U.S. 
"had two opportunities to kill the ICCP:"  the first, during 
the TIFA Council meeting, when he asserted that the U.S. team 
made no substantive objection after the Kuwaiti side 
presented the ICCP; and the second, in AUSTR Catherine 
Novelli's follow-up letter to the Minister of Commerce. 
According to Al-Budaiwi, there was no direct request that the 
GOK get rid of the ICCP.  As a result, he said, the Director 
for Standards and Metrology at the Public Authority for 
Industry had engaged his entire staff to revise the ICCP. 
"We don't know how to tell him" that all his efforts had been 
for naught, Al-Budaiwai commented.  He added that the 
Director was also "really disappointed" that when he 
presented his plan for modifying the ICCP to a U.S. 
government representative in Geneva last month, he was given 
"nice feedback" rather than being told that the program was 
fatally flawed.  Unlike the case with IPR protection, 
Al-Budaiwi remarked, the GOK did not know what the U.S. needs 
Kuwait to do with regard to the ICCP.  Econoffs reiterated 
that because it is a technical barrier to trade, the program 
must be eliminated.  To avoid future miscommunications, 
Econoff suggested that a video- or teleconference on the ICCP 
might also be useful. 
 
--------------------------------- 
Too Much Stick, Not Enough Carrot 
--------------------------------- 
 
7.  (C) Generally speaking, Al-Budaiwi said, the GOK feels 
like it is "just seeing the stick and no carrots" in TIFA 
negotations.  For example, Kuwait had taken a "great step" in 
telecommunications (which Al-Budaiwi called the most 
difficult sector) by resolving its long-standing, 
multi-million dollar dispute with AT&T.  In the GOK's view, 
he said, the Ministry of Communications should have received 
some praise for its actions.  "We need encouragement and 
support," pleaded Al-Budaiwi.  Specifically, the GOK would 
like to have videoconferences, conference calls or other 
types of direct, live interaction to help work out some of 
the difficulties among all concerned parties.  He also made a 
pitch for more feedback from the U.S. side in all areas. 
Econoffs noted that they had prepared and distributed to the 
GOK a presentation outlining the specific next steps that the 
U.S. recommended Kuwait take in all sectors.  The 
presentation, which was intended to remove any ambiguity 
about what changes the U.S. side wanted, would be regularly 
updated to track the GOK's progress.  Al-Budaiwi and 
Al-Mashan had both seen the presentation, and said it was a 
useful tool. 
LEBARON