US embassy cable - 05MANAMA65

C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 000065 
 
SIPDIS 
 
USTR FOR J BUNTIN 
 
E.O. 12958: DECL: 01/12/2015 
TAGS: PREL, ETRD, PTER, BA 
SUBJECT: FOREIGN MINISTER ON PALESTINIANS, SAUDI 
ARABIA/FTA, BAHRAIN SCHOOL 
 
REF: MANAMA 0058 
 
Classified By: William T. Monroe.  Reason: 1.4 (b)(D) 
 
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ABU MAZEN VICTORY BRINGS OPPORTUNITY FOR PEACE 
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1.  (C) Foreign Minister Shaikh Mohammed bin Mubarak Al 
Khalifa opened a January 11 meeting with the Ambassador by 
speaking positively of comments made the day before by 
President Bush about Mahmoud Abbas's electoral victory and 
the President's invitation for Abbas to visit Washington. 
Shaikh Mohammed said that all the parties, but most 
critically Israel, must support Abu Mazen and the 
Palestinians at this time.  There is an opportunity for peace 
and we should take advantage of it. 
 
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TRADE ENGAGEMENT WITH ALL GCC STATES 
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2.  (C) The Ambasador asked Shaikh Mohammed for his thoughts 
on the Free Trade Agreement issue three weeks after it had 
caused such concern during the GCC Summit.  Shaikh Mohammed 
emphasized that there was no change in Bahrain's commitment 
to the free trade agreement (FTA).  Referring to Saudi 
Arabia's criticism, the Minister said that the agreement was 
not done in darkness or closed rooms; it had been on the 
table since 1999.  King Hamad traveled to Washington twice 
and issued statements about the FTA, and the U.S. did the 
same.  The agreement was "worldwide news."  For Saudi Arabia 
to criticize it a week before the GCC Summit was "odd," said 
the Minister.  He mentioned that he had discussed the issue 
with Saudi Foreign Minister Saud Al Faisal on the margins of 
the January 6 Iraq neighbors meeting in Amman.  Shaikh 
Mohammed said that he told Saud that the U.S. was not 
interested in a GCC-wide trade agreement, but was willing to 
engage with all six GCC member-states on trade. 
 
3.  (C) Shaikh Mohammed stated that none of the GCC countries 
wants to leave Saudi Arabia behind, and they all want to be 
helpful in moving Saudi Arabia along the right path with the 
U.S.  The Ambassador responded that, on the free trade issue, 
the first hurdle for Saudi Arabia was to join the World Trade 
Organization (WTO).  The Minister said it was his 
understanding that just one major issue remained unresolved 
-- insurance.  He expressed hope that Saudi Arabia's WTO 
accession could move forward, and wondered what the next 
steps would be after that.  The Ambassador said that he did 
not know the specific thinking with regard to Saudi Arabia, 
but normally next steps could include a Trade and Investment 
Framework Agreement and Bilateral Investment Treaty.  Shaikh 
Mohammed said that Bahrain counsels Saudi Arabia to engage 
more closely with Washington, and suggested that Crown Prince 
Abdulla visit Washington. 
 
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GET AT ROOTS OF TERROR 
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4.  (C) The Minister lamented the continuing struggle with 
terrorism in Saudi Arabia.  Noting that the SAG killed four 
terrorists just a few days earlier and that there had been an 
attack in Kuwait the day before, he commented that the 
international community must address the roots of terrorism. 
The Ambassador agreed, saying that Bush administration 
policy, in addition to combatting terrorsts head on, has been 
to get at the roots through political, economic, and 
educational reform.  FTAs, through their role in promoting 
more open, liberalized economies, play a part in this 
strategy. 
 
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BAHRAIN SCHOOL 
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5.  (C) The Ambassador informed the Minister that the 
Department of Defense has made a decision to continue to 
support the Bahrain School as a DOD institution, but also has 
to deal with the very real problem of a sizeable budget 
shortfall during the current school year.  The Crown Prince 
and others had previously offered to help meet the budget 
shortfall.  A letter is expected shortly from Secretary 
Rumsfeld to the Crown Prince taking him up on the offer, 
which will be essential to keeping the school operating as a 
DOD institution.  It is our hope to work together to 
eliminate the budget shortfall in future years.  Shaikh 
Mohammed affirmed that the GOB wanted to maintain the 
school's status as a DOD institution, and is ready to deal 
with financing in the short term.  It is important to offer a 
proper education far from the influence of militants, so how 
could the school be closed at this time?  He confirmed that 
the Crown Prince was the proper recipient for the letter, and 
asked to receive a copy as well, promising to take the 
proposal to the Prime Minister and support it. 
MONROE