US embassy cable - 05MUSCAT150

UNCLAS E F T O SECTION 01 OF 02 MUSCAT 000150 
 
SIPDIS 
 
SENSITIVE/NOFORN 
 
STATE FOR EB/TPP, EB/IFD, NEA/PI (SFRANCESKI), NEA/ARPI 
STATE PLEASE PASS USTR/JBUNTIN 
ABU DHABI FOR MEPI/HWECHSEL AND MHOPKINS 
USDOC FOR 4520/ITA/MAC/AMESA/OME/MTALAAT 
 
E.O. 12958: DECL: 01/26/2015 
TAGS: ETRD, BEXP, KMPI, EFIN, EINV, ECON, PREL, MU, Economic Affairs, International Organizations 
SUBJECT: FTA PREPARATION: MEPI-FUNDED SEMINAR DRAWS LARGE 
CROWD 
 
 
Classified By: Ambassador Richard L. Baltimore, III. 
Reasons: 1.4 (b) and (d). 
 
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Summary 
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1. (SBU/NF) A recent MEPI-funded seminar in Muscat on Trade 
in Services attracted over 75 participants from a dozen Omani 
government agencies as well as the private sector.  The 
highly interactive two-day event revealed several areas of 
concern leading up to the March opening of free trade 
agreement (FTA) talks, i.e. telecommunications, investment, 
and developing a strong legal team within the government for 
FTA purposes.  Some of the participants believed that Bahrain 
had not negotiated aggressively enough, to the detriment of 
future FTA seekers such as Oman.  End Summary. 
 
2. (U) On January 8-9, the Omani Ministry of Commerce and 
Industry (MoCI) hosted a successful two-day seminar on Trade 
in Services as part of the Middle East Partnership 
Initiative's trade technical assistance program.  Renowned 
consulting firm Booz Allen Hamilton (BAH) carried out the 
seminar in cooperation with the Embassy and MoCI. 
Approximately 75 participants from over a dozen government 
agencies and the private sector attended the workshop, which 
provided an overview of the services, financial services, 
telecommunications, and investment chapters of bilateral free 
trade agreements (FTAs) negotiated by the United States. 
 
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Broad Swathe of Questions 
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3. (SBU/NF) Remarkably for a seminar of this nature, the 
participants (many of whom hold mid-to-senior level positions 
in their agencies) stayed for the entire program; several 
officials even believed a longer program would have been 
useful to review the highly technical nature of FTA services 
chapters.  Another notable quality of this training was its 
interactivity; the participants did not hesitate to ask 
numerous technical questions, particularly on 
telecommunications and investment.  Other questions broached 
possible negotiating positions, to which the BAH trainers 
responded "that's up to the two governments to decide."  A 
number of queries had a protectionist bent, most notably in 
the telecommunications area.  A representative from the 
Education Ministry wanted to know what other countries were 
including in their educational exemptions.  The Ministry of 
Health is seeking foreign direct investment in hospitals, 
which indicates another probable area of interest to the 
Omanis.  On the investment chapter, real estate was also 
raised as a big Omani concern, especially allowing Americans 
the right to own property on par with Omani nationals. 
 
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Lessons from Bahrain 
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4. (SBU/NF) Some participants conveyed the impression that 
Bahrain essentially "signed on the dotted line" and did not 
really negotiate with the USG, which puts Oman at a relative 
disadvantage coming on the heels of the Bahrain agreement. 
Essentially, these participants wanted to know if Oman truly 
has latitude for discussion or if there is to be no deviation 
from the Bahraini model. 
 
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Comment 
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5. (SBU/NF) This MEPI activity was very successful in 
boosting the Omani government's FTA readiness.  Overall, the 
Omani participants seemed committed and involved, and ready 
to do their homework.  Based on an informal readout from the 
BAH trainers afterwards, Oman will need additional work in 
the telecommunications and legal areas in advance of the FTA 
negotiations.  Moreover, Omani officials have not developed 
any sort of internal matrix regarding probable legislative 
changes that will be necessary in order to meet FTA 
baselines.  Nevertheless, BAH informally assessed that the 
Omani government's preparations for FTA negotiations appear 
further along than Bahrain had been at a similar stage.  We 
will continue our extensive set of consultations, including 
the coordination of digital videoconferences and 
teleconferences on issues such as telecommunications and 
intellectual property rights, in order to achieve greater 
preparedness for the March opening of FTA talks in Muscat. 
BALTIMORE