US embassy cable - 05MANAMA206

C O N F I D E N T I A L MANAMA 000206 
 
SIPDIS 
 
STATE FOR NEA/ARPI/DBERNS AND EB/JFMERMOUD 
 
E.O. 12958: DECL: 02/14/2015 
TAGS: ECON, BEXP, EIND, ETRD, BA 
SUBJECT: EB SPECIAL REPRESENTATIVE MERMOUD DISCUSSES 
COMMERCIAL RELATIONS WITH GOB AND BUSINESS LEADERS 
 
 
Classified By: Ambassador William T. Monroe for reasons 
1.4 (b) and (d). 
 
1.  (C) Summary.  EB Special Representative Frank Mermoud met 
with the Minister of Industry and Commerce Dr. Hassan Fakhro, 
Ministry of Finance Director of Economic Planning Yousif 
Hummood, Ministry of Foreign Affairs Director of Bilateral 
Relations Dr. Dhafer Al Umran, and American and Bahraini 
business leaders in a February 1-2 visit to Bahrain.  Mermoud 
was the guest of honor at the AmCham's inaugural dinner event 
where he advocated resolving outstanding issues related to 
formal accreditation with the U.S. Chamber of Commerce. 
Mermoud reaffirmed the President's vision to establish a 
Middle East Free Trade Area (MEFTA) by 2013, and stated that 
Bahrain was the pillar in the Gulf region for MEFTA. 
Indicating continued GOB efforts to shore up its relationship 
with Saudi Arabia, Al Umran asked for U.S. support in gaining 
Saudi buy-in on the U.S.-Bahrain FTA.  End Summary. 
 
2.  (C) In his meeting with Fakhro, Mermoud said Bahrain was 
a strong pillar in the President's vision to establish a 
MEFTA by 2013.  Fakhro noted the King had recently commented 
on the strength of the U.S.-Bahrain relationship in a message 
to President Bush.  Fakhro mentioned what he perceived as 
Washington's beneficial focus on "economic diplomacy," saying 
that the governments can establish the framework, but it is 
up to the private sectors to reap the rewards.  Fakhro and 
Mermoud agreed on the importance of a strategy to expand our 
bilateral economic and commercial relationship and that the 
FTA was a step in the right direction.  In response to 
Mermoud's question, Fakhro said Saudi Arabia's negative 
reaction to the U.S.-Bahrain FTA could reflect Saudi 
uneasiness with other GCC countries acting on their own in 
the bilateral arena.  The Ambassador requested an update on 
the status of a possible Crown Prince visit to Washington. 
Fakhro said he had mentioned it to the King and would get 
back to us when he had more information. 
 
3.  (SBU) The AmCham launched their first official dinner 
event and honored Mermoud.  Minister Fakhro, the Ambassador, 
the head of the Bahrain Chamber of Commerce and Industry, as 
well as other prominent business leaders attended.  The 
AmCham also took advantage of Mermoud's presence and invited 
members of its rival group - American Association of Bahrain 
(AAB), an organization with whom there has been recent 
tension as both parties applied for U.S. Chamber 
accreditation as the AmCham of Bahrain.  The AmCham 
distributed glossy, professional pamphlets on the 
organization and the FTA.  Mermoud's visit served as a 
catalyst to bring the AmCham and the AAB together for the 
first time in almost a year.  The very next day, the AAB 
agreed in principle to join the AmCham as a group and to 
merge the two into one organization. 
 
4.  (SBU) In his meeting with Mermoud, Ministry of Finance 
(MOF) Director Yousif Hummood addressed the BMENA Networking 
of Funds initiative.  He stated that it is still in the 
research phase and that Minister of Finance Sheikh Ahmed Al 
Khalifa would address moving the project forward during his 
call with Treasury U/S Taylor.  (NOTE.  Post understands the 
call took place shortly after the meeting.  END NOTE). 
Hummood also noted that the MOF would receive a team from 
Oman to share FTA negotiation experiences, like they did with 
the UAE and Yemen.  Mermoud congratulated Hummood on 
Bahrain's position as a regional leader in free trade. 
Hummood said Bahrain learned early on that, "small economies 
have no chance to grow unless they are open." 
 
5.  (C) MFA Director Al Umran asked for U.S. support in 
gaining Saudi buy-in on the U.S.-Bahrain FTA.  Umran said 
that he had been tasked by the Crown Prince to come up with a 
strategy to politically "sell the FTA to the Saudis."  He 
emphasized that Bahrain is committed to the FTA, but wondered 
if there was a way for the U.S. to address Saudi concerns. 
He asked if the U.S. could set up a qualifying industrial 
zone (QIZ) in Saudi Arabia under the umbrella of the 
U.S.-Bahrain FTA.  Mermoud stated that Jordan was a special 
case.  He also noted that the U.S. would be willing to engage 
with any country that was willing to engage with us on trade 
issues.  In their discussions with Mermoud, business leaders 
noted that they did not fully understand the benefits of the 
FTA and requested more information on how to use the FTA to 
better promote trade and investment. 
 
MONROE