US embassy cable - 05KUWAIT1172

C O N F I D E N T I A L KUWAIT 001172 
 
SIPDIS 
 
NEA/ARPI PASS TO USTR 
 
E.O. 12958: DECL: 03/22/2015 
TAGS: ECON, ETRD, PREL, KU, Trade Agreements 
SUBJECT: KUWAIT PM'S ECON ADVISER ON TRADE AND ECONOMIC 
POLICY ISSUES 
 
 
Classified By: Ambassador Richard LeBaron, reasons 1.4 (b) and (d) 
 
1. (C) On March 19, Ambassador met briefly with the Prime 
Minister's Economic Adviser, Dr. Youssef Al-Ebraheem, to 
discuss U.S./Kuwaiti TIFA discussions and the state of 
economic reform in Kuwait.  Ambassador briefed on the overall 
impressions of the previous week's discussions with visiting 
USTR official John Fennerty.  Ambassador emphasized that the 
GOK appeared to need a strong, empowered coordinator and 
better outside assistance to grapple with the breadth and 
complexity of the issues that would need to be solved in 
order to achieve a free trade agreement with the United 
States.  Al-Ebraheem took the points, noting that Dr. Fawzi 
Sultan is the putative coordinator for the GOK but has yet to 
be given the formal government mandate needed for an 
effective coordination effort. 
 
2. (C) Al-Ebraheem admitted that the GOK needed to get its 
act together in order to proceed towards free trade 
negotiations, but he also noted that it still appeared that 
the U.S. had political reasons for choosing the order of the 
partners it chooses for FTA talks.  Ambassador disputed this, 
saying that other countries were largely selected as 
negotiating partners because of their level of preparedness 
and enthusiasm.  Al-Ebraheem said he had been in UAE during 
the recent USTR talks there and had read Cathy Novelli's 
positive press interview with some surprise.  He said, "there 
is no way UAE is meeting WTO standards of IPR protection or 
transparency."  He noted the same for Qatar.  Al-Ebraheem 
said he hoped that there would be another formal U.S./Kuwait 
TIFA Council before summer.  In response to Ambassador's 
remark that Kuwait did not seem highly motivated, at least 
for economic reasons, to achieve an FTA, he confirmed that 
the main purpose of a Kuwait FTA with the U.S. is not trade 
enhancement, but achievement of internal reform of laws and 
regulations and "upgrading of the economic environment." 
Al-Ebraheem said he would be in touch soon with Commerce 
Minister Al-Taweel to set up a seminar on Free Trade 
Agreements.  This would likely be backed also by the 
America/Kuwait Alliance.  Al-Ebraheem asked for U.S. 
participation in such a seminar. 
 
3. (C) In response to Ambassador's request for an assessment 
of the overall state of economic reform in Kuwait, 
Al-Ebraheem said he was not satisfied.  He noted some slow 
progress in legislation and upgrading regulations, in such 
areas as privatization, tax law, and labor law.  He said the 
private sector is being encouraged and is doing well, 
particularly in real estate and the oil sector partnerships. 
He predicted that the massive Project Kuwait (to develop 
Northern oil fields) would pass the National Assembly, and he 
pointed to other massive infrastructure development moving 
forward, including the large project to develop a port 
complex at Bubiyan Island.  However, he said there is still 
not a "common business plan" within the GOK that deals with 
economic development in the broad sense.  He pointed to the 
need for changes in education, increased wages, and better 
health services. 
 
4. (C) On the prospects for passage of women's political 
rights in the National Assembly, Al-Ebraheem said the chances 
are good for the bill, if the GOK "plays it right."  He noted 
the importance of the support campaign involving senior 
figures, including the Crown Prince.  (Note: While the Crown 
Prince is in no shape to participate personally in this 
debate, the supportive statement from his office did have 
some impact, given the respect afforded to him and the 
prestige of his position.) 
 
5. (C) Asked about the work of the America Kuwait Alliance, 
(which he oversees), Al-Ebraheem said that progress was slow. 
 The AKA is looking for a U.S. Chairman.  They are 
facilitating a visit by the Vice Chairman of CITIGROUP on 
April 3.  The AKA will support the seminar on FTA.  They want 
to support the Junior Achievement project (that we proposed 
to the AKA) but the JA people postponed a visit to Kuwait. 
They are working with the National Union of Kuwaiti Students 
on exchanges, and they want to develop an American/Kuwaiti 
Business Council in cooperation with the Kuwaiti Chamber of 
Commerce.  (This joint council would be distinct from the 
current American Business Council.)    Al-Ebraheem sees the 
future AKA as the "holding company" for these subsidiary 
efforts. 
LEBARON