US embassy cable - 05MANAMA531

C O N F I D E N T I A L SECTION 01 OF 03 MANAMA 000531 
 
SIPDIS 
 
E.O. 12958: DECL: 04/09/2015 
TAGS: PREL, ETRD, PGOV, PHUM, BA 
SUBJECT: FM DISCUSSES GCC-EU FTA, FORUM FOR FUTURE, 
SECTARIANISM, AL SUMMIT WITH AMBASSADOR 
 
Classified By: Ambassador William T. Monroe.  Reason: 1.4 (b)(d) 
 
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SUMMARY 
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1. (C) Foreign Minister Shaykh Mohammed told the Ambassador 
April 6 that both sides at the recent GCC-EU Ministerial were 
committed to try to conclude an FTA by the end of the year; 
local EU and GCC diplomats, conceding that serious issues 
remain, are skeptical. The EU reiterated concerns about the 
U.S.-Bahrain FTA.  The FM said he placed the highest priority 
on having the Entrepreneurship Center up and running by 
November's Forum for the Future, stating that he wanted to 
demonstrate to doubting Arabs that something positive and 
concrete has been achieved by cooperation with the West. On 
domestic political reform, he said freedom of expression is 
important and permitted in Bahrain, but worried about those 
whose agenda is to keep Bahrain in a state of crisis which 
could open the door to increased Iranian influence.  While 
viewing the changes in Iraq positively, he expressed concern 
that a strengthening and institutionalizing of sectarian 
tendencies there could lead to similar sectarian pressures in 
Bahrain. On last month's Arab Summit, which he attended with 
the Crown Prince, Shaykh Mohammed gave high marks to Mahmoud 
Abbas and said President Assad was clear -- in a bilateral 
meeting -- on his intention to withdraw from Lebanon.  Shaykh 
Mohammed urged strong U.S. leadership to press Israel on the 
settlement issue. 
 
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GCC-EU MINISTERIAL: FOCUS ON FTA 
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2. (C) Foreign Minister Shaykh Mohammed bin Mubarak 
Al-Khalifa, just back from the Arab Summit in Algiers and an 
official visit to New Zealand, and having just chaired the 
15th GCC-EU Joint Ministerial, discussed a range of foreign 
policy issues with the Ambassador during an April 6 meeting. 
Opening with the GCC-EU Ministerial, Shaykh Mohammed 
reiterated what he told the press a day earlier on the GCC-EU 
Free Trade Agreement -- that both sides hoped to complete the 
agreement by the end of the year.  He acknowledged that some 
key issues remained, including on services,  subsidization of 
petrochemicals, and government procurement, but said that 
both sides committed to trying to reach agreement this year. 
(Note: the joint communique "noted the parties' commitment to 
do their utmost to conclude the negotiations at the earliest 
possible stage and preferably before the end of 2005."  UK 
Ambassador Robin Lamb told the Ambassador that there is 
"political will" on both sides to complete the GCC-EU FTA as 
soon as possible, but that there are still some serious 
issues to be resolved.  The Kuwaiti DCM told us he was 
skeptical that an agreement could be reached by the end of 
the year, and that GCC members remain disappointed at the 
slow pace of discussions.  The next round of negotiations is 
scheduled to take place in Brussels June 7-9.  End note.) 
 
3. (C) Shaykh Mohammed said that, during the discussions, the 
EU criticized the U.S.-Bahrain FTA, saying bilateral 
agreements make it difficult to have regional FTAs.  Shaykh 
Mohammed said that he pushed back, saying that they should 
focus on the details of the EU-GCC FTA without getting bogged 
down in the issue of bilateral FTAs.  Talking to the press 
after the meeting, European Trade Commissioner Peter 
Mandelson reiterated EU concerns, saying that "the European 
Union conveyed its deep concern about bilateral free trade 
agreements by individual GCC members and other third 
countries.  The Union regarded that these agreements risk 
undermining the proper functioning of the GCC Customs Union 
and hence the EU-GCC free trade agreement negotiations." 
 
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EU STRATEGIC PARTNERSHIP: WE HAVE ENOUGH PARTNERSHIPS 
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4. (C) The EU raised during the meeting the "EU Strategic 
Partnership with the Mediterranean and the Middle East" 
(adopted by the European Council in June 2004).  While the 
communique suggested that the two sides would explore ways by 
which the Strategic Partnership could strengthen relations 
between the EU and GCC, Shaykh Mohammed expressed skepticism 
about the initiative.  GCC members, he said, suggested that 
the "Strategic Partnership" might be duplicative of existing 
channels of cooperation, such as BMENA and the Forum for the 
Future."  The EU countered that the "Strategic Partnership" 
was a necessary because "we can't have free trade without a 
strategic initiative."  Shaykh Mohammed, noting that the 
initiative is still vague at this point, remained 
unconvinced, saying "We have enough of these partnerships." 
 
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ARAB SUMMIT: U.S. LEADERSHIP NEEDED ON SETTLEMENTS 
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5. (C) On the Arab Summit, Shaykh Mohammed said the most 
important result was the participation of Mahmoud Abbas and 
the speech he gave.  His participation gave his leadership 
credibility.  It is important that he now receive the 
necessary support.  He needs financial support, but Israel 
has to help as well.  Most important, he said, will be a firm 
stand on Israeli expansion of settlements.  "How can you work 
for peace when one side is sabotaging it," he asked. "This is 
where U.S. leadership is required."  He praised the statement 
by the President the day before reiterating the clear 
position of the U.S. that the roadmap calls for no expansion 
of settlements. It will be important, he said, for the United 
States to continue to make clear its policy on settlements to 
Israel, and tell Israel when it is not happy with its 
policies. 
 
6. (C) Shaykh Mohammed said that the head of Bahrain's 
delegation to the Summit, Crown Prince Shaykh Salman, held a 
bilateral with Syrian President Assad, who reiterated his 
commitment to withdraw all military and intelligence elements 
out of Lebanon.  Assad told the Crown Prince he would 
implement UNSCR 1559.  On Hizballah, he said that was a 
Lebanese issue which should be left to the Lebanese. 
 
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FORUM FOR THE FUTURE: WE NEED RESULTS 
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7. (C) Shaykh Mohammed spoke at some length on plans for the 
November meeting of the Forum for the Future, which Bahrain 
will host.  He said that he places the highest priority on 
having a tangible Entrepreneurship Center in place in Bahrain 
by the time of the meeting.  "I will be chairing the 
meeting," he said, "and I want to tell the people what we 
have achieved.  I want to tell the Arab world -- to those who 
don't believe in cooperation -- that we have achieved 
something.  The people need results.  This is a challenge for 
the West to tell the countries of the Middle East that you 
are there and will help us." 
 
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DEMONSTRATIONS: PERMITTED, BUT NOT TO THE POINT OF CRISIS 
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8. (C) The Ambassador said that the USG was pleased with the 
way Bahrain resolved the issue of the al Wifaq demonstration 
that took place in Sitra March 25 without government 
authorization.  Both the government and the opposition, it 
appeared, sought a conciliatory solution that defused a 
potentially difficult situation.  That said, it was important 
for the Government of Bahrain to recognize that, while we 
greatly appreciate and publicly endorse the positive reform 
program introduced by the King, people in Washington do 
notice, and express concern, whenever reports come from 
Bahrain of a closed human rights center, or arrested on-line 
internet providers, or a blocked rally. 
 
9. (C) Shaykh Mohammed replied that the principle of freedom 
of expression, including the right to demonstrate, is 
important and permitted, but that Bahrain also must worry 
about security and stability.  A demonstration here or there 
is fine, but Bahrain can't continually have demonstrations 
and be in a state of crisis all the time.  Bahrain has 
introduced reforms.  It is asking the opposition to join in, 
use the reforms, and work for change from within.  But these 
people want to make change from outside.  They have an agenda 
to keep Bahrain in a state of crisis, stopping traffic, using 
the economy as their hostage.  This risks opening the door to 
increased Iranian influence.  What are the motives of the 
opposition?  Listen to what they are saying in the mosque 
speeches.  Demonstrations are allowed in Bahrain, he 
reiterated, but not every day, every week. 
 
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IRAQ: WORRIES THAT IT MIGHT BECOME A SECTARIAN MODEL 
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10. (C) The Ambassador asked if developments in Iraq, where a 
Shia majority just won an election, were having an impact in 
Bahrain.  Shaykh Mohammed said that the GOB of course views 
the changes in Iraq very positively, but is worried that if 
sectarian tendencies there strengthen and institutionalize, 
it could lead to similar sectarian pressures in Bahrain.  He 
said he was concerned that, as democracy proceeds in Bahrain, 
pressures may develop for some sort of formula for how many 
and which positions go to Sunni and to Shia.  "We are for 
democracy, and it will go forward," he said, but it will not 
be good if it develops along sectarian lines." 
Unfortunately, he added, there are Shia and Sunni extremists 
in Bahrain who will want to play the sectarian card. 
 
11. (U) Baghdad minimize considered. 
MONROE