US embassy cable - 05BAGHDAD3787

UNCLAS SECTION 01 OF 02 BAGHDAD 003787 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EAGR, ETRD, PGOV, IZ 
SUBJECT: ENGAGING THE MINISTER ON IRAQI DATES 
 
REF: BAGHDAD 3672 (NOTAL) 
 
 
Sensitive - not for internet distribution. 
 
1.  (SBU) Summary:  USG representatives met with Minister of 
Agriculture Ali al-Bahadili on September 11 and reviewed the 
process for and advantages of gaining approval to export 
dates to the United States.  During the meeting, a senior 
ministry official confirmed that Iraqi dates have been 
entering the United States through third countries, a 
long-suspected practice that in the past allowed Iraqis to 
circumvent sanctions and currently enables them to avoid U.S. 
regulatory systems.  One potential hindrance to Iraq's 
approval as a direct exporter of dates to the United States 
is their current use of methyl bromide as a pesticide.  We 
are working with the Animal and Plant Health Inspection 
Service (APHIS) and the Environmental Protection Agency (EPA) 
to clarify this matter.  End summary. 
 
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Getting the Minister Involved 
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2.  (U) State, USAID, USDA, and MNF-I met with Minister of 
Agriculture Ali al-Bahadili and discussed the export of Iraqi 
dates, a potentially significant export product, to the 
United States.  We outlined the steps necessary to gain 
approval for exporting dates to the U.S. market (reftel), and 
presented Minister al-Bahadili with the necessary paperwork 
to start the process. 
 
3.  (SBU) Minister al-Bahadili initially said this was more a 
matter for the private sector.  When we stated that the 
efforts for approval needed to be initiated by the 
government, the minister replied that it was more a matter 
for the Ministry of Trade.  We asked him if perhaps his 
ministry, as the counterpart to USDA, might more properly 
process this.  In the end, he stated that his staff would 
look at it seriously. 
 
4.  (U) Assisting Iraq in this approval process is one of the 
key initiatives of the Joint Commission on Reconstruction and 
Economic Development (JCRED).  Iraq, a GSP beneficiary 
country, stands to benefit from its status as a major date 
producer because USG added dates to the list of duty-free 
items in June. 
 
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Will Methyl Bromide be a Show Stopper? 
--------------------------------------------- ---------- 
 
5.  (U) A possible hindrance in the U.S. approval process is 
the Iraqi use of methyl bromide as a pesticide on date palms. 
 The Environmental Protection Agency (EPA) has phased out the 
importation of methyl-bromide treated products.  Certain 
exemptions exist, including the Critical Use Exemption (CUE), 
designed for agriculture users with no technically or 
economically feasible alternatives. 
 
6.  (SBU) We are researching the issue of methyl bromide and 
expect iput from Animal and Plant Health Inspection Service 
(APHIS) and the EPA.  We will work with the Ministry of 
Agriculture (MoA) to provide sample dates to APHIS for an 
assessment of dryness, one of the factors determining which 
regulations apply.  Also, Embassy Baghdad Agriculture Attach 
Marcus Lower intends to travel to Cairo next week to consult 
with the regional APHIS office. 
 
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Profit as a Motivator 
--------------------------- 
 
7.  (SBU) A senior official within MoA confirmed that Iraqi 
dates have been exported from Iraq to the United States 
through third countries, particularly the United Arab 
Emirates (UAE), a long-suspected practice that allowed Iraqis 
to circumvent sanctions during the previous regime but which 
now allows them to avoid the regulatory systems of their 
destination.  The Minister indicated a belief that Iraqi 
farmers would benefit from a direct trading relationship by 
receiving higher prices.  We stressed this point to Minister 
al-Bahadili as a good reason to begin the process of gaining 
necessary approval to export dates to the United States. 
 
8.  (SBU) Comment:  The elimination of third-country 
middlemen from the export process would create challenges 
that Iraq's private sector would need to meet.  The Iraqi 
exporters would need to compete with other traders to find 
buyers and persuade these buyers that they are better off 
buying from Iraq.  Iraqi exporters would then need to finance 
the transaction and move the product from the staging area to 
the buyer in an amount, at a quality and time that the buyer 
wants.  Iraqis have not yet demonstrated their capacity to 
perform this function, but if there is money to be made, it 
is reasonable to expect someone to eventually offer this 
service.  Whether those services can be more efficiently 
performed in Iraq or through a third-country such as the UAE 
remains to be seen.  Iraqis would obviously benefit from the 
additional business opportunities if they can meet the 
challenges.  End comment. 
 
9.  (SBU) Comment:  Though we handed the necessary form to 
the minister and explained to him how to fill it out and the 
significance behind it, past ministry performance would lead 
us to conclude that this will not be a fast process.  In 
addition, the Minister did not seem to place a high sense of 
urgency on the approval process.  We will encourage the 
ministry to complete the form and supporting paperwork in a 
timely manner.  End comment. 
Satterfield