US embassy cable - 05KUWAIT4185

UNCLAS SECTION 01 OF 02 KUWAIT 004185 
 
SIPDIS 
 
SENSITIVE 
 
LONDON FOR TSOU 
STATE FOR NEA/ARPI, EB/CBA 
STATE PLEASE PASS USTR FOR PBURKHEAD AND JBUNTIN 
STATE PLEASE PASS USPTO FOR JNESS AND PFOWLER 
USDOC FOR 4520/ITA/MAC/AME 
USDOC FOR 3131/USFCS/OIO 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, KIPR, PREL, KU 
SUBJECT: COMMERCE MINISTER ON TIFA PROGRESS, ECONOMIC 
REFORM PRIORITIES, AND SAUDI WTO ACCESSION 
 
This cable is sensitive but unclassified; please protect 
accordingly.  Not for Internet distribution. 
 
1.  (SBU) Summary and Comment: During a September 24 meeting, 
Commerce Minister Abdullah Al-Taweel told the Ambassador that 
Kuwait would like another TIFA Council Meeting, and that the 
U.S. "must understand that changing laws in Kuwait takes 
time."  He said that he would soon be sending a letter to 
USTR Portman outlining where he sees the current status of 
the TIFA/FTA negotiations.  He said that economic reform and 
trade are top priorities of the GOK and that the Prime 
Minister would focus on these issues in his speech at the 
opening session of the National Assembly in October.  The 
Commerce Ministry's particular focus would be on trade with 
Iran, Iraq and the rest of the GCC, and on moving forward 
with new legislation on privatization, taxation and copyright 
protection.  Al-Taweel said that Saudi Arabia's imminent 
accession to the WTO would be a positive force in Saudi 
Arabia and the region, adding that "the Saudis will listen 
more to the WTO than to the GCC." 
 
2.  (SBU) Comment:  Al-Taweel was clearly frustrated but 
resigned to the lack of progress towards an FTA.  While it is 
true that changes must be made to certain laws in order for 
Kuwait to qualify for an FTA, if a second TIFA Council 
Meeting were to be held in the near future it would go far to 
encourage people like Al-Taweel and others who have pushed 
hard to make progress on the many issues within the 
TIFA-to-FTA negotiations.  Given the generous support from 
Kuwait for the U.S. forces in Iraq and the large contribution 
for Katrina aid, post believes scheduling a TIFA Council 
meeting would be a very useful signal at this time.  We have 
also seen new energy in IPR protection and progress on other 
U.S. trade objectives.  This progress, and those in the GOK 
who are pushing for it, deserve and need recognition and 
support as they push for more economic reforms.  End Summary 
and Comment. 
 
Go Ahead, Grill Me 
------------------ 
 
3.  (SBU) Ambassador met September 24 with Minister of 
Commerce Abdullah Al-Taweel in order to catch up with the 
Minister on various trade and economic reform issues.  Also 
attending the meeting were Undersecretary Rasheed 
Al-Tabtabaei, Assistant Undersecretary for Foreign Trade 
Affairs Hamad Al-Ghanim, Embassy Commercial Attache and Econ 
Officer.  (The Minister's thoughts on political reform and 
democratization in Kuwait are reported by septel.)  Asked 
about the possibility of being grilled in the upcoming 
National Assembly session, Al-Taweel said that "the MPs are 
ready (to grill him), but they don't know why."  Shrugging it 
off as just politics, he added that "it was (originally) 
about high prices, and now they are widening the scope."  He 
then listed a number of other ministers who are likely to be 
grilled in the upcoming legislative session, indicating that 
all face the same difficulties from a contentious parliament. 
 
Looking for FTA Progress 
------------------------ 
 
4.  (SBU) The Minister did not mince words on his frustration 
with the slow pace of the FTA process.  He said that "the 
U.S. must understand that changing laws in Kuwait takes 
time," and that he believed that otherwise, Kuwait had made 
significant progress on the important issues within the Trade 
and Investment Framework Agreement (TIFA).  He asked for 
another TIFA Council Meeting to be held, "the sooner the 
better."  He added that he would soon be sending a letter to 
U.S. Trade Representative Portman detailing where he sees the 
current status of the FTA negotiations and outlining the 
progress that Kuwait has made.  He welcomed the new USTR team 
and looked forward to renewing the engagement on progress 
towards an FTA. 
 
5.  (SBU) Comparing the U.S. - Kuwait FTA negotiations to the 
GOK's current FTA negotiations with Singapore, Al-Taweel said 
that the Singapore FTA was "almost ready" and might be 
finalized soon.  "They are tougher than you," he added, "but 
they listen to us."  He said that the Singapore FTA was the 
only one besides the one with the U.S. that Kuwait was 
negotiating bilaterally, and that other FTAs, with China and 
Europe, were being negotiated through the GCC.  Commenting on 
the slow process of GCC FTA discussions, Al-Taweel said "we 
don't mind the negotiations, but we do mind the delays," 
referring to the stately pace of GCC group decision-making. 
 
6.  (SBU) Al-Taweel provided specific information on a number 
of issues that fall under the U.S. - Kuwait TIFA/FTA 
negotiations.  He said that the copyright law was being 
worked on, and that he was coordinating closely with the 
Minister of Information to bring all of the IPR protection 
and enforcement functions within the Ministry of Commerce. 
He expected the end result to be a consolidated IPR group 
within his ministry.  Al-Taweel said he was still looking for 
a new leader for the Foreign Investment Office (FIO) and 
hoped to make the office a separate entity outside of the 
Ministry.  He expressed fears that some MPs would restrict 
his reorganization of the FIO with unnecessary amendments 
should he try to reorganize it through a law, but seemed 
determined to move ahead with creating a useful, functioning 
office.  He expected the recently reactivated Offset Program 
to be split off from the Finance Ministry and set up as a 
separate entity as well, noting that the World Bank had found 
that the program was useful but poorly managed.  Finally, 
Al-Taweel said that the International Certification 
Conformity Program (ICCP) would be canceled completely in 
March 2006, and that he would mention this in his letter to 
USTR Portman. 
 
Economic Reform and Trade as the Top GOK Priority 
--------------------------------------------- ---- 
 
7.  (SBU) Al-Taweel said that economic reform and trade had 
become a top priority for the GOK, and that the Prime 
Minister would focus his speech on these subjects when he 
opened the next National Assembly session in October. 
Al-Taweel explained that his office was helping to draft the 
speech, and it would include a push for a positive vote on 
the northern oilfields renovation project, as well as 
movement on privatization and taxation laws.  "The speech 
will focus on (the) delays," he added. 
 
8.  (SBU) Trade with Iran, Iraq, and the rest of the GCC 
would be the top trade priorities over the next year, 
according to Al-Taweel, and he looked forward to a meeting of 
GCC trade ministers in November.  He also said that he would 
be traveling to Amman in a few days for an Arab trade 
ministers meeting to prepare for the WTO meeting in December. 
 
Thoughts on Saudi WTO Accession 
------------------------------- 
 
9.  (SBU) Assistant Undersecretary Al-Ghanim asked the 
Ambassador about the recent news concerning Saudi Arabia's 
WTO accession, to which the Ambassador explained that 
progress Saudi Arabia has made in its WTO accession will 
prepare them for a possible FTA.  The Minister said that it 
was better to have Saudi Arabia be within the WTO than 
outside of it.  He concluded that Saudi Arabia's imminent 
accession to the WTO would be a positive force in Saudi 
Arabia and the region, adding that "the Saudis will listen 
more to the WTO than to the GCC." 
 
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Visit Embassy Kuwait's Classified Website: 
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LEBARON