This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 MANAMA 000305 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USTR 
 
E.O. 12958: N/A 
TAGS: ETRD PREL OVIP SECRETARY OF COMMERCE GUTIERREZ REGION OFFICIALS ECTRD BILAT
SUBJECT: SECRETARY DISCUSSES FTA WITH MINISTER OF INDUSTRY 
AND COMMERCE FAKHRO 
 
¶1. (SBU) Summary. Minister of Industry and Commerce Hassan 
Fakhro told visiting Commerce Secretary Gutierrez February 27 
that the Cabinet would forward most IPR implementing 
legislation for the FTA to the National Assembly in the 
coming days, and that the copyright legislation should follow 
soon after.  He was optimistic that the implementing 
legislation would be passed in the coming weeks.  The next 
step, he stated, will be to launch an aggressive promotional 
campaign to American companies, which will include trade 
missions and highlight the advantages and incentives that 
Bahrain offers.  He hoped Bahrain's textile industry will 
adapt and benefit from the FTA.  Bahrain, with the help of 
Arthur D. Little, is developing an industrial strategy for 
the next 20 years.  Fakhro discussed GCC economic 
integration, including the goal of currency unification by 
¶2010.  He said that if the GCC had tried to negotiate an FTA 
with the US as a group, progress would have been much slower, 
citing the continuing negotiations (12 years so far) that 
have been taking place on a GCC-EU FTA.  He said that King 
Hamad was the true "father of the FTA" in Bahrain.  End 
summary. 
 
¶2. (SBU) During his February 26-28 visit to Bahrain to 
headline a U.S.-co-sponsored conference on "Free Trade in the 
Middle East," Secretary of Commerce Carlos Gutierrez met with 
Minister of Industry and Commerce Dr. Hassan Fakhro to 
discuss the U.S.-Bahrain Free Trade Agreement and other 
trade-related issues.  Minister Fakhro opened the meeting by 
thanking the Secretary for his remarks at the conference 
supporting Bahrain's reform efforts and highlighting the 
benefits of an FTA.  He also thanked the Commerce Department 
for its help to Bahrain in helping develop its commercial law 
(financed under a MEPI grant). 
 
¶3. (SBU) Secretary Gutierrez in turn thanked the Minister for 
Bahrain's support in organizing the Free Trade Conference. 
Noting our hope that U.S. and Bahrain companies will be able 
to benefit from the FTA soon, the Secretary asked about the 
status of the IPR implementing legislation, which must be 
passed before the FTA can take effect.  Fakhro responded that 
"it is almost in the bag."  He said that the Cabinet's legal 
committee approved the legislation this week, and passed it 
back to the Cabinet.  He said that the Cabinet will forward 
the legislation (all except the copyright legislation, which 
is still being finalized) to the National Assembly in the 
coming days, and that he expects it to be passed in a few 
weeks.  He said that Bahrain would still like to implement 
the FTA by April 1, but put the chances of getting it passed 
in time for that at 50/50. 
 
¶4. (SBU) Asked about the copyright legislation, Fakhro said 
that he expected it to be sent to the Cabinet "very shortly." 
 He noted that it was the Ministry of Information, not 
Industry and Commerce, that had responsibility for the 
copyright legislation. 
 
¶5. (SBU) Fakhro said that, after the FTA comes into effect, 
the next challenge will be to promote the FTA and to more 
effectively highlight the advantages and incentives that 
Bahrain offers to American companies.  Bahrain needs to 
develop a campaign that especially targets the U.S.  A key 
will be to get the private sector involved.  One element of 
the campaign will be trade missions to the U.S.  He noted 
that Bahrain has sent a couple of trade missions in the past, 
but needs to do this more aggressively now.  Secretary 
Gutierrez welcomed this, and said that the Department of 
Commerce would be glad to help to make Bahraini trade 
missions successful. 
 
¶6. (SBU) Fakhro said that one sector he, as Minister of 
Industry and Commerce, hopes to promote is textiles.  Noting 
that Jordanian Minister of Trade and Industry Sharif Zubi, in 
his speech that morning at the Free Trade Conference, had 
highlighted how Jordan's textile industry had benefited from 
its FTA, Fakhro stated that he wanted to explore ways to 
restructure Bahrain's textile industry to move upscale and in 
line with tastes in the U.S.  He said that Bahrain's textile 
industry currently employs 12,000 people (25 percent of whom 
are Bahraini) and exports $300 million in textile goods, 
mostly to the U.S.   Bahrain recognizes that its textile 
industry will not be able to compete with China or India, but 
hopes that, with the FTA, it can be competitive if it 
upgrades its production. 
 
¶7. (SBU) More broadly, Fakhro stated, Bahrain is developing 
an industrial strategy for the next 20 years, employing the 
services of Arthur D. Little as consultant.  Asked what 
industries Bahrain would focus on, Fakhro replied that the 
emphasis would be on developing small and medium-sized 
industries.  He said that the government is trying to expand 
the role of the private sector, even in areas that have 
traditionally been run by state-controlled companies, such as 
oil and petrochemicals.  If it works to have the private 
sector run these industries in the U.S., he said, why not for 
us? 
 
¶8. (SBU) The Secretary asked Fakhro about progress towards 
economic integration within the GCC.  Fakhro replied that the 
GCC countries have come a long way in this endeavor, but 
still have a lot to achieve.  The currencies are expected to 
be unified in 2010.  This move will not have a major 
immediate impact, as all currencies are currently pegged to 
the dollar and so are in effect merged.  But it will lead to 
a unified monetary policy and perhaps in time a unified 
fiscal policy.  The GCC customs union will also hopefully be 
finished before too long, which will lead to a completely 
free transfer of goods, services and people. 
 
¶9. (SBU) The Secretary asked if there had been consideration 
of negotiating an GCC-wide FTA with the U.S., instead of one 
country at a time.  Fakhro said that negotiating as a region 
would have slowed the process considerably, citing the 12 
years that the GCC has been negotiating a FTA with the EU as 
an example. Some countries (read: Saudi Arabia) only just now 
joined the WTO and were not ready for an FTA.  Once Bahrain 
knew that there was a possibility of negotiating an FTA with 
the U.S., it did not want to wait years for it to be 
completed. 
 
¶10. (SBU) Noting that the Secretary would shortly meet King 
Hamad, Fakhro said that the King has been the "instigator and 
guardian" of Bahrain's decision to negotiate an FTA with the 
U.S.   Every time a problem or issue came up, he pushed to 
resolve it.  He is a great friend of the U.S., Fakhro stated, 
and in Bahrain the "father of the FTA." 
MONROE