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

C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 000314 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/28/2016 
TAGS: ETRD PREL PGOV BEXP BA REGION OFFICIALS ECTRD BILAT
SUBJECT: COMMERCE SECRETARY GUTIERREZ MEETINGS WITH PRIME 
MINISTER AND DEPUTY PRIME MINISTER 
 
Classified By: Ambassador William T. Monroe for reasons 1.4(b) and (d). 
 
¶1.  (C) Summary:  Prime Minister Shaikh Khalifa welcomed 
Secretary of Commerce Carlos Gutierrez February 27, voicing 
 
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appreciation for his visit and the Secretary's support for 
the U.S.-Bahrain FTA.  The PM stressed the importance of 
stability in the region for development and urged the U.S. to 
provide continued support to Saudi Arabia and Kuwait. 
Bahrain derives benefit from strong U.S. relations with its 
GCC neighbors.  Bahrain is committed to democratic reforms, 
but will not tolerate the abuse of freedom of speech leading 
to destructive mob violence.  The PM encouraged the 
international community to give Hamas a chance and warned of 
the spread of confrontational issues in the region.  In a 
separate meeting with Deputy PM Shaikh Mohammed and other 
senior officials, Finance Minister Shaikh Ahmed said Bahrain 
wanted to explore the concept of export value accumulation 
with other U.S. FTA partners to attain the 35% local content 
minimum.  The Secretary encouraged Bahrain to decide on focus 
industries and let that decision drive future trade 
delegation visits to U.S. cities.  End Summary. 
 
¶2.  (C) In a February 27 meeting with Prime Minister Shaikh 
Khalifa Bin Salman Al Khalifa, Secretary of Commerce Carlos 
Gutierrez affirmed the warm relationship between Bahrain and 
the U.S. and conveyed gratitude for Bahrain's generosity 
during the hurricane Katrina crisis.  Shaikh Khalifa hailed 
the fact that Bahrain is the first GCC country to negotiate 
an FTA with the U.S. and said that the Secretary's visit 
shows support to Bahrain and to the FTA.  He emphasized the 
importance of senior official visits to Bahrain, saying 
Secretary Rice's November visit enabled her to see the real 
 
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Bahrain that cannot be understood completely from reports. 
Deputy Prime Minister for Ministerial Committees Shaikh 
Mohammed Bin Mubarak Al Khalifa, Minister of Industry and 
Commerce Dr. Hassan Fakhro, and Shaikh Khalid bin Abdulla Al 
Khalifa, advisor to the PM, attended the meeting for Bahrain. 
 From the U.S. side, DCM Ziadeh, Commerce Chief of Staff 
Buchan, Commerce Under Secretary Lavin, Commerce Near East 
Office Deputy Director Sams and Poloff (notetaker) were 
present. 
 
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FTA hopes, expectations 
----------------------- 
 
¶3.  (C) Shaikh Khalifa referred to good U.S. relations with 
other FTA countries Jordan and Morocco and expressed hope 
that there will be similar cooperation between the U.S. and 
Bahrain, yielding real results.  "When ships enter a foreign 
port, local pilots navigate because they know the channels. 
Cooperation between friends leads to success.  We want to 
create jobs for the people and we're doing the best we can to 
prepare new workers."  The PM highlighted Bahrain's financial 
sector employing approximately 8,000 skilled workers, many of 
whom were trained at the Bahrain Institute for Banking and 
Finance.  Shaikh Mohammed echoed these thoughts, pointing to 
U.S.-Bahrain cooperation in political, military and economic 
arenas and expressing hope that the FTA would drive further 
economic cooperation. 
 
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Security is key for development 
------------------------------- 
 
¶4.  (C) Shaikh Khalifa said the U.S. should continue to work 
toward stability in the region, calling attention to Saudi 
Arabia's fight against extremists.  Saudi Arabia has taken 
the fight to the terrorists and will not allow them to 
continue operating.  The PM said, "Friends must work together 
to stabilize the region so that democracy can lead to 
development."  More than once he stressed that U.S. security 
support to Saudi Arabia and Kuwait benefits Bahrain, by 
giving Bahrain the freedom to focus on development rather 
than security or national defense. 
 
¶5.  (C) The PM said that Bahrain has the best democratic 
system in the Arab world, but needs special support from the 
U.S. to show that this system can lead to tangible benefits. 
Bahrain promotes freedom of speech, and people are free to go 
to mosques to hear opposition messages.  However, clerics who 
incite people to violence are abusing this freedom.  Shaikh 
Khalifa said, "We listen to the opposition, but we cannot 
listen to mobs that are riled up by clerics."  Bahrain cannot 
step back on democratic reform but does not want to see 
continual obstacles ahead.  People look at Bahrain's 
neighbors, see flourishing economies without democracy, and 
wonder if the democratic experience is worthwhile. 
 
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Give Hamas a chance 
------------------- 
 
¶6.  (C) When asked about Palestine, the PM said that the 
Palestinians are in a difficult situation, and that the 
international community should give them a chance to prove 
themselves after their change in leadership.  He acknowledged 
Hamas' damaging rhetoric but said that Hamas' performance was 
more important.  The PM drew a parallel to Iraqi President 
Jalal Talabani, questioning how he could become the leader of 
a country after being a fighter all his life. 
 
¶7.  (C)  Shaikh Khalifa expressed concern about the spread of 
regional crises and their effect on Bahrain.  "Our country is 
small and is more affected by regional issues; if a rock 
falls on a mountain it has no impact, but if it falls on a 
small hill, it causes damage."  Bahrain used to have only 
occasional protests, usually in support of the Palestinians, 
but recently many issues have sparked protests including the 
cartoon depictions of the Prophet Mohammed and the shrine 
bombing in Samarra. 
 
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Meeting with the Deputy PM 
-------------------------- 
 
¶8.  (C) In lieu of a meeting with Crown Prince Salman Bin 
Hamad Al Khalifa, who was ill, the Secretary met with a 
delegation headed by Deputy Prime Minister Shaikh Mohammed 
who, until a few months ago, had been foreign minister of 
over 30 years.  Also participating on the Bahraini side was 
Foreign Minister Shaikh Khalid bin Ahmed Al Khalifa, Minister 
of Industry and Commerce Fakhro, Finance Minister Shaikh 
Ahmed bin Mohammed Al Khalifa, Economic Development Board CEO 
Shaikh Mohammed bin Issa Al Khalifa, Bahraini Ambassador to 
the United States Nasser Al Balooshi, prominent business man 
and former president of the Bahrain Chamber of Commerce and 
Industry Khalid Kanoo, and Shaikh Khalid bin Abdulla Al 
Khalifa, an advisor to the prime minister.  Joining the 
Secretary on the U.S. side was Ambassador Monroe, Chief of 
 
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Staff Buchan, Under Secretary Lavin, Deputy Assistant USTR 
Bell, Commerce Near East Office Deputy Director Sams, and 
Pol/Econ Chief (notetaker). 
 
¶9.  (C) Deputy PM Shaikh Mohammed opened the meeting by 
thanking the Secretary for visiting Bahrain and participating 
in the Free Trade in the Middle East conference.  Turn-out 
from around the region was better than expected.  The 
Secretary expressed his strong interest in implementing the 
 
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FTA so business people could begin to reap its benefits. 
Finance Minister Shaikh Ahmed said Bahrain wanted to explore 
the concept of export value accumulation with other U.S. FTA 
partners, in particular Jordan.  In order for a product to be 
labeled as Bahraini-origin, there needed to be a minimum of 
35 percent local content.  Bahraini business people could 
more easily achieve this level by cooperating with Jordanians 
or other FTA partners, who could contribute to the 35 percent 
requirement.  USTR's Bell said this was permissible under the 
FTA.  The Secretary encouraged Bahrain to pursue this idea 
and noted it supported the President's concept of a Middle 
East Free Trade Area. 
 
¶10.  (C) The Secretary commended the joint GOB-AmCham Bahrain 
trade mission that visited the United States in December 2005 
and recommended Bahrain plan additional missions.  Ambassador 
Al Balooshi said he had been traveling to several U.S. cities 
to promote interest in doing business with Bahrain.  The 
Secretary recommended that Bahrain first decide the industry 
 
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sectors it wants to focus on, then determine which American 
cities/areas best fit these sectors.  Finance Minister Shaikh 
Ahmed said Bahrain was also interested in attracting 
investment from countries such as India, Thailand, Turkey and 
Saudi Arabia that may want to take advantage of the FTA. 
 
 
MONROE