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

UNCLAS KUWAIT 001779 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD ECON IZ KU
SUBJECT: TRADING WITH IRAQ 
 
REF: A. STATE 104141 
     ¶B. KUWAIT 1213 
     ¶C. KUWAIT 1578 
     ¶D. KUWAIT 1617 
     ¶E. KUWAIT 1683 
 
¶1.  Post responses are provided to questions posed in reftel. 
 
Q: WE UNDERSTAND THAT IRAQ HAS COMPLETED FREE TRADE 
AGREEMENTS WITH A NUMBER OF OTHER COUNTRIES. IF HOST 
GOVERNMENT HAS AN FTA WITH IRAQ, WHAT IS THE EXTENT OF THE 
AGREEMENT? I.E. DOES IT SIMPLY COVER GOODS, OR DOES IT 
COVER OTHER AREAS AS WELL? WHAT IS THE STATUS OF THIS 
AGREEMENT? WITH CHANGE IN IRAQ'S REGIME, IS IT STILL 
VALID? WHERE DOES IMPLEMENTATION STAND ON THESE 
AGREEMENTS AND THE PAN ARAB FREE TRADE AGREEMENT? 
 
A:  Post contacts confirm that Kuwait does not currently have 
an FTA with Iraq. 
 
 
Q:  WHAT DO YOUR HOST GOVERNMENT AND LOCAL BUSINESS PEOPLE 
THINK OF THE PROSPECTS OF TRADE WITH IRAQ? WAS THERE A 
TRADITIONAL LINK THAT WILL BE RE-ESTABLISHED? DO THEY 
EXPECT IT TO POSITIVELY OR NEGATIVELY AFFECT DOMESTIC 
MARKETS? DO THEY STILL HAVE BUSINESS CONTACTS IN IRAQ? 
 
¶A. Post has reported extensively on Kuwait's views on doing 
business with a post-Saddam Iraq (see reftels).  In short, 
Kuwait has extensive historical, trade, and family ties with 
Iraq that it hopes to quickly reestablish and exploit.  In 
the short run Kuwaitis hope to profit generously from 
reestablished trade with Iraq, but realize that without 
significant domestic economic reform the country stands to be 
left behind as the Iraqi economy becomes a magnet for 
investment.  Kuwait has not traded with Iraq since the 1990 
invasion, but is working to reestablish pre-invasion business 
ties. 
 
 
¶Q. WHAT CAN HOST COUNTRY CONTACTS TELL US ABOUT THE 
CUSTOMS REGIME UNDER SADDAM, PRE AND POST SANCTIONS? WAS 
THERE AN IMPORT TARIFF REGIME? WERE THERE OTHER FEES OR 
ASSESSMENTS? WAS THERE A FUNCTIONING CUSTOMS REGIME, 
ELEMENTS OF WHICH COULD BE RETAINED UNDER A NEW IRAQI 
REGIME (OR INTERIM AUTHORITY). 
 
¶A. Post is working with Kuwait Customs on these questions, to 
be reported septel. 
 
 
¶Q. UNDERSTANDING THAT ANY TRADE OUTSIDE OF THE FOOD FOR 
OIL PROGRAM WAS NOT LEGAL AND THEREFORE MAY NOT HAVE BEEN 
CLOSELY MONITORED BY OFFICIAL SOURCES. TO THE EXTENT 
POSSIBLE, WE ARE INTERESTED IN KNOWING TRADE STATISTICS 
FROM 1999-2001. EVEN ESTIMATES WOULD BE HELPFUL. 
 
¶A. Kuwait has not traded with Iraq since the 1990 invasion. 
 
 
¶Q.  WHAT KINDS OF ASSISTANCE DO YOU FORESEE BEING REQUIRED 
BY IRAQ TO ENABLE TRADE TO COMMENCE ONCE SANCTIONS ARE 
LIFTED? WHAT TYPES OF SHORT, MEDIUM TERM TRADE-RELATED 
ASSISTANCE DO YOU THINK IRAQI AUTHORITIES REQUIRE? 
 
¶A. Please see refs B and D.  It is worth noting that at a 
recent Kuwait Economic Society meeting on Iraqi 
reconstruction, the chairman of the Finance and Economic 
Committee of the National Assembly called on the GOK to 
create a company to guarantee Kuwaiti investment in Iraq. 
JONES