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RR RUEHDBU RUEHIK RUEHYG
DE RUEHBUL #1022/01 0671140
ZNR UUUUU ZZH
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FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC 8780
INFO RUCNAFG/AFGHANISTAN COLLECTIVE
RUEHNE/AMEMBASSY NEW DELHI 6824
RUEHIL/AMEMBASSY ISLAMABAD 2891
RUEKJCS/OSD WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUCNDT/USMISSION USUN NEW YORK 2307
RUEHGV/USMISSION GENEVA 5659
RUEHUNV/USMISSION UNVIE VIENNA 1152
RUEHNO/USMISSION USNATO 2501
RUEATRS/DEPT OF TREASURY WASHDC
RHEHAAA/NSC WASHDC
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 04 KABUL 001022 
 
SIPDIS 
 
DEPARTMENT FOR SA/FO, SA/A, 
EB/CBA FOR TGILLMAN 
TREASURY FOR PARAMESWARAN 
NSC FOR AHARRIMAN, KAMEND 
CJTF-76 FOR POLAD, CENTCOM FOR CG CFC-A 
COMMERCE FOR FLAVIN, CBUCHAN, AADLER, SHAMROCK 
USTDA FOR DSTEIN, SGREENIP 
 
SENSITIVE 
SIPDIS 
 
E.O.12958: N/A 
TAGS: ECON ETRD EFIN PREL OPIC EAID PGOV AF
SUBJECT: VISIT OF SECRETARY OF COMMERCE CARLOS GUTIERREZ TO 
AFGHANISTAN FEBRUARY 28  MARCH 1 
 
 
¶1. (SBU) Summary: Secretary of Commerce Carlos Gutierrez 
visited Afghanistan February 28 to March 1. Secretary 
Gutierrez met with GOA President Karzai, Minister of 
Commerce Arsala, participated in a roundtable with Afghan 
International Chamber of Commerce executives and members of 
parliament, business leaders and GOA officials and hosted a 
reception for U.S. companies operating in Afghanistan. 
President Karzai was unenthusiastic about a potential U.S. 
Regional Opportunity Zone initiative that could grant U.S. 
tariff concessions on goods jointly produced by Afghan and 
Pakistan interests unless it were coupled with efforts to 
get Pakistan to prevent attacks from Pakistani territory. 
The Commerce Minister undertook to educate the President on 
the commercial benefits this initiative could offer 
Afghanistan. Post seeks DoC guidance on follow-up 
activities discussed during the visit including reverse 
U.S. and Afghan trade missions and promised DoC assistance 
in identifying U.S. companies interested in working with 
Afghan counterparts to promote dried fruit and nuts, marble 
and carpet exports.  We ask that DoC move forward on 
funding and training a Commercial FSN.  End Summary. 
 
¶2. (U) Secretary of Commerce Carlos Gutierrez visited 
Afghanistan February 28 to March 1.  Following a courtesy 
call with Ambassador Neumann and a Country Team briefing, 
he began a program of meetings with GOA executive and 
parliamentary officials, and Afghan and U.S. businesses. 
 
-------------------------------- 
Minister of Commerce Amin Arsala 
--------------------------------- 
 
¶3. (U) Arsala welcomed Gutierrez and noted the timeliness 
of his visit in the wake of a successful January 31 London 
Conference that endorsed a visionary Afghanistan Compact 
and Afghan National Development Strategy, which commit the 
GoA to promote the role and potential of the private sector 
in advancing sustainable economic development. 
 
¶4. (U) Arsala listed a number of recent GoA private sector 
initiatives, including the December 2005 enactment of a 
private sector investment law and Commerce Ministry efforts 
to ramp up an export promotion directorate.  He highlighted 
dried fruit, hand-knotted carpets, marble and minerals 
(particularly copper) as four key export sector clusters 
that the GoA has targeted for support.  He also emphasized 
expansion of regional trade opportunities as a GoA 
priority, and noted that total bilateral trade with 
Pakistan had grown from USD 60-70 million during the 
Taliban era to current levels of USD 1.1 billion. 
 
¶5. (U) In response to Undersecretary Lavins question on 
how the U.S. Commerce Department could support GoA efforts 
to expand its export markets, Arsala asked for technical 
assistance with fresh fruit cold storage technology and 
dried fruit quality control and packaging technology, as 
well as assistance in making credit available to rural 
producers. 
 
¶6. (U) Secretary Gutierrez agreed to explore ways in which 
the U.S. Commerce Department could help link U.S. private 
sector companies with Afghan counterparts in priority 
export sectors identified by the GoA.  In response to 
Arsalas request that U.S. Foreign Commercial Service 
establish a presence on the ground in Afghanistan, 
Gutierrez noted that Commerce is represented by a State 
 
KABUL 00001022  002 OF 004 
 
 
Dept Commercial Officer that could call on regional Foreign 
Commercial Service assets, including in the UAE. 
 
---------------- 
President Karzai 
---------------- 
 
¶7. (U) President Karzai inquired about the status of the 
Building Business Bridges Initiative and expressed an 
interest in using this program, as well as the announced 
USTDA USD 500,000 technical assistance grant program to 
attract new U.S. investors to Afghanistan.  Karzai is 
particularly interested in expanding Afghan exports to U.S. 
and regional markets, particularly Afghan fresh and dried 
fruits, as well as carpets.  Karzai was dismayed that, 
according to trade figures quoted by the Secretary, Afghan 
carpets represent only three percent by value of Afghan 
exports to the United States. 
 
 
¶8. (U) Sue Hamrock, of the Commerce Departments 
Afghanistan Investment and Reconstruction Task Force, 
indicated that Commerce is exploring possibilities for 
cooperation with State in organizing reverse trade mission 
for U.S. buyers of carpets.  The Secretary suggested that 
the same could be done with buyers for fresh and dried 
fruit. 
 
¶9. (SBU) Secretary Gutierrez raised the urgent need for the 
GOA to address an incomplete legal framework that leaves 
investors with a high degree of uncertainty.  Karzai 
downplayed this concern, saying that I thought we had 
passed a good investment law, but conceded that a 
comprehensive commercial legislative framework is a 
necessary component of an enabling environment for private 
sector-led growth. 
 
¶10. (U) Karzai asked the Secretary how Afghan membership in 
the WTO would be helpful to Afghanistan.  The Secretary 
explained that the WTO is a global trading club and that 
the accession process requires countries to adopt investor 
stor 
friendly policies that in turn allowed the US to extend 
more favorable trade benefits such as equal treatment under 
the Harmonized Tariff Schedule. 
 
¶11. (SBU) When the Secretary raised the issue of possible 
U.S. tariff preferences in the context of Regional 
Opportunity Zones (ROZs) for goods jointly produced in 
Afghanistan and Pakistan, Karzai indicated that he would 
put the squeeze on any initiative that benefited Pakistan 
as long as it continued to export bombs and terrorists to 
Afghanistan.  U/S Lavin pointed out that ROZs could play a 
role in promoting stability in the region.  Ambassador 
Neumann has followed up in pointing out to President Karzai 
the benefits of an ROZ.  He will continue to do so. 
 
---------------------- 
Roundtable Discussion 
---------------------- 
 
¶12. (U) Secretary Gutierrez participated in a roundtable 
discussion hosted by the Afghan International Chambers of 
Commerce (AICC,) which included AICC board members, 
Minister of Agriculture Obidullah Ramin, Chairman of the 
the 
 
KABUL 00001022  003 OF 004 
 
 
Parliamentary National Economy Committee Daud Sultanzoy and 
members of the Afghan business community. 
 
¶13. (U) AICC Chairman Hamid Farooqi introduced his 
organization and asked for the Secretarys assistance in 
promoting Afghan exports to the U.S. and in facilitating 
matchmaking between U.S. and Afghan companies.  Mahmood 
Karzai, brother of President Karzai and AICC board member, 
gave a brief presentation on obstacles to private sector 
development in Afghanistan, which included the usual 
concerns about electricity and roads, access to land and 
capital.  He also cited a lack of clear economic vision by 
the GOA. 
 
¶14. (U) Sultanzoy stated that Parliament is keenly aware 
of the immediate need for legislation that would provide 
legal safeguards for investment, but noted that Parliament 
would need assistance in capacity building. 
 
¶15. (U) Secretary Gutierrez emphasized the U.S. long term 
commitment to Afghanistan, promised to explore potential 
matchmaking and export promotion activities and exhorted 
d 
the Afghan business community to set an example by paying 
their taxes. 
 
------------------ 
Business Reception 
------------------ 
 
¶16. (U) Secretary Gutierrez hosted a reception at the 
newly-opened five-star Kabul Serena Hotel for U.S. 
businesses operating in Afghanistan.  Twenty-five companies 
were represented, including Globecomm Systems, John Walter 
Thompson Advertising, FedEx, Afghan Wireless Communications 
Company and Shaw International. Afghan business leaders, 
GOA officials, including Minister of Finance Anwar-ul-Haq 
Ahadi, Minister of Communications Amirzai Sangeen and 
Minister of Commerce Arsala and members of Parliament also 
attended. 
 
------- 
COMMENT 
------- 
 
¶17. (SBU) President Karzais unhelpful comment on the ROZ 
proposal reflects a real preoccupation.  Commerce Minister 
Arsala later privately committed to EconCouns to educate 
the President on the very real commercial benefits that 
this possible U.S. tariff concession initiative (formally 
y 
announced by President Bush in Islamabad on March 4) could 
offer Afghanistan. We believe that in the end we will 
convince Karzai to support the ROZ. 
 
¶18. (SBU) Post awaits guidance from the Department of 
Commerce on follow-up activities discussed during the 
visit, specifically, reverse U.S. and Afghan trade missions 
and assistance in identifying U.S. companies interested in 
working with Afghan counterparts to improve and promote 
dried fruit and nuts, marble and carpet exports.  LtGen. 
Eikenberry has expressed interest in supporting the 
Secretarys proposed export assistance initiatives at the 
 
SIPDIS 
PRT level and Post is currently exploring available 
mechanisms to do so. 
 
 
KABUL 00001022  004 OF 004 
 
 
19.(U) Finally, our Embassy Economic Section is pleased to 
represent the Department of Commerce in Afghanistan, with a 
dedicated Foreign Service Economic officer working closely 
with DoC/ITA and with DoCs Washington Commercial Advocacy 
Center to actively promote expanded U.S. trade with and 
d 
investment in Afghanistan.  We recommend the Commerce 
Department consider training and funding a dedicated 
Embassy Kabul Commercial FSN to support posts trade and 
investment advocacy efforts. 
 
NEUMANN