VZCZCXYZ0026
PP RUEHWEB

DE RUEHAS #0887/01 1371547
ZNR UUUUU ZZH
P 171547Z MAY 06
FM AMEMBASSY ALGIERS
TO RUEHC/SECSTATE WASHDC PRIORITY 1111
INFO RUEHKL/AMEMBASSY KUALA LUMPUR 0048
RUEHRB/AMEMBASSY RABAT 1309
RUEHTU/AMEMBASSY TUNIS 6150
RUEHRO/AMEMBASSY ROME 0379
RUEHLO/AMEMBASSY LONDON 1265
RUEHFR/AMEMBASSY PARIS 1800
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS ALGIERS 000887 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB/TRA 
 
E.O. 12958: N/A 
TAGS: EAIR ETRA EBEXP KTIA ECON AG
SUBJECT: OPEN SKIES: ALGERIA OFFERS REDUCED WEIGHT ON 
POSTAL RESTRICTIONS BY 2008, TRANSITION PERIOD UPON 
SIGNATURE, WRITTEN ACCEPTANCE OF U.S. LANGUAGE ON EXCHANGE 
RATES 
 
REF: A. STATE 67681 
 
     ¶B. ALGERIA MAY 8 DIPLOMATIC NOTE 305 
     ¶C. ALGIERS 801 
 
¶1. (SBU) Embassy received May 13 an MFA diplomatic note (Ref 
B) providing Algeria's response to our Open Skies proposals 
of March 11 concerning exchange rates, intermodal transport, 
and transition period start date.  The latest proposals 
(faxed to NEA/MAG) overtake Ref A instructions, which had not 
yet been delivered pending an appointment with the relevant 
minister, and may be Algeria's response to Ambassador's 
strong "push" (Ref C) with Transport Minister Maghlaoui to 
accelerate the pace of the negotiations, in order to allow 
for completion by mid-summer at the latest.  The latest 
proposals would appear to resolve two of the three 
outstanding issues in the negotiation and signal potentially 
important movement on the third.  Specifically, the GOA has: 
1) agreed in writing to accept our Article 8 Para 5 language 
on exchange rates; 2) offered to have the five-year 
transition period begin upon the signing of the agreement 
(i.e., even before ratification, which had been our demand); 
and 3) indicated that in 2008 it would lower the weight 
definition of a postal letter from 250 grams to 50 grams (1.7 
oz). 
 
¶2. (SBU) While it was implied, the note was not/not explicit 
in affirming that following the end of the transition period, 
firms would be able to handle intermodal transport without an 
Algerian subsidiary.  However, Transport Minister Maghlaoui 
assured Ambassador May 16 that at the end of the transition 
period, firms would be able to provide intermodal services 
without using a national subsidiary.  Regarding postal 
services, Maghlaoui said that the reduction of the weight 
definition from 250 grams to 50 grams "in 2008" paralleled 
undertakings Algeria had made in the context of WTO accession 
talks.  MFA Americas Deputy Director separately confirmed to 
us May 16, after checking with Transport Ministry Director 
General Benchamam, that the definition of "postal 
services"(from 250 to 50 grams) would occur automatically on 
January 1, 2008 according to executive decree 01-418 of 
December 20, 2001 and modified on December 6, 2004 in 
executive decree 04-397.  For additional information you can 
log on to www.joradp.dz. 
 
¶3. (SBU) In order not to lose momentum, now that the Algerian 
side has accepted our wording or better on both exchange 
rates and entry into force/transition period, and shown some 
"give" on the postal services issue, Embassy recommends we 
turn around our response as quickly as possible.  We also 
recommend consideration of sending an Open Skies team to 
close the deal and determine next steps, if the consensus is 
that we are now within striking distance and that the Jan. 1, 
2008 date for the reduced definition of postal services meets 
our minimum needs.  (End Summary and Recommendation) 
 
¶4.  (SBU) Begin unofficial translation: 
 
Open Skies Agreement 
 
Response of the Algerian Party to the U.S. Proposals of March 
11, 2006 
 
   Article 8 paragraph 5 second sentence (transfer of receipt 
surplus): 
To show goodwill and advance negotiations, the Algerian party 
would be willing to accept the proposal of the American side 
regarding this point.  In return, the Algerian side would 
like its concerns over article 8 paragraph 8 be taken into 
consideration. 
 
   Article 8 paragraph 8 (intermodal transportation): 
 
The Algerian side affirms that it cannot respond favorably to 
the American request to exempt American carriers from the 
fees required by regulations (reglementation) in force 
concerning intermodal transport.  Such an exemption could be 
interpreted by other foreign carriers as preferential 
treatment favoring American companies. 
 
 
 
It is worth noting that: 
 
The carrying out of postal services is regulated by the 
relevant provisions of Law No. 2000-03 of August 5, 2000, 
which sets general rules related to post and 
telecommunications, and by implementing regulations, notably 
Decree No. 01-418 of December 20, 2001, regarding operating 
regulations applied to all postal services. 
 
International express mail is subject to the authorization 
regulations.  The authorizations are granted by the 
regulation authority of Post and Telecommunications (ARPT). 
This category of activity is open to competition based on the 
conditions set by the aforementioned decree.  Currently, four 
foreign operators -- namely DHL, UPS, FALCON (FedEx) and 
Chronopost -- are providing these services. 
 
The postal category pertaining to letters not weighing over 
250 grams is regulated by a requirement of simple 
declaration.  This weight (ceiling) will be reduced to 50 
grams in 2008. 
 
   Article 18 and Annex IX (Entry into Force and the 
Transition Period): 
 
The Algerian side suggests that the transition period start 
upon the date of signature instead of the date of initialing. 
 
End unofficial translation. 
 
 
ERDMAN