VZCZCXYZ0000
PP RUEHWEB

DE RUEHTU #2899 3471612
ZNR UUUUU ZZH
P 131612Z DEC 06
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 2341
INFO RUCNMGH/MAGHREB COLLECTIVE PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY

UNCLAS TUNIS 002899 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/MAG 
STATE PASS USTR (BELL) 
USDOC FOR ITA/MAC/ONE (NATE MASON) 
LONDON AND PARIS FOR NEA WATCHERS 
 
E.O. 12958: N/A 
TAGS: ECIN ETRD EINV TS
SUBJECT: MAGHREB LEADERS EXTOL VIRTUES OF FREE TRADE 
 
REF: TUNIS 2848 
 
¶1. (SBU) Summary: At a recent two-day conference on Maghreb 
business and trade, regional leaders and businessmen extolled 
the virtues of increased regional economic integration and 
lamented the currently low levels of trade and investment 
between the Maghreb countries.  Participants hailed from all 
five Maghreb countries; speakers included Arab Maghreb Union 
(AMU) Secretary General Habib Ben Yahia and GOT Prime 
Minister Mohamed Ghannouchi.  Ambassador Godec also attended 
a portion of the conference.  Despite a general consensus on 
the importance of increasing intra-Maghreb trade, regional 
trade remains at extremely low levels and participants and 
speakers alike had difficulty articulating a practical path 
to remedying the situation.  End Summary. 
 
¶2. (U) The Institut Arabe des Chef d'Entreprises (IACE) 
recently hosted a two-day conference in the Tunisian resort 
city of Sousse on "Maghreb Business: Competition and 
Complementarity."  In his opening remarks to the conference, 
Prime Minister Ghannouchi touted Tunisia's efforts to promote 
regional trade and investment, but also highlighted the 
missed economic opportunities created by the lack of 
intra-Maghreb trade.  Ghannouchi estimated that the cost of 
poor Maghreb economic integration to Tunisia is two percent 
of GDP annually.  He declared that if Maghreb countries had 
enacted the 1989 Marrakesh declarations outlining the 
creation of the Maghreb free trade zone, it would have 
created 20,000 new jobs each year in Tunisia.  While 
bemoaning the previous lack of progress, Ghannouchi stressed 
the importance Tunisia places on intra-Maghreb trade and 
investment and touted GOT efforts to promote enhanced 
integration.  He noted that the GOT automatically authorizes 
Tunisian companies to invest in Maghreb countries. 
Ghannouchi stated that there are over 100 companies with 
Maghreb foreign direct investment in Tunisia, including 
investments in the financial sector.  (Note: In 2005, 
Spanish-Moroccan consortium Attijariwafa purchased a majority 
share of Banque du Sud during its privatization (reftel). 
End Note.) 
 
¶3. (U) During his speech, Arab Maghreb Union Secretary 
General, and former Tunisian Foreign Minister, Ben Yahia 
delivered an impassioned plea for the Maghreb free trade 
zone, declaring that it is "not just a dream, but a 
necessity."  Maghreb cooperation, he stated, provides a noble 
goal for the region's youth -- offering not just liberty of 
movement and increased employment, but also dreams for their 
future.  In a likely reference to the Western Sahara impasse, 
Ben Yahia dismissed the importance of bilateral issues, 
stressing the primacy of common interest.  He noted the 
relatively low levels of regional trade compared to the 
levels of trade between the countries belonging to the 
Mercosur, ASEAN, and Gulf Cooperation Council zones.  He 
implored the businessmen present to do their part to increase 
cooperation and stated that they should "not ask the 
government to do more."  Ben Yahia staunchly defended the 
work of the Arab Maghreb Union, criticizing the media for 
creating the impression that the AMU was not working and 
stating that the process was like an iceburg with much of the 
work occurring below the surface.  Ben Yahia announced that 
the negotiations were completed in the last week of November 
for the free trade zone and that the agreements will soon be 
submitted to involved Ministries of Commerce (NFI) and then 
will be ready for signature and ratification. 
 
¶4. (SBU) Comment: Despite a clear recognition of the benefits 
of Maghreb economic integration, speakers and participants 
offered few concrete proposals for moving the process 
forward.  Ben Yahia's impassioned defense of the AMU aside, 
there has been slow movement on the Maghreb free trade zone 
and regional trade and investment remains at frustratingly 
low levels.  From the perspective of the GOT, promoting 
increased regional investment and trade provides another 
avenue to spur the growth of the Tunisian economy and to help 
address the lingering issue of unemployment.  Nevertheless, 
significant barriers to trade and investment exist in 
Tunisia, notably currency controls and limits to foreign 
investment, that will need to be addressed in order to reap 
the benefits of economic integration.  End Comment. 
GODEC