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C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 000121 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/08/2017 
TAGS: PREL ECON ETRD ELAB BA ECTRD
SUBJECT: CROWN PRINCE AND DEPUTY SECRETARY OF COMMERCE 
SAMPSON DISCUSS TRADE, INVESTMENT 
 
Classified By: Ambassador William T. Monroe for reasons 1.4 (b) and (d) 
. 
 
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Summary 
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¶1.  (C) Crown Prince Shaikh Salman told Deputy Secretary of 
Commerce Sampson February 4 that Bahrain has been and will 
continue to be a close friend of the United States, and he 
expressed his pleasure that the U.S.-Bahrain Free Trade 
Agreement (FTA) was being implemented.  He said he would 
accompany an AmCham trade mission on its stop in Chicago in 
early March.  The goal of the country's labor reform program, 
he explained, is to unify the local and expatriate labor 
markets in Bahrain.  Foreign workers would gain the right of 
freedom of movement among employers while businesses would 
pay a fee for the work permit for each foreign worker.  The 
fees would enter a fund dedicated to training Bahrainis to 
improve their skill sets.  The CP said the Bahrain Investors 
Center had been a boon to promoting small and medium 
businesses by simplifying the registration process.  In 
response to the CP's question about accumulation of 
value-added among U.S. FTA partners for exports to the United 
States, Dr. Sampson said this subject could be an issue to 
discuss at a planned conference on the Middle East Free Trade 
Area to take place on the margins of the Dead Sea World 
Economic Forum in May.  End Summary. 
 
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Bahrain A Close Friend of the U.S. 
---------------------------------- 
 
¶2.  (C) Crown Prince Shaikh Salman bin Hamad Al Khalifa 
welcomed Deputy Secretary of Commerce Sampson to Bahrain 
February 4 and expressed his country's appreciation for the 
United States protecting the security and stability of the 
region for over 60 years.  He affirmed that Bahrain has been 
and will continue to be a close friend of the United States. 
Dr. Sampson replied that the U.S. looks forward to building 
up the bilateral economic relationship to be as strong and 
deep as the strategic relationship.  He said the U.S. 
believes that building trade with, and within, the region is 
critical to the long-term stability and security of the Gulf. 
 The Crown Prince said he was pleased implementation of the 
FTA was moving forward.  Dr. Sampson noted that bilateral 
trade had topped $1 billion for the first time in 2006.  The 
Ambassador added that overall U.S. trade and investment with 
the region was growing substantially. 
 
¶3.  (C) The Crown Prince noted that he would visit the United 
States soon and planned to accompany a trade mission of the 
American Chamber of Commerce in Bahrain on its stop in 
Chicago in early March.  Dr. Sampson said he would try to 
meet up with the delegation in Houston, following its visit 
to Chicago.  He praised the AmCham delegation, saying it 
would increase the visibility of Bahrain in the United States 
and allow for networking between business people.  He offered 
the services of USDOC's export assistance centers to promote 
trade between the two countries. 
 
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Unifying Bahrain's Labor Market 
------------------------------- 
 
¶4.  (C) In response to the Deputy Secretary's question, the 
CP said Bahrain's labor reform program was going well, noting 
that parliament had passed almost all required legislation. 
The only outstanding item to be addressed is a law to 
decrease severance packages for fired employees.  The essence 
of the reform plan is to unify the local and expatriate labor 
markets in Bahrain.  The requirement for expat laborers to 
have sponsors was eliminated, giving them the right of 
freedom of movement among employers.  The fee paid by an 
employer for a work permit for a foreign worker would 
increase, resulting in two outcomes.  One, the costs for a 
(more expensive) Bahraini worker and a (cheaper) foreign 
worker would be in greater balance and, two, funds raised by 
the permits would be used to train Bahrainis to improve their 
skill sets. 
 
¶5.  (C) Shaikh Salman admitted that a major challenge remains 
gaining the buy-in of employers.  He said the government 
should not force businesses to hire people or put employees 
into jobs they are not qualified to perform, which is 
inevitable with the Bahrainization program.  Employers will 
 
MANAMA 00000121  002 OF 002 
 
 
be offered incentives to participate in the labor reform 
program, such as their gaining access to graduates of GOB 
training schemes and obtaining money from the central labor 
fund for company-run training programs.  The CP mentioned 
that an important part of labor reform is providing students 
with the option of participating in applied, 
market-appropriate technical education programs.  The 
University of Bahrain has too many students now, in Shaikh 
Salman's view, and some of these students would be better off 
taking classes at a polytechnic university.  Bahrain used to 
have a polytechnic university, and he was interested in 
seeing it reconstituted. 
 
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Growth Through SMEs 
------------------- 
 
¶6.  (C) The Crown Prince said Bahrain was trying to stimulate 
growth among small and medium enterprises (SMEs), noting this 
was an area where the United States has expertise and could 
possibly assist Bahrain.  He said the Bahrain Investors 
Center, a one-stop shop for registering businesses, had been 
a boon to promoting SMEs.  The Center had reduced the number 
of steps required to establish a business by three-quarters. 
Registrations were approved expeditiously as long as the 
company did not plan to operate in one of a small number of 
restricted sectors.  In response to Dr. Sampson's question, 
the CP said Bahrain had looked to several countries for 
models in improving its education, training, and investment 
regimes, including Australia, Singapore, Ireland, and the 
United States. 
 
¶7.  (C) Shaikh Salman indicated that Bahrain was an 
increasingly desirable destination for foreign direct 
investment, but the government had not wanted to attract too 
much attention while it was building momentum.  He said a 
recent decision to air an advertisement about Bahrain on CNN 
International represented a sense that it was time to give 
the country a higher profile internationally.  The Ambassador 
noted that the timing of the ad was good, with the FTA, 
substantial real estate development, and new industrial parks 
all coming on-line. 
 
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Achieving MEFTA 
--------------- 
 
¶8.  (C) The Crown Prince asked the USG's view of accumulation 
of value-added among FTA partners for export of goods to the 
U.S.  Dr. Sampson replied there was a proposal to hold a 
conference on the Middle East Free Trade Area (MEFTA) on the 
margins of the Dead Sea World Economic Forum at the end of 
May.  A discussion of accumulation would be appropriate at 
that time.  The CP said Bahrain supports MEFTA and wants to 
help the President achieve this objective. 
 
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Elections Attract Moderates 
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¶9.  (C) The Deputy Secretary said Bahrain had experienced 
impressive participation in its recent parliamentary and 
municipal elections.  The Crown Prince stated that citizens' 
participation speaks well about political openness in the 
country.  The electoral process attracted moderates while 
more extreme elements on both the Sunni and Shia sides did 
not participate.  Although Bahrain is doing "all right" so 
far, the CP said he is concerned about tension and violence 
in the region spilling over into Bahrain. 
 
 
********************************************* ******** 
Visit Embassy Manama's Classified Website: 
http://www.state.sgov.gov/p/nea/manama/ 
********************************************* ******** 
MONROE