VZCZCXRO7393
PP RUEHTRO
DE RUEHTU #0225/01 0450734
ZNR UUUUU ZZH
P 140734Z FEB 07
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 2729
INFO RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0860
RUEHAS/AMEMBASSY ALGIERS PRIORITY 7425
RUEHLO/AMEMBASSY LONDON PRIORITY 1271
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0863
RUEHFR/AMEMBASSY PARIS PRIORITY 1732
RUEHRB/AMEMBASSY RABAT PRIORITY 8328
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0061
RUEHCL/AMCONSUL CASABLANCA PRIORITY 4066
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 TUNIS 000225 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/MAG (HARRIS) 
STATE PASS USTR (BELL), USPTO (ADLIN AND ADAMS), USAID (MCCLOUD) 
USDOC FOR ITA/MAC/ONE (NATHAN MASON), ADVOCACY CTR (JAMES), AND CLDP 
(TEJTEL) 
CASABLANCA FOR FCS (ORTIZ) 
LONDON AND PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: ECON ETRD SENV EFIN BEXP ENRG TS
SUBJECT: TUNISIA ECONOMIC HIGHLIGHTS: Jan. 16 - Jan. 31 
 
REF: 
 
¶1. (U) This cable contains highlights of recent economic 
developments in Tunisia on the following topics: 
 
¶A. GOT Promotes Solar Energy 
¶B. Maghreb Ministers of Commerce Discuss FTA 
¶C. GOT To Tax Offshore Companies 
¶D. 6.5 Million Tourists in 2006 
 
------------------------- 
GOT Promotes Solar Energy 
------------------------- 
 
¶2. (U) On January 23, privately-operated Attijari Bank signed an 
agreement with state-owned power utility Tunisian Company for 
Electricity and Gas (STEG) and the National Agency of Energy 
Conservation to provide 117 million dinars (US $90.23 million) in 
loans to households and companies for the purchase of solar panels. 
The solar panels, which will power water-heaters, range in price 
from 550 dinars (approximately USD 424) to 1,150 dinars (roughly USD 
887). Loan terms will be five years, with payments added to 
customers' electricity bills. 
 
¶3. (SBU) Comment: Tunisia relies largely on natural gas and oil for 
the generation of electricity.  This has taken a toll on the 
Tunisian economy, given high global oil prices (06 Tunis 2749).  The 
promotion of solar energy represents the latest in a series of GOT 
measures aimed to reduce dependence on oil and to adopt alternative 
energy sources.  End Comment. 
 
----------------------------------------- 
Maghreb Ministers of Commerce Discuss FTA 
----------------------------------------- 
 
¶4. (U) On January 25, ministers of commerce from Libya, Morocco, 
Mauritania, Algeria and Tunisia, as well as Arab Maghreb Union (AMU) 
Secretary General Habib Ben Yahia, met to discuss regional economic 
 
SIPDIS 
integration and the planned creation of a regional free trade zone. 
The ministers agreed to dismantle tariffs through a tiered process, 
progressively eliminating tariffs in three phases.  Three lists of 
products will be established: the first list of products will be 
tax-free from the first day of FTA implementation, the second list 
will go into effect three years later and the third list after five 
years.  The FTA will operate according to the principle of "Maghreb 
preference," whereby each member country will expand advantages 
allowed to other trading partners, such as the European Union, to 
its Maghreb partners.  There is no timetable for implementation of a 
free trade zone. 
 
¶5. (SBU) Comment and Background:  Intra-Maghreb trade remains at 
extremely low levels years after the Arab Maghreb Union's creation 
in 1989.  While Maghreb leaders continue to pay lip service to the 
desire for a Maghreb free trade zone, there are no indications that 
such a zone might become a reality in the near term.  This meeting 
represents the eighth session of the Maghreb Ministers of Commerce 
Council, six years after the seventh session, which was held in 
Algiers in 2001.  AMU activity is set to increase in 2007 with the 
creation of two Maghreb institutions to promote increased trade and 
investment.  In February, the Maghreb Businessmen's Council will be 
established in Marrakesh, and in March the Maghreb Bank for 
Investment and Trade will be created in Tunis.  End Comment and 
Background. 
 
----------------------------- 
GOT to Tax Offshore Companies 
----------------------------- 
 
¶5. (U) Recent amendments in the Corporation Tax Law have expanded 
the tax on corporate income to the 2,500 (totally exporting) 
offshore companies established in Tunisia.  Offshore companies 
registering after January 1, 2008 or whose 10-year tax exemption has 
expired will be subject to a 10 percent tax on profits.  The GOT 
decision to tax offshore companies complies with an IMF 
recommendation to phase out the institutional separation between 
 
TUNIS 00000225  002 OF 002 
 
 
offshore and onshore sectors.  According to the IMF, the separation 
between Tunisia's onshore and offshore sectors has become difficult 
to justify in light of Tunisia's increased economic integration with 
Europe, in particular. 
 
---------------------------- 
6.5 Million Tourists in 2006 
---------------------------- 
 
¶7. (U) The National Office for Tunisian Tourism (ONTT) announced 
that 6.5 million tourists visited Tunisia in 2006, representing a 
modest 2.7 percent increase over 2005 figures.  Tourism is a major 
source of foreign exchange or Tunisia, bringing in roughly 20 
percent of Tunisia's hard currency receipts.  Hard currency receipts 
from tourism increased 6.3 percent from 2.59 billion dinars (USD 
1.99 billion) in 2005 to 2.75 billion dinars (USD 2.09 billion) in 
¶2006.  The majority of tourists continue to hail from Europe and the 
Maghreb, despite efforts to attract tourists from Asia and North 
America. 
GODEC