VZCZCXRO0907
PP RUEHDE RUEHDIR
DE RUEHKU #1721/01 3471329
ZNR UUUUU ZZH
P 131329Z DEC 07
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 0425
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUEHGB/AMEMBASSY BAGHDAD PRIORITY 1083
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 KUWAIT 001721 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ARP, EEB/TPP, USTR FOR JBUNTIN 
 
E.O. 12958: N/A 
TAGS: PREL ETRD ECON PGOV KU
SUBJECT: COMMERCE MINISTER DISCUSSES TIFA, TRADE WITH IRAQ, 
GOVERNMENT-PARLIAMENT RELATIONS 
 
REF: KUWAIT 1706 
 
¶1.  (SBU) In a December 11 meeting with the CDA, Minister of 
Commerce and Industry Falah Al-Hajeri acknowledged the 
importance of making progress on TIFA-related issues, denied 
the existence of restrictions on Iraqi imports to Kuwait, and 
dismissed reports of possible dissolution of the National 
Assembly as rumors.  Al-Hajeri was accompanied by Assistant 
U/S for Foreign Trade Abdulazziz al-Khaldi and Advisor to the 
Minister Ghazi al-Mudaf.  CDA was accompanied by the 
Commercial Counselor and econoff. 
 
TRADE AND INVESTMENT FRAMEWORK AGREEMENT (TIFA) 
--------------------------------------------- -- 
 
¶2. (SBU) CDA introduced the Commercial Counselor and invited 
the Minister to attend the upcoming Conference on Trade and 
Investment to be held in Jordan early next year, possibly in 
mid-February.  (Note: This Conference hosted by Secretary of 
Commerce Gutierrez, initially scheduled for early January, is 
being postponed to mid-February due to the upcoming POTUS 
regional visit. End Note.)  Al-Hajeri assured the CDA that he 
would attend the Conference if the National Assembly is out 
of session.  CDA also informed the Minister that TIFA (Trade 
and Investment Framework Agreement) negotiations that were 
scheduled for January 10 will be postponed until 
mid-February.  He informed the Minister that AUSTR Shaun 
Donnelly has to delay his regional trip due to scheduling 
conflicts with the upcoming POTUS visit and would try to 
re-schedule it as soon as possible. 
 
¶3.  (SBU) CDA emphasized the importance of the TIFA process 
and encouraged the GOK to make progress on several pieces of 
TIFA-related legislation that are pending in Parliament 
including amendments to copyright and patent laws, labor 
laws, and tax laws.  CDA particularly stressed the importance 
of passing an amendment to the corporate taxation law that 
will reduce the tax rate on foreign corporations from 50 
percent to 15 percent and remove ambiguity about the 
definition of taxable entities.  Al-Hajeri assured the CDA 
that all the laws pending in Parliament will be passed 
eventually.  "Kuwait is a democracy," he said, "we have to 
follow the democratic process to maintain a stable 
government."  He expressed confidence that the taxation law 
will be passed soon. 
 
¶4.  (SBU) Al-Khaldi said the Ministry had drafted all the 
amendments required by the TIFA process.  Unfortunately, he 
said, getting them passed in Parliament is outside the 
Ministry's control.  Although the GOK is eager to move 
forward with TIFA, the Ministry is helpless in getting bills 
passed in the National Assembly, he said.  CDA cautioned that 
the TIFA process will be long, and a lot more progress needs 
to be made before a Free Trade Agreement can be discussed. 
Al-Hajeri affirmed the need to further strengthen the 
important US-Kuwait trade relationship, which he argued is 
based on a long and significant history of cooperation 
between the two countries. 
 
¶5.  (SBU) Commercial Counselor mentioned that trade between 
the United States and Kuwait has grown steadily over the last 
several years.  This year, she said, the value of U.S. 
exports to Kuwait has topped USD two billion.  Al-Hajeri 
added that trade between the two countries would grow 
exponentially once a Free Trade Agreement is signed. 
 
NATIONAL ASSEMBLY 
----------------- 
 
¶6.  (SBU) When asked about suggestions of a possible 
dissolution of the National Assembly, Al-Hajeri laughed it 
off as mere rumor.  He reiterated that Kuwait is a democracy 
and is going through the democratic process.  He expressed 
confidence in the diplomatic skills and political experience 
of the Amir in managing challenges with the National 
Assembly.  The situation in the Kuwaiti National Assembly is 
similar to the U.S. Congress, he said.  Members have their 
own agendas and interests.  Decision-making is therefore a 
slow and deliberate process. 
 
KUWAIT-IRAQ TRADE 
----------------- 
 
¶7.  (SBU) CDA asked about restrictions on Iraqi imports to 
Kuwait and urged the Minister to expand trade between the two 
countries.  The Minister said that he was unaware of any 
restrictions on Iraqi imports and believes that Iraqi goods 
 
KUWAIT 00001721  002 OF 002 
 
 
are free to enter the Kuwaiti market through legitimate 
channels.  He asked the CDA to approach relevant Ministries 
with questions or concerns about specific restrictions (Note: 
 per reftel, post has raised this issue with the MOI, Kuwait 
Customs, and with the Kuwait Chamber of Commerce in recent 
meetings.  End Note.)  Al-Hajeri assured the CDA that Kuwait 
is open to Iraqi imports and that Kuwaitis are willing to 
allow Iraqi products in the Kuwaiti market.  Al-Hajeri cited 
security concerns as a possible reason for placing 
restrictions on certain Iraqi products.  CDA stressed the 
importance of expanded trade between Iraq and Kuwait for 
stability in Iraq and in the region. (Note: As reported 
septel, Kuwait Customs confirmed to econoff and Embassy 
Baghdad econcouns that no Iraqi commercial exports are being 
allowed to enter Kuwait due to concerns over border security 
and smuggling.) 
 
********************************************* * 
For more reporting from Embassy Kuwait, visit: 
http://www.state.sgov.gov/p/nea/kuwait/?cable s 
 
Visit Kuwait's Classified Website: 
http://www.state.sgov.gov/p/nea/kuwait/ 
********************************************* * 
MISENHEIMER