VZCZCXRO1324
PP RUEHTRO
DE RUEHTU #0293/01 0811143
ZNR UUUUU ZZH
P 211143Z MAR 08
FM AMEMBASSY TUNIS
TO RUCPDOC/USDOC WASHDC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 4689
INFO RUEHAS/AMEMBASSY ALGIERS PRIORITY 7655
RUEHEG/AMEMBASSY CAIRO PRIORITY 1587
RUEHLO/AMEMBASSY LONDON PRIORITY 1447
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0981
RUEHFR/AMEMBASSY PARIS PRIORITY 1914
RUEHRB/AMEMBASSY RABAT PRIORITY 8533
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0220
RUEHCL/AMCONSUL CASABLANCA PRIORITY 4211

UNCLAS SECTION 01 OF 05 TUNIS 000293 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NEA/MAG (HOPKINS AND HARRIS), EB/CBA (WINSTEAD/GILMAN), 
EB/TRA/AN(FINSTON), 
STATE PASS USTR (BURKHEAD), 
STATE PASS USPTO (ADAMS, BROWN, MARSHALL) 
USDOC FOR ITA/MAC/ONE (NATE MASON), ADVOCACY CTR (REITZE), 
CASABLANCA FOR (FCS ORTIZ), 
CAIRO (SEVERENS AND MOEZIE) 
LONDON AND PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ECPS EFIN ECON KIPR TS
SUBJECT: US-TUNISIA TIFA COUNCIL MEETING 
 
REF: A. TUNIS 287 
     ¶B. TUNIS 211 
     ¶C. 07 TUNIS 1521 
 
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Summary 
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¶1. (SBU)  The March 10-11 US-Tunisia Trade and Investment 
Framework Agreement (TIFA) Council provided a productive 
exchange of information on areas where progress has been 
made, and areas where more progress is needed, in 
intellectual property rights (IPR), market access, services 
and investment.  Both parties committed to work in 
partnership to strengthen our economic relationship. 
Specifically, the two sides will develop a three- to 
five-year program to set concrete objectives and cooperative 
efforts to move forward, with ongoing contact between 
Tunisian technical experts and the Mission.  In addition to 
the formal TIFA meetings, AUSTR Donnelly and Ambassador Godec 
had excellent meetings (Ref A) with the Prime Minister, 
Commerce Minister, and Minister of Development and 
International Cooperation (MDIC).  End Summary 
 
¶2. (U) The March 10-11 TIFA Council Meetings in Tunis were 
hosted by the Ministry of Development and International 
Cooperation (MDIC) and included a number of other GOT 
participants.  The US delegation, led by Assistant United 
States Trade Representative (AUSTR) Shaun Donnelly, included 
the following officials: 
 
Ambassador Robert F. Godec 
Paul Burkhead, Director, USTR 
Clarence Severens, Regional Financial Attache, Department of 
Treasury 
Nathaniel Mason, Desk Officer, Department of Commerce 
Mayra Caldera, Desk Officer, Department of Agriculture 
Michael Fay, Regional Agricultural Attache, Department of 
Agriculture 
Dorothy Shea, Political/Economic Counselor, Embassy Tunis 
Beth Mitchell, Economic/Commercial Officer, Embassy Tunis 
Victoria Taylor, Economic Officer, Embassy Tunis 
 
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Overview 
-------- 
 
¶3. (SBU)  During the opening plenary of the TIFA Council MDIC 
Minister Jouini said that Tunisia is committed to achieve 
concrete progress, in the interest of both countries, to 
expand and enhance our trade and development relationship and 
is ready to learn from the US experience.  He stressed that 
diversification of the Tunisian economy is a top priority. 
AUSTR Donnelly said that he saw the TIFA as a way for both 
parties to develop a common vision and long-term objectives, 
such as creating investment and jobs in Tunisia, increasing 
Tunisian investment in the United States, and establishing 
building blocks to strengthen our economic relationship. 
AUSTR Donnelly suggested that the TIFA dialogue be continued 
through more regular meetings between Tunisian experts and 
EmbOffs, including developing a mechanism with MDIC to 
coordinate USG technical assistance and cooperative programs. 
 
 
¶4. (SBU) During the working group sessions the US delegation 
raised specific US company concerns, IPR, investment climate 
issues, the need for liberalization of the services sector, 
and market access challenges (e.g., franchises).  In 
addition, the delegation advocated for several US companies 
with pending project/export proposals before the GOT.  It 
also offered technical assistance to Tunisia.  The GOT was 
able to point to recent reforms and new legislation in IPR 
protection and investment since the last TIFA Council in 
¶2005.  The Tunisian delegation also stated their readiness to 
 
TUNIS 00000293  002 OF 005 
 
 
further improve their legal framework and the business 
climate through the TIFA process. 
 
--- 
IPR 
--- 
 
¶5. (SBU)  During this working group session it was agreed 
that Tunisia has a good legislative framework in place but 
enforcement is lacking.  The US delegation suggested that the 
GOT conduct high profile raids and seizures to publicly 
demonstrate its commitment to IPR enforcement.  The US 
delegation also raised concerns over data exclusivity 
protection; asked for a final ruling on appeals filed by US 
pharmaceutical companies' correlated products; and encouraged 
the GOT to adopt a patent linkage system.  The GOT delegation 
noted existing Tunisian IPR laws, and said that it has 
adopted the WTO TRIPS agreement and is open to joining other 
international agreements.  They then listed several IPR laws 
including a December 27, 2007, law No. 2007-68 on geographic 
indicators for handicrafts.  The Tunisian side noted the 
importance of geographic indicators for Tunisian agricultural 
products and handicrafts and suggested that the United States 
become a party to the Lisbon Agreement. 
 
¶6. (SBU)  Regarding data exclusivity, the GOT insisted that 
they have reinforced patent protection and respect data 
exclusivity.  The Tunisians offered to study whether circular 
no. 40 (covering data exclusivity) needs to be turned into an 
administrative decree or law.  The Ministry of Health 
representative said that he has never received any data 
exclusivity dispute cases related to either patents or data 
exclusivity, but that he is willing to review any such cases 
raised by US companies.  He also said that although 
correlation was terminated in January 2007, it was not 
retroactive and that they were still studying the US 
pharmaceutical companies' appeals. 
 
¶7. (SBU)  During the plenary session, AUSTR Donnelly said 
that Tunisia's future is to develop high-value-added 
products, so IPR protection is important.  While taking note 
of the progress that Tunisia has made in its IPR regime, 
AUSTR Donnelly opined that customs officials and countries 
need to cooperate to improve IPR enforcement efforts.   AUSTR 
Donnelly explained that the United States has a different 
approach to geographic indicators, but does believe some 
protection is appropriate.  Jouini said that Tunisia is 
trying to get to a higher stage in the value chain and that 
its destiny is not to compete with China but to produce high 
value-added products.  He added that Tunisia has made 
progress in IPR enforcement and that it is important to 
protect geographic indicators. 
 
------------- 
Market Access 
------------- 
 
¶8. (SBU)  The market access working group discussed tariff 
systems, standards, rules of origin, phytosanitary 
regulations, and sectorial issues.  Tunisia said that its 
average tariff rate in 2007 was 24.6 percent and intends to 
reduce this to 21 percent by the end of 2008.  The US 
delegation said that US customs tariff rates are already 
quite low and that it does not envision any specific 
decreases in the short term other than those that may be 
negotiated to in the WTO Doha Round negotiations.  The US 
delegation asked for and received an overview of tariff 
coverage under the EU-Tunisian Association Agreement. 
Tunisian representatives asked about technical issues related 
to the US rules of orgin, agricultural products standards, 
phytosanitary certificates, and for a list of GSP eligible 
products.  As there was no US expert in these areas present, 
the US delegation offered to follow-up with the FDA and the 
National Institute of Standards and Technology (NIST).  Both 
 
TUNIS 00000293  003 OF 005 
 
 
sides agreed that the GSP program needs higher visibility in 
Tunisia and post has offered to conduct additional outreach, 
including a possible workshop with a GSP expert. 
 
¶9. (SBU)  In the plenary, AUSTR Donnelly said that the US 
approach to FTAs is a global approach where we negotiate 
services, agriculture, investment, and market access at the 
same time.  Jouini replied that Tunisia wants to diversify 
partners, and recognizes that the United States' and the EU's 
approaches are not the same but that Tunisia is ready for 
this.  Tunisia's association agreement with the EU is a 
comprehensive and all-inclusive accord but that it contains a 
gradual implementation schedule.  He noted that as a result 
of the EU agreement, exports increased ten percent with the 
EU and that total investment from Europe increased ten times 
from 1996 to 2006.  Jouini added that market access is an 
important step for preparing for an eventual free trade 
agreement (FTA) and said that he had learned that Tunisian 
exporters have a US market access mechanism available to them 
via the GSP program. 
 
---------- 
Investment 
---------- 
 
¶10. (SBU)  The investment working group session covered the 
new GOT economic initiative law, each parties' concerns over 
the investment climate in the respective countries, and plans 
to better promote and attract increased foreign direct 
investment (FDI) over the long term.  Tunisia's new economic 
initiative law No. 2007-69 (passed on December 27, 2007) 
establishes a negative list approach to facilitate economic 
investment.  The GOT indicated that the negative list is 
under development but will be published in a few months.  The 
Tunisian side also explained the ease with which a company 
can be established in Tunisia and how VAT refund time has 
been reduced from 70 days to just seven days.  The GOT asked 
for clarification on US Mode 4 provisions (GATS - Movement of 
Natural Persons), noting the need to find ways to facilitate 
the movement of people.  The Tunisian delegation commented 
that Tunisians may not invest in the United States because 
they do not have market share or they run into visa regime 
and freedom of movement issues. 
 
¶11. (SBU)  USTR responded that the implementation of Mode 4 
of GATS has proven to be a complicated issue for all WTO 
members, but that we have not received any complaints about 
Tunisian business people being unable to get a visa.  The 
Treasury representative explained that the United States is 
open for business and that the Committee on Foreign 
Investment in the United States (CFIUS) process applies only 
to a minority of foreign investments which could potentially 
harm US national security interests.  The US side broached 
several specific investment issues that US companies wanting 
to invest in Tunisia have encountered and pushed for 
liberalization of the services sector. 
 
¶12. (SBU)  In the plenary, AUSTR Donnelly stated that 
potential investors look for and talk to other successful 
investors before investing in a country.  Attracting FDI is 
about creating confidence in the business environment.  He 
used Singapore as a model, for setting the right investment 
climate to attract investors, that Tunisia might follow. 
Jouini said that he is committed to improve the investment 
climate and that he would like to work directly with the 
principals of several high profile US companies on targeted 
investment projects in Tunisia. 
 
-------- 
Services 
-------- 
 
¶13. (SBU)  The services working group session discussed the 
growing and important role of the services sector in 
 
TUNIS 00000293  004 OF 005 
 
 
Tunisia's economy and initiatives taken to prepare the way 
for opening up this sector to competition.  Stating that 
telecommunications services represents a strategic pillar for 
the development of a knowledge economy, the Tunisian side 
said that the GOT intends to grant additional licenses for 
fixed telephone operators in 2008 and plans to launch a call 
for interest for third generation modes of telecommunications 
in 2009.  The US delegation pushed for further services 
liberalization, highlighting that if one opened the telecom 
and financial services sectors to competition, it would 
attract increased investment across the board since these two 
areas play such a pivotal role in all sectors and have a 
multiplier effect on the economy.  The US delegation also 
asked to be informed about future legislation and/or future 
liberalization of this sector.  GATS Mode 4 was also 
discussed during this session with the Tunisian side asking 
for clarification on the US Mode 4 provisions.  The US 
delegation refered the Tunisians to the US GATS schedule 
which lays out some of our restrictions and to the text of 
our FTAs.  Both sides agreed to continue consultations on 
non-conforming measures. 
 
¶14. (SBU)  During the plenary, AUSTR Donnelly suggested that 
the text of US free trade agreements be looked at and 
considered while Tunisia is discussing services 
liberalization with the EU.  Jouini said Tunisia is working 
to liberalize the services sector with the EU, but it needs 
to proceed gradually and must consider the social and 
economic impact.  He noted that Tunisia is working with the 
World Bank on a program to liberalize the financial services 
sector.  There is a new profile for the Tunisian job market 
with services playing a major role in the economy and being 
the major employer for young university graduates.  He said 
Tunisia is currently adopting a positive list approach in its 
negotiations under the EU Association Agreement but is 
interested in learning about the legal provisions of positive 
lists versus negative lists. 
 
---------- 
Next Steps 
---------- 
 
¶15. (U)  Jouini asked for technical assistance in the areas 
of support for small and medium enterprises, innovation, and 
technology transfer.  He said that both parties need to work 
together to create planned actions to put people together and 
to raise the visibility of US/Tunisian cooperation and to 
take our bilateral economic relationship to a higher level. 
Both sides agreed to work in partnership, between MDIC and 
the Embassy, on a 3-5 year program to engage in an ongoing 
dialogue and to set concrete objectives for a way forward. 
The program also includes developing US technical assistance 
programs under the umbrella of the TIFA and in coordination 
with the MDIC. 
 
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Comment 
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¶16. (SBU)  A very congenial atmosphere surrounded this TIFA 
Council meeting.  Discussions were open and frank but not 
contentious.  The Tunisian side genuinely seemed interested 
in and willing to explore ways to build bridges and advance 
our economic relationship.  The Tunisians are looking to 
diversify away from dependence on the EU market and the US 
market is becoming more attractive to them.  Several 
officials asked detailed technical questions about US FTAs, 
that indicated a more serious level of interest than we had 
heard before.  If we succeed in establishing a developing a 
sound program of regular engagement with MDIC and cooperative 
technical assistance programs under the TIFA umbrella, 
perhaps the bureaucratic obstacles that such programs have 
encountered in the recent past will be resolved.  End Comment. 
 
 
TUNIS 00000293  005 OF 005 
 
 
¶17. (U)  AUSTR Donnelly has cleared this cable. 
 
Please visit Embassy Tunis' Classified Website at: 
http://www.state.sgov.gov/p/nea/tunis/index.c fm 
GODEC