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DE RUEHTRO #0803/01 2820357
ZNR UUUUU ZZH
P 080357Z OCT 08
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC PRIORITY 3976
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHRB/AMEMBASSY RABAT PRIORITY 0717
RUEHAS/AMEMBASSY ALGIERS PRIORITY 0773
RUEHTU/AMEMBASSY TUNIS PRIORITY 0625
RUEHEG/AMEMBASSY CAIRO PRIORITY 1233
RUEHVT/AMEMBASSY VALLETTA PRIORITY 0350
RUEHRO/AMEMBASSY ROME PRIORITY 0470
RUEHFR/AMEMBASSY PARIS PRIORITY 0595
RUEHLO/AMEMBASSY LONDON 8778 PRIORITY
RUEHTRO/AMEMBASSY TRIPOLI 4496

UNCLAS SECTION 01 OF 02 TRIPOLI 000803 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR NEA/MAG; COMMERCE FOR NATE MASON; ENERGY FOR GINA ERICKSON 
 
E.O. 12958: N/A 
TAGS: ECON EIND LY EPET ETRD
SUBJECT: U.S. FOREIGN COMMERCIAL SERVICE OPENS FOR BUSINESS IN LIBYA 
 
¶1.  (SBU)  Summary:  During his October 5 visit to Tripoli, 
Department of Commerce Assistant Secretary and Director General 
of the U.S. and Foreign Commercial Service Israel Hernandez 
officially opened the new Foreign Commercial Service office at 
the Embassy and discussed commercial opportunities with U.S. and 
Libyan business leaders and cooperation with senior Libyan 
government officials.  Coming one month after Secretary Rice's 
historic trip to Libya, Libyan government representatives 
enthusiastically welcomed him, as did the small but growing 
Libyan private sector and representatives of U.S. firms in the 
energy, telecommunications, and construction sectors.  The main 
messages to him were that there are significant commercial 
opportunities for American firms in Libya, but challenges still 
remain in terms of visas, and legal and bureaucratic obstacles. 
End summary. 
 
¶2.  (SBU)  In a breakfast roundtable, the leaders of the major 
U.S. firms in Libya briefed A/S Hernandez on their activities 
here and described some of the challenges they face, such as 
procuring visas (both U.S. and Libyan) for employees and Libyan 
government trainees, and navigating the Libyan legal system. 
Most of the U.S. companies are involved in oil exploration, 
production and services, while others have contracts in the 
burgeoning construction sector (such as AECOM, based in Los 
Angeles).  Some U.S. firms, such as Motorola, are seeking to 
enter the Libyan telecommunications sector.   All the 
participants voiced complaints about visas, either for their 
U.S. staff (and their families) to reside in Libya or for their 
national staff and government partners to travel to the U.S. for 
training.  Some said they believe the Libyan government is 
delaying the issuance of U.S. employees' visas because Libyans 
must still travel abroad (i.e., to Tunis) in order to apply for 
a U.S. visa. The Charge d'affaires pointed out there is a 
Business Visa program at post to facilitate visas for U.S. 
companies' Libyan employees and also informed the group the 
Embassy expects to expand visa issuance in Tripoli in 2009. 
 
¶3.  (SBU)  Another concern of the U.S. businesses relates to the 
Libyan legal system.  One general manager noted "nothing is 
written, so all is interpretation."  He remarked that he 
believes Libya is even more litigious than the U.S. and since 
there are no international law firms and no 
internationally-trained lawyers, the companies have to rely on 
local legal counsel.  As Libya has been isolated for 20 years, 
even legal firms based in the Middle East (such as in Dubai) 
have limited utility in Libya since they lack experience here. 
On the positive side, U.S. businesses have not had major 
problems importing materials for their operations, especially 
since most activities are tied to Libyan government entities, 
such as the National Oil Company (NOC). 
 
¶4.  (SBU)  A/S Hernandez also met with the Libyan Businessmen 
Council, the main organization of Libya's nascent private 
sector.  The  Council welcomed the opening of an Embassy 
Commercial Office because they would like to do business with 
small- and medium-sized U.S. companies.  Most of the American 
delegations they have seen were from large companies that dealt 
mainly with the Libyan government.  Most of the Council's 
members, however, are smaller Libyan enterprises.  One of the 
Libyan representatives for a major U.S. equipment provider noted 
the Libyan market is highly competitive and many European 
companies (French, German, Italians) never left Libya during the 
embargo years.  It is therefore even more difficult for U.S. 
companies to enter or re-enter this market, he said.  He did not 
foresee a "u-turn" on the part of the Libyans to nationalize the 
economy, as in the past, but he did see a need for a more 
aggressive U.S. approach to help U.S. businesses and to promote 
the education of Libyans in American universities, especially in 
medicine and technology. 
 
¶5.  (SBU)  The next stop was the Libyan government's National 
Planning Council in which Under Secretary Mohamed Zidoun and his 
staff briefed A/S Hernandez on Libya's efforts to diversify its 
economy and to privatize government enterprises. The Assistant 
Secretary outlined the purpose of his trip to Libya, i.e. to 
open the new U.S. FCS office here, noting that Libya was one of 
the fastest growing markets for U.S. trade.  He said the US 
already had a significant trade deficit with Libya (USD 2.9 
billion) so the new FCS office would seek to increase U.S. 
exports to the Libyan market.  Under Secretary Zidoun explained 
 
TRIPOLI 00000803  002 OF 002 
 
 
the role of the National Planning Council as a Libyan "think 
tank" that prepares studies related to economic, commercial and 
trade policy.  The proposed government restructuring aimed to 
provide better services to the population and to further 
development in education, technology, and healthcare.  U/S 
Zidoun's staff would like to see Libya adopt U.S. models for an 
educational curriculum.  Libya is also trying to diversify its 
"mono-source" economy so as to raise the standard of living. 
Libya sees itself as a potential transport hub (like Dubai) and 
in particular, seeks to be the "gateway" to the rest of Africa. 
Libya also wants to learn from the Gulf countries' experiences: 
"It is not enough to construct sky-scrapers but one must also 
train people to run the companies that occupy them." 
 
¶6.  (SBU)  On privatization, the Planning Council emphasized 
"expanding the base of ownership."  The Council has conducted 
studies on how to provide services to Libyans everywhere in the 
country via the municipalities (akin to counties in the U.S.). 
The goal is to provide wealth directly to citizens who may spend 
the money as they like.  The Council's staff noted Libya has a 
relatively small population concentrated along the Mediterranean 
coast.  Therefore, they think reforms are possible so that 
government will provide only the "basics."  One Council member 
commented, "we cannot go back; we have suffered a lot and we are 
facing hard moments" in terms of "rebuilding our country" and 
engaging with the world.  He said to A/S Hernandez, "we need 
your help in education and training" in order to rebuild Libya. 
 
¶7.  (SBU)  Lastly, A/S Hernandez met with the Under Secretary of 
the General People's Committee (GPC) for Economy, Trade and 
Investment.  Under Secretary Taher Sarkez and his staff 
explained the GPC's role in negotiating international trade 
agreements (such as the ongoing Trade and Investment Framework 
talks with USTR) and in promoting Libyan exports.  A/S Hernandez 
extended an invitation to Under Secretary Sarkez to visit 
Commerce Department offices in the U.S. to learn about programs 
to assist small- and medium-sized businesses.  Under Secretary 
Sarkez welcomed this opportunity.  A/S Hernandez said the new 
FCS office would also work with Libyan businesses who were 
interested in participating in American trade shows and other 
networking opportunities in the U.S.  U/S Sarkez noted the need 
to host more U.S. business groups in Libya and said Libya would 
probably need to issue more visas to Americans.  Finally, U/S 
Sarkez' staff described an initiative of the GPC to promote 
Libyan exports other than oil and gas, such as agricultural and 
fisheries products, via the newly-created Libyan Export 
Promotion Center. 
 
¶8.  (SBU)  Comment:  A/S Hernandez' trip to Libya is the first 
high-level delegation here since Secretary Rice visited Libya 
just a month ago.  He was enthusiastically welcomed by Libyan 
government representatives, the small but growing Libyan private 
sector, and representatives of U.S. firms.  The main messages to 
him were that Libya is open to American companies and future 
educational/technological exchanges but that challenges still 
remain in forging the new relationship in terms of visas, legal 
and bureaucratic obstacles and re-establishing new ties with 
Libyans after a 25-year absence from the market.  End comment. 
 
 
 
STEVENS 
STEVENSC