VZCZCXYZ0000
PP RUEHWEB

DE RUEHKU #0199/01 0641456
ZNR UUUUU ZZH
P 051456Z MAR 09
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 2925
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS KUWAIT 000199 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USTR 
COMMERCE FOR ADVOCACY CENTER 
 
E.O. 12958: N/A 
TAGS: ECON EINV PGOV CVIS KU
SUBJECT: KUWAIT'S MINISTER OF COMMERCE ON IPR, DOW, FREE 
TRADE, AND NSEERS 
 
 ¶1. (SBU) Summary: On March 5, Ambassador (accompanied by 
EconCouns) called on Ahmad Baqir, Minister of Commerce and 
Industry.   Ambassador commended the GoK's efforts to improve 
IPR enforcement, but stressed the need to improve legislation 
to international standards, while acknowledging the 
difficulty in moving legislation forward given the serious 
GoK National Assembly tensions.  Ambassador highlighted the 
cancellation of the K-Dow deal as having a chilling effect on 
investment.  Baqir gave his personal opinion that there would 
be opportunities for Dow in the future, but stressed that the 
government needed to resolve parliamentary concerns about 
deals (possibly by inviting the State Audit Bureau to become 
engaged early in the process), otherwise they would all be 
blocked.  Ambassador expressed appreciation for the 
Ministry's efforts to resolve AIG's concerns about licensing. 
 Baqir, noting his experiences in 2004, expressed his strong 
concern about the treatment of Kuwaitis at U.S. ports of 
entry.  Baqir was accompanied by Under Secretary Rasheed 
Al-Tabtabaei, and Assistant Under Secretary For Foreign Trade 
Affairs Abdulaziz Al-Khaldi. End Summary. 
 
Debt Relief and Stock Market Reform 
----------------------------------- 
 
¶2. (SBU) Ambassador asked Baqir about parliamentary demands 
to pass legislation providing consumer debt relief to 
Kuwaitis, either as part of the GoK's financial sector rescue 
draft law or separately.  Baqir replied that he was strongly 
opposed to any form of consumer debt relief.  He had been 
opposed to it as a member of parliament and had not changed 
his position since coming into the government.  He opined 
that it "punished the good and rewarded the bad."  In the 
U.S., he noted, it might makes sense to alleviate economic 
dislocation, since Americans had financial obligations. 
"It's different here," he stressed, since the government 
provided "everything," yet people still refused to pay their 
bills.   With regard to Kuwait's draft stock market reform 
law, he noted that it was being considered by parliament.  He 
explained that the GoK had put together a seven person 
committee, led by U/S Tabtabaei, which included both 
government and private sector representatives.  They had 
prepared a report -- in contrast to earlier versions which 
appeared to be garbled translations from English to Arabic -- 
that was clear and easy to understand for National Assembly 
members, and he was hopeful the law would be passed. 
 
IPR 
--- 
 
¶3. (SBU) Ambassador turned the discussion to IPR, commending 
GoK efforts to increase enforcement, but highlighting serious 
deficiencies in existing laws.  She acknowledged the 
cooperation between the USG and the GoK to draft amendments, 
but expressed concern that GoK commitment would not be 
matched by parliamentary action, noting that several laws 
were either stuck in parliament or not even brought forward 
out of fear that they would not be passed.  Baqir argued that 
, while some saw parliament as an obstacle, it was not the 
only obstacle.  He noted the proposed Build Operate Transfer 
(BOT) law, which had languished in parliament for over 15 
years, until he chaired the Parliamentary Economic and 
Financial Affairs Committee and managed to move it forward. 
 
¶4. (SBU) U/S Tabtabaei stressed that the GoK was committed to 
improving its IPR enforcement.  He noted that the GCC would 
be issuing a unified trademark law, which would help avoid 
some parliamentary delays and that the Patent law had been 
extensively revised and was with the cabinet's legal office. 
He was under the mistaken impression that Kuwait had been on 
the Special 301 Priority Watch List, which he said was 
inconsistent with the efforts the GoK had taken.  He 
accepted, however, that Kuwait would need to take further 
steps to get off the watch list.  Ambassador said this was a 
shared goal, but absent legislation would be hard to reach. 
 
Dow and Investment 
------------------ 
 
¶5. (SBU) Ambassador, noting Baqir's comments on the BOT law, 
highlighted the decision to cancel the K-Dow deal as having a 
chilling effect on foreign investment.  Baqir agreed with 
this contention and gave his perspective on the reasons 
underlying the tensions between the government and the 
National Assembly.  Oil sector projects, he noted do not fall 
under Audit Bureau (Kuwait's GAO) control.  The oil companies 
have always resisted having the Audit Bureau oversee their 
projects arguing that it does not have the technical 
competence to understand the issue.  In every case, however, 
 
companies spend time and money developing a deal and -- once 
they conclude it -- parliamentarians discover that the Audit 
Bureau was not engaged.  Parliament would then put strong 
pressure on the GoK to restart the entire process.  Baqir 
noted that MP Ahmed Sa'doun had just proposed a new law that 
would bring in the Audit Bureau from the beginning.  Although 
the GoK had opposed this type of law in the past, Baqir 
stressed that the issue needed to be solved otherwise "every 
project will start over."  He stated his personal opinion 
that the deal would be discussed and "created" again at some 
point in the future.  "Kuwait's only source of finance is 
oil," and the U.S. had expertise in that area. 
 
¶6. (SBU) Ambassador asked for Baqir's thoughts about having 
U.S.  companies approach parliamentarians directly.  She 
noted that she had asked the Speaker of Parliament this 
question and he had categorically rejected the idea.  Baqir 
disagreed, noting that Chevron had visited Kuwait in 2001. 
Jassem Al-Saqer, then an MP had invited Baqir and a group of 
other MPs to dinner at his house and they had an excellent 
conversation with Chevron representatives.  (Note: In 
fairness to the Speaker, the differences in perspectives may 
have more to do with appropriate venue for such contacts, 
i.e., private home verses National Assembly.  End Note.) 
 
AIG 
--- 
 
¶7. (SBU) Ambassador briefly raised AIG's application for a 
second license to offer general insurance in Kuwait, which 
would allow it to stay in the market after it spun off its 
life insurance business.  She thanked Baqir for the efforts 
of Ministry staff to work with AIG in an effort to resolve 
AIG's concerns.  U/S Tabtabaei stressed the GoK's interest in 
keeping AIG in the Kuwaiti market.  He explained that in his 
last meeting with AIG, he explained that the Ministry 
understood about AIG, but needed to be assured that AIG/MEMSA 
was indeed an AIG subsidiary.  The Ministry also wanted to be 
sure that existing policy holders would be protected.  His 
concern appeared to be at least partially motivated from a 
desire to protect the ministry from contingent liabilities on 
the insurance policies. 
 
TIFA and FTA 
------------ 
 
¶8. (SBU) Tabtabaei raised Kuwait's interest in reenergizing 
the TIFA Council discussions with an eye toward making 
progress toward an FTA.  He noted that the GoK had made 
progress under the TIFA and had been caught off guard when 
the U.S. negotiators explained that their Trade Promotion 
Authority (TPA) had expired, and worried aloud that all 
forward motion would be forfeited.  Ambassador and EconCouns 
assured the Kuwaitis that there was continuity in the 
bureaucracy in Washington.  Although TPA and FTAs were 
complicated domestic issues in the U.S., there were steps we 
could take to continue to improve our trade relations. 
(Note:  The Kuwaitis have reiterated their interest in FTA 
negotiations, but they have not yet taken the steps needed to 
make opening negotiations useful.  End Note.) 
 
NSEERS 
------ 
 
¶9. (SBU) Baqir raised his concerns about the treatment of 
Kuwaitis at U.S. ports of entry.  He noted that in his 2004 
visit to the U.S., his wife and two children had been allowed 
into the country.  He, and his 15 year old son, had waited 
for four hours, and he had been asked questions such as when 
was your father born?  (Impossible to answer since Kuwait did 
not keep records in the early 20th century).  He said that he 
saw a member of Kuwait's ruling family waiting in a wheel 
chair, as well as four of the aircraft crew, who told him 
that they were subjected to this every time they arrived in 
the U.S.  He added that the delay occurred despite his 
ministerial rank and the fact that he was carrying a 
diplomatic passport. 
 
Bio Note 
------- 
 
¶10. (SBU) Baqir noted that he had been captured by the Iraqis 
on February 22, 1991 and with around 1,200 Kuwaitis was held 
until March 15, when the Iraqis released them and "kicked 
them" over the border.  He said that the former detainees 
spent a cold night on the border, until the next morning when 
Kuwaiti and U.S. trucks came to pick them up. They drove into 
Kuwait chanting "God bless Kuwait; God bless the USA."  He 
 
stressed that Kuwaitis appreciate all the U.S. has done for 
them and asked "please don't think that when we oppose U.S. 
policy in Palestine" it means that Kuwaitis dislike the U.S. 
 He also noted that he had studied in Egypt, the UK and 
Sweden and that he had seen religious "fanatics" everywhere. 
Although he was Salafi, he stressed, he and his political 
group had turned many away from violence. 
 
Comment 
 
¶11. (SBU) Baqir and his team were engaged in the issues and 
expressed interest in working with the USG to improve 
bilateral economic relations.  Baqir's comment about the need 
to solve the legislative-executive stalemate with regard to 
oil sector investments strikes us as very perceptive.  The 
government and the oil companies are loathe to involve 
parliament in their decision making, but are equally loathe 
to move decisions forward absent parliamentary support. 
Whether the Audit Bureau has the expertise to understand 
complex oil sector contracts is an open question.  It is 
clear, however, that the state oil companies and the GoK 
either need to do a better job of bringing Parliament on 
board or need to more forcefully push through decisions in 
the face of Parliamentary opposition.  The different answers 
of two parliamentarians with regard to foreign "lobbying," 
however highlight the difficulties with educating the 
National Assembly members on oil sector deals.  End Comment. 
 
********************************************* ********* 
For more reporting from Embassy Kuwait, visit: 
visit Kuwait's Classified Website at: 
 
http://www.intelink.sgov.gov/wiki/Portal:Kuwa it 
********************************************* ********* 
JONES