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P 281134Z MAY 09
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 2866
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
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RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RUEHVEN/USMISSION USOSCE 3570
RUEATRS/USTR WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 000662 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
USTR (LILIENFELD) 
 
E.O. 12958: DECL: 05/28/2019 
TAGS: PREL EIND EINV ETRD TIFA TX AZ AF ZK
SUBJECT: TURKMEN MINISTRY OF TRADE:  TRADE VOLUME WITH 
UNITED STATES SHOULD BE BILLIONS, NOT MILLIONS; A 
MCDONALD'S WOULD BE NICE, TOO 
 
Classified By: Charge Richard Miles, reasons 1.4 (B) and (D). 
 
¶1.  (C) SUMMARY:  In a productive meeting, Deputy Assistant 
U.S. Trade Representative, Claudio Lilienfeld exchanged ideas 
with Vepa Garriyev, the Head of the International Directorate 
of Turkmenistan's Ministry of Trade and Foreign Economic 
Relations.  Very little time was spent discussing the 
regional Trade and Investment Framework Agreement.  Instead, 
Garriyev focused on establishing a bilateral experts group 
commission to examine trade issues, diversify 
U.S.-Turkmenistan trade and address the current decrease in 
U.S. demand for Turkmen textiles.  Garryev also raised 
Turkmenistan's interest in taking another look at a possible 
bilateral investment treaty.  The Turkmen Government 
illustrated its readiness for foreign investment by 
discussing its initial correspondence with the McDonald's 
regional headquarters in Baku.  END SUMMARY. 
 
¶2.  (C) As part of his Central Asia tour, Deputy Assistant 
U.S. Trade Representative (DAUSTR), Claudio Lilienfeld met 
with Turkmenistan's Ministry of Trade and Foreign Economic 
Relations, represented by Head of the International 
Directorate, Vepa Garriyev.  DAUSTR Lilienfeld emphasized 
that, as part of the new administration's policy reviews, the 
United States was examining ways to invigorate its trade 
relationships in Central Asia.  While recognizing that the 
U.S.-Central Asia Trade and Investment Framework Agreement 
(TIFA) has been the primary vehicle for the United States to 
discuss trade issues in Central Asia, Lilienfeld suggested 
that the TIFA needed to move beyond just annual meetings and 
into substantive follow-through and results.  He suggested 
that while he was exploring invigorating the TIFA council 
process as one option -- including possibly by creating an 
official working group that would meet during the year to 
help implement the TIFA council agenda -- he also recognized 
that the TIFA alone was not helping the U.S. to develop more 
robust bilateral trade ties with the region, and he was also 
exploring how best to expand commercial ties that could 
bridge Afghanistan,s economy more robustly to the Central 
Asia region.  Lilienfeld expressed USTR,s readiness to 
explore ways to expand bilateral trade and investment with 
Turkmenistan, especially as Turkmenistan's economy further 
evolves and opens to foreign investment. 
 
¶3.  (C) Garriyev responded that there seems to be a general 
concurrence between the U.S. and Turkmenistan visions for 
trade cooperation.  Well informed, Garriyev started by 
suggesting that a bilateral investment treaty could be an 
excellent place to begin strengthening bilateral trade. 
(NOTE:  Apparently the U.S. and Turkmenistan initially 
discussed a bilateral investment treaty in 1998, proposed it 
in draft, but never concluded it.  END NOTE.)  Noting that 
there are 40-some bilateral documents signed between the U.S. 
and Turkmenistan, he suggested a bilateral, inter-ministerial 
working group, or group of experts, that could meet to 
examine all trade and investment issues, to include 
transportation, import/export barriers, and any others.  This 
group would review the documents that have been signed as 
well as the draft bilateral investment treaty and create a 
way to quickly and dramatically improve trade between the 
countries. 
 
¶4.  (C) Garriyev suggested that the current trade volume of 
about 20 million USD could and should be much more -- in the 
billions rather than in the millions.  (NOTE:  While Garriyev 
cited a trade volume of 20 million USD, U.S. data indicates a 
total bilateral goods trade of 200 million USD in 2008, 
including 60 million USD in exports to Turkmenistan and 140 
million USD in imports from Turkmenistan, both significant 
drops from 2007.  END NOTE.)  Garriyev expressed concern that 
U.S. demand for Turkmen goods, especially its textile 
 
ASHGABAT 00000662  002 OF 002 
 
 
products, had decreased over the past year.  Going back to 
the idea of a bilateral commission, he suggested that such a 
group could look into why the U.S. demand for high-quality, 
low-priced designer textiles had decreased. 
 
¶5.  (C) Garriyev turned to his colleague, the Head of the 
Ashgabat Food Supply Department, to note one concrete area 
where Turkmenistan is ready for increased U.S. investment: 
McDonald's.  Apparently, the Ministry of Trade and the 
regional McDonald's headquarters in Baku exchanged some 
correspondence in November 2008, but nothing has come of it. 
The Turkmen side asked for assistance that would help open 
McDonald's franchises in the near future.  Garriyev said that 
top levels of the government -- read:  the President -- had a 
great desire to see a big-name American retailer/business 
invest in Turkmenistan. 
 
¶6.  (C) Garriyev wrapped up by returning to the bilateral 
investment treaty.  Lilienfeld suggested that the two 
governments could discuss the idea as an agenda item in a 
bilateral dialogue, which could take place in September in 
conjunction with the notionally-planned next meeting of the 
TIFA council in Washington, DC.  Lilienfeld said that such 
agreements include strong protections for foreign investors, 
which would create significant requirements for a country 
like Turkmenistan.  Garriyev acknowledged that trade 
agreements bring heavy responsibilities, and he noted that 
these requirements are exactly what Turkmenistan needs to 
attract more foreign investment:  foreign companies would 
feel safer investing knowing that the protections were 
written into the agreement.  He further revealed that one of 
President Berdimuhammedov's priorities is to "get the 
government's hands off business" and develop the private 
sector.  He remarked that the private sector is currently 
responsible for 40 percent of Turkmenistan's economy, but the 
government has plans to increase that share to 70 percent as 
soon as possible.  He closed by expressing the wish that a 
bilateral commission could be formed soon, and reiterating 
that they want billions in trade with the U.S., not just the 
current millions. 
 
¶7.  (C) COMMENT:  Garriyev was fully engaged in the meeting 
and well prepared for the issues that DAUSTR Lilienfield 
raised while furthering Turkmenistan's agenda.  Garriyev 
spent no time discussing the regional TIFA, and rather 
focused on bilateral possibilities, perhaps reflecting 
Turkmenistan's desire for independence from the rest of the 
region.  As Turkmenistan's economy continues to evolve, it 
will be interesting to see how far privatization can go, how 
quickly, and what the bumps on the road will be.  More 
engagement from the U.S. side could help smooth out some of 
those bumps, and create opportunities.  Garriyev might be an 
excellent partner as we move down that road.  END COMMENT. 
 
¶8.  (U) DAUSTR Lilienfield has cleared this message. 
MILES