VZCZCXRO0592
RR RUEHBC RUEHDA RUEHDE RUEHDH RUEHIHL RUEHKUK
DE RUEHGB #1223 1301451
ZNR UUUUU ZZH
R 101451Z MAY 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 2995
INFO RUCNRAQ/IRAQ COLLECTIVE
RUEHGV/USMISSION GENEVA 0294

UNCLAS BAGHDAD 001223 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD PGOV EAID WTO ECON EINV IZ
SUBJECT: IRAQ WTO WORKING PARTY: HOPES FADE FOR A JUNE MEETING 
 
REF: (A) BAGHDAD 1176 
 (B) BAGHDAD 1146 
 (C) BAGHDAD 636 
 (D) BAGHDAD 285 
 
SENSITIVE BUT UNCLASSIFIED.  PLEASE PROTECT ACCORDINGLY. 
 
¶1. (SBU) SUMMARY: A GOI working group has finished compiling Iraq's 
Initial Goods Offer and its new tariff schedule.  However, 
senior-level approval of the Goods Offer will take another several 
weeks, in part because of an unfolding corruption scandal at the 
Ministry of Trade (MOT).  Long-awaited Customs Tariff legislation -- 
necessary to implement the schedule -- may also be delayed for 
several months.  Given these circumstances, the GOI is unlikely to 
be ready for its third Working Party in June. however, once the 
Goods Offer is approved, it should be ready by the fall.  END 
SUMMARY. 
 
Good News on the Goods Offer 
---------------------------- 
¶2. (SBU) A GOI inter-ministerial working group charged with 
compiling Iraq's initial Goods Offer to the World Trade Organization 
(WTO) has largely completed its work, following a week-long "off 
site" (facilitated by USAID's technical assistance providers) in 
Erbil the week of April 27.  Basing the Offer on Iraq's recently 
completed draft tariff schedule, representatives from the Ministries 
of Finance, Trade, Minerals and Industry and Agriculture came to 
agreement, and the final draft has now moved to the Ministry of 
Trade's (MOT) WTO Unit for final formatting and approval from the 
Minister.  There are some areas of the Goods Offer that are certain 
to attract questions from Working Party members; for example, the 
GOI prefers to handle the chapters of the offer covering 
"exceptions" by issuing government decrees rather than by enshrining 
them in law.  Nevertheless, WTO Unit officials (and the USAID 
contractors assisting them) say the document stands up well as an 
Initial Offer, i.e. it should provide the basis for a good exchange 
between the GOI and the WTO once a date for the next Working Party 
is actually determined. 
 
¶3. (SBU) While the Initial Goods Offer looks good, senior-level 
approval of it is likely to be delayed.  Trade Minister Abd Al-Falah 
Al-Sudani must approve it, but an emerging corruption scandal has 
rocked the MOT and brought most normal operations to halt (Reftel 
A).  The alleged corruption occurred within the MOT-administered 
Public Distribution System and has nothing to do with the WTO Unit. 
Still, arrest warrants have been issued for two of Al-Sudani's 
brothers (also MOT employees), and no one expects him to focus on 
WTO issues any time soon.  And if this drama were not enough, WTO 
Unit officials have also suggested that the Initial Goods Offer 
might have to go to the Council of Ministers (COM) for approval 
before it can be submitted to the WTO -- a step that would likely 
cause inordinate delays. 
 
The Wrong Customs Tariff Law 
---------------------------- 
¶4. (SBU) The GOI sent its draft tariff schedule to Geneva in 
December, but MOT officials report that they have yet to receive the 
WTO's comments on it.  Nevertheless, USAID's experts found that it 
made a good basis for the Initial Goods Offer. 
 
¶5. (SBU) Unfortunately, the implementing legislation for the tariff 
schedule will now likely be significantly delayed.  During an April 
27 meeting, Finance Minister Bayan Jabr told EMIN that the COM 
recently approved the draft Customs Tariff bill it had received in 
February, and transmitted it to the Council of Representatives (COR) 
for enactment.  This appears to be the same bill that the previous 
Director General of Iraqi Customs submitted before he was replaced 
in February, and which the MOT had judged to be WTO-incompatible 
Q(Refs B, C).  Although we do not expect to COR to enact the bill any 
time soon, the job of recalling it and rewriting it will be made all 
the more difficult now that it has moved to this next stage. 
 
Comment 
------- 
¶6. (SBU) Given these delays, it seems very unlikely that the GOI 
will submit its Initial Goods Offer in time for it to form a 
meaningful basis of discussion at a Working Party Meeting in June. 
In addition, the GOI has apparently still not agreed with the WTO on 
a candidate to fill the currently vacant Working Party Chair. 
However, we are fairly optimistic that if over the summer the Goods 
Offer is approved -- and a new Working Party Chair is named -- a 
fall working party could prove appropriate.  End Comment. 
 
 
BUTENIS