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DE RUEHEK #0463/01 1340433
ZNR UUUUU ZZH
R 140433Z MAY 09
FM AMEMBASSY BISHKEK
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INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
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RUEHBJ/AMEMBASSY BEIJING 3069
RUCPDOC/USDOC WASHDC 0700
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RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUEHGV/USMISSION GENEVA 1366
RUEHVEN/USMISSION USOSCE 3412
RUCNDT/USMISSION USUN NEW YORK 2798
RUEHNO/USMISSION USNATO BRUSSELS BE
RUEHBS/USEU BRUSSELS
RUEHLMC/MILLENNIUM CHALLENGE CORP
RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL

UNCLAS SECTION 01 OF 03 BISHKEK 000463 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/CEN 
DEPT PASS TO USTR 
COMMERCE FOR ITA (STARKS/HOUSE) 
 
E.O. 12958: N/A 
TAGS: BEXP BTIO ECON KG
SUBJECT: KYRGYZ WELCOME TIFA DISCUSSIONS 
 
BISHKEK 00000463  001.2 OF 003 
 
 
¶1.  (SBU) Summary:  During Deputy Assistant U.S. Trade 
Representative (USTR) Claudio Lilienfeld's visit to Bishkek, 
Kyrgyz Government officials, as well as private sector 
representatives, welcomed USTR's ongoing review to determine 
how to invigorate the U.S.-Central Asia Trade and Investment 
Framework Agreement (TIFA) and consider ways to enhance 
bilateral U.S.-Kyrgyz trade and investment.  Local 
businesspeople lamented the low level of U.S. business 
interaction with the Kyrgyz Republic, and suggested that U.S. 
firms operating in China, Russia or other neighboring 
countries might be tempting prospects for U.S. investment 
here.  The Kyrgyz Republic lacks a trade and investment 
promotion agency, and international experts highlighted that 
assistance in strengthening the application of manufacturing 
and sanitary/phytosanitary standards would be important to 
enable increased Kyrgyz exports.  Kyrgyz government officials 
welcomed USTR's efforts to invigorate the regional TIFA, 
noting that the last meeting in Dushanbe failed to generate a 
practical protocol for future action.  They also welcomed 
news that USTR was considering whether and how to develop a 
bilateral dimension to U.S.-Kyrgyz trade discussions.  Kyrgyz 
officials are aware of plans for a high-level Washington TIFA 
meeting in September, and were happy to report progress in 
their work to simplify customs procedures through a single 
window approach.  End Summary. 
 
Business Community Offers Insights 
---------------------------------- 
 
¶2.  (SBU)  During an April 22 tea hosted by the Ambassador 
for visiting Deputy Assistant U.S. Trade Representative 
Claudio Lilienfeld, Bishkek-based business representatives 
noted the relative absence of U.S. firms active in the Kyrgyz 
Republic when compared to European companies and suggested 
holding a forum to attract U.S. firms resident in China, 
Russia or other neighboring areas to opportunities in the 
Kyrgyz market.  Niyaz Aldashev, a prominent local trade 
lawyer, highlighted the cheaper operating expenses for 
conducting business in Bishkek vis-a-vis Almaty, and lamented 
foreign representatives' tendency to focus on reports and 
press conferences rather than concrete investment promotion. 
Gulnara Kalikova, another prominent business lawyer, promoted 
the Kyrgyz legal environment, but cited the relatively small 
size of the Kyrgyz market as a key limiting factor for 
foreign investment.  Coca-Cola's Ezel Agaoglu seconded 
Kalikova's observation that Kyrgyz authorities had not 
promoted investment opportunities, and suggested that the 
relatively high skill level of Kyrgyz workers could be an 
asset, including in Afghanistan. 
 
¶3.  (SBU) In these and other meetings, interlocutors 
described how the Kyrgyz Republic's business environment was 
a difficult one.  Though in the end the Kyrgyz did not want 
to drive out investors, the struggles faced by foreign 
companies were a significant disincentive for new investment. 
 Lilienfeld made the point that to the extent that the U.S. 
was considering increasing its bilateral work, it was both a 
means to work with the Kyrgyz government to improve its 
business climate, but also created an incentive for the 
Kyrgyz government, as the U.S. would be less inclined to 
engage if the Kyrgyz government was non-responsive to its 
concerns. 
 
Standardization 
--------------- 
 
¶4.  (SBU) USAID personnel, as well as representatives of the 
German technical assistance provider GTZ, advised Lilienfeld 
on the importance of making improvements in manufacturing 
standards and sanitary/phytosanitary (SPS) quality in the 
 
BISHKEK 00000463  002.2 OF 003 
 
 
Kyrgyz Republic to facilitate exports, including supplies to 
U.S. operations in Afghanistan.  As an example, USAID 
outlined a project that would aid Kyrgyz sugar production. 
GTZ representatives also promoted the benefits of possible 
ISO certification of Kyrgyz products to aid Kyrgyz exports. 
A USAID contractor complimented Kyrgyz progress in 
streamlining customs processing through development of a 
single window approach, and Kyrgyz officials touted their 
significant progress as well.  (Note:  Per USAID's trade 
liberalization and customs project coordinator, the Kyrgyz 
are furthest along in implementing the "single window" 
approach among the five Central Asian countries; single 
window has been one of the core TIFA agenda items.  End 
Note.) 
 
¶5.  (SBU) When discussing regional and bilateral approaches, 
the GTZ representatives also agreed with Lilienfeld's 
expressed concern about the lack of results coming from the 
regional TIFA, and said that regional approaches in general 
(including under the rubric of the Asian Development 
Bank-funded Central Asia Regional Economic Cooperation 
initiative) have suffered from insufficient follow through 
from the countries in the region and that country-by-country 
work had tended to yield more progress.  The GTZ 
representatives outlined their priority trade-related 
initiatives which address:  1) administrative barriers to 
trade (such as by streamlining customs procedures through the 
single window customs approach), and 2) technical barriers 
such as manufacturing standards and SPS.  He cautioned, 
however, that it was important to be aware that the European 
Union and the United States take different approaches to 
these issues. 
 
Government Sounds Optimistic 
---------------------------- 
 
¶6.  (SBU) MFA International Economic Cooperation Department 
Counselor Aziz Kurumbaev welcomed Lilienfeld's visit, and 
encouraged him to identify bilateral means to invigorate 
TIFA.  Kurumbaev reviewed the Kyrgyz Republic's priorities, 
including regional water issues as well as the benefits 
accruing to the Kyrgyz Republic as an avenue for transit and 
reexport of goods through the Kyrgyz Republic.  Deputy 
Minister of Economic Development and Trade Kurmanbek Ukolov 
lamented the overly "formal" work of TIFA, and noted the lack 
of an agreed action plan following the 2008 Dushanbe TIFA 
meeting.  That said, he pledged to support senior Kyrgyz 
participation in the anticipated September Washington TIFA 
gathering.  In addition, Ukulov said he wanted to explore 
ways to contribute to the development of the SME sector in 
the Kyrgyz Republic -- and to that end he said the Ministry 
would provide proposals identifying priority sectors that 
could benefit from match-making. 
 
¶7.  (SBU) Ukulov also noted that Kyrgyz companies could be 
sources for goods needed in Afghanistan.  Emboff reminded 
Ukulov of the February Defense Logistics Agency (DLA) visit 
to Bishkek to identify suppliers for products for 
Afghanistan, and the Ministry's refusal to meet with the DLA 
team.  Ukulov promised to send the Embassy a list of 
suitable, capable Kyrgyz suppliers of goods to Afghanistan. 
(Comment:  As of May 12, the Ministry still has not been able 
to provide Embassy with the promised list.  End Comment.) 
 
Comment 
------- 
 
¶8.  (SBU) Lilienfeld's interlocutors seemed keen to develop a 
more fruitful mechanism for engaging the United States on 
trade and investment issues and for expanding U.S. trade and 
 
BISHKEK 00000463  003.2 OF 003 
 
 
investment with and in the Kyrgyz Republic.  To that end, 
they seemed to welcome any efforts, whether through 
invigoration of the TIFA process and/or a new emphasis on 
bilateral engagement.  Lilienfeld's visit offered the Kyrgyz 
the opportunity to be responsive to the U.S. examination of 
new approaches by better articulating the Kyrgyz Republic's 
priorities, areas of interest for trade and investment, and 
readiness to improve conditions for such activity. 
 
¶9.  (U) DAUSTR Lilienfeld cleared this cable. 
GFOELLER