VZCZCXRO9113
PP RUEHDE RUEHDH RUEHDIR
DE RUEHYN #1576/01 2351244
ZNR UUUUU ZZH
P 231244Z AUG 09
FM AMEMBASSY SANAA
TO RUEHC/SECSTATE WASHDC PRIORITY 2644
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHGV/USMISSION GENEVA 0301

UNCLAS SECTION 01 OF 02 SANAA 001576 
 
SIPDIS 
 
USTR FOR JASON BUNTIN 
USAID FOR CHRIS KISCO 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EAID ECIN PREL PGOV KMCA KMPI YM
SUBJECT: YEMEN: ROYG ASKS FOR MORE U.S. FLEXIBILITY ON WTO 
ACCESSION REFORMS 
 
REF: 06 SANAA 2063 
 
¶1.  SUMMARY: The ROYG continues to balk at what it claims are 
unfair U.S. demands regarding WTO accession, even as it 
insists it is still willing to make a good faith effort in 
ongoing negotiations.  The WTO accession team at the Ministry 
of Industry and Trade (MOIT) recognizes that Yemen needs to 
make progress on bilateral market-access negotiations and to 
finalize WTO rules issues.  Yemen, which has been in 
negotiations for WTO accession since 2002, would like to open 
another Trade and Investment Framework Agreement (TIFA) 
meeting with the USG.  The ROYG may be more amenable to 
conceding in bilateral negotiations on sticky issues 
regarding market access and rules ) whether through a TIFA 
meeting or not - than initially apparent on the surface.  END 
SUMMARY. 
 
TRADE MINISTRY PRIORITIZING WTO ACCESSION 
----------------------------------------- 
 
¶2.  In a meeting with the Ambassador on August 18, Dr. Yahya 
al-Mutawakel, the Minister of Industry and Trade, said that 
there needs to be more collaboration between the Ministry of 
Industry and Trade (MOIT) and the USG on WTO accession, which 
he acknowledged was essential in order to  create more jobs 
and investment in Yemen.  Gentling chiding his own 
government, he suggested that the ROYG is de-emphasizing 
economic planning in the face of tremendous political 
challenges, and failing to recognize that the flailing 
economy is inherently linked to the political crisis.  He 
suggested that a recent focus on governance by donor 
countries has left economic development by the wayside. 
Mutawakel indicated that a holistic approach involving both 
the public and private sectors is critical to sustainable 
development and economic reform in the long-term, and 
believes that WTO accession is crucial. 
 
RESERVATIONS HINDERING NEGOTIATIONS 
----------------------------------- 
 
¶3.  When pressed by the Ambassador, the WTO accession team at 
the Ministry of Industry and Trade (MOIT) recognized that 
Yemen needs to make progress on bilateral market access 
negotiations and to finalize WTO rules issues.  Dr. Hamoud 
Ali al-Najar, Chief of Communication and Coordination Office 
with the WTO, said that the ROYG has a number of reservations 
about the negotiation process.  Najar specifically requested 
greater U.S. flexibility on agricultural-related negotiations 
and sensitive products.  According to Najar, the concessions 
Yemen seeks are comparable to those granted to other Least 
Developed Countries (LDCs) that gained WTO accession 
recently, specifically identifying Nepal, Cambodia, and Cape 
Verde.  Still, the team remains optimistic about accession 
and is hoping to wrap up negotiations by the end of the year. 
 (Note: Yemen has closed multilateral negotiations with the 
European Commission (EC) and, according to Ministry 
officials, is near to closing bilateral negotiations with 
Australia and Japan.  End Note.) 
 
ROYG PRESSING FOR U.S.-YEMEN TIFA 
--------------------------------- 
 
¶4.  The MOIT, which has been in negotiations for WTO 
accession since 2002, would like to open another Trade and 
Investment Framework Agreement (TIFA) meeting with the USG as 
soon as possible.  According to the WTO accession team at the 
MOIT, a U.S.-Yemen TIFA would raise confidence within the 
ROYG about the accession process.  It would also lay the 
groundwork for the WTO ministerial meeting and a working 
party meeting, both of which will take place in December 2009 
in Geneva.  (Comment: The MOIT insists that the last 
U.S.-Yemen TIFA, which took place in Washington in November 
2004, achieved considerable progress in the negotiations, and 
that another TIFA can do the same.  End Comment.) 
Nevertheless, given the USG position that progress on 
outstanding issues must be made before another TIFA is 
scheduled, Mutawakel indicated that the MOIT would be willing 
to extend the deadline for the TIFA meeting, while building 
consensus through additional video-teleconferences (VTCs). 
Mutawakel's position suggests that the WTO accession team may 
be willing to extend discussion on outstanding issues such as 
market access and WTO rules. 
 
¶5.  COMMENT: Yemen's interest in opening another (and final) 
TIFA meeting with the U.S. appears to be connected to its 
desire to close bilateral negotiations with the USG and 
 
SANAA 00001576  002 OF 002 
 
 
proceed with WTO accession.  While the WTO accession team 
continues to insist that Yemen already has made significant 
concessions, Minister Mutawakel seems more flexible in 
lengthening the negotiations process.  The ROYG may be more 
amenable to conceding in bilateral negotiations on sticky 
issues such as market access and rules ) whether through a 
TIFA meeting or not - than initially apparent on the surface. 
END COMMENT. 
 
SECHE