VZCZCXRO2703
PP RUEHDBU RUEHPW RUEHSL
DE RUEHBUL #3306/01 2901237
ZNR UUUUU ZZH
P 171237Z OCT 09 ZDK
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 2214
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0914
RUCNAFG/AFGHANISTAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/USDA FAS WASHDC

UNCLAS SECTION 01 OF 02 KABUL 003306 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR S/SRAP STAFF, SCA/FO, SCA/RA, SCA/A, EEB/TPP/BTA 
DEPT PASS AID/ASIA SCAA 
DEPT FOR H 
DEPT PASS USTR FOR DELANEY AND DEANGELIS 
TREASURY FOR MHIRSON, ABAUKOL, AWELLER, AND MNUGENT 
COMMERCE FOR HAMROCK-MANN, DEES, AND FONOVICH 
 
E.O.12958: N/A 
TAGS: ETRD BEXP PREL PGOV AF PK
SUBJECT: COMMERCE MINISTER SHAHRANI - GOOD TRIP TO WASHINGTON, NOW 
BACK WORKING ON TRANSIT TRADE 
 
REF: KABUL 3176 
 
¶1. (SBU) Summary.  Minister of Commerce and Industries Shahrani 
reported on his October 4 - 8 trip to Washington, including 
take-aways from the U.S./Afghanistan trade and investment framework 
agreement (TIFA) talks and his participation in the TIFA meeting 
with the Central Asian countries.  He shared with Coordinating 
Director Wayne his appreciation for USG support for Afghanistan's 
bid for WTO membership and discussed at length the talks with 
Pakistan on a transit trade agreement.  On the transit trade 
agreement talks with Pakistan, Shahrani said that he had worked out 
a way ahead with Foreign Minister Spanta and that the Foreign 
Ministry was formally inviting Pakistan to send its delegation to 
Kabul in November to continue the negotiations.  However, the 
Commerce Ministry has picked up signs that Islamabad prefers to wait 
until the post-election picture in Kabul is clarified. 
Nevertheless, Shahrani stated his team's willingness to redouble 
efforts to complete the agreement by the end of the year.  End 
summary. 
 
TIFA and Other Washington Meetings 
---------------------------------- 
 
¶2. (U) Minister of Commerce and Industries (MOCI) Wahidullah 
Shahrani told Coordinating Director for Development and Economic 
Affairs (CDDEA), Ambassador E. Anthony Wayne, October 13 that he 
found his discussions the previous week in Washington useful and 
that he was focusing on follow-up.  (Shahrani's views on the Afghan 
political situation were reported septel.)  Shahrani expressed 
appreciation for meetings with Deputy Secretary of State Lew, 
Commerce Secretary Locke, the U.S. Trade Representative, D/USTR 
Marantis, SRAP Holbrooke, USAID Acting Administrator Fulgham, and 
five members of Congress.  One takeaway from his talks with Sen. 
Bond, Rep. Van Hollen, and others was the importance of bringing 
visiting members out to USAID and other assistance projects to see 
the positive impacts in livelihoods, incomes, and employment in 
Afghanistan resulting from U.S. assistance. 
 
¶3. (U) On his direct participation in the annual U.S. Afghanistan 
Trade and Investment Framework Agreement (TIFA) talks and his 
participation as an invited observer in the TIFA talks with the 
Central Asian countries, Shahrani noted the importance of the 
Defense Department's Northern Distribution Networks (NDNs) 
initiative.  The initiative stems from a Congressional waiver that 
allows for the purchase of goods and services from the region. 
Minister Shahrani said he will mobilize Afghan private sector firms 
that can meet the standards set for the initiative. 
 
Border Crossing 
--------------- 
 
¶4. (U) Also as a result of his Washington discussions, Shahrani told 
Ambassador Wayne he is looking to facilitate efforts by 
international forces to receive their supplies without delays, 
particularly at Heiratan and Sher Kan Bandar (SKB) border crossings 
in the north.  Sharani noted ISAF IJC Commander LTG Rodriguez' 
interest in improving the situation at SKB and Hairatan and said he 
was looking to step up Ministry staff at those crossings, adding he 
had talked to the Finance Minister and Central Bank Governor about 
other steps GIRoA might take.  The Minister also said that in 
Hairatan and Torygundy, where the Commerce Ministry runs the Fuel 
Liquid Gas Enterprise (FLGE), a state-owned fuel distribution 
company, he has achieved 24 hour/seven days a week operations.  He 
said he is engaging the Central Bank and Finance Ministry to end the 
practice at these two crossing points where, reportedly, officials 
have worked only eight hours a day, even though trucks continuously 
crossed in from Uzbekistan and Tajikistan.  Shahrani was pleased his 
efforts had meant Afghan officials, unlike in past years, had worked 
at the crossing points during the Eid holidays. 
 
WTO 
--- 
 
¶5. (SBU) With regard to progress on WTO, Minister Shahrani expressed 
thanks for Ambassador Kirk's support for Afghanistan's WTO 
membership.  Shahrani noted MOCI's submission of the Memorandum of 
Foreign Trade Regime (MFTR) in March 2009 and the establishment of a 
WTO Unit within the Ministry as signs of the progress the Afghan 
Government is making.  To advance Afghanistan's WTO application 
further, Shahrani said he would leave the next day for Tanzania and 
a conference for Least Developed Countries (LDCs) and the WTO where 
 
KABUL 00003306  002 OF 002 
 
 
he would also meet WTO Director General Lamy.  Shahrani added he 
thought USTR Kirk had helped arrange the Lamy meeting and that he 
appreciated the USG's help. 
 
Reconstruction Opportunity Zones/ 
Boosting Afghan Prosperity 
--------------------------------- 
 
¶6. (U) The status and importance of the reconstruction opportunity 
zone (ROZ) legislation was the chief focus of Commerce Minister 
Shahrani's meetings with senators and congressmen.  While noting 
passage is delayed in the Senate, Minister Shahrani said he would 
use this time to initiate feasibility studies of six to eight 
locations likely suitable for ROZs.  The studies will focus on 
product, labor availability, and access to markets.  USAID's planned 
Trade & Accession Facilitation for Afghanistan (TAFA) will also 
provide support. 
 
¶7. (U) Further on boosting Afghanistan's economic growth, Ambassador 
Wayne noted a recent phone call with Ambassador Verveer regarding 
women and entrepreneurship and said the Embassy wanted to expand 
efforts in this area.  Minister Shahrani and USAID agreed to meet to 
discuss efforts further to strengthen the opportunities for firms 
owned by Afghan women to supply U.S. firms.  Minister Shahrani added 
that Afghan women traditionally worked in producing carpets, shawls, 
and cashmere. 
 
Afghanistan/Pakistan Transit Trade Agreement (APPTA) 
--------------------------------------------- ------- 
 
¶8. (SBU) Minister Shahrani expressed appreciation for his 
discussions with Deputy Secretary Lew and SRAP Holbrooke on the 
transit trade negotiations.  He noted the confusion that existed in 
Kabul, i.e., with the Foreign Ministry, over the provision for a 
study on re-exports/smuggling.  He added that some had suggested the 
two Ministries of Interior needed to be brought into the process 
since they are responsible for the borders.  The reality, however, 
is that neither side is able to control the border, and so, Shahrani 
continued, it is best to continue focusing on the trade. 
 
¶9. (SBU) Since returning to Kabul, Shahrani met with Foreign 
Minister Spanta to brief him on the talks and the importance of 
proceeding with the study on re-exports.  Shahrani said he thought 
he had reached an understanding with Spanta on a way ahead which he 
thought Pakistan's Government might accept.  He said Spanta had not 
been properly briefed on the terms of reference for the re-export 
study.  Shahrani said the Foreign Affairs Ministry's First Political 
Department would issue an official letter that day to invite the 
Pakistani delegation from to the next negotiating round November 
10-11.  Moreover, the Afghan side is offering to hold several 
negotiation rounds per month to conclude the agreement by the end of 
the year deadline.  The Commerce Minister noted, however, that the 
Pakistani side may hold back due to the political situation in 
Afghanistan resulting from the results of the August elections.  The 
Afghan MFA, he continued, is also uncertain as to the level of 
commitment in Pakistan's Government to successful transit trade 
talks.  [Note: A senior Commerce Ministry official subsequently told 
emboffs Pakistan's Embassy in Kabul informed MOCI that Islamabad 
does not think talks should proceed until the political situation in 
Kabul is clarified.  End note.] 
 
¶10. (SBU) Focusing on the re-export study, Shahrani stated the 
assessment will go in a "parallel way," so as to coincide with, but 
not be integrated into APTTA negotiations, reflecting on Spanta's 
concern.  The study will take 6 - 12 months, providing sufficient 
time to understand the impact -- positive and negative -- on the 
border areas.  The Minister said he expects international experts, 
provided through USAID's TAFA program, to guide the study, but that 
Afghans could participate as needed, for example, in conducting 
field work.  He offered to introduce possible staff who could 
support this effort.  The Minister also suggested forming a joint 
committee to explore implementing the study's recommendations and to 
further information sharing.  Shahrani stated blocking the trade 
would negatively affect 40% of Pakistan's tribal areas, who are 
largely dependent upon this trade for their livelihoods.  Ambassador 
Wayne said it was good that the Minister was thinking about the 
talks, maintaining a strategic sense of their value and how to 
advance them.  Maintaining such a perspective is important to 
ensuring the talks' success. 
 
EIKENBERRY