VZCZCXYZ0676
PP RUEHWEB

DE RUEHTU #0747/01 2800640
ZNR UUUUU ZZH
P 070640Z OCT 09
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 6860
INFO RUCNMGH/MAGHREB COLLECTIVE
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS TUNIS 000747 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EEB/IFD/OMA, EEB/EPPD, AND NEA/MAG 
STATE PASS USTR (BURKHEAD) AND USAID (MCCLOUD) 
USDOC FOR ITA/MAC/ONE (MASON), ADVOCACY CTR (TABINE) 
CASABLANCA FOR FCS (KITSON) 
LONDON AND PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: ECON PREL EFIN EINV ETRD TS
SUBJECT: EIZENSTAT WORKING TO REVIVE INITIATIVE FOR MAGHREB 
INTEGRATION 
 
REF: TUNIS 562 
 
SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. 
 
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Summary 
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¶1. (SBU) During an October 1 presentation to a group of elite 
Tunisian business leaders, former Deputy Secretary of the 
Treasury Stuart Eizenstat discussed Maghreb integration. 
Eizenstat chalked up the failure of his Clinton-era 
initiative to shifting priorities with the change of 
administrations but said the fight against terrorism provided 
new space in which to revive it.  He suggested new trade 
mechanisms to link the region with the U.S. market and said 
the United States and Europe could play vital roles as 
catalysts.  In a parallel event on the same day, the Centre 
de Jeunes Dirigeants (CJD), a young businessmen's 
association, hosted a symposium on Maghreb integration which 
brought together speakers from Tunisia, Morocco, Mauritania, 
Libya, and Algeria.  In both events, all participants agreed 
economic cooperation will pull the train of Maghreb 
integration, and politics will follow later.  End summary. 
 
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Ambassador Eizenstat in Tunisia 
------------------------------- 
 
¶2. (SBU) At the invitation of UTICA, Tunisia's Employers' 
Union, former Deputy Secretary of the Treasury Stuart 
Eizenstat spoke at a round table dinner on October 1 about 
Maghreb integration.  In attendance were a small group of 
businesspeople and a representative from the Ministry of 
Foreign Affairs Americas desk.  During his talk, Eizenstat 
said the Maghreb was the least integrated region in the world 
and that growth rates were suffering as a result.  He 
outlined broad economic strategies for Maghreb countries, 
such as investment in education and courting foreign direct 
investment.  He said the United States, and to some measure 
Europe, could be catalysts toward this process - a process 
that has not succeeded from within the Maghreb for over 
thirty years. 
 
--------------------------------------------- ----- 
U.S.-Linked Trade Mechanisms to Foster Integration 
--------------------------------------------- ----- 
 
¶3. (SBU) Ambassador Eizenstat introduced the idea of Maghreb 
Economic Integration Zones (EIZ), building on the model of 
Qualified Industrial Zones (QIZ) in Jordan and Egypt, as a 
way for Tunisia to send products to the U.S. duty-free. 
According to Eizenstat, regional cumulation of origin would 
allow Tunisia to provide inputs to Morocco and the final 
product be shipped under the U.S.-Morocco Free Trade 
Agreement (FTA).  In addition, the U.S. could enact policy to 
allow shipment under the FTA if any portion of the product 
was from Morocco, regardless of the shipment origin. 
Eizenstat said these strategies could be adopted by the USG 
as means to integrate the region, much as the QIZ did with 
Egypt, Israel, and Jordan.  Some businesspeople perked up at 
the idea, and saw it as a more comprehensive opportunity than 
the privileges currently granted by the Generalized System of 
Preferences. 
 
--------------------- 
Barriers and Setbacks 
--------------------- 
 
¶4. (SBU) Tariff barriers between Maghreb countries are 
relatively low, and Eizenstat blamed non-tariff barriers for 
lack of progress.  Mondher Ben Ayed, former head of the 
Tunisian-American Chamber of Commerce and a leader in the 
Tunisian information technology (IT) sector, said Tunisians 
were frustrated with the pace of integration.  He said "we 
want integration, but we can't wait," referencing rising 
unemployment and Tunisia's challenge to create jobs.  He 
pointed fingers at Algeria, noting its recent legislation 
requiring 51 percent Algerian ownership of a foreign 
enterprise hindered investment.  He said Tunisia had done its 
part, building the right highways to link to Algeria and 
Libya for example, but those countries had not built theirs. 
The participants, including Eizenstat, discussed political 
 
barriers, but came to a consensus that the private sector 
bore the responsibility of integration and were the only 
equipped actors to achieve results. 
 
¶5. (SBU) When asked why his initiative failed in its first 
iteration during the Clinton administration, Eizenstat said 
the change of administration meant the initiative got folded 
into efforts to extend a free trade zone through the larger 
Middle East.  When that policy failed, the Maghreb fell 
through the cracks.  One participant said the initiative was 
doomed to fail because of its limited (5 million dollar) 
budget.  Eizenstat said this time terrorism had changed the 
playing field, and said he is lobbying for a congressional 
hearing on the Maghreb, and has reached out to the World Bank 
and the International Monetary Fund to focus on the issue. 
 
----------------------------------- 
Voices from the Rest of the Maghreb 
----------------------------------- 
 
¶6. (SBU) Coincidentally, on the same day as the Eizenstat 
visit the Centre for Jeunes Dirigeants, a young business 
leaders organization with a large network throughout Tunisia, 
organized a symposium on Maghreb integration.  In attendance 
were high-level voices from all Maghreb countries, including 
a former Algerian Prime Minister.  All speakers converged on 
a few themes:  the fact that economic integration had to take 
place before political integration; the crucial role of youth 
and cultural exchanges; the importance of infrastructure 
development (roads, railroads and electricity); and an 
appreciation for couscous. 
 
¶7. (SBU) From the Tunisian side, the CJD seminar featured the 
Vice-President of UTICA, Mohamed Sahraoui and from the 
Ministry of Foreign Affairs Abdelhafidh Harguen, Secretary of 
State for Maghreb Affairs.  Both enthusiastically praised 
President Ben Ali for his commitment to Maghreb Integration. 
Sahraoui praised the Maghreb Entrepreneurs Association, a 
private sector association created two years ago and now 
headed by Libya, and announced the next meeting would take 
place in Tunis in May 2010  (Note: the last meeting took 
place in Algeria May 2009, but according to one Tunisian 
participant, language barriers and a lack of agenda made the 
event unsuccessful.  End note.)  Harguen, interestingly, 
called for civil society and youth to play a role in 
integration.  He specifically cited the need to create a 
knowledge economy, as the IT sector in particular was a 
driver for growth. 
 
¶8. (SBU) From the Moroccan participant, Jaouad El Hamni, 
Special Consultant to the Moroccan Finance Ministry, the 
discourse was much the same.  He said economic integration 
via the private sector is a real possibility, but that the 
private sector was responsible to act.  He mentioned the 
Morocco-U.S. FTA and blamed the stagnation of the agreement 
on the inability of the Moroccan private sector to take 
advantage of opportunities.  Ahmed Youra Haye, a Mauritanian 
economics professor, focused on rule of law and competition, 
feeling confident economics could trump politics. 
 
¶9. (SBU) Brahim Hafedh, the Libyan head of the Maghrebian 
Employers Union said cooperation already existed between 
Libya and Tunisia, but that more youth integration needed to 
take place.  He described an ideal future for the Maghreb, 
where the countries could negotiate as one bloc vis-a-vis the 
EU or the United States.  At one point in the discussion, an 
audience member asked why Libya imposed a 500 dollar tax on 
vehicles entering over land from Tunisia.  Hafedh said he 
disagreed with this, and was working within his organization 
to reach decision-makers in the Libyan government who could 
repeal the tax.  Sid Ahmed Al Ghozali, former Prime Minister 
of Algeria, said only the private sector can create wealth, 
and agreed that politics should only be brought into the 
picture when all other aspects of integration are in line. 
 
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Comment 
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¶10. (SBU) The two events covering Maghreb integration 
encompassed different groups of private sector 
representatives but all converged on one idea:  economic 
integration is possible in the Maghreb despite political 
 
obstacles.  The rhetoric of the discussion was familiar and 
there was no debate on the merits of economic integration 
itself.  At the CJD event in particular (which was on the 
record), there was little discussion of the impediments to 
change or tangible, unifying projects taking place. 
Eizenstat for his part did offer some new mechanisms (the EIZ 
and QIZ options) and suggested integration could come forth 
from more formalized private sector associations.  In many 
ways, talking to Tunisians about Maghreb integration is like 
preaching to the choir - most private sector representatives 
feel Tunisia has done its part, and now it is time for the 
other Maghreb countries to resolve their differences and get 
on board.  End comment. 
GRAY