Identifier
Created
Classification
Origin
04KUWAIT4554
2004-12-29 10:59:00
CONFIDENTIAL
Embassy Kuwait
Cable title:  

TOO MUCH STICK, NOT ENOUGH CARROT: KUWAIT EMBASSY

Tags:  ETRD PREL ECON KIPR KU 
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This record is a partial extract of the original cable. The full text of the original cable is not available.

291059Z Dec 04
C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004554 

SIPDIS

STATE PLEASE PASS TO USTR JFENNERTY

E.O. 12958: DECL: 12/29/2014
TAGS: ETRD PREL ECON KIPR KU
SUBJECT: TOO MUCH STICK, NOT ENOUGH CARROT: KUWAIT EMBASSY
REPS COMMENT ON TIFA PROCESS


Classified By: Ambassador Richard LeBaron, reasons 1.4(b) and (d)

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004554

SIPDIS

STATE PLEASE PASS TO USTR JFENNERTY

E.O. 12958: DECL: 12/29/2014
TAGS: ETRD PREL ECON KIPR KU
SUBJECT: TOO MUCH STICK, NOT ENOUGH CARROT: KUWAIT EMBASSY
REPS COMMENT ON TIFA PROCESS


Classified By: Ambassador Richard LeBaron, reasons 1.4(b) and (d)


1. (C) Summary and Comment. Econoffs met with
representatives from the Kuwaiti Embassy in Washington on
December 21 to discuss the TIFA process and prospects for a
second TIFA Council meeting. They echoed the comments made
by senior Ministry of Commerce officials that Kuwait is
"jealous" that Oman and UAE are moving toward free trade
agreement (FTA) negotiations even while Kuwait has had only
one TIFA Council meeting. Econoffs said that without serious
progress on IPR protection and enforcement and movement
toward eliminating the International Certification Conformity
Program (ICCP),the TIFA process was likely to remain
stalled. The Kuwaitis acknowledged that the GOK has fallen
short on IPR protection, but said that Kuwait's TIFA
committee chair and the Kuwaiti Ambassador to Washington are
pushing the Ministry of Information to improve. The Kuwaitis
blamed the U.S. side for not clearly articulating that the
ICCP had to be removed rather than modified, saying the U.S.
had missed two opportunities to kill the program. Econoffs
reiterated that because it is a technical barrier to trade,
the ICCP must be eliminated. Al-Budaiwi said the GOK
generally feels like it is "just seeing the stick and no
carrots" in TIFA negotations, and that the GOK needs
"encouragement and support" Specifically, the GOK would like
to have more feedback, as well as videoconferences,
conference calls or other types of direct, live interaction
to help work out some of the difficulties among all concerned
parties.


2. (C) Comment. In post's view, video- or teleconferences
would be an extremely useful method of moving forward. The
Government of Kuwait is not terribly "wired," and many
ministries lack email (even officers at the Kuwaiti Embassy
in Washington use internet email accounts because they do not
have government accounts). As a result, email communication
is of somewhat limited utility. A further advantage of
video- and/or teleconferencing is that it would allow all of
the interested experts on both sides to hash out problems

simultaneously, to avoid any further misunderstanding about
the prerequisites for positive progress toward a second TIFA
Council meeting. End Comment.

--------------
Whither the U.S.-Kuwait TIFA
--------------


3. (C) Econoffs met with two representatives from the
Kuwaiti Embassy in Washington, Jasem Al-Budaiwi and Zeyad
Al-Mashan, on December 21 to discuss the U.S.-Kuwait Trade
and Investment Framework Agreement (TIFA) process.
Al-Budaiwi and Al-Mashan, both of whom are responsible for
monitoring U.S.-Kuwait trade relations, sought the meeting
during their holiday in Kuwait to assess where Kuwait stands
and when the second TIFA council meeting might be scheduled.
Al-Budaiwi said that the GOK has received no positive signs
from the U.S. about the prospects for a second meeting,
adding that there had been few responses from the USG to
anything that the GOK had done. He echoed the comments made
by senior Ministry of Commerce officials that Kuwait is
"jealous" that Oman and UAE are moving toward free trade
agreement (FTA) negotiations even while Kuwait, which signed
a TIFA before both Oman and UAE, has only had one TIFA
Council meeting. Al-Budaiwi remarked that GOK officials were
telling him that they are more committed and serious than UAE
or Oman, that they have better laws on the books than either
country, and that they cannot understand why there has been
no forward progress.


4. (C) Noting the frankness of Al-Budaiwi's comments,
Econoffs responded that without serious progress on
intellectual property rights (IPR) protection and enforcement
and movement toward the removal of the International
Certification Conformity Program (or ICCP, which the US
considers a technical barrier to trade),the TIFA process was
likely to remain stalled. Econoff noted that the US is
looking at these two issues particularly closely to determine
Kuwait's commitment to liberalizing its trade regime, and
that moving ahead with the second TIFA council meeting, while
a USTR decision, is contingent upon Kuwait making significant
changes in these areas. While commending the efforts of
Kuwait Customs and the Ministry of Commerce on IPR
enforcement, Econoff pointed out that the Ministry of
Information continues to shirk its statutory role as the
protector of intellectual property rights.

--------------
IPR: We Hear You
--------------


5. (C) Al-Budaiwi and Al-Mashan acknowledged that the GOK
has fallen short on IPR protection, and that the Ministry of
Information is especially weak. They reported that Ministry
of Commerce Assistant Secretary for International Trade
Affairs Hamid Al-Ghanam, who is the working chair of Kuwait's
TIFA committee, met with the Ministry of Information's
undersecretary to stress the importance of IPR protection to
TIFA/FTA talks. "We know it is a problem, and we know what
the problem is," said Al-Budaiwi, citing inconsistent
enforcement, spotty prosecution, and insufficiently strong
penalties for proven violators. He added that the Kuwaiti
Ambassador to Washington is a "great friend" of Minister of
Information Muhammad Abulhassan (NOTE. The Ambassador worked
for Abulhassan when the latter was Kuwait's permanent
representative to the UN. END NOTE.),and would call the
Minister to emphasize the necessity of better IPR laws and
enforcement. Al-Budaiwi suggested that the various American
and Kuwaiti IPR experts hold a video conference or conference
call to discuss Kuwait's progress, continued shortcomings,
and suggested ways forward. (Note. The Minister of
Information is currently experiencing some serious political
difficulties with the National Assembly. His tenure is
uncertain. End Note.)

--------------
ICCP: Failure to Communicate
--------------


6. (C) With regard to the ICCP, Al-Budaiwi averred that
although the Kuwaiti Embassy now understood that the ICCP
needed to be eliminated, there had been serious
miscommunication between the US and Kuwaiti teams about
whether the program could be salvaged. He said that the U.S.
"had two opportunities to kill the ICCP:" the first, during
the TIFA Council meeting, when he asserted that the U.S. team
made no substantive objection after the Kuwaiti side
presented the ICCP; and the second, in AUSTR Catherine
Novelli's follow-up letter to the Minister of Commerce.
According to Al-Budaiwi, there was no direct request that the
GOK get rid of the ICCP. As a result, he said, the Director
for Standards and Metrology at the Public Authority for
Industry had engaged his entire staff to revise the ICCP.
"We don't know how to tell him" that all his efforts had been
for naught, Al-Budaiwai commented. He added that the
Director was also "really disappointed" that when he
presented his plan for modifying the ICCP to a U.S.
government representative in Geneva last month, he was given
"nice feedback" rather than being told that the program was
fatally flawed. Unlike the case with IPR protection,
Al-Budaiwi remarked, the GOK did not know what the U.S. needs
Kuwait to do with regard to the ICCP. Econoffs reiterated
that because it is a technical barrier to trade, the program
must be eliminated. To avoid future miscommunications,
Econoff suggested that a video- or teleconference on the ICCP
might also be useful.

--------------
Too Much Stick, Not Enough Carrot
--------------


7. (C) Generally speaking, Al-Budaiwi said, the GOK feels
like it is "just seeing the stick and no carrots" in TIFA
negotations. For example, Kuwait had taken a "great step" in
telecommunications (which Al-Budaiwi called the most
difficult sector) by resolving its long-standing,
multi-million dollar dispute with AT&T. In the GOK's view,
he said, the Ministry of Communications should have received
some praise for its actions. "We need encouragement and
support," pleaded Al-Budaiwi. Specifically, the GOK would
like to have videoconferences, conference calls or other
types of direct, live interaction to help work out some of
the difficulties among all concerned parties. He also made a
pitch for more feedback from the U.S. side in all areas.
Econoffs noted that they had prepared and distributed to the
GOK a presentation outlining the specific next steps that the
U.S. recommended Kuwait take in all sectors. The
presentation, which was intended to remove any ambiguity
about what changes the U.S. side wanted, would be regularly
updated to track the GOK's progress. Al-Budaiwi and
Al-Mashan had both seen the presentation, and said it was a
useful tool.
LEBARON