IRAQ TRADE MINISTER DECIDES NOT TO REQUIRE ARAB

UNCLAS BAGHDAD 003132

SIPDIS

SENSITIVE

PLEASE PASS TO EB WAYNE, NEA: GODEC AND NEA/I SILVERMAN;
COMMERCE FOR PETER HALE; JUSTICE FOR GENERAL COUNSEL'S
OFFICE

E.O. 12958: N/A
TAGS: ETRD EINV IZ BEXP BTIO ECON
SUBJECT: IRAQ TRADE MINISTER DECIDES NOT TO REQUIRE ARAB
LEAGUE BOYCOTT DECLARATION FOR FOREIGN INVESTORS


1. (SBU) On July 28, acting ECON Counselor, accompanied by
IRMO senior consultant and IRMO technical management
consultant, expressed USG concerns over the Ministry of
Trade's imposition of an Arab League Boycott declaration on
foreign investors in Iraq. GOI Minister of Trade Abdel
Basset Karim told us that in fact he had instructed all the
Director Generals in the Ministry of Trade not/not to ask any
company interested in doing business in Iraq whether or not
they dealt with Israel. He acknowledged that as recently as
one and half months ago his Ministry had asked for this
information but that is no longer the case.


2. (SBU) When pressed, Karim stressed that he had decided--as
Embassy has underscored with the ITG--that Iraq has no law
that requires the Ministry of Trade to enforce the Arab
League Boycott (ALB). He emphasized the businesses would not
be required to make a boycott declaration and he welcomed
foreign investors to come to Iraq. Karim told us that he
understood the importance of this issue for the US and he
acknowledged WTO membership implications for Iraq if they
enforce the Arab League Boycott.


3. (SBU) We briefed Pepsico VP for International Government
Affairs, Elizabeth Avery (based at Pepsico HQ in NY). She
said that this was good news indeed. We discussed Pepsi's
other problems in Iraq -- difficulties of trademark
protection and the fact that nearly half of the Pepsi product
sold in Iraq is counterfeit. Embassy will continue to press
with Ministry of Industry steps on trademark registration and
protection.


4. (SBU) Comment: Corrective action by the Minister of Trade
on boycott enforcement is a major step. We will stay in close
contact with Pepsico and other US companies to ensure that
the boycott issue is, in fact, resolved. End Comment
Khalilzad