ISRAELI BOYCOTT SCRAPPED

C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 001434

SIPDIS

E.O. 12958: DECL: 08/24/2015
TAGS: PGOV ETRD ETTC ECIN ECON BA
SUBJECT: ISRAELI BOYCOTT SCRAPPED


Classified By: Ambassador William T. Monroe, reasons 1.4 (b) and (d)

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SUMMARY
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1. (C) The GOB has made good on its promise to close its
Israeli Boycott Office and is now the subject of heated
criticism from the press, parliamentarians, political
societies and anti-normalization groups. Following the
October 1 opening of its current session, the Parliament
appears set to hear debate on the controversy. As the GOB
prepares to face its domestic critics, it can take some
solace in the knowledge that it is not alone in the region in
facing the need to end the boycott of Israel. End Summary.

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BOYCOTT OFFICE CLOSED
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2. (SBU) Minister of Finance Shaikh Ahmed bin Mohammed Al
Khalifa September 5 sent a letter to USTR Portman reaffirming
that the secondary and tertiary boycotts of Israel had been
abolished, and attached a copy of a memorandum to all
ministries reminding them of that fact and instructing them
to ensure that tender offers and government contracts
reflected this. The letter said that "Bahrain recognizes the
need to dismantle the primary boycott of Israel and is
beginning efforts to achieve that goal." Shaikh Ahmed sent a
second letter to USTR Portman September 17 informing him that
"the Boycott of Israel Office in the Kingdom of Bahrain is
now closed."



3. (C) Econoff called on Bahrain Customs, Ports and Free
Zones President Eid Abdulla Yusuf September 20 and received a
tour of the dilapidated and now abandoned boycott office
space. Yusuf said the six former employees had been
reassigned to other Customs jobs. Emboff confirmed with
national phone company Batelco September 21 that the phone
line to the Boycott of Israel Office had been permanently
disconnected.

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LOCAL REACTION
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4. (U) A controversy erupted when news of the closure of the
local boycott office was leaked. Parliament opened on
October 1 and the press is forecasting a stormy week. Member
of Parliament (MP) Mohammed Khalid will reportedly present an
urgent proposal rejecting an end to the boycott. However, MP
Jihad Bukamal, chair of the Finance and Economy Committee of
the Council of Representatives, urged that the public should
not make any conclusions regarding the lifting of the boycott
prior to hearing the GOB's response to expressions of
dissent.


5. (U) Akhbar Al Khalij columnist Tefla Al Khalifa criticized
MPs as "pretending to be surprised by the decision to lift
the ban on Israeli goods" and asserts that the Council of
Representatives knew or should have known that the lifting of
the boycott was inevitable. Al Wasat editorialist Hafedh Al
Sheikh decried the "ferocious and desperate pressure" the
U.S. applies against GCC states and Arab and Islamic
countries to recognize the "Zionist state." Al Wasat's
Fawzia Rasheed demands that the government reconsider its
decision to end the boycott, citing the public's resentment.


6. (U) Al Menbar Al Islami Deputy Chairman Ahmed Abdulla said
his block in the Council of Representatives will use "all
parliamentary tools" to reject the end of the boycott. Other
political societies also weighed in. National Democratic
Action Society Chairman Ibrahim Sharif urged resistance to
any measures leading to normalization with Israel. He added
that the results of lifting the boycott would not be
beneficial to Bahrain and doubted that local businessmen
would begin importing Israeli goods for fear of alienating
customers. The Al Wasat Al Arabi Al Islami Society urged all
citizens to stand united in confronting the government's
normalization policies and insisted that the legitimate
rights of Palestine will not be abandoned.


7. (U) Anti-normalization groups were also quick to denounce
the move. Society for Resisting Normalization Chairman
Mohammed Al Aradi was quoted in daily newspaper Al Wasat as
saying he saw no benefits to the FTA. Referring to the
Israeli boycott, he added that Arab League obligations should
supersede FTA commitments.

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GOB READIES A RESPONSE
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8. (C) In anticipation of tough questioning by
parliamentarians in the coming week, Minister of Finance
Shaikh Ahmed called the Ambassador on October 2 to ask for
information on what other regional countries had done, or
pledged to do, on the boycott issue as part of their FTA
negotiations with the U.S., as well as any commitments Saudi
Arabia had made in connection with its WTO accession. He
said that the Ministry was preparing a paper that would
approach the issue from different aspects - technical,
commercial, political - and that he wanted to be well
prepared both for private discussions with key
parliamentarians and committees, and for any public
questioning that he will face.

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COMMENT
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9. (C) Bahrain's lifting of the boycott may have been sparked
by FTA-related preparations, but it has been an outstanding
requirement since its 1994 accession to the WTO. Bahrain is
not alone in the region in confronting this issue. Other
regional countries either negotiating FTAs with the U.S. or
preparing to negotiate will need to address this issue as
well. Bahrain may feel exposed and alone at the current
time, but several of its neighbors will soon have to wrestle
with this same issue. End Comment.


MONROE