FOREIGN MINISTER ON PALESTINIANS, SAUDI

C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 000065

SIPDIS

USTR FOR J BUNTIN

E.O. 12958: DECL: 01/12/2015
TAGS: PREL ETRD PTER BA
SUBJECT: FOREIGN MINISTER ON PALESTINIANS, SAUDI
ARABIA/FTA, BAHRAIN SCHOOL

REF: MANAMA 0058

Classified By: William T. Monroe. Reason: 1.4 (b)(D)

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ABU MAZEN VICTORY BRINGS OPPORTUNITY FOR PEACE
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1. (C) Foreign Minister Shaikh Mohammed bin Mubarak Al
Khalifa opened a January 11 meeting with the Ambassador by
speaking positively of comments made the day before by
President Bush about Mahmoud Abbas's electoral victory and
the President's invitation for Abbas to visit Washington.
Shaikh Mohammed said that all the parties, but most
critically Israel, must support Abu Mazen and the
Palestinians at this time. There is an opportunity for peace
and we should take advantage of it.

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TRADE ENGAGEMENT WITH ALL GCC STATES
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2. (C) The Ambasador asked Shaikh Mohammed for his thoughts
on the Free Trade Agreement issue three weeks after it had
caused such concern during the GCC Summit. Shaikh Mohammed
emphasized that there was no change in Bahrain's commitment
to the free trade agreement (FTA). Referring to Saudi
Arabia's criticism, the Minister said that the agreement was
not done in darkness or closed rooms; it had been on the
table since 1999. King Hamad traveled to Washington twice
and issued statements about the FTA, and the U.S. did the
same. The agreement was "worldwide news." For Saudi Arabia
to criticize it a week before the GCC Summit was "odd," said
the Minister. He mentioned that he had discussed the issue
with Saudi Foreign Minister Saud Al Faisal on the margins of
the January 6 Iraq neighbors meeting in Amman. Shaikh
Mohammed said that he told Saud that the U.S. was not
interested in a GCC-wide trade agreement, but was willing to
engage with all six GCC member-states on trade.


3. (C) Shaikh Mohammed stated that none of the GCC countries
wants to leave Saudi Arabia behind, and they all want to be
helpful in moving Saudi Arabia along the right path with the
U.S. The Ambassador responded that, on the free trade issue,
the first hurdle for Saudi Arabia was to join the World Trade
Organization (WTO). The Minister said it was his
understanding that just one major issue remained unresolved
-- insurance. He expressed hope that Saudi Arabia's WTO
accession could move forward, and wondered what the next
steps would be after that. The Ambassador said that he did
not know the specific thinking with regard to Saudi Arabia,
but normally next steps could include a Trade and Investment
Framework Agreement and Bilateral Investment Treaty. Shaikh
Mohammed said that Bahrain counsels Saudi Arabia to engage
more closely with Washington, and suggested that Crown Prince
Abdulla visit Washington.

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GET AT ROOTS OF TERROR
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4. (C) The Minister lamented the continuing struggle with
terrorism in Saudi Arabia. Noting that the SAG killed four
terrorists just a few days earlier and that there had been an
attack in Kuwait the day before, he commented that the
international community must address the roots of terrorism.
The Ambassador agreed, saying that Bush administration
policy, in addition to combatting terrorsts head on, has been
to get at the roots through political, economic, and
educational reform. FTAs, through their role in promoting
more open, liberalized economies, play a part in this
strategy.

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BAHRAIN SCHOOL
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5. (C) The Ambassador informed the Minister that the
Department of Defense has made a decision to continue to
support the Bahrain School as a DOD institution, but also has
to deal with the very real problem of a sizeable budget
shortfall during the current school year. The Crown Prince
and others had previously offered to help meet the budget
shortfall. A letter is expected shortly from Secretary
Rumsfeld to the Crown Prince taking him up on the offer,
which will be essential to keeping the school operating as a
DOD institution. It is our hope to work together to
eliminate the budget shortfall in future years. Shaikh
Mohammed affirmed that the GOB wanted to maintain the
school's status as a DOD institution, and is ready to deal
with financing in the short term. It is important to offer a
proper education far from the influence of militants, so how
could the school be closed at this time? He confirmed that
the Crown Prince was the proper recipient for the letter, and
asked to receive a copy as well, promising to take the
proposal to the Prime Minister and support it.
MONROE