DEMARCHE ON ALGERIA'S WTO ACCESSION DELIVERED

UNCLAS ALGIERS 001299

SIPDIS

SENSITIVE
SIPDIS

STATE PASS TO USTR

E.O. 12958: N/A
TAGS: ETRD ECON WTRO AG
SUBJECT: DEMARCHE ON ALGERIA'S WTO ACCESSION DELIVERED

REF: STATE 108034


1. (SBU) Ambassador, accompanied by PolEC Chief, delivered
reftel demarche July 11 to MFA Americas Director General
Selmane. Reviewing reftel points and leaving a non-paper in
French and English at the end of the discussion, Ambassador
highlighted strong U.S. support for Algerian WTO accession,
our extensive technical assistance designed to facilitate
the accession process, and our favorable view in principle of
FM Bedjaoui's proposal to schedule expert level discussions.
At the same time, Ambassador also conveyed our conclusion,
with regret, that absent revised Algerian offers on goods and
services market access and responses on other questions,
which we had been waiting for in some cases for over a year,
there did not seem to be a basis for bilateral talks at this
time. Ambassador explained that we were delivering this
demarche to the MFA in the first instance because it was our
response to the proposal the Minister had made during his
visit. The Pol/Econ chief was also seeking an appointment at
the Ministry of Commerce to review directly the points in the
demarche with the WTO coordinator.

ALGERIA NEEDS TO MAKE STRATEGIC
DECISION TO COMPLETE WTO ACCESSION
--------------


2. (SBU) Ambassador stressed the importance of WTO accession
for Algeria and the need for a strategic decision to complete
the process, provide the necessary instructions to Algerian
WTO negotiators, and undertake the legislation necessary to
bring Algeria into full conformity with international trade
norms. Ambassador noted he had made similar points during
his farewell call on President Bouteflika in June. Noting he
was speaking frankly and as a friend, Ambassador explained
that Algerian slowness in responding to questions and the
fact that accession talks had dragged on since the
mid-nineties had unfortunately left the impression that
Algeria was not taking this issue seriously or making
accession a priority.

A FRUSTRATING PROCESS FOR BOTH SIDES
--------------


3. (SBU) Ambassador said the accession process had been
frustrating for both sides. The Algerian side was frustrated
with the slowness of the process and the repeated questions
seeking clarification. For its part, the United States was
disappointed because we felt we had gone to great lengths to
assist the Algerian side, providing technical assistance and
expertise, furnishing analytical papers, coaching on how to
answer questions, and proposing to accelerate the question
and answer process by informally vetting proposed answers
before they were sent to Geneva for formal circulation.
Unfortunately, the Algerian side had never followed up in
writing on the goods and services offers presented in late
2004 and early 2005; had taken five months to respond to
questions submitted in October 2005; had been late in
responding to our non-papers; and, contrary to what had been
agreed, had not informally shared their proposed responses,
as a quality check, before sending them to Geneva.


4. (SBU) In this regard, while noting he was not an expert,
Ambassador understood the quality of the Algerian responses
reviewed to date had not been what we had hoped. It was
important to answer questions in a way that did not raise
additional questions needing clarification, Ambassador
advised. Another source of delay in the accession process
was the reluctance of the Algerian delegation, during
sessions in Geneva, to answer questions on the spot.
Insisting on written questions and written responses for all
questions was a much more time-consuming method.

AMBASSADOR ADVISES THERE NO
POSSIBILITY OF ACCESSION IN 2006
--------------


5. (SBU) Ambassador explained that our support for Algerian
WTO accession was based on our analysis that Algeria's
acceptance of international trade norms would, as it has with
other countries, promote economic modernization, attract
investment, and alleviate unemployment, a major issue facing
Algeria. Ambassador recalled that when he arrived in 2003,
there had been some hope that Algeria might achieve accession
by 2004. The target date had then slipped to 2005 and then
to 2006. And now there was virtually no possibility of
Algeria achieving accession this year. Ambassador said it
was in Algeria's interest to accede as soon as possible,
since the accession of each new member state potentially
raised the bar for what would be expected of candidate
countries. Saudi Arabia, for example, had made a generous
offer on energy services, and this meant the international
community would now not be prepared to accept a less generous
offer from newer members. Selmane thanked Ambassador for his
explanations, noting they would assist her in addressing WTO
accession issues within the GOA.


ERDMAN