A/S BOUCHER DISCUSSES U.S.-PAKISTAN STRATEGIC

C O N F I D E N T I A L SECTION 01 OF 02 ISLAMABAD 005978

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/06/2016
TAGS: ECON PREL PK
SUBJECT: A/S BOUCHER DISCUSSES U.S.-PAKISTAN STRATEGIC
DIALOGUE WITH PAKISTAN MFA

Classified By: Derived from DSCG 05-01, d.


1. (C) Summary: Assistant Secretary Boucher reviewed the
status of Strategic Dialogue initiatives and options for
structuring the Dialogue in April 4-5 meetings with Foreign
Minister Kasuri, Foreign Secretary Khan and Additional
Secretary for the Americas Shahid Kamal. All sides agreed

SIPDIS
that the Dialogue marked a major step forward in the
bilateral relationship. The Pakistani side welcomed A/S
Boucher's report on work that is already underway, and noted
that they have appointed co-chairs for some of the Dialogue
topics. MFA reps did not have strongly held views about how
the Dialogue might be structured, but were receptive to
proposals offered by A/S Boucher. End Summary.


2. (C) In all of A/S Boucher's meetings at the Ministry of
Foreign Affairs, counterparts praised the Strategic Dialogue
as a major advance in the U.S.-Pakistan relationship.
Foreign Minister Kasuri commented that the inauguration of a
Strategic Partnership during President Bush's visit had
broadened the bilateral relationship. He welcomed the fact
that this would be institutionalized in the Dialogue.
Foreign Secretary Riaz Khan alluded to perceived ups and
downs in the relationship over the years and said that, in
the public eye, the Dialogue would be seen as a welcome sign
of a new and more stable friendship.

Initiatives:
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3. (C) A/S Boucher used his Islamabad meetings to review
progress already underway under the Dialogue, including
energy discussions launched during Energy Secretary Bodman's
visit, expansion of the Fulbright program, inauguration of a
University Exchange program with Southern Methodist
University, and Science and Technology initiatives. Riaz
Khan emphasized the need for "real projects" that would
symbolize the deepening bilateral relationship.


4. (C) Khan said the Bilateral Investment Treaty was with
the Prime Minister's Office and there were still several
outstanding issues, including liability and jurisdiction. An
internal meeting had been scheduled later in April to review
the issues again, he said. Khan agreed with A/S Boucher that
these matters could be addressed in a side letter, rather
than the text of the treaty.


5. (C) A/S Boucher reported that the U.S. is commissioning a
study on the Reconstruction Opportunity Zones initiative, in
part to lay the groundwork for Congressional approval.
Legislation could not be submitted before the fall, he said;
in the meantime, the U.S. was looking at product areas, with
a view to diversification of exports -- though apparel would
be factored in. He encouraged Pakistan to use the planned
April 19 Joint Economic Committee meeting with Afghanistan to
discuss ROZ ideas.


6. (C) Shahid Kamal said that the Pakistani business
community is enthusiastic about the proposed Center for
Entrepreneurship and noted that the Beyster Institute of UC
San Diego had relevant expertise.

Structure
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7. (C) It was clear that the MFA did not have strongly held
views about how the Strategic Dialogue should be structured.
Riaz Khan was open to the idea of attaching sub-groups to the
Dialogue, suggesting that the India-Pakistan Composite
Dialogue offered a model, with occasional high-level plenary
sessions overseeing reasonably autonomous subgroups. A/S
Boucher agreed that the sub-groups should operate
autonomously. Khan added that Pakistan was very interested
in the various economic, educational and scientific areas,
but that the Dialogue should also include a forum for
discussing political issues, such as Iran, India and nuclear
issues. A/S Boucher agreed, noting that those were good
subjects to review in strategic-level discussions, and that
in addition Afghanistan and relations with Central Asia
should also be included.

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8. (C) Shahid Kamal reported that Pakistan had agreed to the
proposed April 26-27 dates for the inaugural Washington
meeting of the Strategic Dialogue. He informally suggested
that subjects might be divided into three baskets, to address
bilateral, regional and global issues. He envisioned that
the initial April 26-27 meeting might consist of relatively
small delegations and serve as a "curtain raiser" for
follow-on subgroup meetings in subsequent weeks. Pakistan
had already identified Dr. Ataur Rahman (Chair of the Higher
Education Commission) and Finance Secretary Tanvir Ali Agha
as likely Pakistani co-chairs of subgroups. A/S Boucher
proposed that the April 26-27 session begin with a smaller
dinner for senior participants on the 26th. This could be
followed by an expanded meeting on the 27th that would
include subgroup heads, with a full plenary session to follow
-- in which participants would be given their marching
orders. Sub-groups would then meet separately and reconvene
at the end of the day for a concluding session. Meanwhile,
the principals on each side could cover political and
strategic topics separately.

CROCKER