MINISTRY OF COMMERCE UPBEAT ON TIFA, WELCOMES USTR

UNCLAS SECTION 01 OF 02 KUWAIT 004151

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/ARP AND EB; STATE PASS TO USTR JBUNTIN AND
PBURKHEAD

E.O. 12958: N/A
TAGS: PREL ETRD ECON BEXP KU
SUBJECT: MINISTRY OF COMMERCE UPBEAT ON TIFA, WELCOMES USTR
VISIT



1. (SBU) Summary. On October 17, EconCouns met with
Ministry of Commerce and Industry (MOCI) Assistant Under
Secretary Hamid Al-Ghanim to review the TIFA Council meeting

SIPDIS
that took place on September 5, and to discuss next steps in
the TIFA process. Al-Ghanim said the TIFA was important for
the GOK and stated his desire to host the next TIFA Council
meeting in Kuwait, possibly as early as March 2007.
Al-Ghanim acknowledged receipt of AUSTR Donnelly's letter of
September 25 following up on TIFA issues and said the
Ministry was nearly finished preparing its response.
Al-Ghanim welcomed a visit to Kuwait by AUSTR Donnelly later
this year, and encouraged EconCouns to meet with Ministry of
Finance officials to make progress on the issue of taxation
of U.S. companies. Al-Ghanim said the Ministry was still
working out the details of assuming responsibility for
copyright protection. End Summary.


2. (SBU) On October 17, Econoffs met with Hamid Al-Ghanim,
the Assistant Under Secretary of Commerce and Industry
(MOCI). Al-Ghanim, who attended the TIFA Council meeting in
Washington, DC on September 5, described the TIFA meeting as
"fruitful" and said the GOK is eager to move forward towards
an eventual FTA. Econcouns said the U.S. shared that
interest, but there were hurdles that needed to be addressed.
He asked that Kuwait be recognized for its efforts to enact
new legislation covering TIFA reforms despite a lack of
legislative success, and blamed the National Assembly for the
failure to change Kuwait's laws, saying MPs were "delaying
things so that they can work on their own interests."
Al-Ghanim noted that U.S. firms are working well in the
Kuwaiti economy but stressed the importance of Kuwait being
more "officially open." He hoped the next TIFA Council
meeting would take place in Kuwait and suggested March 2007
as a possibility.


3. (SBU) Al-Ghanim said he had reviewed USTR's September 25
letter to the Minister. The Ministry was nearly finished
preparing its response, which would likely be sent after the
Eid holiday (October 23). EconCouns urged that the GOK
response be strong and substantive, and directly address the
points and questions raised in the letter. Al-Ghanim said he
was coordinating a response with the Ministry of Interior and
Ministry of Finance. Al-Ghanim said he had spoken to
Ministry of Finance officials about the taxation issue, and
encouraged EconCouns to meet with them as well. Al-Ghanim
welcomed a possible AUSTR visit in December but noted that
Minister of Commerce Falah Al-Hajri would be out of the
country until December 10. A visit in mid-December would be
ideal, he said.


4. (SBU) EconOff asked about the status of MOC's assumption
of primary responsibility for intellectual property rights
(IPR) enforcement. Al-Ghanim responded that the bureaucratic
details of moving personnel from the Ministry of Information
to the MOCI have not been completed. (Note: A Council of
Ministers decision in June transferred primary IPR protection
responsibility from the Information Ministry to MOCI.)
Al-Ghanim stated that IPR was a "very important issue" for
him. He related that during a recent meeting with the
Minister of Social Affairs and Labor, which regulates the
stores of Kuwait's many cooperative societies, he asked the
Minister to ban vendors from selling pirated discs in front
of the cooperatives.


5. (SBU) EconCouns noted USG appreciation for the GOK's
willingness to address seriously its long-standing billing
dispute with AT&T, and looked forward to resolution of the
remaining issues. Al-Ghanim said he did not have details of
the September meetings, but understood that there had been
progress and the dispute was almost fully resolved. (Note:
AT&T and the Ministry of Communications held talks in
September and agreed on a framework to resolve their
long-standing billing dispute. From our conversations with
the two parties, both sides were pleased with the result and
the positive working atmosphere during the visit. The
Minister of Communication spent five hours with the
delegation over the course of two days and was clearly
charged with achieving a positive outcome. Under the
agreement, MOCI will commit to a contract for new business
with AT&T but hopes to convince the company to reduce its
rates. Depending on how this evolves, MOCI will gradually
open up more lines to AT&T. In the meantime, MOCI has been
working out the required accounting to zero out all or most
of AT&T's outstanding balance. AT&T would still be required
to pay a nominal sum, but MOCI officials have told us
privately they hope to ultimately reduce this to a zero
balance. Accounts are supposedly settled up to August 2006,

KUWAIT 00004151 002 OF 002


and some of the phone lines have been opened. End Note).

********************************************
For more Embassy Kuwait reporting, see:
http://www.state.sgov.gov/p/nea/kuwait/index. cfm?cables

Or Visit Embassy Kuwait's Classified WQsite:
http://www.state.sgov.gov/p/nea/kuwait/
********************************************
Tueller