SME DEVELOPMENT FOCUS OF DAS VINEYARD VISIT

UNCLAS MUSCAT 001382

SIPDIS

SIPDIS

STATE FOR NEA/ARP, EB/CBA
STATE PASS USTR FOR JBUNTIN
COMMERCE FOR ITA DAS VINEYARD

E.O. 12958: N/A
TAGS: BEXP ECON EINV ETRD PREL KMPI MU
SUBJECT: SME DEVELOPMENT FOCUS OF DAS VINEYARD VISIT

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SUMMARY
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1. The importance of small and medium-sized enterprise (SME)
development took center stage during Deputy Assistant
Secretary of Commerce Holly Vineyard's September 16 meetings

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in Muscat with top government officials. The FTA will
provide the USG an opportunity to work closely with its Omani
counterparts in fostering SME growth. End Summary.

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FTA TRUMPS ALL REGULATIONS
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2. On September 16, the Ambassador and Deputy Assistant
Secretary of Commerce for International Trade Administration

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Holly Vineyard discussed the potential impact of the
U.S.-Oman Free Trade Agreement (FTA) with Minister of
Commerce and Industry (MOCI) Maqbul bin Ali Sultan. Maqbul
remarked that once President Bush signs the FTA into law, the
government would pass a Royal Decree that would enable the
FTA to supersede any Omani regulations contradictory to its
provisions. On the issue of intellectual property, Maqbul
noted that his ministry would receive a delegation from the
World Intellectual Property Organization (WIPO) on October 7
to review USTR's comments on Oman's draft industrial property
law. MOCI Special Advisor Said al-Riyami added that the
Ministry would schedule a DVC with USTR shortly thereafter to
take stock of the process. Maqbul further commented that
while trade figures between the U.S. and Oman are healthy,
the Sultanate would benefit from technical assistance
programs that focus on developing SMEs.

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MESSAGE IMPORTANT
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3. In a follow-on meeting, Omani Center for Investment
Promotion and Export Development (OCIPED) Executive President
Salem bin Nasser al-Ismaily expressed the importance of
raising Oman's profile in the U.S. business community. In
addition to the direct U.S. investment that the FTA will
attract, Ismaily pointed out that the spillover benefits
would be equally important. For example, he mentioned that
Dow's investment in a petrochemicals complex had already
spurred an additional $350 million in investment from India.
Ismaily commented that Oman had to advertise itself as a
country that adheres to the rule of law, and promotes the
ease of doing business, to attract foreign interest. He
continued that the Omani government should actively promote
entrepreneurship through programs geared toward SMEs. To
this end, Ismaily expressed interest in understanding the
U.S. Small Business Administration's role in assisting SME
development.

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SME EXPERTS WELCOME
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4. Oman Chamber of Commerce and Industry (OCCI) Executive
President Salem al-Ghattami echoed the importance of
developing SMEs under the FTA to DAS Vineyard. Ghattami
recommended that the USG work with the OCCI in promoting SME
expert visits to Oman. Ghattami further welcomed cooperation
between the U.S. and Oman on various business development
projects, and heartily agreed to facilitate a possible U.S.
trade delegation visit to Muscat in late October. Ghattami
noted that the FTA provided Oman the opportunity to leverage
its strategic position in efforts to develop itself as a
regional hub.
GRAPPO