COMMERCE MINISTER ADDRESSES FTA CONCERNS

UNCLAS MUSCAT 001490

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/ARP, EB/CBA (BBEHRENS)
STATE PASS USTR FOR JBUNTIN
COMMERCE FOR ITA COBERG

E.O. 12958: N/A
TAGS: ECON ETRD EINV PREL MU
SUBJECT: COMMERCE MINISTER ADDRESSES FTA CONCERNS


1. (U) On October 16, Econoff, Poleoff, and Poleassistant
attended Commerce and Industry Minister Maqbool bin Ali
Sultan's address on the U.S.-Oman Free Trade Agreement (FTA)
to members of the Oman Journalists' Association. Maqbool
used the public engagement to highlight the FTA's expected
benefits once it takes effect in January 2007. He noted that
concluding the FTA with the United States was "no surprise,"
and that it was a result of the "natural process and the
rational development of the Sultanate's economic and
commercial vision." In addition to the FTA's advantages for
Oman in the services sector, Maqbool expressed his view that
the Agreement would attract U.S. investment in the transport,
electricity production, real estate, and tourism sectors. He
further remarked that the FTA would open export possibilities
for new plastics and aluminum production facilities in Oman
once they come on line over the next four years. Maqbool
commented that Oman would continue to expand its trade links
by negotiating, through the GCC, free trade agreements with
the European Union, Turkey, China, Singapore, Australia,
India, and Pakistan.


2. (SBU) During the comment session following the address,
most participants voiced their support for the government's
efforts to conclude the FTA, noting that it would pave the
way for greater U.S. investment in the Sultanate. Others,
however, complained that the FTA never went to the Majlis
(Oman's consultative council) for formal consideration, akin
to the U.S. Congressional ratification process. In
responding to a question on Oman's participation in the Arab
League boycott of Israel, Maqbool stated that the government
already had lifted the ban on trade with Israel in
preparation for its 2000 accession to the World Trade
Organization. Maqbool also dismissed concerns that U.S.
products would swamp locally-produced goods once the FTA was
implemented, noting that the types of U.S. imports to benefit
most from the Agreement - such as automobiles and heavy
industry equipment - would not pose a threat to domestic
businesses. Finally, in answering a local bank CEO's concern
that U.S. banking institutions would crush their
less-competitive Omani counterparts, Maqbool reminded him
that the FTA included a safeguards chapter to address such
potential outcomes.


3. (SBU) Comment. The audience's reaction to the Minister's
speech indicated broad support for the FTA. The event itself
represented an opportunity for Maqbool to address criticism
that the government had not done a good job in communicating
the contents of the FTA to the public. To further emphasize
the government's commitment to promoting the FTA, Maqbool
highlighted the Ministry's staging - in conjunction with the
Omani Center for Investment Promotion and Export Development,
the Oman Chamber of Commerce and Industry, and the Embassy -
of an FTA awareness conference in early December. End
Comment.
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