LIBYAN ECONOMY AND TRADE OFFICIALS REVIEW BILATERAL

C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000361 SIPDIS STATE FOR NEA/MAG, NEA/PPR, T, G, OES, E.O. 12958: DECL: 7/25/2016 TAGS: ETRD ETTC EINT LY SUBJECT: LIBYAN ECONOMY AND TRADE OFFICIALS REVIEW BILATERAL COOPERATION WITH COMMERCE DEPUTY SECRETARY SAMPSON CLASSIFIED BY: Greg Berry, Charge d'Affaires, USLO, State. REASON: 1.4 (b),(d) CLASSIFIED BY: Greg Berry, CDA, EMBASSY TRIPOLI, Department of State. REASON: 1.4 (B) (D) ¶1. (C) SUMMARY: On July 11, 2006, Deputy Secretary of Commerce David Sampson, accompanied by DCM met with Taher Sarkez, the Under Secretary of the General People's Committee for Economy and Trade (Economics Ministry). Looking forward, Sarkez hoped that more U.S. companies would register in Libya, especially in the healthcare and infrastructure development fields. Overall, Libya requested more training and technical assistance. Referring to his own fondly-remembered travel experiences in the U.S., he called for more exchange visits and increased tourism on both sides, especially professional and educational exchanges. His staff also shared information about the new commercial agency law and company registration process. END SUMMARY. -------------- LIBYA'S REFORM PLANS -------------- ¶2. (U) Under Secretary for the General People's Committee for Economy and Trade (Economics Ministry),Taher Sarkez, welcomed Deputy Secretary of Commerce David Sampson to Libya and presented a broad overview of Libya's economic strategy. He said the General People's Committee for Economy and Trade (GPCET) had pursued improved relations between our two countries for a long time and now hoped to stress trade opportunities. He said Libya was trying to develop its private sector and attract foreign investment, adding that a free trade zone was announced this year, the stock market was in the planning stages and an export board was operational. He claimed that Libya was in the final stages of preparing a memorandum requesting WTO membership. Looking forward, he hoped that more U.S. companies would register in Libya, especially in the healthcare and infrastructure development fields. Overall, Libya requested more training and technical assistance. Referring to his own fondly-remembered travel experiences in the U.S., he called for more exchange visits and increased tourism on both sides, especially professional and educational exchanges. -------------- U.S. CALLS FOR OPENNESS AND TRANSPARENCY -------------- �0A;¶3. (C) Deputy Secretary Sampson said he would focus on demonstrable activities resulting from the meetings. He thanked Libya for its strategic, significant steps and hoped that his visit would lead to expanded prosperity for both countries. Noting the Libyan aim to diversify beyond the oil sector, Deputy Secretary Sampson called for more commercial and legal SIPDIS transparency in the Libyan system that would be conducive to attracting investment and expanding opportunity. He described small business expansion as the engine of growth for the U.S. economy and advised the Libyans that business incubators and government contracting access for small business were important programs. He called for resolution of any difficulties with visa issuances on both sides to help open new markets. ¶4. (C) Since the free flow of trade and investment is critical to economic development, Deputy Secretary Sampson offered cooperation on Libya's planned WTO accession and noted that export controls would gradually be eased. At the same time, he urged Libya to remove any prohibitive boycott language from contracts. He also announced that export licenses were granted for Boeing aircraft purchased by Buraq Air, and that he hoped to see more purchases of U.S. aircraft by Libya in the future. ¶5. (U) The head of the Libyan Foreign Investment Board, Rajab Shigbalu, reviewed some of the many agreements Libya signed with other countries. Referring to the proposed OPIC agreement pending since last year, he said any proposed agreements offer reciprocal treatment to both parties. Pointing out that the OPIC draft did not offer any protection for Libyan funds in the U.S., he did not offer any indication that the proposal might move forward. ¶6. (U) A representative of the Libyan Export Promotion Board, established one month ago, struck a positive note saying, "our first call was from a businessman exporting to the U.S." Emphasizing that Libya needed to export more than oil to gain hard currency he said, "Libya suffers from Dutch Disease," and that he sought contact with the U.S. Department of Commerce to plan joint events or sign a cooperative memorandum. He also requested training and technical assistance. Deputy Secretary Sampson advised that the U.S. National Export Strategy might serve as a helpful template for new Board's efforts. ¶7. (U) Encouraging more U.S. businesses to open in Libya, the commercial registration manager said that all citizens could start companies, as opposed to former practices that limited fields of activity. Mr. Daouki said that 620 foreign companies were registered in Libya specializing in construction, oil, communications, and medical services. He claimed that registration files could be processed in ten days. In addition, he said the new commercial agencies law, for which implementing regulations are being determined by the General People's Congress, was meant to expand opportunity. Giving more detail, he said 60 percent of the companies could be owned by the "founders" while 40 percent of the company had to be open to public participation. The goal was to broaden participation by all Libyans in commercial activities since there was a perception that some people with special connections dominated the import market in the past. "Companies requiring significant capital to build showrooms, warehouses, workshops, and equipment must provide a way for all Libyans to invest in the enterprises," said Daouki. Libya doesn't want individuals to import expensive equipment without ensuring the associated agency can provide support and maintenance over the long-term. In the GPCET analysis, company registrations were low because people didn't have the capital required. It is trying to put in place legislative mechanisms and regulations to distribute work and opportunity equally. Daouki noted that there was a "grace period" until August 17 for existing agents to legalize their operations under the new regulations. "During the sanctions period," Daouki said, "non-Libyans, especially Egyptians, Tunisians, and Maltese exercised agency control and this is now prohibited under Libyan law." ¶8. (U) Deputy Secretary Sampson agreed to return to the GPCET on July 13 for an informal question and answer session with the Libyan press to expand on plans for future cooperation. He also invited Under Secretary Sarkez for a reciprocal visit at the Department of Commerce in the U.S. ¶9. (U) The U.S. meeting participants included: Dr. David Sampson, Deputy Secretary of the Department of Commerce Ms. Aimee Strudwick, Chief of Staff to the Deputy Secretary of Commerce Ethan Goldrich, DCM Elizabeth Fritschle, Pol/Econ Chief The Libyan Participants included: Taher Sarkez, Under Secretary of the General People's Committee for Economy and Trade Milaud Daouki, Manager of Commercial Registration Mohammed Hassan Ayyab, Americas Desk Officer at the General People's Committee for Foreign Liaison Rajab Shiglabu, Secretary of the Libyan Foreign Investment Board Ali Asawi, General Director of the Export Promotion Board Faraj al Masdur, Chief of Financial Administration Jumaa al-Humaa, Head of the Foreign Trade Department BERRY