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.

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LIBYA'S REFORM PLANS
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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.

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U.S. CALLS FOR OPENNESS AND TRANSPARENCY
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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

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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