Identifier
Created
Classification
Origin
06TUNIS2899
2006-12-13 16:12:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tunis
Cable title:  

MAGHREB LEADERS EXTOL VIRTUES OF FREE TRADE

Tags:  ECIN ETRD EINV TS 
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VZCZCXYZ0000
PP RUEHWEB

DE RUEHTU #2899 3471612
ZNR UUUUU ZZH
P 131612Z DEC 06
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 2341
INFO RUCNMGH/MAGHREB COLLECTIVE PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
UNCLAS TUNIS 002899 

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/MAG
STATE PASS USTR (BELL)
USDOC FOR ITA/MAC/ONE (NATE MASON)
LONDON AND PARIS FOR NEA WATCHERS

E.O. 12958: N/A
TAGS: ECIN ETRD EINV TS
SUBJECT: MAGHREB LEADERS EXTOL VIRTUES OF FREE TRADE

REF: TUNIS 2848

UNCLAS TUNIS 002899

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/MAG
STATE PASS USTR (BELL)
USDOC FOR ITA/MAC/ONE (NATE MASON)
LONDON AND PARIS FOR NEA WATCHERS

E.O. 12958: N/A
TAGS: ECIN ETRD EINV TS
SUBJECT: MAGHREB LEADERS EXTOL VIRTUES OF FREE TRADE

REF: TUNIS 2848


1. (SBU) Summary: At a recent two-day conference on Maghreb
business and trade, regional leaders and businessmen extolled
the virtues of increased regional economic integration and
lamented the currently low levels of trade and investment
between the Maghreb countries. Participants hailed from all
five Maghreb countries; speakers included Arab Maghreb Union
(AMU) Secretary General Habib Ben Yahia and GOT Prime
Minister Mohamed Ghannouchi. Ambassador Godec also attended
a portion of the conference. Despite a general consensus on
the importance of increasing intra-Maghreb trade, regional
trade remains at extremely low levels and participants and
speakers alike had difficulty articulating a practical path
to remedying the situation. End Summary.


2. (U) The Institut Arabe des Chef d'Entreprises (IACE)
recently hosted a two-day conference in the Tunisian resort
city of Sousse on "Maghreb Business: Competition and
Complementarity." In his opening remarks to the conference,
Prime Minister Ghannouchi touted Tunisia's efforts to promote
regional trade and investment, but also highlighted the
missed economic opportunities created by the lack of
intra-Maghreb trade. Ghannouchi estimated that the cost of
poor Maghreb economic integration to Tunisia is two percent
of GDP annually. He declared that if Maghreb countries had
enacted the 1989 Marrakesh declarations outlining the
creation of the Maghreb free trade zone, it would have
created 20,000 new jobs each year in Tunisia. While
bemoaning the previous lack of progress, Ghannouchi stressed
the importance Tunisia places on intra-Maghreb trade and
investment and touted GOT efforts to promote enhanced
integration. He noted that the GOT automatically authorizes
Tunisian companies to invest in Maghreb countries.
Ghannouchi stated that there are over 100 companies with
Maghreb foreign direct investment in Tunisia, including
investments in the financial sector. (Note: In 2005,
Spanish-Moroccan consortium Attijariwafa purchased a majority
share of Banque du Sud during its privatization (reftel).
End Note.)


3. (U) During his speech, Arab Maghreb Union Secretary
General, and former Tunisian Foreign Minister, Ben Yahia
delivered an impassioned plea for the Maghreb free trade
zone, declaring that it is "not just a dream, but a
necessity." Maghreb cooperation, he stated, provides a noble
goal for the region's youth -- offering not just liberty of
movement and increased employment, but also dreams for their
future. In a likely reference to the Western Sahara impasse,
Ben Yahia dismissed the importance of bilateral issues,
stressing the primacy of common interest. He noted the
relatively low levels of regional trade compared to the
levels of trade between the countries belonging to the
Mercosur, ASEAN, and Gulf Cooperation Council zones. He
implored the businessmen present to do their part to increase
cooperation and stated that they should "not ask the
government to do more." Ben Yahia staunchly defended the
work of the Arab Maghreb Union, criticizing the media for
creating the impression that the AMU was not working and
stating that the process was like an iceburg with much of the
work occurring below the surface. Ben Yahia announced that
the negotiations were completed in the last week of November
for the free trade zone and that the agreements will soon be
submitted to involved Ministries of Commerce (NFI) and then
will be ready for signature and ratification.


4. (SBU) Comment: Despite a clear recognition of the benefits
of Maghreb economic integration, speakers and participants
offered few concrete proposals for moving the process
forward. Ben Yahia's impassioned defense of the AMU aside,
there has been slow movement on the Maghreb free trade zone
and regional trade and investment remains at frustratingly
low levels. From the perspective of the GOT, promoting
increased regional investment and trade provides another
avenue to spur the growth of the Tunisian economy and to help
address the lingering issue of unemployment. Nevertheless,
significant barriers to trade and investment exist in
Tunisia, notably currency controls and limits to foreign
investment, that will need to be addressed in order to reap
the benefits of economic integration. End Comment.
GODEC