MINISTER OF TRADE SUPPORT FOR WORLD TRADE

C O N F I D E N T I A L BAGHDAD 000821

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/06/2017
TAGS: ECON PGOV IZ
SUBJECT: MINISTER OF TRADE SUPPORT FOR WORLD TRADE
ORGANIZATION ACCESSION

REF: BAGHDAD O-I 2/27/2007

Classified By: Economic Minister-Counselor Daniel Weygandt for reasons
1.4 (b) and (d).


1. (C) Summary: On March 4, Minister of Trade Abdul Falah
Al Sudani told emboffs that Iraq's accession to the World
Trade Organization has his full support and that he will
attend the April 19 opening of the Working Group. Minister
Al Sudani (Shi'a - Da'wa Tanzim) was appreciative of
USAID-funded technical assistance in the WTO accession
process. He is committed to Public Distribution System
reform, but noted that change is difficult in the current
security situation. He also discussed current activities of
PDS and described his bilateral efforts at expanding Iraqi
trade. Minister Al Sudani said that he was pleased with the
draft Hydrocarbon Law, and expected it to be passed by the
Council of Representatives. End summary.

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Steps to WTO
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2. (C) USAID official and econoff thanked Minister Al
Sudani for his and the Ministry of Trade's continued support
for Iraq's accession to the WTO, congratulating him on
setting a date for the first Working Party meeting on April
19 (reftel). Minister Al Sudani thanked the US for its
technical assistance during this process, mentioning the
successful WTO training session in Amman from January 21-31.
(Note: Given the security situation, it is difficult to bring
the WTO delegation members together for long meetings in
Baghdad. End note.) USAID official noted that given current
need for stability and short-term development results, and
the protracted WTO accession process, GOI commitment to a
successful working party meeting and follow-up would
strengthen the case for continued USG technical assistance.


3. (C) Minister Al Sudani said that he understood USAID's
position. He said that there was support from different
parts of the Iraqi government for this work, including the
Ministry of Foreign Affairs (MFA) and the Ministry of
Industry and Minerals. He recounted that the MFA had at
first insisted that the negotiations should be led by the
Ministry of Foreign Affairs, but that now they understand
better the technical nature of the process. Minister Al
Sudani said that Kurdistan's legislation may raise a few
questions during negotiations, but he expects that they all
will be resolvable. He plans on attending the opening
session of the Working Party meeting in Geneva on April 19,
and he said that he was reading a book on Saudi Arabia's WTO
accession.

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PDS - Targeting and Payments
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4. (C) The Public Distribution System (PDS) remains a major
part of the Ministry of Trade's work; it imports, for
example, 1.5 million tons of wheat per month. Minister Al
Sudani continues to work on making the distribution system
more efficient and less open to corruption. He said that he
had ended a corruption ring that had been replacing the good
quality food with bad quality food during the distribution
process. Ultimately, he said, the Ministry of Trade will
need to target the program to the needy, likely based on the
people included within the Social Safety Net. He also would
like to introduce payments to PDS, so that the food may be
subsidized but will not be entirely free. "When something is
free, people do not value it as much," he said. While these
ideas reflect the Minister's long term plans, he said that
the present security situation makes real reform difficult.


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Bilateral Meetings: Syria, South Korea and Iran
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5. (C) Minister Al Sudani has been traveling over the past
few months. He went to Syria in January, where he had
preliminary meetings. He will send a delegation there in the
next two weeks to discuss trade issues. He said that he also
had good meetings in Egypt and in South Korea. He said that
he would travel to Iran on March 5, to take part in
'bilateral joint committees' on a range of issues, including
trade. "Iran is very active in Iraq," Minister Al Sudani
said, "and some of it is good and some of it is bad". He
said that for Iraq to have a healthy trade relationship with
Iran there would need to be more oversight of Iran's
activities.

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Comment
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6. (C) When Minister Al Sudani was first appointed to this
position in 2006, he expressed disinterest in leading the
Ministry of Trade. Over the course of the past year,
however, he has shown increasing interest in the overall work
of the Ministry, as he understood better its role and
potential. As shown by his reading a book on Saudi Arabia's
WTO accession and his willingness to go to the first WTO
Working Group meeting, he is working to become more involved
in the activities of the ministry. While not involved with
the details of the negotiation preparation, the Minister is
clearly supportive of the WTO process. We will work with him
to use that interest to move the process forward.
KHALILZAD