FTA PROCESS WEARING ON FRUSTRATED COMMERCE MINISTER

C O N F I D E N T I A L MUSCAT 000191 SIPDIS SIPDIS STATE FOR NEA/ARP STATE PASS USTR FOR JBUNTIN COMMERCE FOR ITA COBERG E.O. 12958: DECL: 02/25/2017 TAGS: PREL ETRD ECON MU SUBJECT: FTA PROCESS WEARING ON FRUSTRATED COMMERCE MINISTER Classified By: Ambassador Gary A. Grappo for Reasons 1.4 (b, d) ¶1. (U) This is an action request. Please see paragraph 6. ¶2. (C) The Ambassador recently received information via Baker Donelson, Oman's counsel in Washington, that Commerce and Industry Minister Maqbool bin Ali Sultan is tiring of the slow pace of the U.S.-Oman Free Trade Agreement implementation process. Days later, Ministry of Foreign Affairs Under Secretary (Deputy Minister equivalent) Sayyid Badr al-Busaidi phoned the Ambassador to inquire, "What's wrong with the FTA?" ¶3. (C) The Minister had earlier expressed his frustration in dealing with U.S. government counterparts on implementation issues in a February 6 meeting with Commerce Department Deputy Secretary David Sampson. During that meeting, Maqbool stressed that his government was making a good faith effort to amend its regulations and laws to comply with the FTA's provisions, in addition to taking the "extraordinary" step of issuing a Royal Decree that enabled FTA provisions to trump all existing Omani regulations that may run counter to it. Nevertheless, Maqbool concluded, "Some people don't want the FTA to happen." ¶4. (C) Maqbool echoed similar comments in a December 5 meeting with Assistant USTR Shaun Donnelly. He voiced his perception that there was a "one-way" street in dealing with the USG, and noted that there appeared to be "no end in sight" to comments relating to revisions of Oman's intellectual property and labor regulations, among others. Compounding Maqbool's concerns, Embassy believes, is the amount of political capital he has expended in ushering the FTA through the Council of Ministers, especially with the Sultan and with the Ministers of Manpower and of Regional Municipalities, Environment and Water Resources. ¶5. (C) Comment: Since Maqbool's long-running frustration over the FTA is well-known, it is difficult to say whether what we are hearing is just more of the same, or some new irritant. Recently, he has complained about repeated requests to modify documents after earlier changes had been incorporated. This is putting some strain on his limited staff, who are beginning to work on FTAs with the EU, India, and others. He also asks why the FTA cannot be implemented now with a commitment by both sides to address remaining issues within an acceptable period of time following implementation. Ultimately, we believe that he is under increasing pressure and taking considerable criticism, especially from the cabinet, for having made significant concessions without delivering the goods. End comment. ¶6. (C) Action request: Embassy is concerned that Maqbool's frustration may impact ultimate implementation of the FTA. He has told the Ambassador that he will not speak publicly about the FTA until it is implemented, which is undermining Embassy efforts to promote greater trade and investment under the Agreement. Without his strong support, reforms needed to comply with the FTA will not be completed in a timely way. To shore up the Minister's support and enthusiasm for the process, the Ambassador intends to meet with him at the earliest opportunity. In preparation for this meeting, Embassy requests guidance from the Department and from USTR in order to engage Maqbool. In particular, we want to give him a clear roadmap to FTA implementation, including the most significant milestones necessary from the USG point of view. End action request. GRAPPO