DEMARCHE DELIVERED: CENTRAL-ASIA TIFA COUNCIL

C O N F I D E N T I A L SECTION 01 OF 02 TASHKENT 001678

SIPDIS

SIPDIS

DEPT FOR SCA/CEN

E.O. 12958: DECL: 09/24/2017
TAGS: ECON EFIN ETRD WTRO ZK UZ
SUBJECT: DEMARCHE DELIVERED: CENTRAL-ASIA TIFA COUNCIL
MEETING

REF: STATE 117583

TASHKENT 00001678 001.2 OF 002


Classified By: CLASSIFIED BY ECON OFF B. OLSEN FOR REASONS 1.4 (B, D).


1. (U) This is an action request. Please see paragraphs 5
and 6.


2. (C) Summary: DCM delivered reftel demarche on September 14
to Uzbek Minister for Foreign Economic Relations, Elyor
Ganiev. Ganiev found the Trade and Investment Framework
Agreement (TIFA) meeting useful, saying he would like to see
more US presentations at the 2008 meeting. The Government of
Uzbekistan (GOU) is comfortable with the next meeting
occurring in Turkmenistan or Tajikistan. He reiterated
Uzbekistan's interest in U.S. investment, especially in light
industry. The GOU does not intend to accede to Article 18 of
the Berne Convention due to retroactive fines for
non-compliance. All members of the Eurasian Economic
Community (EurAsEC) have harmonized customs forms and duties.
Ganiev said Kyrgyzstan, as a WTO member, is EurAsEC's weak
link due to China's dominance of the Kyrgyz economy. The GOU
is interested in being a regional conduit for fiber optic
communications, but believes it is too early, as only
Kazakhstan has similar capabilities. End summary.


3. (C) In a two-hour meeting, Minister Ganiev told the DCM
the TIFA meeting increased mutual understanding of regional
issues and problems of trade and investment. He especially
appreciated the presentations by U.S. businesses. Ganiev
reiterated Uzbekistan's desire to increase U.S. investment,
especially in industrial sectors. He specifically mentioned
textiles, food processing, light industry and energy
infrastructure. (Note: The majority of natural resources are
considered critical to national security and the GOU does not
want foreign businesses directly involved in extractive
industries. End note.) He said the next TIFA meeting should
include more U.S. businesses and segments on textiles and
food processing. The GOU is comfortable with either
Turkmenistan or Tajikistan holding the 2008 TIFA meeting and
any date is workable; Ganiev said these countries should
share their meeting proposals with other TIFA members.

GOU frustrated with USG and Berne Convention
--------------


4. (C) Regarding Intellectual Property Rights (IPR) and the
Berne Convention, Ganiev politely complained that for 10
years the U.S. has mentioned IPR protection in connection
with the Generalized System of Preferences (GSP). Every
year, he said, the U.S. encourages the GOU to join a
convention or agreement in order to avoid losing GSP
privileges. Ganiev said the GOU was tired of hearing the
U.S. push this issue and threaten to remove privileges, when
each year they are given. He added that the GSP is
"unimportant, it will be given or not given"; the impact of
privileges is decreasing as Uzbekistan imports fewer US
goods. The sticking point for not adopting Article 18 is the
retroactive fines that, in Ganiev's opinion, would be
assessed for Uzbekistan's many years of not protecting the
works of deceased artists. Such a fine "is unacceptable", he
said, as it would greatly exceed the value of GSP privileges;
Uzbekistan should not be held responsible for the lack of IPR
protection during the Soviet era.

Action Request
--------------


5. (SBU) Uzbekistan appears to be using a similar argument to
Russia's when it adopted Article 18 with reservation. Post
requests guidance (L and EB) on the application of
retroactive fines from the adoption of Article 18. This
seems to be the only barrier to Uzbekistan's full accession
to the Berne Convention; if Uzbekistan can avoid retroactive
fines, the GOU will likely adopt Article 18.


6. (SBU) Ganiev said Uzbek lawyers told him the U.S. has not
joined Article 18 of the Berne Convention. Post requests the
text of the U.S.'s adoption of the article and a brief
history of the adoption, so that we may set the record
straight with the GOU. POC is Econ Officer Briana Olsen.

EurAsEC Customs
--------------


TASHKENT 00001678 002.2 OF 002



7. (C) In principle, said Ganiev, all EurAsEC members use
customs forms that meet international standards set forth by
the World Customs Organization. Therefore, no amendments on
this topic are planned. Duty harmonization is increasingly
complicated as EurAsEC members look towards WTO accession.
Ganiev mentioned the case of Kyrgyzstan, whose domestic
producers have been "killed" due to zero tariffs and China's
large market share. EurAsEC fears Kyrgyzstan will become an
unregulated conduit for goods to and from China should other
EurAsEC members join WTO. Uzbekistan is playing the wait and
see game before it chooses the WTO over EurAsEC. Ganiev said
Afghanistan is welcome to harmonize its form with
Uzbekistan's.

Fiber Optic Capabilities
--------------


8. (SBU) Ganiev reiterated the message he gave at TIFA:
Uzbekistan's fiber optic network stretches to all its borders
and has the capacity to act as a transit hub for a regional
network. In his opinion, Uzbekistan is well-placed to
connect China to Europe and Central Asia to Russia and
Europe. He said that aside from Kazakhstan and Uzbekistan,
South and Central Asian nations are not equipped with fiber
optic networks. Without roads, there cannot be cables.
Ganiev expressed concern that Afghanistan's ring road is
taking a long time to build; Iran is very active in
connecting to western Afghanistan, which is also the most
convenient way for Uzbekistan to transport goods. The DCM
asked Ganiev to share information on Uzbekistan's fiber optic
network. Ganiev said the topic is moot in the region, as
Turkmenistan, Tajikistan, Afghanistan and Kyrgyzstan are
unconnected. He implied the Uzbeks would not be able to
share such information. He added that Uzbekistan is
interested in being the regional conduit for financial
reasons.
NORLAND