Identifier
Created
Classification
Origin
07TUNIS1249
2007-09-14 12:26:00
CONFIDENTIAL
Embassy Tunis
Cable title:  

ECONOMIC DELEGATION SPURS GOT ACTION

Tags:  ECON ETRD EAIR EINV BEXP TS 
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VZCZCXYZ0007
PP RUEHWEB

DE RUEHTU #1249/01 2571226
ZNY CCCCC ZZH
P 141226Z SEP 07
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 3845
INFO RUCNMGH/MAGHREB COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
C O N F I D E N T I A L TUNIS 001249 

SIPDIS

SIPDIS

STATE FOR EEB (DIBBLE),NEA/MAG (HOPKINS AND HARRIS)
STATE PASS USTR (DONNELLY AND BURKHEAD) AND USAID (MCCLOUD)
USDOC FOR (VINEYARD AND MASON),ADVOCACY CTR (JAMES),AND
CLDP (TEJTEL AND MCMANUS)
USDOC PASS USPTO (ADAMS, BROWN AND MARSHALL)
CASABLANCA FOR FCS (ORTIZ)
CAIRO FOR FINANCIAL ATTACHE (SEVERENS)
LONDON AND PARIS FOR NEA WATCHER

E.O. 12958: DECL: 09/12/2017
TAGS: ECON ETRD EAIR EINV BEXP TS
SUBJECT: ECONOMIC DELEGATION SPURS GOT ACTION

REF: A. TUNIS 959


B. TUNIS 618

C. TUNIS 271

D. 06 TUNIS 2771

Classified By: Ambassador Robert F. Godec for Reasons 1.4 (b) and (d).

-------
Summary
-------

C O N F I D E N T I A L TUNIS 001249

SIPDIS

SIPDIS

STATE FOR EEB (DIBBLE),NEA/MAG (HOPKINS AND HARRIS)
STATE PASS USTR (DONNELLY AND BURKHEAD) AND USAID (MCCLOUD)
USDOC FOR (VINEYARD AND MASON),ADVOCACY CTR (JAMES),AND
CLDP (TEJTEL AND MCMANUS)
USDOC PASS USPTO (ADAMS, BROWN AND MARSHALL)
CASABLANCA FOR FCS (ORTIZ)
CAIRO FOR FINANCIAL ATTACHE (SEVERENS)
LONDON AND PARIS FOR NEA WATCHER

E.O. 12958: DECL: 09/12/2017
TAGS: ECON ETRD EAIR EINV BEXP TS
SUBJECT: ECONOMIC DELEGATION SPURS GOT ACTION

REF: A. TUNIS 959


B. TUNIS 618

C. TUNIS 271

D. 06 TUNIS 2771

Classified By: Ambassador Robert F. Godec for Reasons 1.4 (b) and (d).

--------------
Summary
--------------


1. (C) During a September 9-12 visit to Tunisia, the
interagency economic delegation headed by EEB PDAS Elizabeth
Dibble stressed the US commitment to strengthening the
bilateral economic relationship and the need for concrete
action. Meetings with Minister of Development and
International Cooperation (MDIC) Mohamed Nouri Jouini,
Minister of Foreign Affairs Abdelwahab Abdallah, and Prime
Minister Mohamed Ghannouchi produced not only strong
statements of GOT support for enhanced economic ties, but
also agreement on specific next steps, including
reinvigorating the TIFA Council. The visit of this unique
delegation provided a strong signal of US interest in
Tunisia, laying the groundwork for both short- and long-term
economic engagement. End Summary.

--------------
Jouini Optimistic
--------------


2. (C) In his meeting with the delegation, Minister Jouini
outlined the GOT's long-term economic vision of reaching
OECD-level development both in terms of revenue and human
development. He told the delegation that the GOT will
continue both micro- and macro-level reforms, including
improvements in the investment climate and development of
infrastructure. While he noted Tunisia's economy is oriented
towards Europe, he stressed the need for Tunisia to diversify
and build stronger relationships with other countries --
first and foremost the United States. Jouini bemoaned the
low level of US trade and investment in spite of the great

potential in Tunisia for US business. However, Jouini
declared himself "more optimistic than two years ago" and
eager to enhance economic relations with the United States.
Signaling MDIC's renewed enthusiasm for advancing the
bilateral economic relationship, MDIC assembled a large
interagency contingent of their own, including
representatives from the Ministry of Commerce, Ministry of
Public Health, and Ministry of Transport.

--------------
"Tunisia Must Be the Best"
--------------


3. (C) PDAS Dibble emphasized that due to its small size,
Tunisia needs to "be the best" in order to attract US trade
and investment. Jouini demurred at comparisons to Jordan and
Morocco, stating that greater US investment in these
countries is a result of greater US government attention and
encouragement. Dibble stressed that while our governments
can send signals to the business community, it is up to
businesses to make their own decisions. Dibble stressed that
elements of the business climate such as transparency, access
to the internet, and the ease of getting permits all affect
investors' decisions to enter a country. She cited direct
air links, clear rules, less red tape, transparent tendering
and foreign exchange convertibility as improvements that
could positively impact trade and investment. Treasury
Financial Attache Alex Severens commended Tunisia's solid
macroeconomic performance and good rating on the World Bank's
Doing Business survey. Severens cautioned that in order to
maintain a high ranking on this survey Tunisia "needs to run
to stay ahead" as other country's try to improve their own
rankings. Quini laughed while stating that he knows that
"Tunisia needs to run and needs to run fast."

--------------
Reinvigorating the TIFA
--------------


4. (C) Both Minister Jouini and the delegation lamented the
lack of action on the TIFA following the 2005 TIFA Council.
USTR's Paul Burkhead emphasized that, although the TIFA is
organized around the goal of an FTA, the TIFA can also be
used to address specific concerns. Jouini agreed that the
TIFA can lay the groundwork for an FTA and that a TIFA
council would send a positive signal to the business
community. Referring to his comments at the MEPI-sponsored
FTA roundtable (Ref B),Jouini repeated that the GOT is
committed to an FTA with the United States. Jouini told the
delegation that he "understands and accepts" that the
philosophy of an FTA is different than an Association
Agreement with the EU, but emphasized that if there is real
interest compromises must be made on both sides. Jouini
continued that an agreement needs to consider a country's
specificities, reflecting Jouini's desire for flexibility in
implementation timelines. Jouini said he would be pleased to
meet AUSTR Shaun Donnelly in October in order to set a date
and location for the next TIFA council meeting.

--------------
Open Skies: Agreement on an Agreement
--------------


5. (C) PDAS Dibble raised the Open Skies Agreement with all
three ministers and reiterated US interest in beginning
negotiations. Dibble stressed the important economic impact
of direct air links both in facilitating trade and investment
and specifically, in encouraging US tourism. At the MDIC
meeting, Director General of Civil Aviation Hamadi Ben
Khelifa, reading directly from his talking points, stated the
Minister of Transport would like an agreement. Ben Khelifa
presented the Ministry of Transport suggestion that American
companies enter into discussions with state-owned Tunisair
regarding codeshares. He also indicated that Northwest
Airlines codeshare request would be approved if Northwest
entered into a codeshare with Tunisair. Ambassador Godec
reiterated US interest in receiving an official response.
Minister Jouini, who could be seen writing, replied
laughingly that he had taken note of this and stated "We'll
respond."

--------------
IPR: Progress and Lingering Concerns
--------------


6. (C) Commerce DAS Holly Vineyard commended the progress on
intellectual property rights, noting that the removal of
pirated products from Carrefour (Ref D) and the termination
of "correlation" (Ref C). She cited continuing confusion
over the appeals filed for pharmaceutical products correlated
in late December 2006 and urged the GOT to make final
rulings. Referring to pharmaceutical company concerns that
the GOT does not provide data exclusivity, DAS Vineyard
highlighted that pharmaceutical companies tend to invest in
countries that offer five-year data exclusivity and the GOT
should clear up misperceptions. Director General of the
Pharmaceutical and Drug Administration Kamel Iddir responded
that Tunisian laws respect TRIPs and the GOT respects its
international obligations for medical products. Ambassador
Godec added that this provided a good example of how more
information and contact with companies could resolve
misperceptions. In response to Vineyard's encouragement for
a patent linkage system, Jouini stated that the GOT believes
"WTO is sufficient." Jouini added that if the US
demonstrates that the GOT is not TRIPs compliant, the GOT
will address this.

--------------
Advocacy
--------------


7. (SBU) In all three meetings, PDAS Dibble raised
outstanding advocacy cases and pushed for favorable
resolution. Advocacy included Cisco Systems, e-government
proposal, Coca-Cola,s carbonated beverage tax solution, the
pharmaceutical companies' correlated drugs, Northwest
Airlines' codeshare request and Boeing's anticipated bid for
Tunisair,s fleet renewal tender. Minister Jouini urged the
delegation to forward all such issues to MDIC and undertook
to respond to these concerns.

--------------
FM Abdallah: "Political will exists"
--------------


8. (C) In his meeting with the delegation, Minister of
Foreign Affairs Abdelwahab Abdallah, in a particularly jovial
mood, emphasized his desire to reinforce and strengthen
economic ties. Abdallah stated that the "political will
exists" to strengthen the bilateral economic relationship.
Referring to the spate of recent congressional visits,
Abdallah told the group he was happy to receive delegations
and hoped the increased rhythm of visits would continue.
Abdallah acknowledged that Tunisia has more to do on freedom
of the press and human rights, but stated that the GOT is
working to improve daily life in all areas. Citing an
oft-heard refrain, Abdallah stated that it is necessary to
recognize each country's "specificities"; every country has a
unique vision. PDAS Dibble affirmed that democracy is not
"one-size fits all", but emphasized that the United States is
looking for a positive trend on political reform,
transparency, and accountability. Dibble highlighted the
linkage between the close political relationships the US has
with Morocco and Jordan and the strong economic
relationships. Turning to Maghreb integration, Abdallah
noted the negative impact of the Western Sahara impasse on
economic exchange in the region and also in hampering Arab
Maghreb Union progress.

--------------
PM Ghannouchi: GOT Committed
--------------


9. (C) Prime Minister Mohamed Ghannouchi, who had to cut the
meeting short after being summoned by President Ben Ali,
reiterated GOT commitment to enhancing bilateral economic
relations. In response to PDAS Dibble's assertion that
negotiation of an open skies agreement could lead to direct
air links and expanded commercial exchanges and tourism
between the US and Tunisia, Ghannouchi told the delegation
the GOT is committed to exporing the details of open skies
and noted that there is a trend towards progressively
liberalizing more Tunisian airports. Ghannouchi lamented the
limited number of American companies, less than 70 out of
2800 foreign companies in Tunisia. Citing Tunisia's trade
balance with the United States, Ghannouchi stated that more
must be done to promote Tunisian exports and acknowledged the
need to enhance the TIFA process. (NOTE: Tunisian National
Institute of Statistics figures show a 2006 Tunisian trade
deficit of approximately 377 million Tunisian dinars (roughly
US $300 million),while USDOC figures show a US deficit of
approximately US $141 million. END NOTE.) PDAS Dibble
highlighted some of the concerns raised by US businesses
during an Embassy-hosted roundtable (septel),including the
need for predictability and a level playing field.
Ambassador Godec emphasized the need for concrete action such
as beginning Open Skies negotiations and holding a productive
TIFA council meeting. Ultimately, Dibble stated "we both
want results."

--------------
Key Next Steps
--------------


10. (C) The delegation underscored the need for concrete
action to advance the bilateral economic relationship and
outlined several specific steps for the coming months. In
side meetings with MDIC, Burkhead and MDIC agreed to name
heads for the four TIFA working groups, who would begin
discussions via DVC prior to the next TIFA Council. Minister
Jouini agreed to meet with AUSTR Shaun Donnelly while he is
in Washington in October to set a time and place for TIFA
council. The October door knock mission to Washington by the
Tunisian-American Chamber of Commerce and the November visit
to Tunisia of a US business delegation present opportunities
to generate private sector interest in the bilateral economic
relationship. These events set the stage for a TIFA Council
at the end of 2007 or beginning of 2008.

--------------
Moving Forward
--------------


11. (C) The visit of this unique interagency delegation
provided a strong signal of US interest in Tunisia that will
lay the groundwork for both short- and long-term economic
engagement. Although the delegation did not receive an
official agreement to begin negotiations for an Open Skies
Agreement, GOT officials sent strong signals that they are
interested in proceeding. PDAS Dibble made it clear both in
official meetings and in the press that the ball is now in
the GOT's court. The Embassy will continue to follow up on
the proposed Open Skies text. In the long-term, it will be
important to maintain the momentum created by the
delegation's visit by continuing to encourage systemic
improvements in Tunisia's investment climate and stressing
the linkage between close political cooperation and stronger
economic ties.

(U) This cable was cleared by PDAS Dibble.
GODEC