SFAX FACTS: TUNISIA'S BUSINESS CAPITAL WANTS

UNCLAS SECTION 01 OF 03 TUNIS 000591

SIPDIS

SIPDIS

NEA/MAG FOR HOPKINS AND HARRIS, EB/CBA (WINSTEAD),ECA,
NEA/PPD (FERNANDEZ AGNEW)
STATE PASS USTR (BELL),USPTO (ADLIN),USAID (MCCLOUD)
USDOC FOR ITA/MAC/ONE (NATE MASON),ADVOCACY CTR (JAMES),
AND CLDP (TEJTEL)
CASABLANCA FOR (FCS ORTIZ)

E.O. 12958: N/A
TAGS: EAID ECON ETRD KPAO SCUL TS
SUBJECT: SFAX FACTS: TUNISIA'S BUSINESS CAPITAL WANTS
GREATER COLLABORATION WITH THE UNITED STATES

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Summary
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1. Ambassador conducted a familiarization tour of the
southern governorate, and second largest city, Sfax from
April 4-8. The visit included economic/commercial, public
affairs, and humanitarian components. Interlocutors at every
stop pressed for increased collaboration and assistance from
the USG, including branch offices for AMIDEAST (English
language programs) and TACC (Tunisian American Chamber of
Commerce),biotechnology and university linkages, and trade
delegations from US business and government officials. The
Sfax governorate aggressively seeks the attention that its
citizens believe Tunisia's economic, industrial, and
agricultural hub should command. Sfaxians with whom the
Ambassador met were supportive of a Free Trade Agreement
(FTA) with the United States. Many also made the case that
Sfax represents an ideal base for US companies wishing to do
business in the region --- especially with Libya. The
Embassy is following up on the visit by considering ways to
increase interaction with Sfax, including the possible
creation of a Virtual Presence Post. We are also working
with AMIDEAST and TACC to encourage establishment of branch
offices. End summary.

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Ready for a US/Tunisia FTA
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2. In his meeting with the Governor of Sfax Kamel Somai, the
Governor touted the Sfax governorate as:

-- an agricultural center, with 6.2 million olive trees,
as well as almond and pistachio cultivations. Sfax also
accounts for 30 per cent of Tunisia's chicken production and
40 per cent of its egg production

-- a fisheries center, with 20 per cent of the national
production and 70 per cent of its fish exports

-- Tunisia's industrial capital, with approximately 2400
small and medium-sized business representing all industrial
fields: textiles, plastics, electric and electronic
components, mechanical components, chemicals (phosphates, and
oil and gas),and food processing; 80 per cent of Tunisia's
energy production comes from the Sfax Governorate.

-- a university center, composed of 20 higher education
institutes, 25,000 students, and 2 research institutes (one
olive oil research center and a biotechnology research
center).


3. The Ambassador opined that free trade is essential to
prosperity and that he was in Sfax to listen and to learn
about the prospects and opportunities of the Sfax
governorate. Somai replied that it was time for an FTA with
the United States, and that he looked forward to developing
good relations with US businesses. He cited the lack of
English language capabilities among Sfaxians as the primary
obstacle to attracting increased US investment to Sfax and
requested USG assistance in bringing English language
teaching resources to Sfax. The Ambassador mentioned that he
hoped to bring an economic delegation to Tunisia. He also
stated that he wanted to promote greater US/Tunisian
collaboration and strengthened ties via US economic
delegations and US trade missions to Tunisia and vice versa.
He broached the possibility of including Sfax in the program
of any such delegations.

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Taparura Project - Investment Opportunities
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4. Somai said he hoped that future opportunities in urban
development and tourism related construction projects,

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associated with the Taparura Project, would help attract
greater US investment to Sfax. Taparura is a major
environmental clean-up and beach rehabilitation and urban
development project currently underway along the northern
coast of Sfax. What was once a toxic phospho-gypsum
wasteland is envisioned to become a tourist venue with green
zone parks, residential zones, an oceanographic museum, a
nautical club, and an aqualand amusement park. Major roads,
hotels, business convention facilities, a cruise or pleasure
boat port, and an extension of the Sfax airport are also
planned parts of this project. The tender for the first
phase (environmental clean-up, dike construction, ground
surface preparation) has been awarded to Jean de Nul
Belgique-Envisan in collaboration with Somatra (a Tunisian
public works company). This phase of the project is
projected to be completed by the end of 2008. According to
Somai, new public tenders will then be launched for the
second phase -- urbanization and tourism development -- of
the Taparura Project.


5. The Ambassador visited the project site and asked the
Governor and the project leader to inform the Embassy when
major tenders are about to be released. The Embassy would
then notify US investors of the opportunities to participate
in the Taparura and other major development projects.

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United States - We Want You
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6. Throughout the visit, the Ambassador heard calls for
strengthened bilateral ties, investment, and collaboration
with the United States. Meetings with the Chamber of
Commerce, UTICA (Employers' Union),CJD (Centre des Jeunes
Dirigents - young entrepreneurs group),the University of
Sfax, the Center of Biotechnology (CBS),and local businesses
all reiterated common themes: Sfax has the infrastructure,
educated work force facilities, stability, and location to
make it an ideal base for US business operations targeted at
Libya, the Maghreb, European Union, African, and/or Middle
Eastern markets. Sfax seeks US investment, increased ties to
the United States and to US businesses and universities,
increased scientific exchanges between CBS and US
Universities, US delegations to visit and explore cooperative
opportunities and Sfaxian delegations to visit the United
States to do likewise. Sfaxians also pressed for a branch of
AMIDEAST offering English classes (particularly business and
legal English),and a branch of the Tunisian American Chamber
of Commerce (TACC). The President and faculty at the
University of Sfax stressed their need for assistance in
building the "spirit of entrepreneurship" among their
students. Sfaxian businesspeople also requested US
assistance both in financing imports from the United States
and exports to the United States, and technical assistance.
They indicated that they want to work with the Embassy to
encourage collaboration and to augment trade between the
United States and Tunisia.


7. In all of his meetings, the Ambassador expressed interest
in strengthened ties with Sfax. In follow-up to his visit,
he discussed the possible establishment of both TACC and
AMIDEAST branch offices in Sfax with their respective
directors. He said that he believed that such branch offices
will permit the creation of a solid base upon which to build
increased business ties between the United States and Sfax.
The Ambassador told his interlocutors that he and the US
Embassy team will work to encourage business and university
partnerships between Sfax and United States counterparts. He
pointed out that there are many avenues to exchange
information and to foster strengthened relations.
Specifically, the United States offers many programs and/or
technical assistance that can help meet the needs of Sfax
business and university entities such as the International
Visitor Program, Trade Development Agency programs, the
Business Facilitation Incentive Fund, Commercial Law
Development Programs, USDA programs and Export/Import Bank

TUNIS 00000591 003 OF 003


programs. The Ambassador also stated that he would be happy
to write letters to the US Chamber of Commerce, US University
presidents, and others to encourage them to visit Tunisia --
and Sfax in particular -- in order to explore collaboration
and partnership possibilities.

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HIV/AIDS Prevention and Treatment Center
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8. The Ambassador visited an HIV/AIDS Prevention and
Treatment Center in support of Tunisia's efforts to encourage
civil society participation in the promotion of HIV/AIDS
awareness among youth. Construction was funded via a USD
250,000 grant from the US Department of Defense Humanitarian
Assistance Program. The center will serve as a youth center
for diverse social activities but will specialize in HIV/AIDS
information dissemination and confidential HIV/AIDS testing.
The Tunisian association for the Prevention of AIDS and
Sexually Transmissible diseases in Sfax (ATL/MST/SIDA),the
NGO that will be responsible for operating the center, is
currently working with the Tunisian Ministry of Public Health
and UNAIDS to finalize the operational plan that will enable
it to open its doors to the public in the near future.
During his visit, the Ambassador toured the facility and
observed various HIV/AIDS youth awareness activities
initiated by the association. The Ambassador presented Dr.
Zahaf, Director of ATL/MST/SIDA Sfax with a plaque
acknowledging the USG contribution to this project and
commended the collaborative efforts of the Ministry of Public
Health, ATL/MST/SIDA, and UNAIDS for the design and future
successful operations of the center. The Ambassador cited
the project as a true symbol of Tunisian-American cooperation.


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Comment
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9. This trip provided the Ambassador with an excellent
introduction to the commercial capital of Tunisia and its
second largest city. We were struck by the oft-repeated
mantra that Sfax is the perfect platform for US companies
wishing to expand their business in the region, especially
towards Libya, and Embassy's Econ/Commercial Officer will be
following up on relevant leads in this regard. The
Ambassador's visits to CBS, the University of Sfax, and the
HIV/AIDS Center provided him with a first-hand view of the
fruits of the various USG-funded technical and humanitarian
assistance projects in the region. Post will follow-up on
the various possibilities for additional linkages, including
the possible establishment of a Virtual Presence Post and
branches of TACC and AMIDEAST in Sfax. The Executive
Director of TACC subsequently told Econ/Commercial Officer
and P/E Counselor that TACC is moving towards establishing a
branch office in Sfax. End comment.
GODEC