AZERBAIJANI MFA READOUT ON MAY WTO WORKING PARTY

UNCLAS BAKU 000473

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E.O. 12958: N/A
TAGS: ECON ETRD PREL EAGR WTRO AJ
SUBJECT: AZERBAIJANI MFA READOUT ON MAY WTO WORKING PARTY
MEETING

REF: STATE 51516

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1. (SBU) Summary: Deputy Foreign Minister Mammadguliyev
provided a positive assessment of Azerbaijan's May WTO
Working Party meeting and bilateral negotiations with the
U.S. Azerbaijan plans to complete concordance within the
next two months and hopes to complete its WTO Action Plan and
submit responses to questions by the end of the year.
Mammadguliyev hopes to hold another Working Party Meeting in
the first quarter of 2009. Although Mammadguliyev reiterated
long-standing GOAJ policy regarding the protection of certain
agriculture sectors, he agreed to provide a list of specific
sensitive goods in the question/answer process.
Mammadguliyev insisted that certain strategic sectors -
energy, financial services and communications - must be
protected to prevent neighboring countries from gaining
inappropriate influence and access. Per reftel, we
underscored the need for significantly improved market access
offers. End summary.

WORKING PARTY MEETING
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2. (U) In a May 21 meeting, Deputy Foreign Minister Mahmud
Mammadguliyev provided a positive assessment of the Working
Party meeting. He noted that the GOAJ had brought a team of
experts from key line Ministries that provided more detailed
information on Azerbaijan's positions; he hopes that the more
detailed presentations will result in fewer questions than in
previous rounds. Mammadguliyev said the GOAJ understood the
need to complete concordance as soon as possible and planned
to do so "in the next two months." He also said that the
GOAJ had submitted an updated schedule for its WTO action
plan. The GOAJ plans to complete the ten outstanding pieces
of legislation by the end of this year, and also hopes to
respond to questions by the end of this year. Mammadguliyev
acknowledged that another Working Party meeting this year
would be unrealistic but hopes to hold another meeting in the
first quarter of 2009. He hinted that he hoped the 2009
Working Party meeting would be the last one required,
commenting "this should be the final point."

BILATERAL NEGOTIATIONS
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3. (U) Mammadguliyev also was positive about the bilateral
market access discussions with the United States.
Mammadguliyev characterized the meeting's atmospherics as
"very positive" and said he felt the U.S. negotiators had a
better understanding of GOAJ perspectives on key goods and
services issues. He reiterated the GOAJ's long-standing
policy that it must protect certain sensitive sectors -
particularly in agriculture - in order to promote the
diversification of Azerbaijan's heavily energy-dependent
economy and support rural development goals, and also stated
that Azerbaijan hopes to accede with developing country
status for certain agricultural sectors. When Pol/Econ Chief
noted that the U.S. urged Azerbaijan to narrow the list of
sensitive sectors to key product-specific sensitivities,
Mammadguliyev said he had agreed during the bilateral
negotiations to provide a concrete list of specific,
sensitive goods and hoped to continue this discussion during
the question/answer process.


4. (SBU) In response to U.S. concerns about services market
access, Mammadguliyev said that the GOAJ "took on some of
your requests." However, he expressed concern that open
market access in strategic sectors such as energy, financial
services, and communications could allow neighboring
countries (Russia and Iran) inappropriate access and
influence in Azerbaijan. "You know who I mean," he added
with a knowing look. "These sectors are very strategic and
we can't open them." When Pol/Econ Chief responded that
these are priority sectors for the U.S. and will be important
for a bilateral market access agreement, Mammadguliyev said
the GOAJ is revising its list of sensitive goods. He added
that he hoped the U.S. and Azerbaijan could address this
issue in bilateral negotiations in Washington, as the GOAJ
has found negotiations in capitals to be more effective. Per
reftel, Pol/Econ Chief underscored that Azerbaijan needed to
submit significantly improved market access offers in order
for negotiations to advance.

COMMENT
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5. (SBU) Mammadguliyev's positive assessment of the Working
Party meeting and our bilateral negotiations does not reflect
the serious market access issues that must be addressed for
both the Working Party and our bilateral negotiations to
proceed. However, he is extremely open to further questions,
requests, and information from the U.S., and stressed that he
hopes many of the outstanding issues can be addressed through
the question/answer process. Mammadguliyev will be part of
the Azerbaijani delegation to the bilateral Economic
Partnership Commission meeting; his visit to Washington could
be a good opportunity for further discussions on market
access issues.
DERSE