MINISTER ACKNOWLEDGES TELECOM AS MAJOR STICKING

C O N F I D E N T I A L MUSCAT 000144 SIPDIS SIPDIS STATE FOR NEA/ARP STATE PASS USTR FOR SDONNELLY, JBUNTIN COMMERCE FOR ITA THOFFMAN E.O. 12958: DECL: 02/18/2018 TAGS: ECON ETRD PREL MU SUBJECT: MINISTER ACKNOWLEDGES TELECOM AS MAJOR STICKING POINT IN FTA REF: A. MUSCAT 83 ¶B. 07 MUSCAT 1091 Classified By: Ambassador Gary A. Grappo for Reasons 1.4 (b, d) ¶1. (U) This is an action request. Please see paragraph 7. ¶2. (C) On February 16, the Ambassador met with Commerce and Industry Minister Maqbool bin Ali Sultan to urge rapid implementation of the U.S-Oman Free Trade Agreement (FTA). Maqbool agreed that the implementation phase has "taken a long time," and acknowledged that most all remaining issues are "mainly Omani." The Minister added that the ministries involved in the process, such as HEALTH and Legal Affairs, were "not used to these sorts of things." ¶3. (C) Of the pending issues, Maqbool remarked that the tender law was now "100% finished" and is with the Sultan for final approval. He stated that the copyright and industrial property laws were also completed from the Commerce Ministry's perspective, and that the Ministry of Legal Affairs was doing its final review of the legislation. On customs issues, the Minister said that he had been in touch with the Royal Oman Police's Inspector General to speed up the signing of the revised customs administration letter, as well as the rules of origin annex. ¶4. (C) Maqbool affirmed that "the ONE thing that is not finished is telecommunications." The Ambassador highlighted the fact that the Telecommunications Regulatory Authority (TRA) had not yet rescheduled a February 5 DVC with USTR officials. The Ambassador further commented that the USG's confidence level regarding telecom licensing would be increased substantially with the licensing of U.S. telecommunications suppliers such as Navlink. Maqbool replied that he was familiar with mobile phone operator Nawras' interest in teaming up with Navlink to provide competitive international call service, and offered to raise these issues with TRA Chairman Mohammed bin Nasser al-Khusaibi. (Note: Ref B provides a readout of the Ambassador's December 2007 meeting with Khusaibi. End Note.) ¶5. (C) In addition to calling on the TRA, Maqbool pledged to see each minister separately to urge completion of the FTA. The Ambassador raised the possibility of Deputy USTR John Veroneau visiting Muscat to heighten the importance of the FTA's expeditious implementation. Maqbool welcomed the visit and suggested that it occur between mid-March and mid-April. ¶6. (C) Comment: As reported ref A, telecommunications is delaying implementation. While the other issues appear to be winding their way slowly through Oman's legal review process, telecommunications licensing remains so problematic at this point that the TRA cannot even re-engage with USTR. Nearly 18 months since its signing by the President and the Sultan, the FTA has come up against a substantive obstacle in its way toward implementation. The Minister was not forthcoming on this issue, choosing to deflect detailed discussion of the specific impediments. Embassy believes, however, that further movement on telecommunications liberalization will depend on the speed by which the government proceeds in finding a strategic partner for Omantel, its fixed-line monopoly carrier. End Comment. ¶7. (SBU) Action Request: Embassy recommends that DUSTR Veroneau strongly consider visiting Muscat, within the time period suggested by Minister Maqbool, to help move forward implementation of the FTA. End Action Request. GRAPPO