WTO ACCESSION STEPS UNLIKELY BEFORE JANUARY

UNCLAS BAGHDAD 002374 SIPDIS SENSITIVE USTR FOR DAWN SHACKLEFORD E.O. 12958: N/A TAGS: ETRD PGOV EAID WTO ECON EINV IZ SUBJECT: WTO ACCESSION STEPS UNLIKELY BEFORE JANUARY ELECTIONS REF: A. BAGHDAD 1233 ¶B. BAGHDAD 636 ¶1. (SBU) Summary: The GOI seems unlikely to make the sound economic but tough political decisions that would move Iraq closer to World Trade Organization (WTO) accession before Iraqi national elections in January 2010. Although Iraq has completed the requisites for the next round of accession talks, the GOI's inter-ministerial WTO committee will likely delay submitting its WTO package to Geneva. As of September 1, the GOI has: 1) completed a goods offer and tariff schedule, 2) updated its legislative action plan, and, 3) finalized draft laws on intellectual property rights (IPR) and technical barriers to trade (TBT). In our discussions with Ministry of Trade officials, we have noted that WTO accession will be discussed -- either positively or negatively -- at October 19 Dialogue on Economic Cooperation (DEC) and could draw unwanted attention at the October 20-21 U.S.-Iraq Business and Investment Conference. In response, the MOT's senior advisor said he is seeking a solution that balances political concerns with a genuine interest in demonstrating tangible progress ahead of the Washington meetings. End Summary. -------------- Progress Likely to Slow Ahead of Elections -------------- ¶2. (SBU) In a meeting with Ministry of Trade Senior Advisor and SFA JCC Trade and Investment Working Group co-chair Dr. Abdulhadi al-Hamiri on August 26 at the MOT, al-Hamiri said that the GOI would take few, if any, concrete steps on key economic issues -- specifically WTO accession -- before Iraqi national elections scheduled for January 2010. Acting Trade Minister Safaa al-Safee is facing "significant pressures" to balance reforms such as those required for WTO accession with political concerns for his government's re-election, al-Hamiri said. He stated that, in general, public views about WTO accession were negative and, in the absence of a public information campaign, would not change in the short term. The result is an aversion to opening debate on contentious policy issues and a reluctance to make tough decisions in advance of elections. "Timing is bad," according to al-Hamiri. (Comment: In our discussions with the MOT, we have recommended that the MOT lead a GOI public information campaign and we will continue to deliver that point. We are currently exploring options to help the GOI start a campaign. End comment.) -------------- Status of World Trade Organization Accession -------------- ¶3. (SBU) Al-Hamiri chaired an August 20 GOI inter-ministerial working group (the "National WTO Accession Committee") meeting to address three significant milestones to WTO accession: 1) submission of the GOI's initial goods offer; 2) submission of the GOI's initial services offer; and, 3) submission of draft legislation that conforms Iraq's intellectual property rights regime to the provisions of the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). As of September 3, MOT WTO Division Director Tharwat Salman, was assembling the GOI's planned WTO package, which, according to Salman, will include: - Iraq's initial goods offer (including bound tariff schedule, a proposed agricultural subsidy offer, and a schedule of commitments on provisions of the GATT and WTO agreements on trade in goods); - final ACC4 (data on the status of Iraq's agricultural subsidy regime); - updated legislative action plan; Q- updated legislative action plan; - final draft intellectual property law; and, - final draft technical barriers to trade law. Salman would not commit to a submission timeline beyond noting that the package had not been forwarded yet to Acting Trade Minister Safaa al-Safee for approval. Press reports following the August 20 committee meeting were less specific, but noted that the GOI intended to submit a package for the next round of WTO negotiations. -------------- Despite Political Concerns, Work Continues -------------- ¶4. (SBU) Al-Hamiri stated that the WTO Accession Committee had determined that submitting initial goods and services offers required notification to, but not prior approval by, the Council of Ministers (COM) and Council of Representatives (COR). This is a departure from previous practice and could speed the accession process significantly (ref B),but likely only if the same government remains in power after the January elections. (Comment: We have repeatedly reminded our GOI interlocutors that submitting offers to Geneva marks the beginning -- not the end -- of accession negotiations, and that COM or COR approval for each step of the negotiation process would result in unnecessary delays. End comment.) The committee has also considered a version of the GOI's initial services offer that includes positions on five services sectors (100 of 155 sub sectors): tourism, finance, telecommunications, computers and research and development, and transportation. According to al-Hamiri, there was some "difference of opinion among the Ministries" on the services offer that al-Hamiri has tasked committee members to "work out." Al-Hamiri said the GOI is considering whether to submit the initial services offer with five sectors completed or wait until the entire package is completed. We urged the former. -------------- COMMENT -------------- ¶5. (SBU) The upcoming U.S.-Iraq Dialogue on Economic Cooperation and the Business and Investment Conference have created some leverage for us, which we will continue to use to urge quiet steps forward on WTO accession. We stressed to Dr. al-Hamiri that, in the context of the Washington conference, potential investors would only look to concrete, demonstrable progress (measured, in part, by steps forward on WTO accession) that Iraq is opening for business. Al-Hamiri sees increased trade and investment as political talking points for the elections, and understands that improvements to Iraq's business and investment climate are critical to attract foreign deals. Both views give us traction -- which we will continue to use in our discussions with the GOI in the run-up to the October Conference and beyond. HILL