ISRAELI AND GC CHAIR ON PA BID FOR WTO OBSERVER STATUS

UNCLAS GENEVA 000845 SENSITIVE BUT UNCLASSIFIED SIPDIS DEPT PASS USTR TEL AVIV FOR AMB, DCM, AND ECON USTR FOR CKLEIN, AVENKATARAMAN,SFRANCESKI, MMOWREY E.O. 12958: N/A TAGS: ETRD WTRO ECON PREL KWBG IS SUBJECT: ISRAELI AND GC CHAIR ON PA BID FOR WTO OBSERVER STATUS Reftels: (a) Jerusalem 1607 (B) Secstate 99831 (c) Geneva00783 (d) Tel Aviv 02166 (e) Geneva00839 ¶1. (SBU) Charge was approached by both the Israelis and General Council (GC) Chair Matus this morning. The Israelis passed on informal word that they probably will have some flexibility on the issue of observership in the Ministerial Conference. They also indicated their intent to be very low key at the GC Chair's consultation tomorrow. Matus, for his part, confirmed his plans for the meeting as reported in ref (e) but expressed concern about Egypt. An Arab source has told him that the Egyptian Ambassador's approach to this issue is being directed from Cairo, with a suggestion that his directions are coming from the highest level. Tomorrow's meeting is for WTO Members only so the PA's more moderate voice will not be there as counterpoint if the Egyptians choose to go on the offensive. Matus seemed pretty firm in his intention not to place this issue on the agenda for the October GC. However, he is keeping his options open in terms of whether he might mention the PA request at GC meeting under other business until he sees how tomorrow's meeting goes. ¶2. (SBU) We understand that when the Israelis met with Matus they handed him a note that they asked him not to circulate. (They did not share the noted with us either.) In the note they argue that the PA does not meet the criteria for WTO membership as a country or a customs territory. It goes on to say that they view the PA's request for GC observership as a violation of the terms of their bilateral agreements in that it attempts to unilaterally change their status. SHARK