URGING AFGHANS TO CONCLUDE APTTA

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C O N F I D E N T I A L SECTION 01 OF 02 KABUL 004056

SIPDIS

STATE FOR D-LEW; S/SRAP; SCA/A, EEB/BTA

STATE PASS USTR FOR DELANEY, DEANGELIS

E.O. 12958: DECL: 12/17/2019

TAGS: ETRD, PREL, ECON, PK, AF

SUBJECT: URGING AFGHANS TO CONCLUDE APTTA

REF: KABUL 3974 AND PREVIOUS

Classified By: CDDEA E. Anthony Wayne for reasons 1.4 (b) and (d)

1. (C) Summary: Embassy Kabul has vigorously lobbied the

Ministers of Commerce, Finance and MFA to push for closure on

the APTTA. The Ministers are unified in their view that this

agreement can not provide Afghanistan with less access to

India than the 1965 Transit Agreement. They believe they can

reach an agreement on what to call the border crossing

points, appeared willing to capitulate on a way to resolve

the Pakistani-proposed interim measures but remain steadfast

in their insistence on achieving access to India. The

Afghans are concerned about fulfilling the commitment they

made in Washington to complete the agreement before the end

of the year, but also on how the USG would react if they

could not. From conversations at all levels in the

government, they appear to be ready for the negotiations to

carry over into the New Year.

2. (C) Kabul believes we need to collectively press both

sides to negotiate seriously on the tough issues, pushing

them on the clear compromises which can give both sides the

essence of what they want. We believe Deputy Secretary Lew's

call to Minister of Finance Zakhiwal will help reinforce this

message. End Summary.

3. (SBU) Between December 15-16, Embassy Kabul has met

repeatedly with the Ministers of Commerce and Industry,

Finance and Foreign Affairs and members of the Afghan

negotiating team to press the Afghans to reach an agreement

in Islamabad during the December 19-21 negotiating round of

the APTTA. In addition, we have provided the Afghans with

technical assistance to develop WTO-compliant negotiating

positions on the four tough issues: Access to India through

the border at Wagah; steps to deal with unauthorized trade

(smuggling); terms for designating border posts, and dispute

settlement mechanisms. Universally, we hear the latter two

points will be solved in the upcoming round. The Afghan and

Pakistani ability to resolve access to Wagah and deal with

unauthorized trade remains uncertain.

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Commerce: Trying to Broker Consensus

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4. (C) On December 15, Coordinating Director for Development

and Economic Affairs (CDDEA) Amb. Wayne and Deputy Economic

Counselor met with Minister of Commerce and Industry

Wahidullah Shahrani to discuss Afghan preparations for the

APTTA round. Shahrani voiced concerns that Minister of

Foreign Affairs Spanta was not totally on board to conclude

the agreement this weekend. However, according to Shahrani,

Spanta is concerned about the USG reaction if the parties

don,t conclude the agreement, given their commitment in

Washington to do so by the end of this year. Shahrani

clearly also was concerned about the USG reaction, asking us

point blank, &What would happen if we don,t get an

agreement?8 Shahrani noted the great uncertainty over

President Karzai,s cabinet picks, which has paralyzed the

government.

5. (C) In subsequent conversations with Amb. Wayne and Deputy

Econ Counselor on December 16 and 17, Minister Shahrani said

he believed USG lobbying efforts with Ministers Spanta and

Zakhiwal at the Ambassadorial and Washington levels would be

helpful in overcoming and resistance on the Afghan side to

conclude the agreement in the next round. He also advocated

a similar approach with the Pakistani Ministers, which we

assured him would happen. Shahrani plans to fly to Islamabad

on Monday, December 21, following the Cabinet meeting, to

broker a solution on any outstanding issues. Embassy Note:

It is not confirmed that Shahrani will remain as Minister of

Commerce in the new Cabinet ) should President Karzai

announce his new appointments before the 21st, this would add

another obstacle into concluding the agreement before the end

of the year. End note.

6. (SBU) These concerns are mirrored at the negotiating team

level, with Commerce and Customs officials privately pushing

to delay the round, pending an announcement of Ministers.

Commerce and Customs believe the Ministry of Foreign Affairs

does not want to sign an agreement. The Afghanistan lead

negotiator and negotiating team members have independently

told Econoffs they are under heavy pressure to secure access

to India through Wagah, without which there will be no

agreement. Still smarting over the Fourth Round of

negotiations during which Pakistan tabled language calling

for interim measures to counter unauthorized trade or

smuggling, and insisted on renegotiating text which had

previously been agreed upon, they expressed severe doubt the

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Pakistanis are interested in reaching an agreement.

Finance Minister Takes Tough Stand

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7. (C) During his December 16 meeting with CDDEA Wayne,

Minister of Finance Omar Zahkiwal said the new agreement

needs to be an improvement on the 1965 agreement, noting that

"putting conditions on Wagah what are worse than what already

exists is not acceptable." He said Afghanistan will not sign

an agreement on the losing end of the stick, just for good

publicity. He asserted "Afghanistan is now more of a transit

country for Pakistan than vice-versa. We want reciprocity."

Zakhiwal said Afghanistan has negotiating chips that it can

use since it has already allowed Pakistani trucks to transit

to Central Asia and could, in theory, use this to barter for

access to India. Continuing with his hard line, Zakhiwal

said, "Pakistan has too many conditions for too little in

return."

8. (C) Amb. Wayne noted it would likely take a process and

time to get to full agreement on Wagah. Zahkiwal said he had

met with Pakistani Finance Minister Tarin in Instanbul about

a month ago and Tarin told him he thought access to India

would not be an issue. Zakhiwal offered to call Minister

Tarin and remind him of this discussion, with Amb. Wayne,s

strong encouragement.

Foreign Affairs: Not Sure of Success

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9. (C) Ambassador Eikenberry spoke to Foreign Minister Rangin

Spanta on December 16 and 17, emphasizing the importance of

Afghanistan honoring its commitment. Spanta said he believed

the December 19-21 talks would not succeed, but still thought

there would be success before the end of the year. He

indicated to Amb. Eikenberry the Afghans would take a tough

stance and have a fallback they would not deploy during the

negotiations. Amb. Eikenberry noted to Spanta that he and

Minister Shahrani were key in achieving agreement and given

that neither may continue with their current portfolios in

the new Cabinet, time was of the essence. Amb. Eikenberry

also encouraged Spanta to be flexible and accept a formula

which would permit increasing Afghan access to the Indian

markets over time.

10. (C) Comment: Embassy Kabul has advocated compromise to

the Afghans, providing specific examples of WTO compliant

language as suggestions in formulating their negotiating

options. In addition we have reminded them of S/SRAP

Holbrooke,s advice that full access to India might be a

bridge too far at this point, but could be achieved in the

future. The Afghans are afraid of hitching their access to

India to Pakistan,s access (e.g. if they were to negotiate

for national treatment),fearing this could take twenty

years. We welcome Washington's calls on December 17 to urge

flexibility and completion. Given the uncertainty

surrounding both Ministers Spanta,s and Shahrani,s

positions, we will continue to lobby with them from Kabul,

and are not sure that Washington calls will push them further

than we have. End Comment.

EIKENBERRY

URGING AFGHANS TO CONCLUDE APTTA

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