PM GHANNOUCHI ON MIDDLE EAST PEACE, ACST, AND THE

C O N F I D E N T I A L TUNIS 000461

NOFORN
SIPDIS

NEA/FO AND NEA/MAG (SWILLIAMS, MHAYES)

E.O. 12958: DECL: 07/10/2019
TAGS: PGOV PREL ASCH TS
SUBJECT: PM GHANNOUCHI ON MIDDLE EAST PEACE, ACST, AND THE
REPORTED PLOT

REF: A. TUNIS 456

B. TUNIS 455

C. TUNIS 447

D. TUNIS 339 AND PREVIOUS

E. TUNIS 243

Classified By: Ambassador Robert F. Godec for reasons 1.4 (b) and (d)

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Summary
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1. (C) During a farewell call by the Ambassador on July 10,
Tunisian Prime Minister Mohamed Ghannouchi:
-- dismissed the reported plot against US military personnel
as &banal8;
-- welcomed the new policies of President Obama and offered
Tunisian support on efforts for Middle East peace;
-- pressed for the American Cooperative School of Tunis
(ACST) to sign the Ministry of Finance,s tax agreement and
leave other issues for future resolution; and,
-- thanked the Ambassador for his contributions to bilateral
relations.


2. (C) The Ambassador:
-- asked the GOT to do more to support US efforts to achieve
peace in the Middle East, noting President Obama,s letter to
President Ben Ali;
-- made clear the US Government wants a global resolution
soon of the issues regarding ACST;
-- urged the GOT to do more to open up the political process,
including strengthening freedom of expression and
association, in advance of the upcoming elections; and
-- thanked the Prime Minister for his friendship and
assistance.
End Summary.

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Farewell Call
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3. (C) On July 10, the Ambassador paid his farewell call on
Prime Minister Mohamed Ghannouchi. The Prime Minister was
accompanied by his international affairs advisor, Diplomatic
Counselor Youssef MeKaddem. The Ambassador was accompanied
by acting Pol/Econ Counselor Laura Byergo (notetaker).

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Reported Plot Against the US Military Not Serious
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4. (C) The Ambassador asked for information regarding the
reported plot to attack US military personnel (Ref C).
Ghannouchi said the case was "banal," suggesting it posed no
real threat. The group had nothing to do with Al-Qa'ida in
the Islamic Maghreb, he added. Ghannouchi said the Middle
East region needs more security and praised the Obama
administration for improving the political atmosphere and
thereby reducing the ability of extremists to recruit.


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Middle East Peace: PM Welcomes Obama Administration Efforts
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5. (C) The Ambassador stressed the importance of progress on
Middle East peace and the other challenges in the region. He
underscored that President Obama began his efforts for peace
on his first full day in office and asked for the Prime
Minister,s impressions of the Cairo speech. The Ambassador
noted, too, that he had delivered to Minister of State Ben
Dhia July 9 a letter from President Obama to President Ben
Ali on the peace process (Ref B). He stressed that the United
States cannot bring peace alone, and asked for Tunisia,s
support and assistance.


6. (C) Ghannouchi praised President Obama and his policies,
noting the Cairo speech had changed political rhetoric in the
region. The speech, he said, had brought hope. Ghannouchi
welcomed Senator Mitchell's efforts, and referred to the good
meeting the two held in April (Ref E). He expressed
appreciation for the Administration's clear support for a two
state solution, its pragmatic approach to Iran, and its focus
on the Taliban in Afghanistan. All, he said, need to be
pushed forward. Now the Administration needs concrete
achievements, he stressed. Finally, Ghannouchi emphasized
that the United States can count on the GOT to work with it
for peace in the region. Support for peace and for US
efforts to advance it are integral parts of GOT policy, he

said.

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ACST: Be Flexible, Accept the Tax Agreement
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7. (C) Ghannouchi raised ACST and asked for the US Government
and the school to be flexible and settle the tax dispute
immediately. Then, he said, other issues (land and status)
could be settled, implying that the resolution would be
favorable. He referred to the ACST issues as a "grain of
sand" in our relations. The Ambassador stressed that the
United States and ACST have agreed, in principle, to the tax
settlement. Nevertheless, the land and status questions
remain open and the United States prefers a global
resolution. He stressed that the school is fully prepared to
pay just, fair and reasonable taxes going forward. The
Ambassador pointed out that because both the tax and land
issues involved money, it is best both be settled together.
He noted the Embassy had sent a draft bilateral agreement to
the MFA and expressed hope an agreement could be concluded
soon.


8. (C) The Prime Minister repeated, using several
formulations, his request for ACST and the US Government to
separate the tax issue from other questions and to proceed to
settlement. The Ambassador pointed out that the Ministry of
Finance was asking the impossible by refusing to provide ACST
with a copy of the tax agreement and demanding that it simply
be signed on the spot. Many school board members are out of
the country and no member who is here has the authority to
sign any agreement. For someone to be given such authority,
ACST needs a copy of the proposed agreement and an
opportunity for the board and Department of State lawyers to
review it. Finally, the Ambassador said the Ministry of
Finance,s demand that the school produce a check for one
million dinar in 24 hours was also unrealistic and could not
be met. The Ambassador noted that ACST,s US bank had
blocked much of the school,s account in response to the
GOT,s action and it would take time to unblock it.


9. (C) Ghannouchi expressed surprise that the school had not
received the tax document but continued to press for the US
Government to accept a piecemeal approach to solving the
problem. The Ambassador finally said he would convey the
message to Washington; but noted again that while multiple
ministries may be involved, ACST needs to know its full
obligations to the GOT before it could agree to anything.
The Ambassador asked why the GOT was unwilling to conclude a
global school agreement with the United States as it had with
France and Italy. The Prime Minister demurred, suggesting
the cases were different.

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Bilateral Relations: More Political Progress Needed
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10. (C) The Ambassador expressed appreciation for
Ghannouchi's friendship and all he had done to advance
US-Tunisian relations. He gave the GOT credit for the
significant economic and social progress it has made but said
more could be done in the political arena. He noted the
opportunity presented by the upcoming presidential and
legislative elections, saying progress was specifically
needed on freedom of expression and association. The Prime
Minister said that when a country makes progress in some
areas, more is always asked of it.


11. (C) The Ambassador also highlighted the progress that has
been made in the past three years on US-Tunisian military
cooperation (notably in increased US assistance),relations
between Congress and the Chamber of Deputies, and on cultural
programming, including increased English-language
instruction. The Ambassador noted the Mission,s
considerable efforts to deepen economic and commercial
cooperation. Ghannouchi seconded the successes in developing
and diversifying the relationship, specifically emphasized
the security relationship. He added, it is always possible
to do more, expressing a desire for deepening economic
relations. He said as Tunisia is dealing with the financial
crisis, efforts on the economic side to encourage business
contacts and foreign investment are key. He hoped that the
increased interest shown by US companies in the last year
would lead to tangible results. The Prime Minister expressed
appreciation for all the Ambassador had done for Tunisia and
for US-Tunisian relations.

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Comment

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12. (C) PM Ghannouchi is one of Tunisia,s brightest and most
effective officials. He justifiably receives much of the
credit for the country,s generally good economic governance.
He is untainted by rumors of personal corruption. The Prime
Minister,s commitment that the GOT will work with the United
States on Middle East peace, and his praise for President
Obama, were welcome even if not new. The Prime Minister
clearly understood that the new US Administration has created
a unique opportunity for peace. Nevertheless, the GOT is
always slow to take actions that may pose a risk. We should
continue to ask them to take concrete steps to back up their
promises of support.


13. (C) The Prime Minister,s repeated efforts to persuade
the Ambassador to separate the ACST tax deal from other
issues was notable. Ghannounchi clearly understood the
Ambassador,s explanation of the ACST and USG position, but
pressed for the school to sign the tax deal now. We continue
to believe it is essential for ACST to have a global deal
before signing specific agreements, however. The good news
is that we have the attention of the GOT,s highest officials
and they say they want to reach a resolution. We need to
continue to make clear our position at all available
opportunities. If we do, we may be able to conclude a deal.

Godec