VZCZCXRO3404
PP RUEHBC RUEHDE RUEHDH RUEHKUK RUEHROV
DE RUEHTRO #0619/01 2151434
ZNY CCCCC ZZH
P R 031434Z AUG 09
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC PRIORITY 5098
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUEHLO/AMEMBASSY LONDON 1097
RUEHFR/AMEMBASSY PARIS 0772
RUEHRO/AMEMBASSY ROME 0542
RUEHVT/AMEMBASSY VALLETTA 0427
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHTRO/AMEMBASSY TRIPOLI 5638

C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000619 
 
NOFORN 
SIPDIS 
 
STATE FOR NEA/MAG; STATE PLEASE PASS TO USTR PAUL BURKHEAD; COMMERCE FOR ITA NATE MASON; COMMERCE FOR THE ADVOCACY CENTER; ENERG 
 
E.O. 12958: DECL:  8/3/2019 
TAGS: ECON EAGR EPET EFIN PGOV ETRD LY

1.(C) Summary. The Ambassador met with Minister-equivalent of Economy, Mohammed Ali al-Hweij, August 2, to address stalled CAT negotiations; to set a date for a TIFA signing; to solicit support for a U.S. Executive Trade Mission in November; to encourage forward movement on the Commercial Law Development Program; and to seek the Minister's help in securing visas for U.S. business travelers. Al-Hweij told the Ambassador that a resolution to stalled Caterpillar (CAT) negotiations was on the horizon and was also positive on the possibility of concluding a Trade and Investment Framework Agreement (TIFA) before the UN General Assembly. He agreed in principle to support a U.S. Trade Mission visit in November, as well as to moving forward with the Commercial Law Development Program. Regarding visa support for U.S. business travelers, the Minister referred the Ambassador to the Prime Minister-equivalent's office for resolution. End Summary.

CAT NEGOTIATIONS COMPLICATED BY FIVE-YEAR-OLD LAW

2.(C/NF) Minister-equivalent of Economy, Mohammed Ali al-Hweij, told the Ambassador, Pol/Econ Chief, and FCS August 2 that an end was in sight for stalled CAT negotiations (Ref A). Backing down from prior demands that the local, quasi-governmental Economic and Social Development Fund (ESDF) take full ownership of a would-be CAT distributorship in Tripoli, al-Hweij reported that he had personally instructed the ESDF to offer CAT a 60-percent/40-percent split deal, with the ESDF holding the controlling share. Qualifying his statement, al-Hweij noted that this would be the agreed-upon arrangement "at least for the first five years." Al-Hweij emphasized that CAT must comply with a 2004 law governing foreign distributors that the government had recently decided to enforce (septel) , whereby all such companies would have to work with Libyan-owned and operated trade agents in order to sell their products within the country. Al-Hweij emphasized that this law would be applied to all foreign companies across the board in an attempt to regulate the market and prevent terrorist finance networks from exploiting the heretofore unregulated environment.

3.(C/NF) Al-Hweij informed the Ambassador that the ESDF had already sent CAT's Regional Director, Andrew Sheridan, the new proposal. [Note: Sheridan later told FCS that he received the proposal by email only hours before the Ambassador's meeting with al-Hweij. End Note.] Al-Hweij went out of his way to prove the veracity of his statement, personally calling the head of ESDF, Hamed Hoderi, by phone in order for the Ambassador to hear firsthand that the proposal had been extended. The Ambassador pressed al-Hweij on the Ministry's previous implicit threats to reimpose a ban on CAT imports, stating that discriminatory market barriers would not be viewed favorably. Al-Hweij reassured the Ambassador that a ban on CAT imports would not be reimposed, stating that he hoped his Ministry and our Embassy would cooperate effectively to resolve any future issues in order to avoid such drastic measures. He designated his deputy for international cooperation, Dia Hammouda, as the point person for addressing bilateral, trade-related issues of concern. Al-Hweij expressed an interest in meeting more often with the Ambassador to review the status of bilateral trade relations - an idea that the Ambassador welcomed.

POSITIVE SIGNALS ON BILATERAL TRADE COOPERATION

4.(C) Al-Hweij was also positive on TIFA, saying that the text was approved and only a date needed to be set. The Ambassador noted that we want the agreement signed before UNGA and stated that setting a date for the signing was more important than the location. In response, the Minister promised to have the agreement finalized before UNGA.

5.(C) Al-Hweij agreed in principle to support a Department of Commerce Executive Trade Mission visit in November, requesting a formal program proposal via diplomatic channels. He also asked us to resubmit information on the Commercial Law Development Program to improve the commercial legal environment for businesses.

6.(C) Regarding visa support for U.S. business travelers, al-Hweij requested additional information regarding the difficulties that U.S. businesses face in attempting to obtain visas for travel to Libya. Making sure not to tread outside of his boundaries, he also advised the Ambassador to raise the visa TRIPOLI 00000619 002.2 OF 002 issue with the Prime Minister's office. [Note: During the Ambassador's first meeting with al-Hweij in March, the latter pledged to help business travelers to secure visas - a pledge he has not been able to uphold. (Ref B) End Note.]

7.(C/NF) Comment: The fact that the CAT negotiation process was taking place at the same time that the Ministry was trying to impose a five-year-old law involving distributorships undoubtedly complicated the negotiations. Al-Hweij's apparent actions to press the ESDF to compromise on the CAT deal are positive and demonstrate that he has at least some authority to be able to make decisions within the business sector. His pledge not to reimpose the ban on CAT equipment and to see that a compromise is achieved is also a positive signal. Al-Hweij seemed genuinely interested in improving the environment for foreign investment and in regulating local markets for goods and services. Post will follow-up on al-Hweij's requests for additional information regarding an Executive Trade Mission visit and the Commercial Law Development Program. End Comment. CRETZ