Viewing cable 05MUSCAT210
Title: COMMERCE U/S ON FTA, TRADE ISSUES (C-NE4-01168)

IdentifierCreatedReleasedClassificationOrigin
05MUSCAT2102005-02-08 04:32:00 2011-08-30 01:44:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Muscat
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 03 MUSCAT 000210 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EB/TPP, NEA/ARPI 
STATE PASS TO USTR/JBUNTIN AND JFENNERTY 
USDOC FOR 4250/ITA/MAC/AMESA/OME/MTALAAT 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ECON KIPR TBIO PINR MU
SUBJECT: COMMERCE U/S ON FTA, TRADE ISSUES (C-NE4-01168) 
 
REF: A. MUSCAT 142 
     ¶B. MUSCAT 165 
 
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Summary 
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¶1. (SBU) In a February 5 introductory call by the Ambassador, 
new Ministry of Commerce and Industry Under Secretary Ahmed 
al-Dheeb offered an optimistic outlook on impending 
U.S.-Omani Free Trade Agreement talks.  Noting that labor 
issues under the FTA will require some work, he likewise laid 
down a marker for special consideration on rules of origin in 
light of the importance of Oman's industrial sector. 
Al-Dheeb described developments in several key sectors, 
including port development and tourism.  The Ambassador 
raised a possible IPR violation involving a Viagra knock-off, 
and expressed hope that Bechtel will win a tender to 
construct an aluminum smelter in Sohar.  Al-Dheeb sought the 
Embassy's help in attracting to Oman any U.S. firms seeking 
to depart Saudi Arabia.  He shared some of his biographic 
background.  End summary. 
 
¶2. (SBU) On February 5, the Ambassador paid an introductory 
call on Ministry of Commerce and Industry (MOCI) Under 
Secretary Ahmed bin Hassan al-Dheeb.  Al-Dheeb was appointed 
 
SIPDIS 
to the position by Sultan Qaboos on January 3 to fill the 
vacancy left when Ali al-Sunaidi became the new Minister of 
Sports Affairs.  Al-Dheeb previously served as CEO of the 
Public Establishment for Industrial Estates (PEIE) -- see 
biographic details in paras 9-10. 
 
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FTA: Labor, Rules of Origin 
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¶3. (SBU) Al-Dheeb quickly underscored to the Ambassador how 
keen MOCI is to sign a Free Trade Agreement (FTA) with the 
U.S.  While the Minister, Maqbool Sultan, will lead the 
negotiations from the Omani side, al-Dheeb said he would be 
playing a supporting role.  One of the Under Secretary's 
first meetings after being transferred to MOCI was with 
Assistant U.S. Trade Representative for Labor, William 
Clatanoff (ref A).  Al-Dheeb said MOCI's expectations right 
now are that the FTA negotiations should proceed fairly 
smoothly, although there are some issues on labor and some 
other matters that will require work.  He felt AUSTR 
Clatanoff had expressed good ideas in their January meeting, 
and said that as long as Oman's FTA labor text remained close 
to Bahrain and Jordan FTA's, "we should be OK."  He asked 
that we bear in mind that, particularly when housing, 
transportation and other benefits are added to salaries, 
Oman's expatriate workforce is significantly better 
compensated than expat labor elsewhere in the region. 
 
¶4. (SBU) Perhaps reflecting his industrial background, 
al-Dheeb indicated that rules of origin issues will be a 
vital concern from Oman's viewpoint.  Noting that Bahrain's 
economy is more service-oriented and less industrial than 
Oman's, he envisions seeking adjustments to the Bahrain FTA 
text to provide Oman with a more liberal calculation of what 
constitutes local content in manufactured goods.  Overall, 
the Under Secretary sought the Ambassador's views on whether 
a U.S.-Oman FTA will in fact be signed.  The Ambassador noted 
the positive statements during their recent visits to Oman of 
Deputy Secretary (and former US Trade Representative) Robert 
Zoellick and House Ways and Means Committee Chairman Bill 
Thomas as solid indications of the USG's serious intent to 
achieve an FTA with Oman in an expedited manner. 
 
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IPR Issues, Pharmaceuticals 
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¶5. (U) Asked for his assessment on intellectual property 
rights protections in Oman, al-Dheeb acknowledged that there 
are always some minor violations but that, overall, IPR 
protections in Oman compare favorably in his view with those 
in some of the U.S.'s other FTA partners.  The Ambassador 
then took the opportunity to broach a potential problem 
concerning a drug produced and marketed in Oman under the 
name "Aladin."  A representative of the Pharmaceutical 
Research and Manufacturers of America (PhRMA) had notified 
the Embassy February 2 that "Aladin" violated Phizer's Viagra 
patent.  The manufacturer of "Aladin," the National 
Pharmaceutical Industries Co. (NPI), is partly owned by the 
Omani Ministry of Health.  Al-Dheeb was unfamiliar with 
"Aladin," but as a former director of the Rusayl Industrial 
Estate where NPI is located, he said he was quite familiar 
with the company.  He asked that the Embassy provide him with 
all of the pertinent details as to why PhRMA believes this to 
be an IPR violation.  Al-Dheeb assured the Ambassador that 
MOCI and the Ministry of Health would take prompt action 
against NPI to take "Aladin" off the market should PhRMA's 
complaint prove legitimate. 
 
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Port Development 
---------------- 
 
¶6. (SBU) Recalling his upbringing in the southern Omani port 
city of Salalah, al-Dheeb remarked on the rapid growth of 
that and other ports in the Sultanate.  He expects the 
long-awaited Salalah Free Trade Zone to finally start 
operations within the next 18 months, and extolled its great 
potential for warehousing.  He was not certain, however, that 
the port itself could be much increased beyond the current 
expansion project that will add 2 berths and extend the 
breakwater.  He also indicated that another long-simmering 
project, the development of a dry dock and commercial port in 
the remote Central Omani port of Duqm, would also soon be 
getting underway.  He indicated that Duqm was well placed to 
build up Oman's fishing industry and exploit mineral deposits 
for processing (limestone, cement) or export.  The Ambassador 
brought to al-Dheeb's attention an investment dispute still 
working its way through the Omani courts involving a joint 
U.S.-Omani shrimp farm investment that had been displaced 
from Duqm by the port project. 
 
¶7. (SBU) The Ambassador turned the conversation to the Sohar 
Industrial Port, which is rapidly growing based on gas-fed 
industries including a USD 3 billion investment from American 
chemical giant Dow.  Al-Dheeb emphasized the Sultanate's plan 
to spread economic development as broadly among the nation's 
eight regions as possible.  The country's five most 
significant current or planned ports (Muscat, Sohar, Salalah, 
Sur and Duqm) are each located in a separate region. 
Obviously, he said, the gas-based industry in Sohar is 
currently the most prospective, with massive foreign and 
state investment pouring in.  In that vein, the Ambassador 
noted U.S. firm Bechtel's strong bid for the aluminum smelter 
contract in Sohar, and hoped a favorable decision from the 
Tender Board would add yet another significant U.S. 
investment to the Omani economy.  Al-Dheeb in turn asked for 
the Embassy's assistance in steering toward Oman any U.S. 
firms that may be seeking to relocate from Saudi Arabia. 
 
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Tourism 
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¶8. (U) The Under Secretary feels the tourism industry in Oman 
is still a few years away from really taking off.  He said 
the government is working hard to complete a number of road 
and other infrastructure projects in the next 2-3 years that 
will give visitors much more than merely nice hotels to enjoy 
during their stays.  He pointed to recently completed road 
projects along the scenic coast between Quriyat and Sur, and 
into the idyllic valley oasis of Wadi Bani Khalid.  The 
massive 3-hotel Shangri La resort complex just south of 
Muscat will add 450 hotel rooms by the end of the year.  The 
Ambassador apprised the Under Secretary of the Smithsonian 
Institution's annual Folklife Festival on the Washington 
Capital Mall, which this summer will make Oman the first Arab 
country to be individually featured.  Al-Dheeb acknowledged 
he had heard about it, and agreed that the millions of 
expected visitors will give Oman an unprecedented chance to 
market itself as a tourist destination and trade partner. 
 
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Biographic Notes 
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¶9. (SBU) Ahmed bin Hassan bin Alawi al-Dheeb Ba-Umar 
originally hails from Salalah, capital of the southern Dhofar 
Governorate.  (Note: Of cabinet members, only the Foreign 
Minister and Minister of Regional Municipalities join the 
Sultan as native Dhofaris.  End note.)  Born in 1964, he is 
currently married and has four sons and one daughter.  He 
resides in the Muscat suburb of al-Khuwayr, near the U.S. 
Embassy.  Al-Dheeb received his B.Sc. in Industrial 
Engineering from the University of Miami (Florida) in 1989, 
and his MA in Industrial Development from the University of 
East Anglia (UK) in 1993.  He began his employment at the 
Rusayl Industrial Estate (in Muscat) in 1989 as an industrial 
engineer before becoming director of the RIE Technical 
Department in 1992 and finally Director of RIE from 1993-96. 
In 1996, al-Dheeb was promoted to Managing Director of the 
Public Establishment for Industrial Estates, and served as 
PEIE Executive President from 1997-2005.  He has attended 
numerous training programs and workshops in Europe and Asia. 
Of his new duties, al-Dheeb said he finds them to be very 
similar to his experience at PEIE.  He noted inheriting a 
number of committee assignments from his predecessor, 
including the chair of the "Omani-American Joint Commission" 
(which, from his explanation, we believe he means the Trade 
and Investment Framework Agreement (TIFA) Council although he 
could be referring to the long-defunct, USAID-funded 
development program of the identical name). 
 
¶10. (SBU) Al-Dheeb has excellent English language skills, and 
retains a strong fondness for Miami despite not having been 
back there since 1989.  He claims to follow avidly the Miami 
Dolphins football team.  Al-Dheeb recounts with humor the 
trouble he had in Florida of not speaking Spanish, since many 
people assumed him to be Hispanic from his complexion.  He 
also liked to show off by climbing coconut trees in Miami, 
the same way he routinely climbed them in his native Dhofar. 
Al-Dheeb's last visit to the U.S. was in 1996, when he 
attended a one-week seminar on small and medium enterprise 
development that took place in the World Trade Center in New 
York City.  He remembers being shocked at the fast pace of 
New Yorkers, but said by his third day he found himself 
walking fast like everyone else. 
BALTIMORE