Commerce's William Lash sees Kuwait as potential trade center

The United States is working with local business communities in Iraq and surrounding countries to promote private business opportunities and develop Iraq's economic sector.

William Lash, the U.S. Assistant Secretary of Commerce for Market Access and Compliance, told reporters in Kuwait December 8 that the United States views Kuwait as a "natural gateway" to trade in Iraq.

Since Kuwaiti businesses are already participating in Iraq's economy, "they have a unique position to understand the market," he said, "and we want to learn more about what they are doing."

Lash said that in February 2004, the Kuwaiti Minister of Finance would be sending a delegation of public and private sector representatives to the United States to promote their country "as a hub and a gateway into Iraq for business and investment and trade."

"I pledge the support of our administration and the Department of Commerce to assisting him and his colleagues in this mission, as well as other initiatives being taken in Kuwait by the private sector to promote trade and investment," said Lash.

"The Iraqi business community has a lot to learn from Kuwaiti merchants and traders," he said, adding that the Bush administration plans to bring businessmen from both countries together for joint venture possibilities.

The United States is also promoting similar "matchmaking opportunities" between Iraqi firms and their counterparts in other neighboring countries in the Middle East, he said, as well as supporting possible trade missions and training opportunities for entrepreneurs and government officials in the region.

This regional initiative, led by Secretary of Commerce Donald Evans, is using U.S. resources and personnel to work with American and other business communities and governments to encourage their participation and investment in Iraq's reconstruction, he said.

The Commerce Department is organizing digital videoconferences (DVCs) and seminars in the region to inform entrepreneurs of current business opportunities, what sectors of the Iraqi economy need the most attention, and how to apply for a contract to perform a reconstruction project. The department is also bringing entrepreneurs into direct contact with Iraqi officials and businesses.

"We realize this is a comprehensive challenge, and it needs a comprehensive, integrated approach. So, every one of our coalition partners and every one of our Gulf partners has a role to play," he said.

Lash also pledged that the new round of contracts in Iraq will be "totally transparent and entirely open to all of our coalition partners."

He said there was no guarantee that American firms would win any of the contracts, which are slated to go to the best-qualified and best-priced bidders.

The assistant secretary also said he would be meeting with Kuwaiti officials and business representatives to discuss bilateral economic relations, including a trade and investment framework agreement (TIFA) that both countries plan to sign.

The TIFA, he said, "will create a U.S. -- Kuwait council on trade and investment, and this formal structure will allow us, at the government-to-government level, to have very candid and very forward discussions on our economic relationship."

Following is the transcript of Assistant Secretary of Commerce William Lash's remarks:

(begin transcript)

Transcript of Press Conference with Assistant Secretary of Commerce for Market Access and Compliance, William H. Lash III

Radisson SAS Hotel Kuwait City, Kuwait December 8, 2003

Assistant Secretary Lash: Good afternoon and Salam Alaikum. I'm delighted to be back in Kuwait among our very close friends. First and foremost, may I begin by thanking the government of the people of Kuwait for their steadfast friendship and partnership in the war on terrorism and Operation Iraqi Freedom. During the past, we've realized we have many friends and many coalition partners. All of these partners gave some, but one partner gave all. The people of Kuwait and the Kuwait government are the partner who gave all, and for this we thank you again. We offer to you not just our friendship but also our genuinely sincere admiration and the affection of our people. As [Assistant Public Affairs Officer] Kevin [Olbrysh] stated, this is a regional visit. I'm visiting Saudi Arabia, Kuwait and Oman on this trip, focusing on our commercial and economic relationships. Our trade relationship is a very solid one and a very old one with three billion dollars annually in bilateral trade and billions of dollars in investment.

During this visit, I'll be meeting with Ministers of Finance, Energy and Commerce, as well as the local business community and students at the university. We will be discussing the economic relationship and discussing our soon-to-be-signed trade and investment framework agreement -- a formalized structure where the two countries can discuss a wide range of trade and investment issues -- as well as the economic reforms going forth in Kuwait and the various energy policies being advocated by the Prime Minister.

The trade investment framework agreement is a very significant step in our economic relationship. These are very specialized relationships that are part of the President's agenda towards promoting free trade among our close friends and allies, with the idea of eventually signing a free trade agreement. The TIFA, as we call it, will create a US -- Kuwait council on trade and investment, and this formal structure will allow us, at the government-to-government level, to have very candid and very forward discussions on our economic relationship.

I'm also here as the leader of the US Department of Commerce's Iraqi Reconstruction Task Force. My visit to the region, particularly here in Kuwait, will be to highlight our goals of working jointly with our friends and partners in developing the economy of Iraq and trade and investments between Iraq and her neighbors. We are working with the local business community as well as government officials. To my left is Mr. Peter Alois who is our Minister Counselor for Commercial Affairs at the US Embassy in Kuwait and who will be leading our efforts in Kuwait to harness the business community, both Kuwaiti and American, to work to develop opportunities in Iraq. This reconstruction effort, particularly the economic sector, is of vital interest to everyone as we hope to see a peaceful and prosperous Iraq.

This is an effort that will require the cooperation of all of our partners, particularly Kuwait. To that end, I know that when I spoke today with the Minister of Finance, he described that there will be a mission of government officials and business leaders from Kuwait to the United States in February to promote Kuwait as a hub and a gateway into Iraq for business and investment and trade. I pledge the support of our Administration and the Department of Commerce to assisting him and his colleagues in this mission, as well as other initiatives being taken in Kuwait by the private sector to promote trade and investment.

We know that in January, for example, there will be a conference in Kuwait on Rebuilding Iraq 2004. We know that US firms will be there, but also representatives of the Department of Commerce from Washington as well as our colleagues at the embassy in order to help support this effort, because this is a not only an economic imperative but also a moral imperative to promote peace and stability in the region working with our colleagues in Kuwait to promote formal trade missions into Iraq.

With that, I'll stop my brief statement and take your questions.

Q: Miriam Aimee, German news agency, DPA. Did you discuss energy issues with Kuwait and what did you mean by that energy agreement? I didn't know there was a policy between the United States and Kuwait.

A/S Lash: I think you misheard. There was no energy agreement discussed. I was talking about sectors we discussed, including energy. We discussed energy today briefly at the Ministry of Finance. We'll be discussing energy tomorrow at the Ministry of Energy. These are regular dialogues we have on this vital sector, and for us it is more of a listening mode to hear again the programs and developments that the Kuwait government is anticipating in the energy sector.

Q: No projects? You didn't talk about projects?

A/S Lash: At this meeting, we discussed Project Kuwait very generally. With the Ministry of Energy we will, I assume, have a more detailed, information session on the energy sector.

Q: Diana Elias, AP. Can you elaborate more on the Kuwait February mission to the US, and how the two countries can work together?

A/S Lash: Certainly. The mission in February is led by the Kuwaiti government, comprised of various members of the government from the Ministry of Commerce, Energy and Finance along with private sector representatives. They will be coming to the US and having business-to-business meetings and meetings with the Kuwaiti government and our businesses to learn more about the opportunities of working in Kuwait, doing business in Kuwait and working jointly in Iraq on long-term projects of business investment and trade. They'll be doing presentations for our industry. They'll be talking with a wide variety of government officials, and our role is to facilitate and assist them in any way we can in that mission.

Q: Do Kuwaitis have the feeling that they didn't get the big part of the reconstruction in Iraq, from your discussions?

A/S Lash: I can't comment on the feelings of Kuwaitis because I've only been here 24 hours. The impression that we got from our meeting with the Ministry of Finance was very positive. In fact, when the initial tender and the initial contracts were awarded, Kuwaitis did receive some sub-contracts. Private business is going on and we'll be learning more about Kuwaiti businesses regularly going to Iraq. This next round of contracts will be tendered by the CPA program management office. The tenders will be announced on-line, fully public, with the bid qualification requirements -- all very transparent and very open -- under the same rules of acquisition law that we use in the United States. We anticipate firms from all the coalition partners bidding on various contacts, as well as being able to engage in lots of sub-contracting. Of the previous contracts, 65 % of the sub-contracts went to Iraqi firms, but other coalition partner firms did receive contracts.

Q: I'm Dahem Al-Qahtani from the Al-Rai Al-Aam newspaper and I will ask my question in Arabic. [Arabic]

Translator: The question is, you're promoting Kuwaiti merchants to trade in Iraq, but unfortunately some small businessmen and truck drivers who have been doing business in Iraq have been exposed to security problems and have been hurt. Is there any form of guarantees or any compensations that you can guarantee to these small business owners that will help promote the business they are undertaking in Iraq?

A/S Lash: Certainly, the security situation in Iraq remains very fluid and there obviously are risks. We're not in the position to offer any guarantees or compensation for the risks these companies have voluntarily undertaken. What we do know is that there is a lot of business that takes place day in and day out, safely and without incident throughout the country. We want to encourage and promote that, as well as make sure that Kuwaitis are not just sharing a contract or working as joint venture partners. The Iraqi business community has a lot to learn from Kuwaiti merchants and traders. One of the things that we will be working on with our offices in Kuwait is bringing them together for dialogue, for joint-venture possibilities. Many of the discussions will take place in Kuwait. Some of the opportunities will be pursued in Iraq. Many of the envisioned joint-venture matchmaking projects, combining US firms and Kuwaiti firms and Iraqi firms will take place here [in Kuwait] as well. Again, we will try to be as flexible as possible to accommodate the interests as well as being mindful of the security concerns in Iraq.

Q: Ahmed Farag of Kuwait News Agency. Just a comment. The official people in Kuwait announced that the mission would be in January, not in February. Has there been a change?

A/S Lash: This morning we spoke to our colleagues and they said February. Early February.

Q: Yes. I have a question. About the contracts and tenders, we have heard there is some corruption, for example, in the telecommunications contracts.

A/S Lash: I can tell you this: the US government has a zero tolerance policy for corruption in procurement. We've always had that, particularly now in the second round which is governed—as our first round was—under US transparency rules, US rule of law, US rules of anti-corruption. I have not heard of any corruption. If there is corruption, I can assure you that our administration will deal with that quite severely.

Q: What about telecommunication corruption?

A/S Lash: Again, I have not heard of any corruption, in any sector, or in any part of the contracting community. Our policy has always been zero tolerance in corruption.

Q: Suliman Buhaimed of the Daily Star Kuwait daily. In what sector will the US be focusing on when participating in the Rebuild Iraq project?

A/S Lash: Iraq has so many needs. It is almost better to ask what sectors will we not be focusing on. For example, the conference being held in Kuwait in January—the Rebuilding Iraq conference— sectors range from health care, hospitals, rebuilding schools, the security sector, infrastructure, logistics. In many cases, we are really starting at step one. Kuwait, as a very sophisticated trading partner with specialized experience in the region, and a leadership role in the region, can play a major role in the reconstruction of Iraq.

Q: Mahmoud Abdel Razak, Al-Qabas newspaper. President George Bush recently declared that you will lift the tax imposed on steel imports to the United States, believed because of pressure by the media and other international producers. What this impact will be on the steel producers in the United States? They will again press for to protect them?

A/S Lash: The safeguard measures that were taken before on steel, as you correctly said, have been lifted by the President. But he lifted it because even our primary steel producers, including US Steel—our largest company— recognize that the industry had made the adjustment to the new market conditions that were required by the WTO. It wasn't simply a question of imposing a safeguard on steel. Industry had to take steps during that period that we believe are WTO legal and consistent. Even though the WTO ruled against us, the President believed very firmly that it was our obligation to make sure that the industry had the chance to adjust and to be able to compete in this new world of, frankly, excess steel capacity. We have seen statements already from the highest-ranking steel officials saying that they recognize why the President took these steps and they also recognize that they've had the chance to adjust and they've made the adjustment.

Q: You mean it was a matter of winning time, from the time it was imposed to the time that pressure was averted and led to the decision. This was a time in favor of the steel makers in America.

A/S Lash: The WTO and all trade agreements have a safeguard provision. The general theme of safeguard is to give industry a chance to adjust to competition. That means time, but also actions. Industry took actions. They consolidated, they closed inefficient mills, they spent more money on R&D. But at the same time you have to recognize that globally there was a steel crisis taking place of excess capacity and inefficient producers. There was two hundred million excess tons of steel produced annually. We took our steps. We hope that some other trading partners will similarly take steps, both at the OECD multilaterally as well as individually.

Q: Ben Garcia from the Kuwait Times. I just want to ask one question, also. Kuwait has been helping a lot to this reconstruction effort in Iraq. What about other Gulf countries, other countries in the Middle East. What kind of help that you are getting?

A/S Lash: I just came from Saudi, we're now in Kuwait and we are headed to Oman—all of these countries have important roles in reconstruction. Our Secretary has had our Iraq Reconstruction Task Force develop a regional initiative that will have people like [Commercial Officer, Embassy Kuwait] Mr. Alois in each of these countries. Typically, their role is to focus on US exports exclusively. Now, what they have been asked to do by our Secretary is to help support the reconstruction effort by bringing in assistance from local business communities. So, events are being held by Turkey, in Bahrain, in UAE, either helping in putting together matchmaking opportunities between Iraqi firms and possible partners in other countries in the Gulf or helping in supporting possible missions and training opportunities for entrepreneurs and other government officials in the region. We realize this is a comprehensive challenge, and it needs a comprehensive, integrated approach. So, every one of our coalition partners and every one of our Gulf partners has a role to play.

Q: This is the [inaudible] approach?

A/S Lash: Yes, exactly. The entire approach of the regional initiative from Secretary [of Commerce] Donald Evans is pulling in our resources and our people on the ground and having them work with both American as well as domestic business communities and governments to help support the reconstruction efforts. One of the things that we are trying to do is to make sure that our colleagues have all the information available to take part in reconstruction. For example, we are doing a commercial book on commercial codes in Iraq and doing business in Iraq. Well, it is useful to have that book translated into Arabic. All entrepreneurs, large and small, may not speak or read English. We are trying to make sure that we are doing digital videoconferences and seminars onsite, so that local businesses and officials will be able to answer questions, and know what the opportunities are. Saying and telling them how they can apply for a contract, it's interesting. It's useful. Showing them how to apply, showing what sectors need to be addressed, showing them the opportunities, bringing them into face-to-face contact with Iraqi officials, Iraqi businesses -- that is part of the regional initiative by Secretary Evans.

Q: So you are doing it in their own country?

A/S Lash: Yes, we are doing it throughout the region, on the ground, face-to-face, video seminars, as well again as bringing Iraqi officials to those countries for the contract. What we are going to be using in Kuwait... Kuwait is not only a close partner but also a natural bridge, a natural gateway to Iraq. Thank you.

Q: Sir, that means that you will be repeating this type of visit in all these countries, in Saudi, in Qatar, or is Kuwait a special [inaudible] because of the geography and because of the trade connections? Did you do the same thing in Turkey?

A/S Lash: That's a whole lot of questions in one question.

Q: I just want to know the trade relationship.

A/S Lash: Which I will tell you. We are doing different programs throughout the region, but given the proximity and our special relationship with Kuwait, we will be particularly engaged. I think some of our earlier forays commercially into Iraq were from Kuwait. We were in Jeddah and in Riyadh earlier this week. We are going to Oman. Members of my team will be in UAE promoting the relationship. I spoke with the Turkish business council and Turkish officials in Washington a week ago. So, again we have programs on the ground everywhere. People in Washington will be out of the field promoting the relationship, promoting the information exchange, promoting the reconstruction efforts. But again, the ways into Iraq right now are through Turkey, Jordan and Kuwait.

Q: So these three have preference?

A/S Lash: I would not call it preference, but I think Kuwait has a special... As I stated from the outset in my opening statement, Kuwait has a very special relationship with the United States.

Q: Because... based on geography?

A/S Lash: No, I never said geography. The relationship, as I stated earlier, is that Kuwait was our one indispensable ally throughout Operation Iraqi Freedom. We have genuine affection and admiration for the people of Kuwait who have stood with us during these very challenging times. But also they have a unique position to understand the market. Kuwaiti businesses are already doing business in Iraq, and we want to learn more about what they are doing. I have a Commercial Officer right here on the ground, we are doing...it is very easy to promote that. The Kuwaitis again at this meeting we had with [Chargé d'Affaires] Mr. Urbancic already purposed a plan and want to come to the US and talk about how we can work jointly. That's very forward thinking and it makes all of our lives easier. They are very prepared to do this business. We are working with all of our colleagues in the region. We are here in Kuwait today talking about the Kuwaiti relationship particularly.

Q: I am curious about what the words "access" and "compliance" mean in your title?

A/S Lash: That's great Washington-speak for trade policy and trade enforcement. We are the policy arm of the Department of Commerce for all of our trading partners, and we are the ones who try to ensure that if a country signs an agreement with the US— and we have over 300 trade agreements, from the WTO to bilateral trade agreements on various sectors to a comprehensive bilateral trade agreement— we are the ones that make sure that American firms are receiving the full benefit of those agreements and that they receive fair market access as negotiated, and trade barriers are removed. Thank you.

Q: You were saying Kuwait was like an indispensable ally... Hashem from Arab Times. You said Kuwait was an indispensable ally in the world. I thought that at the US government create more chance in the reconstruction effort than other countries because [inaudible] to Kuwait. You said there are contracts and sub-contracts. Why not the big contracts?

A/S Lash: Here is what you have to understand -- under the first contracts that were awarded, the contracts went to large American companies that had the comprehensive ability to handle the massive early reconstruction efforts. This new round of contracts being tendered by the program management office, with the deadline closing February 24, 2004, I believe... there is no guarantee American firms get any of those contracts. Under our system, under this system, it is totally transparent. May the best-qualified and priced bidder win. So there is no guarantee... we may get one, we may get two, we may get none. Kuwaiti firms have an opportunity to bid on those contracts as well, as well as other coalition partners, as well as Iraqi firms. We do not as a government... our Secretary, for example, could not award a contract unilaterally to anybody. Our system is: you take your chances, you compete. What we are trying to do with our close friends and allies in Kuwait is to make sure that they have every possible opportunity to compete, to share information with them, to share opportunities with them, to make sure they have opportunities to share their expertise with Iraqi companies, Iraqi firms, Iraqi business and Iraqi government leaders. So this next round of contracts again is totally transparent and entirely open to all of our coalition partners.

Q: Companies from non-coalition countries who are not getting share or major contracts in the reconstruction of Iraq, is this in your view due to they are not [inaudible] because as it was announced before they are deprived of having major contracts?

A/S Lash: Again, the first contracts were not awarded by our normal procedures. So we'll put that, I'll say, in a separate box. That is another story. The story today, for the contracts being awarded is that America is putting up 18.6 billion dollars just for infrastructure development and things of that nature. For those contracts that are being awarded by the program management office of CPA, it is a totally transparent process. The bidders can be US firms, Iraqi firms and firms of any coalition partner.

Thank you very much.

(end transcript)

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)