Foreign Relations of the United States, 1977–1980, Volume XVII, Part 3, North Africa

201. Telegram From the Embassy in Tunisia to the Department of State¹

Tunis, April 5, 1979, 1620Z

2842. Dept pass OPIC EXIM AID Peace Corps and Dept of Interior. Subj: (U) U.S. Tunisian Joint Commission: Summary of Proceedings and Implications for Future Bilateral Relations. Ref: Tunis 2703.²

1. Summary. The fourth session of the U.S. Tunisian Joint Commission met March 30–31 in Tunis under the chairmanship of Secretary of Commerce Kreps and Minister of Commerce Ben M’Barek. A productive and frank exchange of views reflected increased emphasis on commercial and other non-aid relations and resulted in one major new development—the establishment of a U.S. Tunisian Binational Committee on Communications. The U.S. delegates on the Economic Development Subcommission had a somewhat delicate and difficult task as the Tunisians were intent on our declaring that our concessional assistance would be made available beyond 1981. We noted that 1982 is quite distant and we are not at this time in a position to address the question of aid after 1981. The Trade and Investment Subcommission encountered few differences and shared a desire to move to practical steps to increase two-way trade and the U.S. commercial presence in Tunisia. We are optimistic that the establishment of a Binational Committee on Communications will facilitate cultural and educational exchanges between the two countries. In a period when Middle East developments could have put stress on our bilateral relationships, the Joint Commission meeting definitely served to strengthen these ties. End summary.

2. The fourth session of the U.S. Tunisian Joint Commission met in Tunis, March 30–31. The American and Tunisian delegations were headed by Secretary of Commerce Juanita Kreps and Minister of Commerce Slaheddine Ben M’Barek, respectively. In addition to her participation in the Joint Commission session, which received extensive local press coverage, Secretary Kreps called on Prime Minister Nouira (Tunis 2669)³ and Minister of Plan Zaanouni (memcon to follow)⁴ OPIC President Bruce Llewellyn also participated in the Joint Commission and called on the Presidents of API (the investment promotion agency) and BDET (the state industrial development bank) and Minister of Agriculture—memcons have been forwarded to Washington.⁵ The Joint Commission was held at the Sidi Bou Said Hotel, just outside of Tunis. The pleasant surroudings and atmosphere of the hotel added to the congeniality of the meetings. This was in sharp contrast to the institutional atmosphere of the “Maison du Parti,” where the last Joint Commission meeting in Tunis took place.⁶

3. The Tunisians had their “shopping lists” ready. Yet in spite of the fact we said “no” to some requests, the meetings had an upbeat flavor. This was especially true in the Educational and Cultural Cooperation Subcommission. Although funding is (and will be) limited, and important framework—in the form of a Binational Communications Committee—was established to further exchanges between Tunisia and the U.S.

4. The most important issue for the GOT in the Economic Development Subcommission clearly was that of extension of bilateral concessional loans and grants after 1981. Following Tunisian Co-Chairman Khelil’s presentation on the importance of continued U.S. economic assistance after 1981, U.S. Co-Chairman Wheeler reaffirmed the U.S.’s intention to provide substantial assistance through the end of the fifth plan. We noted that 1982 is quite distant and indicated the USG is not yet in a position to address the question of post-1981 aid. (In subsequent discussion on wording of the joint communique regarding continued U.S. participation in Tunisia’s economic development, it was made clear to the Tunisians, who fully understood, that the wording does not commit the U.S. to concessional aid after 1981. Rather, as specifically stated in the Economic Development Subcommission, it was understood by both delegations that no decisions have been made regarding the period after 1981. It was also understood by both parties that aid decisions applicable to Tunisia are governed in part by our desires to move to less concessional form of assistance in middle-income countries.)

5. The second priority for the GOT during the Economic Development Subcommission concerned near-term aid levels. This reflected in repeated requests for information about the amounts of funding programmed for projects, in particular for Central Tunisia Rural Development (CTRD); in the tabling of a dossier on an expanded 22-delegation central Tunisia project costing TD100 million, for which an AID contribution of TD 83 million was requested; and in a request for commodity aid of $10 million per year in 1979, 1980, and 1981. In response:

A. We stressed that we have taken very seriously our pledge to provide substantial assistance through 1981. Because good projects were available, we last year accorded twice as much aid as we originally estimated.

B. We ruled out commodity aid, but did give an indication, subject to the usual caveats of congressional approval and availability of funds, that approximately $25 million might be available for CTRD. In providing this estimate, we stressed the importance of the sub-project planning process through the Central Tunisia Development Authority. Regarding an expanded central Tunisia project, we expressed appreciation for the opportunity to learn the full scope of GOT planning for the region, but noted that the program appeared to be more suitable for multi-donor financing.

C. With regard to PL–480 Title I food aid, we indicated it would probably be possible to reach annual levels in 1980 and 1981 on the trend of the last several years, i.e. in the range of $10–12 million, assuming that strong developmental justifications can continue to be made as was done for the FY79 Title I agreement via application of proceeds to CTRD.

D. Regarding PL–480 Title II, we stated that the GOT may wish to consider gradual assumption of responsibility for supplemental feeding programs. (In discussions with Khelil following the subcommission sessions, Wheeler put the issue in terms of two options: a gradual unilateral phase-down of Title II shipments by the U.S.; or discussions leading to mutual agreement on a transition schedule permitting orderly budgeting and administrative decision-making on both the U.S. and GOT sides.)

E. In respect to the housing guaranty program reference was made to on-going negotiations for a $25 million investment program to be authorized in FY79, to be followed by second tranche of $25 million in 1981. Both sides expressed satisfaction with negotiation and confidence these would soon be satisfactorily concluded.

6. The Subcommission on Trade and Investment reviewed a number of issues of mutual interest. There was ample give and take, and common ground was reached on most topics.

7. The following are highlights of the discussions:

A. The Tunisians noted their imports of $2 billion. They felt Tunisia should be an interesting market for U.S. manufacturers, as 70 percent of imports are capital goods, and expressed disappointment at the limited response of U.S. firms to calls for tender.

B. In response to a GOT request, we explained that their thorough understanding of GSP could result in more favorable treatment for Tunisian exports in the U.S. The Tunisians seemed eager to pursue GSP, in particular to start using the petition system. We expect further GSP discussion both in Washington and Tunis.

C. CEPEX (Tunisian export promotion agency) would like to be able to call on U.S. Department of Commerce resources for assistance in gathering American market information, and in organizing two Tunisian buying/selling missions to the U.S. It was agreed that the U.S. Department of Commerce (through CAGNE) would provide such assistance.

D. API (Tunisian investment promotion agency) requested that OPIC locate and financially support American investment advisors for its New York and Tunis offices. We explained OPIC could not meet this request given its limited resources. However, the OPIC representative reiterated that it continues to be upbeat on Tunisia. By coming up with good specific projects for OPIC to market in the U.S., Tunisia could preempt more OPIC resources. Further, OPIC is willing to consider devoting more of its time to the Tunisian program.

E. The Tunisians requested OPIC provide funds for an agribusiness expediting office in Tunis. We explained that OPIC had invested over $1.5 million in support of agribusiness council activities in developing countries, and only one project had ever been realized, and, therefore, funding for such an office would not be possible. We made the point that OPIC remained available to assist American investors with insurance, loans and feasibility study funding for their Tunisian investments.

F. We explained USAID’s reimbursable development program, and how this program—with funding for prospection and orientation visits and feasibility studies—increases the possibilities for access to U.S. technology, especially in the American private sector. The Tunisians seemed quite interested; this promises to be an excellent tool for bolstering our export development program in conjunction with USDOC and EXIMBank.

G. Other topics were discussed, i.e., discrepancies in reporting trade statistics, problems encountered in identifying and formulating private investment projects, and agreement in principle was reached to resume negotiations for a U.S. Tunisian tax treaty. This last topic needs to be pursued; we will follow up in the coming week.

8. The work of the Educational and Cultural Cooperation (third) Subcommission proceeded smoothly without any major disagreements between the two parties. The relative ease with which agreements were made can be attributed to discussions with the Tunisian side before the formal opening of the commission. Indeed, discussion of a draft accord and memorandum had already taken place. Meetings of the subcommission therefore were devoted to listening to the Tunisian requests for aid in the areas of education, cultural, information, youth and sports and then to agreeing on final drafting of official documents. The subcommission decided to establish a Tunisian-U.S. Binational Committee on Communications to discuss and implement joint programs on a case by case basis. This committee will meet quarterly in Tunis.

9. Only two major points requiring negotiation arose in discussions of this subcommission. The Tunisians objected to use of term “cost sharing” in relation to financing exchange programs. They felt it implied an equal division of costs in all cases. Instead, language calling for the apportioning of costs was settled upon. On another issue, we had wished to get the Tunisians to agree to facilitating the work of American archaeologists, including all phases of field work and digs. The Tunisians refused to accept the mention of field work and excavations in any official document. They simply promised to facilitate cooperation between archaeological institutes, thus revealing extreme sensitivity to safeguard what is for them an important element of their national heritage.

10. On the whole, we found in the third subcommission that the Tunisians, while intent upon presenting their “shopping list”, were content to settle for the establishment of a Binational Communications Committee in the hope they could achieve their ends through regular and less formal negotiations with ICA Tunis.

11. In sum, the Joint Commission meeting went well. The presence of Secretary Kreps and OPIC President Llewellyn clearly signaled our interest in Tunisia. Although the Tunisians were slow getting started, the entire proceedings went smoothly, and the hospitality offered Secretary Kreps was equal to any afforded a visiting Minister. There were no dramatic new departures, but the meeting—at a time when other developments in the Middle East might have placed stress on our bilateral relations—contributed to the maintenance of our excellent relations and gave reasonable promise of strengthening developmental, cultural and commercial ties.

Bosworth

1. Source: National Archives, RG 59, Central Foreign Policy File, D790157–0277. Limited Official Use; Priority. Sent for information Priority to the International Communication Agency, Department of Commerce, and Department of the Treasury. Sent for information to Algiers, Rabat, and Tripoli.
2. In telegram 2703 from Tunis, April 2, the Embassy transmitted the text of the joint communiqué. (National Archives, RG 59, Central Foreign Policy File, D790151–1089)
3. In telegram 2669 from Tunis, March 30, the Embassy summarized the private meeting between Kreps and Nouira, in which they discussed the aftermath of the Israeli-Egyptian Treaty signing, the PLO-Fatah, and the potential for war between Egypt and Libya. (National Archives, RG 59, Central Foreign Policy File, D790146–1045)
4. Not found.
5. Neither found.
6. The Joint Commission last met in Tunis October 17–20, 1975. The Embassy reported on the proceedings in telegram 6306 from Tunis, October 23, 1975. (National Archives, RG 59, Central Foreign Policy File, D750368–0420)