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Two Washington Groups Help Americans Crack Libya's Market
The Washington Diplomat / October 2009

By Larry Luxner

Two organizations, located barely a block from each other along Washington's busy K Street corridor, are vying to boost commercial ties between the United States and Libya.

The National US-Arab Chamber of Commerce (NUSACC) and the US-Libya Business Association (USLBA) aim to help American businesses crack North Africa's most lucrative market while navigating the bureaucratic obstacles that make Libya such a challenging environment.

NUSACC's president and CEO, David Hamod, said total U.S. exports to Libya in 2008 came to $720.8 million, just over half of that from two states alone: Texas and Oklahoma. That, of course, is a consequence of Libya's oil and gas-driven economy, which produces 60 percent of Libya's public-sector wages and 98.7 percent of its export earnings.

By 2012, however, U.S. exports to Libya will more than quadruple to $3.2 billion, according to NUSACC projections. Drilling and oilfield equipment will account for $856 million, or 26.6 percent of that total. Other lucrative export sectors will include new and used passenger cars ($260 million in projected 2012 exports); corn ($216 million), trucks, buses and special-purpose vehicles ($172 million), industrial engines ($96 million) and excavating machinery ($82 million).

"These numbers are based on a relatively speedy return to normalcy in the international economy," said Hamod. "We ran these numbers earlier this year, in the midst of the downturn, so I think they're still largely on track. That assumes nothing catastrophic will happen."

Hamod, 51 and a third-generation Lebanese-American who was born and raised in Iowa, took over NUSACC in 2004. Before that, he ran his own consulting firm, which promoted business between the United States and the Arab world.

In the past five years, he's been to Libya half a dozen times.

"On two of those trips, I led business delegations from the United States, and on both occasions, we had approximately 20 companies, including not only the big guys but also small and medium-sized companies," he said. "During my first trip, the Libyans were reluctant because for years they had been told not to do business with the Americans. But now that those hurdles have been removed, there's a great deal of interest on both sides."

Unlike the 18-member USLBA, NUSACC has roughly 1,500 member companies, most of them small and medium-size enterprises. The chamber has been around for nearly 40 years and has offices in Houston, Los Angeles and New York in addition to its Washington headquarters.

"There are so many business development opportunities in Libya that just about every sector from the U.S. has the potential to find a niche," Hamod told The Diplomat. "Having said that, the visa issues are presenting problems on both sides. It's not easy for Americans to go to Libya, and it's not easy for Libyans to come to the United States."

Hamod added that "the State Department has now put some procedures in place designed to expedite the process, and having a U.S. embassy there also helps a great deal."

Hamod, who plans to lead another mission to Libya to coincide with the 40th anniversary of Qaddafi's rise to power, said U.S. companies are "the best-positioned in the world" right now to cash in on Libya's booming economy, which is expected to grow by 6 to 8 percent this year.

"Things don't change overnight, but I've been very encouraged at the high level of interest by Libyan companies in identifying partners in the United States," he said. "In recent years, Libya's nascent business community has started to come alive again. The United States still has an excellent reputation in Libya, based on our activites there going back to the 1960s. People have very fond memories of the Americans who worked there."

The USLBA, meanwhile, says its objective is three-fold: to promote the development of commercial law in Libya so that U.S. companies can do business there; to "educate" the U.S. government and the public about Libya's new approach to the world, and to overcome "serious obstacles" to the bilateral relationshp.

Formed in 2005, the association's honorary chairman is David L. Mack, former U.S. ambassador to the United Arab Emirates and deputy assistant secretary of state for Near Eastern affairs. Its executive director is Charles W. Dittrich, who's also vice-president for regional trade initiatives at the National Foreign Trade Council.

"Our association isn't geared towards developing a large membership," Dittrich told The Diplomat. "We tend to attract companies which have made a substantial and long-term commitment to the Libyan market." General membership in the USLBA costs $10,000 a year, while board membership costs $20,000 annually. Eight companies are board members at present: AECOM, Chevron, BP, ConocoPhillips, ExxonMobil, Hess, Occidental Petroleum and Marathon Oil. The USLBA's 10 regular members are Dow Chemical, Fluor, Halliburton, Midrex, Motorola, NorthropGrumman, Shell, United Gulf Construction Co., Valmont and White & Case LLP.

The USLBA has a management contract with NFTC but remains an independent organization with Section 501(c)(3) nonprofit status.

"Among our core missions at the NFTC is the ending of unilateral economic sanctions," Dittrich said; indeed, through its USA*Engage affiliate, the NFTC has pushed incessantly to abolish punitive U.S. measures against Cuba, Syria, South Africa and Iran.

In late September, when Col. Muammar Qaddafi visits the United States for the first time ever to address the UN General Assembly, USLBA will honor the Libyan leader with a lavish dinner and reception.

"We look forward to welcoming him to New York," Dittrich said. "We think this visit is a milestone in normalizing the U.S.-Libyan relationship."

USLBA's executive director since its inception until very recently was David Goldwyn, a longtime oil-industry advocate who earlier this summer was named State Department coordinator for energy affairs.

Dittrich, who's never been to Libya, is a former Commerce Department official who spent much of his time dealing with international business, investment and technology licensing issues. He also has experience in the Arab world as manager of the NFTC's US-Middle East Free Trade Coalition. In that capacity, he lobbied hard for implementation of free-trade agreements with Bahrain, Morocco and Oman.

None of those countries, of course, was ever blacklisted by the United States as Libya was for so many years which makes the Libyan Arab Jamahiriya a special case.

"Our members are very sophisticated global companies. They're in any number of markets worldwide. What makes it easy to operate globally are common rules, and countries that are most integrated into the global economy operate by the same standards," Dittrich said. "Libya, having been isolated and not yet a member of the WTO, is not necessarily in sync with global standards. This makes things more difficult because you sort of have to re-invent the wheel."

On the other hand, Dittrich added, "we see a continuing and growing pace of official visits from Washington to Tripoli and vice-versa. Once Libya becomes a routine and sort of common place for U.S. companies to do business, then we'll consider our work done."

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