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Cablegate: Tifa Council- U.S.-Nigeria

VZCZCXRO7742
PP RUEHMA RUEHPA
DE RUEHUJA #2600/01 3551220
ZNR UUUUU ZZH
P 211220Z DEC 07
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 1687
INFO RUEHOS/AMCONSUL LAGOS PRIORITY 8438
RUEHZK/ECOWAS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 05 ABUJA 002600

SIPDIS

SIPDIS
SENSITIVE

DEPARTMENT PASS TO USTR-AGAMA, EXIM-JRICHTER, TDA-EEBONG
TREASURY FOR PETERS AND HALL
DOC FOR 3317/ITA/OA/KBURRESS, 3130/USFC/OIO/ANESA/ DHARRIS, AND
USPTO - JKOEPPEN AND PSALMON
DOJ FOR MKOUAME
DOE FOR CGAY AND GPERSON
DOT FOR MARAD

E.O. 12958: N/A
TAGS: ETRD ECON EFIN EINV EAID PGOV NI
SUBJECT: TIFA COUNCIL- U.S.-NIGERIA

REF: A. ABUJA 2593
B. ABUJA 2403
C. ABUJA 2178

SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY

1. (SBU) Summary. Following the Trade and Investment Framework
Agreement (TIFA) Council meeting with the Government of Nigeria
(GON), the U.S. and GON agreed on a work plan and joint-communique
that paves the way forward for greater dialogue and engagement.
Several GON officials expressed interest in discussing a bilateral
investment treaty, and advisors from President Yar'adua's office
hurriedly requested a sample U.S. BIT before the President's meeting
with President Bush in Washington, D.C. The GON expressed strong
interest in U.S. investment in infrastructure and other areas,
including manufacturing sectors linked to downstream processing of
petrochemicals and other products. The GON made no commitment on
removing import bans reducing tariffs and the full implementation of
the Economic Community of West African States (ECOWAS) Common
External Tariff (CET). The GON agreed that, in addition to the
annual TIFA council meetings, there should be quarterly
consultations to advance the work plan. A team of USG officials
also used the opportunity of the TIFA to hold a series of meetings
on the important issue of improving Nigeria's protection of
intellectual property rights and anti-counterfeit efforts. End
Summary.
.
TIFA COUNCIL AND AGOA WORKSHOP
------------------------------
.
2. (SBU) On December 11, in Abuja, the fifth TIFA Council meeting
and an AGOA workshop took place. The U.S. delegation was led by
Florizelle Liser, Assistant United States Trade Representative for
Africa and included members from the Departments of State, Commerce,
Agriculture, and agencies ranging from the African Development
Foundation to USAID, USAID West Africa Trade Hub, and the U.S. PTO.
The GON delegation was led by Elizabeth P.B. Emuren, Permanent
Secretary (PS) at the Ministry of Commerce and Industry (MCI).

SIPDIS
Although he was the host, MCI Minister Ugwuh arrived several hours
after the start and promptly left one hour later. Curiously his
deputy, Minister of State Ahmed Garba Bichi, who was to chair the
AGOA workshop, did not show up.
.
GON DELEGATION
--------------
.
3. (U) The members of the GON delegation were -- Engineer Charles
Ugwuh, Minister for MCI, E. B. P. Emuren Permanent Secretary, MCI;
Dr. Ochi C. Achinivu, Director of Trade, MCI; Jimmy Olumi, MCI; W.
K. Amuga, MCI; B.G. Hamza, MCI; I. C. Ibeh, MCI; Alex Akpakpu,
Nigerian Export Processing Zones Authority; Prince Joseph Idiong,
Association of Nigerian Exporters; J. H. Badu, Nigerian Export
Promotion Council; N. T. Igba, Central Bank of Nigeria; John O.
Asein, Nigerian Copyright Commission; Grace O. Adeyemo, Nigerian
Customs; B. U. Gimba, Nigerian Customs; M. T. Othman, Nigerian
Customs; Gloria Esiaba, Ministry of Health; Fowu Bowade, MCI;
Ifeanyi Mbah, MCI; A. A. Adigwe, MCI; I. N. Briggs, MCI; Udu-Ejembi,
MCI; and E. E. Kalu, MCI.
.
USG/NIGERIA STRATEGIC ECONOMIC PARTNERSHIP
------------------------------------------
.
4. (SBU) In her opening remarks AUSTR Liser stressed that the TIFA
Council meeting was an opportunity to explore common objectives,
identify challenges, adopt a joint work plan that identifies
priority areas for U.S.-Nigerian cooperation, and advance work on
the WTO Doha Development Agenda. The TIFA provides a joint
mechanism to develop a concrete plan of action for deepening and
expanding the $30 billion trade relationship. The U.S. views
Nigeria as a strategic partner, and currently the trade relationship
is dominated by Nigerian petroleum and minerals exports. The AUSTR
contended that AGOA, coupled with domestic policy reforms, provides
an opportunity to expand and diversify the relationship. She noted
that there are a number of market access issues that need to be
addressed in order to advance the relationship. In particular,
Nigeria's import bans need to be addressed in order for Nigeria to

ABUJA 00002600 002 OF 005


maintain its current AGOA eligibility status.
.
NIGERIA'S PLAN FOR IMPROVED ECONOMIC PERFORMANCE
--------------------------------------------- ---
.
5. (SBU) Following opening remarks from AUSTR Liser, Permanent
Secretary (PS) Emuren reported that the GON planned to continue

SIPDIS
macroeconomic, institutional and structural reforms, and create an
atmosphere of zero tolerance for corruption. PS Emuren stressed
that the GON would focus on developing infrastructural facilities to
support a manufacturing sector for both domestic and export
industries. It would expand free trade and special economic zones
with the ultimate goal of Nigeria becoming one of the 20 largest
economies in the world by the year 2020.
.
AGOA AND BILATERAL TRADE
------------------------
.
6. (SBU) AUSTR Liser highlighted that the $30 billion in two-way
trade between Nigeria and the United States in 2006, was a 16%
increase over 2005 and that U.S. total exports to Nigeria was $2.2
billion in 2006, a 16% increase from 2005. She noted that non-oil
imports from Nigeria accounted for only $1.4 million, but had
doubled since last year. She emphasized that the USG wants to work
with Nigeria to expand and diversify its non-oil trade, and that USG
resources at the West Africa Trade Hub could be utilized.

7. (SBU) The USG underscored several areas of concern -- Nigeria
continues a system of high tariffs and import bans, despite Nigeria
agreeing to implement the ECOWAS Common External Tariff (CET). The
USG contended that these tariffs and non-tariff barriers (NTBs) have
a major impact on U.S. agricultural and manufactured product exports
to Nigeria.

8. (SBU) In response, Dr. Ochi Achinivu, MCI Director of Trade said
Nigeria is committed to working on the issue of the import bans and
tariffs. He said that the Manufacturing Association of Nigeria
(MAN) was lobbying the GON to keep the bans and high tariffs to
protect Nigeria's infant industries. In addition, MAN is pushing
the 5th tariff band of 50 percent in order to protect local
industry. Director Achinivu opined that there were other methods to
protect these industries through incentive schemes.

9. (SBU) He reported that MCI has already notified President
Yar'adua of USG concerns. He also expressed concern that the bans
and high tariffs were having a negative statistical impact on the
Nigerian economy. MCI had recommended to the President and Ministry
of Finance that following the WTO regime was the best way forward
and that GON is working on resolving these issues.

10. (SBU) Several members of the GON asked the status of a Bilateral
Investment Treaty (BIT) with Nigeria and Director Achinivu noted
that a draft had already been sent to the GON and that GON welcomed
discussions on a technical level.

11. (SBU) The USDA/FAS representative expressed concern with
Nigeria's use of arbitrary reference prices to assess duties on rice
as well as Nigeria's use of irregular import valuation measures.
According to the WTO, import values should be based on the actual
transaction value of the good, not an arbitrary reference price. As
a member of the WTO, Nigeria's practices should be in-line with the
Customs Valuation Agreement. The Nigerian Customs officials said
that a workshop on the Customs Valuation Agreement had been held and
they expected implementation of the transaction value method of
valuing imports, inline with WTO rules. At the same time, Customs
is waiting for passage of a bill that will legislate the change.
The USG requested a draft copy.

12. (SBU) The USDA representative invited the GON to participate in
a trade mission scheduled for 2008 in Accra, where U.S.
agribusinesses could meet with the GON and Nigerian companies to
identify partners for potential business. The AUSTR offered the
services of the Animal, Plant, and Health Inspection (APHIS) expert
that was based at the regional trade hub to provide guidance on
exporting agricultural products to the U.S. The GON expressed
interested in being part of the trade mission and in working with

ABUJA 00002600 003 OF 005


the APHIS standards expert.
.
TRANSPORTATION/ENERGY/INFRASTRUCTURE
------------------------------------
.
13. (SBU) The AUSTR said she was very aware of the constraints that
impacted the ability of all African countries to export their
products due to problems with transportation, physical
infrastructure and energy. She noted that the new Delta Airlines
service between Atlanta and Lagos is a sign of progress and
commended Nigeria's privatization of ports and its goal of becoming
a maritime hub for West Africa. PS Emuren said infrastructure was
the key limiting factor to the success of business in Nigeria.
Director Achinivu added that everything made in Nigeria was 45% more
expensive because of the electric power and tariff issues.

14. (SBU) The GON contended that there are opportunities for U.S.
investors to invest in providing infrastructure such as highways,
and in petrochemicals and solid minerals sectors. The USG asked for
terms and conditions to be declared and the GON indicated readiness
to work with the U.S. in analyzing the terms and conditions and
identifying impediments to investment.

15. (SBU) The GON inquired about technical assistance to assist
project finance and the Econ Counselor answered that the U.S. Exim
Bank has a proposal to work with USTDA to hold a seminar in Nigeria
with bankers to discuss project financing. The USG welcomed
Nigerian input on who should be present for such a seminar. Econ
Counselor contended that, if the terms and conditions are right,
U.S. investors would come to Nigeria and if the MCI wished to pull
together key actors on the Nigerian side to look at conditions for
investment, the USG would do the same.
.
INTELLECTUAL PROPERTY RIGHTS - MORE INPUT NEEDED
--------------------------------------------- ---
.
16. (SBU) MCI officials contended that a good IPR regulatory
framework was in place, however, investment from the film and music
industries was not forthcoming. In response AUSTR Liser commented
that a major impediment to investment was IPR violations, and that
Nigeria is the largest market for pirated products. PS Emuren
explained that IPR was a major issue that the GON wanted to improve,
and the GON needed assistance on following international standards.
PS Emuren also asked for assistance in initiating a copyright
registration scheme, and for USG comments to the optical disk
registration law passed in Dec. 2006. USTR responded that the USG
would provide comments on the law and suggested Nigeria adopt the
WTO WIPO International Treaty.

17. (SBU) GON officials indicated Nigerian rights holders had
complained of IP violations in the United States regarding the
pirating of Nigerian movies online and unlawful duplication. USTR
responded that the USG welcomed any information that was available
about the violations, that the USG does not support piracy and there
are methods in place that the rights holders, could use to take down
the websites. They lamented that when the movie and music producers
pulled out of Nigeria, they left a vacuum, and if they were to come
back they could partner with the GON to reduce piracy. USTR
contended that the vacuum in the music and movie industry is an
issue that would be resolved when the rights holders saw more
examples of the GON enforcing IPR rules.

18. (SBU) The GON IPR officials complained that the more the GON did
to protect IP, the more the U.S. wanted them to do. The GON
reported a draft bill from the IP Commission was being put together
to help close holes in the current legislation and that public
awareness was low. The GON asked for assistance in creating this
awareness, and the USG offered to assist.
.
TRADE CAPACITY BUILDING - GON WANTS MORE
---------------------------------------
.
19. (SBU) The USG outlined current trade capacity building
assistance to Nigeria from the following agencies: Export Import
Bank (Exim), the Overseas Private Investment Corporation (OPIC), the
United States Trade and Development Agency (USTDA), USAID/WA, USAID,

ABUJA 00002600 004 OF 005


the African Development Foundation (ADF), and the United States
Department of Agriculture (USDA).

20. (SBU) The GON listed the following as areas where TCB is
needed:
-- Establishing a trade database.
-- Training for staff of the MCI's trade department on the use of
statistical software for various analyses.
-- Training on trade negotiations.
-- Training on impact assessments of various trade policies.
-- Equipment for calibration, weights and measures of products such
as oil and gold.
-- Internet Access and VSAT link between the Ministry and its state
offices.
The USG agreed to review the requests for possible assistance, but
made no commitments.

21. (SBU) The GON also expressed interested in capacity building
opportunities offered by the Trade Hub and USAID, because the GON
wanted to increase their value added products. Nigeria's private
sector rep was particularly concerned with the phytosanitary issue
(SPS) and requested that a TIFA working group identify technical
assistance that could be given to Nigeria.
.
DOHA
----
.
22. (SBU) AUSTR Liser pointed out that the GON's positions on Doha
hurt its interests, and asked why the GON continues to support these
positions. She questioned the Less Developed Countries (LDCs)
position that all LDCs should have duty free and quota free (DFQF)
access to Europe and the United States. The AUSTR explained that
Nigeria (not an LDC) and other African countries (both LDC and
non-LDCs) have this through AGOA and questioned Africa's push to
extend AGOA-like preferences to countries like Bangladesh that are
much larger exporters. She urged Nigeria to review its current
positions in-line with its own national interests. Addressing this
issue, Director Achinivu stated that agricultural subsidies needed
to be reduced as did tariff rates on non-agricultural market access
(NAMA) products, and that Nigeria is aligned with the G20. He
praised U.S. moves to address agricultural subsidies, but said that
the EU, particularly France, was not doing enough. He reiterated
that Nigeria would continue to cooperate with the U.S. on WTO
issues.

23. (SBU) The GON asked if the U.S. was still pursuing a WTO waiver
for AGOA and what the status was on a draft bill in Congress that
intended to give LDC countries AGOA-like benefits. Regarding the
WTO waiver for AGOA countries, USTR reported it is still in the
negotiations stage, and China has informally agreed not to oppose
the waiver, but some other countries, such as Paraguay, continue to
oppose the waiver approval. USTR answered that a draft LDC bill has
not been passed and a vote was not expected until early 2008. The
AUSTR reported that the African embassies in Washington, D.C. will
be consulting with Congress on the bill.

JOINT-COMMUNIQUE - GOOD PROGRESS
--------------------------------
.
24. (SBU) In the joint communique issued after the TIFA Council
meeting both sides agreed to explore common objectives, including
cooperation in the World Trade Organization, commercial issues and
trade restrictions, trade capacity building and technical
assistance, intellectual property protection and enforcement, export
diversification, and infrastructure and other investment issues.
The communiqu urged the GON to continue its efforts to reduce
tariffs over time and convert existing import bans to tariff
structures.

25. (SBU) Both sides will work towards clarification of procedures
for temporary import licenses for oil service equipment and other
short term remedies as well as a long term solution, to ensure
support for petroleum exploration and development. On AGOA, the two
sides agreed to focus on specific product areas with export
potential for Nigerian review and discussion with USAID West Africa
Trade Hub experts. Addressing the current WTO Doha negotiations,

ABUJA 00002600 005 OF 005


the U.S. and Nigeria agreed to work towards the successful
completion of a broad and balanced final agreement.

26. (SBU) The two countries agreed to form a working group to
identify the terms and conditions necessary to attract investment in
these areas. The U.S. will continue to assist with efforts to
develop electric power, including through a seminar for the Nigerian
banking community on project financing models. Nigerian officials
also expressed interest in discussing a bilateral investment treaty
(BIT) and said they would provide comments on the U.S. Model BIT
presented at the last Council session.

27. (SBU) In the area of intellectual property rights, the two sides
agreed on new areas of cooperation, including improving enforcement
against piracy and counterfeiting. The U.S. applauded Nigeria's
issuance of optical disc regulations. The Nigerian side welcomed
comments on these regulations as well as on its draft intellectual
property legislation. Nigeria requested information on an IPR
recordal system to improve border enforcement.
.
CONCLUSION
----------
.
28. (SBU) The Council agreed to form a working group to meet
quarterly to accelerate its work, and to finalize a work plan for
2008. The AUSTR urged Nigeria to continue to look at the business
environment regulations that affected trade - tariffs, import bans,
IPR, licensing, and customs reforms. She reaffirmed the USG's
commitment to working with Nigeria through the TIFA and other
mechanisms to strengthen and diversify U.S.-Nigeria trade and
investment.

29. (SBU) PS Emuren underscored that the meeting had touched on a
lot of issues and that there would be a report from each
participating agency. She hoped that the quarterly collaboration
would allow Nigeria to learn more and be better informed on the full
range of trade and investment issues discussed at the TIFA Council
meeting.
.
COMMENT
-------
.
30. (SBU) Overall, the TIFA Council meeting was successful in
committing the GON to review areas of friction between the U.S. and
Nigeria and creating an ongoing mechanism under the TIFA for
accomplishing the work plan. The quarterly consultations will
assist the USG in prodding the GON to act on previous commitments
and continue a cooperative dialogue. The joint-communique provides
a good foundation for that dialogue and was drafted near the end of
meeting due to a push from the President's office to have one prior
to his trip to the U.S. Previously, MCI had rejected the need for
it.

31. (SBU) Minister Ugwuh's slight participation was unfortunate and
PS Emuren being new to MCI limited her ability to play a leading
role. Surprisingly, the Ministry of Finance (MINFIN) did not attend
the meeting and only offered to meet with the AUSTR to discuss the
import bans and customs issues when schedules no longer allowed for
a meeting to take place.

SANDERS

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