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Cablegate: Nigeria: Ambassador's Call On Minister Of

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 ABUJA 001543

SIPDIS


E.O. 12958: N/A
TAGS: ECON ETRD EAID BEXP NI
SUBJECT: NIGERIA: AMBASSADOR'S CALL ON MINISTER OF
COMMERCE: WORK REMAINS ON AGOA AND PROCTER & GAMBLE


---------------
SUMMARY
------------------


1. (SBU) Ambassador Jeter met June 26 with Minister of
Commerce Bello for a discussion of U.S.-Nigeria trade
relations. He stressed the need for Nigeria to take
advantage of AGOA's benefits quickly. Minister Bello
concurred and thanked the U.S. for its capacity-building and
technical assistance efforts on AGOA. He noted that the GON
will promote the sale of inputs, mainly textiles to countries
already AGOA-certified while developing Nigeria's own
finished-product export capacity. Minister Bello was unclear
on AGOA statutory requirements regarding plant inspections
and records keeping. Econ Chief noted those points and will
work closely with Ministry staff to ensure they are properly
reflected in the final Custom Code revisions presented to
USTR for certification. Ambassador Jeter also raised Procter
& Gamble's interest in a differentiated tariff structure
designed to provide tariff relief for P&G while
simultaneously protecting Nigeria's domestic detergent
producers. Although the proposal was not accepted
immediately, we will continue to push this idea at all levels
of the Ministry. End Summary.


2. (U) Ambassador Jeter, USAID Abuja Chief Economist Aulakh
and Embassy Economic Section Chief Carrig met June 25 with
Minister of Commerce Mustafa Bello, Permanent Secretary Amuna
Lawal Ali and six of the Ministry's Directors at the
Minister's Federal Secretariat office for a discussion of
U.S.-Nigerian trade relations. Members of the press covered
the Ambassador's initial courtesy call.


3. (U) Ambassador Jeter opened by noting the importance of
commerce to our developing bilateral relationship, citing the
critical necessity to move "from aid to trade" as the basis
for our cooperative efforts. He congratulated Bello on the
Commerce Ministry's progress in preparing Nigeria for full
participation in the export opportunities offered by the
Africa Growth and Opportunity Act (AGOA).


-------------------------------
AGOA Preparations
------------------------------


4. (U) Noting that the "Asian Tigers" owe much of their
current prosperity to the preferential tariff structure
programs now available to Nigeria, Ambassador Jeter stressed
the importance of bringing Nigeria "on line" as quickly as
possible, given the time limit on Generalized System of
Preferences status for eligible AGOA countries.


5. (U) He continued that the current terms of trade are
overwhelmingly in Nigeria's favor and that the USG wants to
address that imbalance in a positive manner designed to
provide increased wealth and an improved standard of living
for all Nigerians. That, the Ambassador noted, is the only
sure route to a meaningful "democracy dividend." Ambassador
Jeter's remark that "We, the United States, want for
Nigerians what Nigerians want for themselves: prosperity and
a rightful place in global trade," drew spontaneous applause
from the Minister, his staff, and the press as well.


6. (U) Minister Bello thanked Ambassador Jeter for his
observations on the signal importance of our trade relations
and praised the efforts of USAID and Embassy staff to
increase Nigeria's capacity to trade in world markets. With
respect to AGOA, Bello outlined the GON's preparatory steps
that have included a November 2000 day-long joint
Embassy/Ministry of Commerce "AGOA Sensitization Seminar" for
the 36 State Commissioners of Commerce meeting at Jos,
Plateau State; combined GON/Embassy AGOA road shows; and the
GON's creation of AGOA committees at the State, Ministerial
and Presidential levels.


7. (U) Bello was particularly supportive of the
participation of USAID and Embassy officers as non-voting
members of key Presidential level committees, assisting in
developing products lines for export to the United States.
Ambassador Jeter reiterated the importance of moving quickly
to take advantage of Nigeria,s duty-free status for
thousands of products and commended Minister Bello,s
strategy to provide inputs to nations already AGOA compliant
on textiles (e.g. Mauritius, South Africa, and Lesotho) while
simultaneously ramping up Nigeria,s own export
infrastructure.


8. (U) Bello also praised the Embassy's efforts to assist
GON officials in bringing Nigeria's Customs regulations and
criminal penalties for textile visa circumvention into line
with AGOA requirements. He said he appreciated the Embassy's
offer of support for a Ministry-organized AGOA Sensitization
Seminar for key members of the National Assembly to acquaint
them with the changes needed in Nigeria's criminal code.


9. (U) Ambassador Jeter commented that the Embassy was ready
to assist the Ministry in the U.S. as well. He noted that
Mr. Carrig, the Embassy,s AGOA coordinator, would be in
Washington during the month of July and was prepared to (a)
discuss the GON,s textile visa proposals with USTR and (b)
initiate coordination with prospective investors and buyers
of priority products lines identified by the Ministry.


10. (U) Bello made a miss step, however, when he described
two key provisions of the AGOA statute ensuring Nigeria is in
compliance with the textile visa requirements as optional.
Speaking of the need to keep the Customs Code clutter-free so
as not to complicate trade relations with other countries (he
mentioned Japan), Bello suggested that Nigeria could ignore
-- in rewriting its regulations -- the AGOA requirement that
textile plants are subject to inspection by U.S. Customs. He
also opined that Nigerian firms need not keep all the
"voluminous records" mandated by AGOA.


--------------------------------------------- ------
Assistance to Procter & Gamble
--------------------------------------------- ------


11. (U) Ambassador Jeter reviewed for Minister Bello our
continuing efforts in support of Procter & Gamble's request
for tariff reductions on its Ariel soap powder in exchange
for a substantial increase in P&G's already sizeable
investment in Nigeria. Nigerian producers fear competition
from cheap imports should the tariff barrier be lowered
across the board.


12. (U) Ambassador and Econ Chief outlined the latest P&G
proposal, which calls for a differentiated tariff structure
based on the quality of the detergent product, in this case
its enzyme load. In its elementary form, the P&G proposal
would have duties inversely proportional to quality - the
higher the quality, the lower the tariff. This approach
could give P&G a break on tariffs for its high quality
product without necessarily endangering the lower end of the
market that domestic detergent producers fear they would lose
were the tariff barrier removed for all qualities of
detergent.


13. (U) Minister Bello was not immediately supportive of the
idea. He noted that P&G could relocate its Ariel production
facilities to Nigeria and benefit from Nigeria's export
promotion regime, perhaps saving the firm more money than a
cut in tariffs could provide. The Minister's staffers in
early conversations with EconChief had also suggested that
P&G would be unlikely to get the tariff concessions it seeks
without: (a) agreeing to a price undertaking that would limit
competition with domestic products; and (b) a sunset
provision providing a date-certain by which the special
differentiated tariff structure would expire.


14. (SBU) Minister Bello, however, did not assert that any of
these suggestions were absolute or non-negotiable. He
offered to convene a roundtable of the appropriate
decision-makers to listen directly to proposals by P&G
representatives and to have that group then make appropriate
recommendations to the Presidency. (Comment. Three times we
have scheduled just such a roundtable discussion. Each time
one or another of the proposed participants, i.e., Commerce,
Finance, Office of the Vice President, Office of the Chief
Economic Advisor, Nigerian Export Promotion Council, and
Nigerian Investment Promotion Commission, has had to withdraw
at the last minute, scuttling the session. We will continue
our efforts, however. End Comment.)


15. (SBU) Comment. Minister Bello,s remarks about
Nigeria,s presumed capacity to negotiate the terms of AGOA
regarding record-keeping and U.S Customs access to Nigerian
textile factories surprised us. We have been in close
contact with the Minister and his staff for months regarding
the provisions of AGOA. Perhaps, his comment may have been
more directed to the press present in the room than to us.


16. (SBU) Comment Continued: In a pull aside following the
meeting, EconChief mentioned to Bello that the provisions for
AGOA textile certification are not opening bids for bilateral
negotiations; rather, they are integral components of the
AGOA legislation, non-negotiable and applied equally to all
nations asking for AGOA benefits. In subsequent
conversations with Bello,s staff, EconChief was assured that
the GON,s textile visa submission would be virtually
identical to that of South Africa,s already approved Customs
Code. End Comment.
Jeter

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