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Cablegate: November Tifa Talks in Abuja Underscore Gon

This record is a partial extract of the original cable. The full text of the original cable is not available.

100535Z Dec 04

UNCLAS SECTION 01 OF 03 ABUJA 002040

SIPDIS

SENSITIVE BUT UNCLASSIFIED

STATE ALSO FOR USTR -- LISER

E.O. 12958: N/A
TAGS: ETRD ECON EIND NI
SUBJECT: NOVEMBER TIFA TALKS IN ABUJA UNDERSCORE GON
ECONOMIC POLICYMAKING INEFFICIENCIES

REF: Abuja 1942

1. (SBU) Summary. Assistant USTR for Africa Liser held
talks in Abuja on November 11 with Nigerian economic
officials in the context of the annual meeting of the U.S.--
Nigeria Trade and Investment Framework Agreement (TIFA)
Council. The discussions included a trade capacity building
seminar on the U.S. African Growth and Opportunity Act
(AGOA) and focused on intellectual property rights and
tariffs and bans on U.S. goods including and textiles.
Reflecting bureaucratic inefficiency, the GON had not
approved a communiqu of the TIFA talks as of December 2.
Similarly, it took nearly three weeks following the talks'
conclusion for the GON economic ministries to clear a letter
to USTR Zoellick removing a ban on U.S. textile imports.
The GON's disorganization before and after the TIFA talks
underscores how difficult it is for GON reformers like
Finance Minister Ngozi Ikonjo--Iweala to "deliver the
goods." End summary.

2. (U) On November 11 in Abuja, Assistant USTR for Africa
Liser held talks with Nigerian economic officials in the
context of the annual meeting of the U.S.--Nigerian Trade
and Investment Framework Agreement (TIFA) Council. The
talks included a trade capacity building seminar on
"Maximizing the Benefits of AGOA (African Growth and
Opportunity Act) in Nigeria." Nigerian Minister of Commerce
Minister A.D. Idris Waziri led the GON delegation, while
Florie Liser was assisted by Laurie--Ann Agama, USTR
director for African affairs; Alicia Robinson--Morgan, U.S.
Department of Commerce deputy director, Office of Africa;
Roxana Henderson, U.S. Department of Agriculture (USDA)
international trade specialist; and USDA attach Jamie
Rothschild. The talks focused on intellectual property
rights (IPR), GON tariffs and bans on U.S. exports, and
Nigeria's hope for increased textile exports under AGOA.

Intellectual Property Rights Protection
--------------------------------------------- ---------------
----------------------------------

3. (U) A/USTR Liser described Nigeria as the largest
African market for pirated U.S. goods and requested
specifics on Nigeria's protection of intellectual property
rights (IPR). John Asein, assistant legal director of the
Nigerian Copyright Commission (NCC), replied that Nigeria's
Office of the Presidency is strongly committed to an anti--
piracy policy. Asein remarked that Nigeria has copyright
inspectors, whom he termed the first line of defense, and
that Nigeria has a CD registration/inspection system that
monitors the production of music CDs. "There is adequate
legal machinery in place" to uphold the protection of IPR in
Nigeria, Asein asserted. Asein noted, however, that
Nigeria's private--sector participation in intellectual--
property protection is weak, and that the Nigerian private
sector can't or won't do much about the problem. Asein said
Nigeria is encouraging companies to reenter the market
place, but holders of IPR need to regain confidence that
their rights will be protected before they do so.

4. (U) Fred Agah, director of the Ministry of Commerce 's
External Trade Department, said the Ministry of Commerce has
created the framework for an IPR regime, and especially for
alternative dispute resolution. According to Agah, draft
legislation dating to 2002 aims to reduce the time needed to
produce results, and to establish an institution similar to
the United States' International Trade Commission (ITC) to
investigate complaints in a transparent manner. Commerce
Minister Waziri added that the GON is trying "everything
possible" to protect trademarks, but he provided almost no
specifics to accompany this assertion.

Tariffs and Bans on U.S. Goods
--------------------------------------------- ---------------
--------------------

5. (U) Assistant USTR for Africa Liser highlighted the
importance of investor certainty and policy predictability
and consistency, and explained how import bans and tariffs
undermine such an environment. The USDA representative then
requested a product--by--product listing of all U.S. goods
that Nigeria has banned or on which it has imposed high
tariffs. Fred Agah replied that such a listing might not be
available because the GON plans to implement a new tariff
regime by July 1, 2005. Agah said some changes in
classification could be phased in as early as January 2005
and imports will be classified according to four categories.
He defined these categories as "essential goods," on which
no duty will apply; "inputs," which will face a 5--percent
duty; "intermediate goods," on which will be levied a 15--
percent duty; and "finished goods," the duty on which will
be 20 percent. The Federal Executive Council (cabinet) must
approve the four categories of imports. Agah said the GON
is formulating its policy regarding what are finished goods,
which he explained are goods destined for use in Nigeria.
Further deliberations are necessary because some goods, such
as educational materials, will be duty free because they
are essential, but are nonetheless finished products. Agah
also said the import bans would be lifted by 2007.

6. (U) Commerce Minister Waziri had said the United States'
low level of imports of Nigerian non--oil products is prima
facie evidence the U.S. tariff system discriminated against
Nigerian goods, especially textiles. A/USTR Liser responded
that when Nigerians say they cannot sell in the U.S. market,
this doesn't signal a market access issue but rather a trade
capacity issue. After Liser made clear that Nigeria's
inability to compete in the U.S. market reflects unfavorable
comparative costs and inadequate product marketing rather
than U.S. market barriers, Waziri acknowledged that "the
[United States'] door is wide open," but repeated that
Nigeria's non--oil sector "can't compete" in international
markets.

7. (U) Gladys Sasore, President Obasanjo's AGOA advisor cum
CEO of the Nigeria Export Promotion Commission and special
adviser to Obasanjo on export programs, disclosed that
Chinese companies counterfeit copyrighted traditional
Nigerian print designs. She said six Nigerian textile
companies have closed down because of this practice. In the
northern city of Kano, Sasore declared, 90 percent of
printed cloth is counterfeited, meaning that the cloth
itself bears an inaccurate statement of where the cloth was
produced. A/ USTR Liser responded that Nigeria could
implement safeguard measures to combat dumping since China's
World Trade Organization (WTO) accession agreement
authorizes the use of special safeguards to prevent "market
disruption." Commerce Minister Waziri replied that he knew
nothing about the relevant provision. Liser responded that
USTR could provide Nigeria relevant documentation.

Nigeria's Erratic Preparation for the Talks
--------------------------------------------- ---------------
----------------------------------------

8. (SBU) The GON's planning for the TIFA Council was poor,
and it was evident repeatedly during the session that the
Nigerian side had prepared inadequately for these talks.
Two days before the session began, Nigeria's various
agencies had not yet decided each ministry's role in the
talks nor which officials would represent Nigeria, nor had
the Ministry of Commerce ---- the TIFA Council's host ----
sent out invitations to other GON ministries to participate
in the session. Once the talks opened, the "program of
events" that the Nigerian side distributed stated it was a
"draft" document. Also, Commerce Minister Waziri, who was
an opening speaker at the TIFA Council, arrived late, noting
that his staff had not informed him of the session's correct
starting time. Near the end of the talks, a Nigerian
aviation official interjected to use this TIFA trade--
promotion session as a forum to urge the U.S. Federal
Aviation Authority to provide technical assistance, safety
and security equipment, and fire trucks to Nigeria.

Precursory Side--Show
--------------------------------------------- ---------

9. (SBU) Minister of Finance Ngozi, who did not participate
in the TIFA talks, got caught up in similar disorganization
elsewhere. On November 10, the evening before the TIFA
Council met, Ngozi had arrived more than three hours late
for a reception at Ambassador Campbell's residence. Ngozi
had agreed earlier to meet with A/USTR Liser at the
residence on what later became an hour--long discussion on
the removal of Nigeria's ban on selected textile products of
U.S. origin. She arrived late because she had to attend GON
meetings seeking to avert a threatened nationwide strike
over higher gasoline prices. This strike was set to start
in five days. The Nigeria Labor Congress had announced on
October 14 its determination to carry out such a labor
action. (Begin comment. The threatened strike was called
off on November 15, one day before it was to begin. Ngozi's
delay in meeting with the U.S. delegation on a trade issue
extremely important to Nigeria highlighted the lack of depth
on the GON's economic--policymaking "bench," as well as the
GON's consistent failure to address seriously the strike
issue earlier, the threat of which had been made three weeks
before the meeting at the residence with A/USTR Liser. End
comment.)

Comment
------------------------

10. (SBU) Although up to 20 Nigerian officials were present
at the talks at any one time, Fred Agah, director of the
Commerce Ministry's External Trade Department, was the only
unquestionably capable official present representing Nigeria
that day. Aside from Agah, no Nigerian officials present
evinced substantial knowledge of WTO accession treaties and
the related protection they offer to WTO members. Because
the GON has few trade experts and its bureaucracy is
inefficient and ineffective, Nigeria's commerce minister had
yet to release a GON interagency approved communiqu of the
TIFA talks as of December 2. We will transmit the text of
the approved communiqu asap.

11. (U) The TIFA talks were held at the Abuja NICON Hilton,
one of the capital's two international--class hotels.
During the discussions, and later at an evening reception
also at the Hilton, the electricity supply failed perhaps
seven times. Although the hotel's generators provided some
backup power, the NICON Hilton's air conditioning system
operated either negligibly or not at all during the day and
that evening. The stifling resulting heat, which provoked
d
participants' dozing off during the day and may have
accelerated the evening reception's premature conclusion,
was vivid evidence of Nigeria's continuing infrastructure
problems from which even its supposedly international--class
hotels are not exempt.

12. (SBU) The TIFA Council talks were particularly
important because they made it possible for the U.S. Del to
reconfirm to the GON our concerns about Nigeria's ban on
U.S. textile products (reftel). This issue was the core of
the discussion between A/USTR Liser and Finance Minister
Ngozi on November 10 at the Ambassador's residence. Despite
Ngozi's having promised that evening to send a letter to
USTR Zoellick by November 14 clarifying the matter, it took
the better part of three weeks following the TIFA talks for
the GON's economic ministries to conclude their interagency
review of the letter in question. It finally was given to
us on December 2 despite our repeated attempts to obtain it
earlier. The GON's bureaucratic inefficiencies, as
exhibited before and after the TIFA talks, underscore the
immense difficulty of economic reformers like Ngozi to
"deliver the goods," regardless of their substantive skill
and closeness to President Obasanjo.

CAMPBELL

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