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Cablegate: First Tifa Council Meeting in Kigali


DE RUEHLGB #1047/01 3071122
R 031122Z NOV 06





E.O. 12958: N/A

1. (U) Summary. Deputy United States Trade Representative
Ambassador Karan Bhatia led the USG delegation to the
first-ever Trade and Investment Council Meeting held in
Kigali on October 31. Discussions covered such topics as the
WTO DOHA round of negotiations, AGOA and bilateral trade,
trade capacity building, investment promotion, and
infrastructure. Bhatia and the Rwandan delegation head,
Commerce Minister Protais Mitali, agreed upon a 15-point
workplan, and issued a communique which expressed firm
intentions to intensify cooperation, including quarterly
reviews of progress on the Work Plan, the hosting of an AGOA
national workshop in Kigali in early 2007, and preliminary
discussions on a possible Bilateral Investment Treaty. (Note:
Work Plan and Communique are attached at end of this cable).
End Summary.

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2. (U) Ambassador Bhatia, accompanied by AUSTR for Africa
Florie Liser, AUSTR for Trade Capacity Building Mary Ryckman
and other USTR personnel, and joined by Ambassador Arietti,
USAID Director Mullally and other embassy and
regionally-based USDA and USAID officers, met with the
Rwandan delegation for a full day of discussion in Kigali.
Minister Mitali was accompanied by the Rwandan Ministers or
Ministers of State for Energy, Agriculture, Lands and
Environment, Industry and Investment Promotion, and Foreign
Affairs and Cooperation, two Presidential Advisors (Great
Lakes Envoy Ambassador Sezibera and NEPAD/MCC Advisor Francis
Gatare) as well as officers of various governmental and
business entities, including the Rwandan Investment and
Export Promotion Agency (RIEPA), the Rwanda Private Sector
Federation, the Rwanda Bureau of Standards, and the Rwanda
Environmental Management Agency.

3. (U) The two delegations initially reviewed the proposed
Work Plan, including such items as identification of trade
barriers, improved customs procedures, consultation on AGOA
implementation, protection of intellectual property rights, a
strengthened financial sector, and capacity building. The
two sides agreed that the Work Plan as approved should be a
dynamic and flexible document, to be refined and updated as
circumstances dictated.

4. (U) The delegations then examined the WTO Doha
negotiations, with Ambassador Bhatia expressing USG
commitment to an ambitious, markete-opening outcome,
including in the area of agriculture. The Rwandan delegation
pledged continued support for a reinvigorated Doha process
and flexibility on all sides, and also indicated its support
for the USG position on the sectoral on drugs and medical

5. (U) Regarding AGOA and bilateral trade, the Rwandan
delegation conveyed its continuing efforts to increase the
small level of AGOA trade, noting several obstacles: limited
production capacity, high transport costs, uncertain energy
supplies, and capacity limitations regarding standards and
required documentation. Some successes were noted,
particularly the sale of 200,000 baskets to Macy's and the
development of the specialty coffee sector (NB: the
delegation had an excellent trip to a coffee-washing station
outside Kigali to see processing of coffee now being exported
to the U.S. market). The USG delegation urged intensified
effort toward export diversification and targetted value
addition, and offered the U.S. organics market as a possible
opportunity. Value-added products such as leather, jewelry
and essential oils appeared to be possible areas for export

6. (U) On trade capacity, the Rwandan delegation noted
ongoing constraints, including outdated legal and regulatory
frameworks, an over-reliance on subsistence agriculture,
limited access to capital, and the low volume and low value
of the limited number of export products Rwanda produces.
The USG delegation offered continued and focused
collaboration on Rwanda's financial sector, regional
integration of markets, identification of niche markets and
appropriate products for the U.S. market, and assistance with
skills development and standards upgrades.

7. (U) In assessing the business environment, RIEPA Director
General Nkurunziza offered a spirited and ambitious reform
agenda with a pro-private sector emphasis, including reform
of RIEPA itself, a streamlined fee schedule for customs and
warehousing clearance, labor law reform, the setting-up of
commercial courts, a strengthened arbitration center, a new
Commercial Registration Agency to assist with new business
registration, new business laws almost completed, reform of
the IPR regime, and a continued commitment to privatization.
He offered Rwanda's vision of itself as a future regional
services and trading center, serving a growing regional
population with Rwanda as a hub for investment, transport and
communications. Ambassador Bhatia replied that a "gold
standard" investment regime, such as that offered by the
possible US-Rwanda Bilateral Investment Treaty (BIT), was key
to attracting investment to Rwanda, and would help to ensure
such things as free flow of capital and clear arbitration
rules for disputes. He noted that invesstment negotiators
from State and USTR would be conducting exploratory
discussions on a BIT with Rwandan counterparts on November
1-2. Ambassador Arietti added that while Rwanda had clearly
adopted a reform agenda, it must not measure itself simply
according to its own past performance, but rather as compared
to the reform efforts of its regional competitors. You may
be improving, he said, but you must assess whether or not
your neighbors are improving faster and more comprehensively.

8. (U) In a brief discussion of goverance issues and
Millenium Challenge Corporation assessment of GOR progress,
Ambassador Sezibera announced the recent creation of a
Governance Advisory Council, composed of representatives from
public, private, civil society and faith-based organizations,
to assist the GOR in expanding political space and reviewing
its performance.

9. (U) Finally, on infrastructure, the Rwandan delegation
offered a balanced presentation of current limitations and
opportunities within various sectors, noting the possibility
for investment and growth in the energy, IT and transport
areas. The delegation discussed at some length its plans for
a second international airport, as well as new roads, a
possible rail link to western Tanzania, and hydro and thermal
power plant possibilities. We are ambitious, said Lands and
Environment Minister Bazivamo, but we are realistic. AUSTR
Liser welcomed the Rwandan delegation's presentation,
replying that Rwanda must make focused choices on
infrastructure projects, and appeared prepared to do so.

10. (U) As a summary of the day's discussions from the USG
side, Ambassador Bhatia noted approximately a dozen points of
agreement and/or follow-on activities, including:
--quarterly review of the Work Plan by Bhatia and Mitali
--an early 2007 AGOA workshop in Kigali
--a visit from the East and Central Africa Global
Competitiveness Hub before the end of the year to discuss
AGOA Category 9 certification (for handloomed goods).
--opening discussions on a possible Bilateral Investment
--identification of USTR Africa Director William Jackson and
RIEPA Director General Williams Nkurunziza as POCs for TIFA
--continual consultations aimed at advancing the Doha
negotiations and, specifically, the NAMA drugs and devices

11. (SBU) Comment. The breadth of participation (several
dozen senior Rwandan officials in attendance) and focused
presentations by the Rwandan side impressed us. Their
clear-eyed vision of Rwanda, small, rural, and far from
established trading hubs, but possessed of strategic outlook
and a committed government, suggests that it will make the
most of the TIFA framework and follow-on activities. End

12. (U) Text of Communique:

Communique from the Governments of the United States and the
Republic of Rwanda regarding the October 31 Meeting of the
U.S.-Rwanda Trade and Investment Council

The first meeting of the U.S.-Rwanda Trade and Investment
Council, under the terms of the June 2006 U.S.-Rwanda Trade
and Investment Framework Agreement (TIFA), took place in
Kigali, Rwanda on October 31, 2006. The meeting was led on
the Rwandan side by Minister of Commerce, Industry,
Investment Promotion, Tourism, and Cooperatives Protais
Mitali and on the U.S. side by Deputy U.S. Trade
Representative Karan Bhatia. Each delegation also included
representatives from several other trade-related agencies
within each respective government.

Among the major agenda items covered during the day-long
discussion were the World Trade Organization,s Doha Round of
global trade negotiations; enhancing Rwanda,s use of
opportunities available under the African Growth and
Opportunity Act (AGOA); trade capacity building assistance;
measures to improve the business environment and increase
investment flows; ways to enhance U.S.-Rwanda investment; and
issues related to trade-related infrastructure.

The two sides agreed on the need to intensify cooperation on
means to develop, increase, and diversify U.S.-Rwandan trade.
The two sides will collaborate in developing the program for
a U.S.-sponsored AGOA National workshop for Rwanda, to be
held in early 2007. They will also deepen consultation on
priority trade capacity building activities and on specific
measures to improve the business environment and to promote
trade linkages between our two private sectors. They
confirmed their intent to explore a possible Bilateral
Investment Treaty between the two countries and jointly look
forward to discussions on this topic to be held in Kigali
later this week. They also discussed existing and
prospective activities and technical assistance related to
improving Rwanda,s trade-related infrastructure. Finally,
the two sides agreed on the urgent need to breathe new life
into the Doha negotiations and to work together toward an
ambitious, market-opening outcome that sparks new global
trade flows and promotes economic growth and development,
especially among developing countries. They agreed on the
need to maintain momentum in sectoral negotiations, and
Rwanda agreed in particular to undertake its best efforts to
support the sectoral on pharmaceuticals and medical devices.

At the outset of the meeting, the two sides agreed on a
15-point workplan to guide ongoing work under the TIFA in the
run-up to the next meeting of the Council in approximately
one year. They agreed to identify specific action items and
establish priorities in the workplan and to develop quarterly
status reports on progress on these action items. In
general, the two sides agreed to use the TIFA process to
coordinate and leverage ongoing as well as future trade- and
investment-enhancing initiatives in the two countries.

Both parties agreed that the excellent discussions and
subsequent agreement on next steps not only contributed to a
very successful first meeting of the U.S.-Rwanda TIFA
Council, but laid the groundwork for enhanced U.S.-Rwandan
trade and investment under the TIFA as we move forward.

End text.

13. (U). Text of Work Plan:

Workplan for the Trade and Investment Framework Agreement
Between the Government of the United States of America and
the Government of the Republic of Rwanda

The Government of the United States of America and the
Government of the Republic of Rwanda will endeavor to work
cooperatively on the following priorities under their Trade
and Investment Framework Agreement:

1. Developing and implementing government policies that
foster increased trade and investment between the
two nations;

2. Identifying market entry barriers and jointly working to
eliminate them with a view toward increasing

3. Improving customs procedures, enforcement, and trade
4. Coordinating and consulting on AGOA implementation,
including the encouragement of value-added
production and trade diversification;

5. Coordinating and consulting on issues and positions in
multilateral trade negotiations, including in
the World Trade Organization;

6. Promoting and facilitating private sector contacts and

7. Promoting and protecting intellectual property rights;

8. Improving technical regulations and standards, including
sanitary and phytosanitary (SPS) measures;

9. Improving regulatory, commercial, competition, labor, and
environmental legislation, policy,
and enforcement;

10. Strengthening agricultural trade and agribusiness

11. Developing and strengthening the financial sector and
improving access to trade finance, including
the promotion and protection of investment and
encouraging investment flows;

12. Promoting trade in services, including tourism and ICT;

13. Promoting transparency and working to eliminate bribery
and corruption in business transactions;

14. Improving and developing trade-related infrastructure,
including transportation and energy.

15. Identifying priority capacity building needs relating to
the above items, and furthering efforts to
address those needs.

As agreed at TIFA Council meeting 31 October 2006

End text.

14. (U) This cable was cleared by USTR.


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