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Cablegate: Nigeria: Commerce Minister Speaks On U.S. Relationship

VZCZCXRO7533
PP RUEHMA RUEHPA
DE RUEHUJA #2593/01 3550951
ZNR UUUUU ZZH
P 210951Z DEC 07
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 1679
INFO RUEHOS/AMCONSUL LAGOS PRIORITY 8434
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 02 ABUJA 002593

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 NI
SUBJECT: NIGERIA: COMMERCE MINISTER SPEAKS ON U.S. RELATIONSHIP

REF: A. ABUJA 2403

B. ABUJA 2178

SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY

1. (SBU) Summary. In a meeting prior to the December 11 Trade and
Investment Framework Agreement (TIFA) Council meeting, the Minister
of Commerce and Industry Charles Ugwuh expressed appreciation for
AGOA and contrasted USG understanding of what countries like Nigeria
need to expand trade relative to the position taken by the EU in EPA
talks. He noted that the GON would not be signing an EPA by the end
of 2007. In response to concerns expressed by AUSTR Liser about GON
import bans and high tariffs, the Minister noted that it was
"premature" to discuss their removal given limited agricultural and
manufacturing capacity. He highlighted new medium term industrial
policy to develop clusters of small enterprises. He also pushed for
more U.S. investments in Nigeria especially in petrochemicals and
infrastructure. Ugwuh did not commit to when the GON would fully
implement the Economic Community of West African States (ECOWAS)
Common External Tariff (CET) scheme. End Summary.

2. (SBU) On December 10, Florizelle Liser, Assistant United States
Trade Representative for Africa met with Charles Ugwuh, Minister for
Commerce and Industry, as a prelude to the 5th U.S. - Nigeria TIFA
Council meetings held in Abuja on December 11. Liser brought up
U.S. concerns regarding Nigeria's trade policy regime. She
specifically mentioned conflicting signals from Nigeria about
removing import bans by January 2008; high tariffs; and aligning
Nigeria's tariffs with the ECOWAS CET by the end of 2007.
.
MINISTER RESPONDS
-----------------
.
3. (SBU) Ugwuh said the GON is working on solving the problems
facing Nigeria's industrial sector. He said that though he does not
support the bans, it might be too early to remove them if the GON's
plan to improve the industrial sector is yet to yield the expected
dividends.

4. (SBU) On tariffs, Ugwuh said he expects no immediate movement.
He informed us that he is willing to assist on specific issues of
concern to the U.S. whenever such issues are brought to his notice
but import bans and tariffs are right now "political landmines" that
he is not willing to touch.

5. (SBU) Ugwuh reiterated the GON desire to diversify its economy
and requested AUSTR Liser's help in convincing U.S. oil companies
such as ExxonMobil and Chevron to invest in Nigeria's downstream oil
and gas sector. He said he wants investment in petrochemicals, and
sees no reason why U.S. oil majors have been reluctant.
.
MANUFACTURERS AGAINST TRADE LIBERALIZATION
------------------------------------------
.
6. (SBU) In a side meeting following the meeting with the Minister,
Ochi Achinivu, Director of Trade at the Ministry, reported that the
minister had made a presentation to the cabinet on the negative
signals Nigeria's import bans and high tariffs send to Nigeria's
trading partners. He commented that lobbying from the Manufacturers
Association of Nigeria (MAN) has made it difficult for the GON to
remove trade bans and high tariffs. (NOTE: Ugwuh was the immediate
past president of MAN. END NOTE)

COMMITTEE INVESTING TRADE IMPACT
--------------------------------

7. (SBU) Embassy contacts tell us that the GON is unable to make any
commitment on tariffs and import bans because a team is
investigating the use of waivers, concessions, tariff exemptions,
trade incentives, execution of the Export Processing Zones,
exemptions under customs and excise tariffs, existing incentives
such as the Export Expansion Grant (EEG), ECOWAS Trade
Liberalization Scheme (ETLS), the Manufacturers Export In-Bond
Scheme (MEIBS), and the impact of the CET on the fiscal policy
objectives of the GON. The team was assembled in September and is
expected to come up with their findings by the end of 2007. It is

ABUJA 00002593 002 OF 002


unlikely that the GON will take steps to remove import bans and
lower tariffs until the report is concluded.

COMMENT
-------
.
8. (SBU) Ugwuh was the immediate past president of MAN and appears
to lack the political gravitas to win the battle against his primary
constituency. His knowledge of TIFA details appeared sparse
considering the TIFA Council meeting was scheduled the following
day. He noted concerns that he might not be available to host the
Council meeting because of possible travel to the U.S. with
President Yar'adua. (NOTE: The Minister did not travel with the
President and was in Abuja on the day of the Council meeting. END
NOTE).

SANDERS

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