NIGERIA: NEW GON COMMERCE MINISTER SUPPORTS STRONG

UNCLAS SECTION 01 OF 02 ABUJA 000152

SIPDIS


SENSITIVE


STATE FOR AF/W AND EB/TPP
STATE PASS USTR
COMMERCE FOR ITA/MAC
GENEVA FOR USTR


E.O. 12958: N/A
TAGS: ETRD NI WTRO USTR
SUBJECT: NIGERIA: NEW GON COMMERCE MINISTER SUPPORTS STRONG
TRADE TIES WITH UNITED STATES

REF: A. ABUJA 40

B. ABUJA 29

C. 02 ABUJA 3357

D. 02 ABUJA 3351


Summary
--------------

1. (U) Minister of Commerce Ngelale told the Ambassador in a
January 10 meeting that he intends to follow his predecessor
as a strong voice for sub-Saharan Africa in the WTO. He also
endorsed a constructive relationship between the United
States and Nigeria on trade issues. A Ministry of Commerce
official separately previewed Nigerian positions on current
U.S. proposals in the WTO, indicating likely support for our
TRIPs moratorium but opposition on agriculture. Minister
Ngelale also expressed disappointment that Nigeria had not
yet taken full advantage of AGOA and discussed how AGOA
legislation pending in the National Assembly might be passed.
End Summary.


Maintaining a Strong U.S.-Nigeria Trading Relationship
-------------- --------------

2. (U) Minister of Commerce Precious Ngelale told Ambassador
Jeter in a January 10 meeting that he intends to be a
constructive voice for sub-Saharan Africa in the World Trade
Organization (WTO). He recognized with "pride and gratitude"
that his predecessor was such a voice. Ngelale pledged to
work within the WTO framework to ensure that developing
countries are not disadvantaged in the world trading system.



3. (U) Mentioning the productive relationship between the
United States and Nigeria in recent years on trade issues,
Ngelale hoped to continue working collaboratively with the
United States in this area. In particular, he desired to work
closely with Ambassador Zoellick and looked forward to
meeting Zoellick at the Mauritius AGOA forum.


WTO and GON Trade Policy Formulation
--------------

4. (U) Only on the job for two weeks, Ngelale recognized that
he was still learning many issues, including the WTO. He was
unable to respond to the Ambassador's queries on specific
U.S. proposals such as our TRIPs moratorium, agricultural
proposal, and our proposal for market access for
nonagricultural goods, but he promised that Nigeria's
positions would be formulated in terms of the broader
national interest and not narrow vested interests.



5. (U) Ngelale took on the Ambassador's suggestion that the
Ministry and Embassy establish a working-level committee to
discuss WTO issues, and on January 13, Ministry of Commerce
Deputy Director for Bilateral Trade A. T. Ogunfemi and Deputy
Director for Multilateral Trade Ibrahim Ma'ibbi provided
Econoff with a preview of likely Nigerian positions on WTO
issues.



6. (U) Ma'ibbi said Nigeria would not likely back the U.S.
agricultural proposal. In particular, he said Nigeria was
concerned about significant tariff liberalization on
agricultural goods because reducing tariffs on rice, for
example, would spell the immediate doom of Nigerian rice
farmers. Nigeria's non-oil economy, still agriculturally
based, could not absorb the many dislocated farmers quickly,
and this would hurt the Nigerian economy. Ma'ibbi also
contended that tariff liberalization would put Nigerian food
security in a more perilous state than it currently is as a
net importer already. Ma'ibbi added that Nigeria would likely
support efforts to limit domestic support and export subsidy
programs in developed countries, but would like to see the
door left open for developing countries to provide support
for agricultural development.



7. (U) On the TRIPS moratorium, Ma'ibbi characterized the
U.S. offer as forward leading. He expressed appreciation for
U.S. efforts to improve access to medicine for the treatment
of serious health epidemics in Nigeria. However, he was
unable to say unequivocally that Nigeria would support the
U.S. proposal. On services liberalization, he said Nigeria
would seek gradual liberalization.



8. (SBU) Ma'ibbi emphasized that these positions were
preliminary and would have to be adopted as the national
trade policy. He went on to provide a candid assessment of
the GON weaknesses in trade policy formulation. First,
coordination was poor among agencies such as the Ministry of
Commerce, Ministry of Finance, and Ministry of Industry.
Second, the knowledge base of government officials on trade
issues within each of these Ministries was low. Third, the
Nigerian private sector generally opposed trade
liberalization out of fear of increased competition. Without
a domestic constituency for free trade, it is difficult to
secure government resources for that objective, he said. In
response to a query, Ma'ibbi promised to provide Econoff with
suggestions on where assistance in trade capacity building
would be most effective.


AGOA
--------------

9. (U) Echoing the Ambassador, Ngelale also was disappointed
Nigeria has not taken full advantage of AGOA. He pointed to
two key factors limiting his country's participation. First,
he recognized that AGOA-consistent textile visa legislation
needed to be enacted. Under his leadership, he contended the
Ministry of Commerce would be prepared to take a more active
role in getting the National Assembly to pass the measure.
Ambassador Jeter pointed out that part of the problem was the
AGOA-related measure had been included in an omnibus customs
reform bill. The overall customs bill was facing stiff
opposition for several reasons and the AGOA measure had
become a casualty. Ambassador Jeter then suggested that the
Assembly remove AGOA textile provisions from the
comprehensive customs bill. Ngelale agreed to consider this
option and readily accepted the Ambassador's offer to join
him in a call on key legislators to explore it further.



10. (U) The second reason for Nigeria's failure to take
advantage of AGOA, according to Ngelale, is that
stakeholders--in particular the private sector--do not fully
understand the advantage that AGOA gives African nations. The
Minister pledged to more actively educate the private sector
on AGOA opportunities.


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

11. (SBU) The constraints in trade policy formulation
described by Ma'ibbi confirm our belief that support for U.S.
positions on trade issues will not be won in the public
arena. Rather, the cultivation of relationships with key
players such as Minister Ngelale will be vital. Fortunately,
Minister Ngelale appears favorably disposed to maintaining
close relations on trade issues. In the long-run, though, it
is clear that trade capacity building will be important to
maintaining and garnering more Nigerian support for our trade
initiatives. We intend to assess the Commerce Ministry's most
critical needs and recommend to Washington priority areas for
capacity building support.



12. (U) Meanwhile, the Economic Section will follow-up on the
Ambassador's proposal to establish a working-level committee
between the Embassy and the Ministry on WTO issues. We
envision this committee will meet every six weeks. With
support from our Public Affairs Section, we hope to provide
the Ministry with the background information it needs to
build its institutional capacity on WTO issues of priority to
the United States. End Comment.
JETER