NIGERIA'S LIKELY REACTIONS TO EXPIRATION OF AGOA

UNCLAS ABUJA 000961 SIPDIS SENSITIVE STATE ALSO PASS TO USTR E.O. 12958: N/A TAGS: ETRD PREL WTRO ECON NI SUBJECT: NIGERIA'S LIKELY REACTIONS TO EXPIRATION OF AGOA THIRD-COUNTRY FABRIC PROVISION REF: A. STATE 120038 ¶B. STATE 120719 ¶C. ABUJA 277 ¶D. ABUJA 290 ¶E. 03 ABUJA 2231 ¶F. 03 ABUJA 2184 SENSITIVE BUT UNCLASSIFIED, NOT FOR PUBLICATION ON THE INTERNET OR INTRANET. ¶1. (SBU) In response to the Department's request concerning a failure to extend the AGOA third-country fabric provision (Ref A),post believes there could be important political effects on both the bilateral and multilateral fronts, although the economic effect would be slight. -------------- TEXTILE VISA STILL A MAJOR ISSUE -------------- ¶2. (SBU) While the impact on Nigerian industry will be slight, given Nigerian export problems (Ref D),there could be much more political fallout. President Obasanjo and other Nigerian leaders often raise AGOA, and specifically the long-delayed provision of an AGOA Textile Visa for Nigeria (Ref C). (Note: The GON provided the Textile Visa documents to post, and post provided them to USTR and the Department on December 27, 2003 -- Ref E.) Although Nigerians do not export much other than oil under AGOA to the U.S., it is a prominent feature of the bilateral relationship in Nigerian minds. Nigeria's new Ambassador to the U.S. raised AGOA in his first meeting with the Secretary on May 27 (Ref B). While the discourse about AGOA is usually positive, we would expect Nigerians to add failure to extend the AGOA third-country fabric provision to their complaints over the delay in the Textile Visa. ¶3. (SBU) Reaction from Nigerian industry is apt to be low decibel. Nigeria is not exporting garments made of third-country fabric to the United States, nor is Nigeria likely to do so within the next two years. Post proposed a program to improve Nigeria's use of AGOA for non-oil exports to the U.S. (Ref F),but has yet to receive a response from USDOC or the Department. -------------- MULTILATERAL EFFECTS IN AFRICA AND THE WTO -------------- ¶4. (SBU) Even if Nigeria is not itself a main beneficiary of the provision, its government will sympathize with African states whose benefits might cease with the provision's expiration on September 30, 2004. The GON might interpret U.S. congressional inaction to extend the provision another three years as waning American interest in the development of Africa's manufacturing and export capacity, hence in its overall development. Nigeria's reaction could well be to rally to the support of other states at the WTO sharing such sentiments, which might make it more difficult for us to achieve broader objectives in that forum. CAMPBELL