MOZAMBIQUE: RESPONSE ON WTO SERVICE NEGOTIATIONS

UNCLAS MAPUTO 001315

SIPDIS
STATE FOR AF/S - HTREGER AND AB/TPP/MTA NISSEN
USTR FOR AHORAN, CBLISS AND PCOLEMAN
COMMERCE FOR KBOYD
E.O. 12958: N/A
TAGS: ECON ETRD MZ
SUBJECT: MOZAMBIQUE: RESPONSE ON WTO SERVICE NEGOTIATIONS
INFORMATION REQUEST

REF: STATE 176381

1. (U) On October 6, Emboff discussed Mozambique's stance on
WTO service negotiations with Ministry of Industry and
Commerce National Director Luis Sitoe. Sitoe informed that
Mozambique has not stated that its submission of a revised
services offer is linked to negotiations of other aspects of
the Doha Round, such as agriculture or non-agricultural
market access. Sitoe stated that Mozambique would be
prepared to table offers in services while awaiting movement
in other areas. Mozambique's only significant commitment at
present is in the banking sector, which was made some years
ago.


2. (U) Sitoe stated that relevant ministries (i.e. Tourism,
Agriculture, Public Works, Health, Transport, Communications,
etc.) will play a key role in decisions on service
negotiations, as will the remaining major parastatals,
including those operating in the airline, airport, rail,
port, and fixed line communication sectors. According to
Sitoe, all interested parties would have to agree to offers
in their respective area before they could be offered up in
the WTO. The legislature would not play a significant role.


3. (SBU) There is a significant constituency within the
ruling Frelimo party that believes the remaining parastatals
should remain at least under partial state control, even if
some limited private management or concessioning is allowed.
Tourism and construction are already fairly open to private
ownership and control, while the health sector remains a
mixed system with much of the private provisions delivered or
owned by individuals with close connections to the Ministry
of Health.


4. (SBU) Comment: The parastatals are not likely to retreat
quietly from the service sector in Mozambique, and some have
considerable political influence, particularly those
operating in the port, rail, airline and energy sectors. The
political establishment guards its privileges carefully,
sometimes implementing measures that can serve to impede
investment (e.g. making it difficult for qualified outsiders,
whether foreign or Mozambican, to get licenses in sensitive
areas). Further complicating the issue, the GRM has paid
little attention to the services question in preparation for
Hong Kong, as it has yet to fully understand what advantages
can be gained by making services offers. A convincing
argument will need to be made as to the benefits of trade in
services, if we hope to engage Mozambique in this area.
DUDLEY