THE U.S.-MOZAMBIQUE BILATERAL INVESTMENT TREATY

UNCLAS MAPUTO 000159

SIPDIS
DEPT FOR L/T - ZYLMAN, L/EB - SVAT AND BLANCK, AF/S -
TREGER, EB/IFD/OIA - ROCHE
DEPT OF COMMERCE FOR MOZAMBIQUE DESK OFFICER - RTELCHIN
DEPT OF LABOR FOR ILAB - PWHITE AND RYOUNG
MCC FOR GAULL
DEPT PASS TO CORPORATE COUNCIL ON AFRICA - TMCCOY
DEPT PASS TO USTR - PCOLEMAN AND JSHRIER
JOHANNESBURG PASS TO FCS - RDONOVAN
JOHANNESBURG PASS TO USTDA - JBELL
E.O. 12958: N/A
TAGS: EINV ETRD ECON BEXP MZ BIT
SUBJECT: THE U.S.-MOZAMBIQUE BILATERAL INVESTMENT TREATY
(BIT) FINALIZED

REF: A. 01 STATE 44940

B. EXCHANGE OF INSTRUMENTS OF RATIFICATION MEMO
(01/25/05)


1. On February 1 Ambassador La Lime and Mozambican Minister
of Foreign Affairs and Cooperation Leonardo Santos Simao
signed the Protocol of Exchange for the instruments of
ratification of the US-Mozambique Bilateral Investment
Treaty. The US-Mozambique BIT, formally known as the
"Treaty Concerning the Encouragement and Reciprocal
Protection ofInvestment" was signed earlier in Washington
by both parties on December 1, 1998, ratified by the US
Senate in November 2000 and ratified by the Mozambican
Council of Ministers in December 2004. With the
ratification instruments now exchanged, the Treaty enters
into force on March 3, 2005.


2. Bringing the BIT into force is an important step forward
for investment and trade between the US and Mozambique.
The BIT offers US investors greater protection for their
investments and should therefore increase US investor
interest in Mozambique. Total flow of US foreign direct
investment (FDI) in Mozambique in 2004 was USD 860,000,
making the US only the 17th largest foreign investor.
South Africa continues to lead, investing USD 58.5 million
in 2004 alone. The value of US exports to Mozambique in
2004 (January-November) totaled USD 49 million. US import
values from Mozambique for the same period totaled USD 10
million. The US Trade Representative is considering
working with the GRM this year to create a Trade and
Investment Framework Agreement (TIFA) to further strengthen
the bilateral trade relationship.


3. Post is sending via registered pouch the Mozambican
instrument of ratification and the US original of the
Protocol of Exchange to the Office of the Assistant Legal
Adviser for Treaty Affairs in the Department (ref B).
LALIME