WILL THE DRC BUY WHAT COMESA IS SELLING?

UNCLAS KINSHASA 000230 SIPDIS SENSITIVE SIPDIS TREASURY FOR WJACKSON E.O. 12958: N/A TAGS: ETRD ECON EAID EMIN PGOV CG SUBJECT: WILL THE DRC BUY WHAT COMESA IS SELLING? ¶1. (U) Summary. COMESA, the Common Market of Eastern and Southern Africa, continues its attempts to engage the DRC. COMESA's Deputy Secretary-General led a delegation to the DRC the week of January 23, with the primary purpose of appealing to GDRC officials to pay membership dues and join the customs' union and free trade area. Numerous political and administrative obstacles stall the GDRC's engagement in the economic activities of COMESA and other regional trade organizations. COMESA has also indicated it plans to send an observer mission for the DRC's national elections. End summary. ¶2. (SBU) A COMESA delegation came to Kinshasa in late January in yet another attempt to convince the DRC to participate in COMESA activities and pay its dues. COMESA's last visit was in November 2005. The January visit included high-level ministry meetings and a workshop on the COMESA free trade zone. COMESA's Deputy Secretary General emphasized the importance of the DRC's taking advantage of AGOA opportunities, elimination of trade barriers, economic liberalization, and good governance, including regulatory reform and institutional strengthening. ¶3. (U) Although the DRC is officially a COMESA member, it does not pay dues, and engaging the DRC in COMESA has been challenging because of political and administrative obstacles. On a political level, COMESA has had difficulty obtaining a more substantive commitment from the DRC beyond a general agreement to participate. ¶4. (U) Administratively, COMESA is often unable to obtain needed data, such as trade statistics, from the DRC. Technical-level civil servants have even questioned the COMESA Secretary General's statement that the GDRC had committed itself to participation; some requested the meeting minutes that evidenced the GDR's commitment. ¶5. (SBU) There are unlikely to be short-term benefits for the DRC in joining COMESA's existing free trade area and its customs union, the latter of which is planned to begin in ¶2008. To date, more economically advanced COMESA countries, such as Egypt, have been the primary free trade beneficiaries. For example, Egypt's exports to Sudan have increased by USD 100 million since it joined the free trade area. Another reason the DRC has not committed itself to signing onto COMESA's free trade plan is that OFIDA, the Congolese national customs entity, is not able conclusively to calculate the impact of free trade on GDRC revenues; it is believed, however, that at least in the short term, the DRC would face revenue decreases, absent any offsetting income generating mechanism. ¶6. (U) Despite COMESA's full-court press, only general promises for future economic cooperation have thus far emerged from the visit. These include working towards increased agricultural production and marketing, and discussing implementation in the DRC of a COMESA-wide transport license to facilitate movement of goods within COMESA countries. ¶7. (U) The GDRC is a member of three regional trade organizations (SADC, COMESA and the Central African Economic and Monetary Community (CEMAC),but it does not engage substantially in any of these organizations' economic activities. A Ministry of Agricultural consultant told EconCouns, however, that CEMAC's tariff regime corresponds most closely to the GDRC's. During a February 7 meeting with EconCouns, Ministry of External Trade officials did not yet seem prepared to engage with any regional organization. ¶8. (U) The visit also had a political dimension as COMESA has indicated it will send a team to observe upcoming national elections. COMESA has had a program on peace and security since 1999, with a mandate to facilitate meetings of Ministers of Foreign Affairs from the region at least once every year to promote peace, security, and stability. COMESA submitted to USAID/REDSO in Nairobi, in an unsolicited proposal to support the costs of an observer mission, and USAID/REDSO has provisionally agreed to support the mission. MEECE NNNN