CHAD PLEASED WITH U.S. SUBSIDY ELIMINATION,

UNCLAS NDJAMENA 000251

SIPDIS

SIPDIS

DEPT FOR AF, EB, USTR FOR BILL JACKSON, LONDON AND PARIS
FOR AFRICA WATCHERS

E.O. 12958: N/A
TAGS: EAGR ECON EFIN ETRD PGOV CD
SUBJECT: CHAD PLEASED WITH U.S. SUBSIDY ELIMINATION,
REQUESTS SUPPORT FOR COTTON SECTOR



1. SUMMARY: Following Hong Kong, Chad's Minister of Commerce
has expressed the GOC's approval for U.S. measures to
eliminate the Step 2 program, and provide technical
assistance for Chad and other cotton-producing countries.
Nevertheless, the GOC remains concerned by the rapid need to
improve the region's cotton sector, and hope to see more
ambitious technical assistance from the United States and
donor community. END SUMMARY.


2. On February 17, the Ambassador visited Minister of
Commerce Carmel Ngarbatina to discuss the GOC perspective on
Hong Kong, and formally inform her of the U.S. Congress'
decision to eliminate the Step 2 program. The Ambassador
relayed the hope by the U.S. that commitments to reduce
export subsidies on cotton could advance global negotiations
on overall agricultural subsidies before the conclusion of
the Doha round. Ngarbatina told the Ambassador that she and
the GOC were pleased with the decision made by the United
States to take a measure to assist impoverished African
cotton producers unable to compete with producers from the
United States and Europe. While the Minister stated that she
hoped to see a similar commitment by the United States in the
area of domestic support, Ngarbatina pointed out that she was
also happy to see the U.S. understanding of the impact of
reduced cotton prices on the quality of life for the African
farmer.


3. The Minister noted the GOC's hope for greater discussion
and cooperation with the United States on the reform of the
country's cotton sector. Ngarbatina explained that that
while Chad has emerged as a petroleum country, three million
citizens are dependent upon the cotton sector. She added her
concern that Chad, being the only Central African cotton
producer among the C-4 countries, is sometimes forgotten by
the United States when it comes to determining assistance and
technical support. The Minister said that she hoped a CODEL
similar to the recent visit by Representative Kolbe another
representatives to Senegal and Benin would be able to visit
Chad, and better understand the difficulties faced by Chadian
cotton producers. She added that the Ministry is working
with Nagoum Yamassoum, the coordinator for privatization
efforts for Chad's parastatal CotonTchad, to develop a series
of recommendations for the Embassy and other members of the
donor community for possible assistance to reform the cotton
sector.


4. The Ambassador pointed out that the United States has
already committed resources to not only the development of
the cotton sector, but also the improvement of the Central
African commercial environment. He referred specifically to
resources committed to West African Cotton Improvement
Initiative and the Cochran Program, and pointed to the USG
commitment to open a new trade hub in Dakar that would
possibly assist in training initiative for trades authorities
from Central African governments. The Minister welcomed
these initiatives, but stated that Chad needs more resources,
and initiatives to reform not only the cotton sector, but
also the overall private sector. She added that the GOC is
keen to establish greater commercial ties with the United
States, particularly in the context of AGOA, but needs
capacity-building measures to improve the environment for
enhanced cooperation between the two countries. This would
include assistance for infrastructure development, training
in English and technical skills, and the development of a
strong Chamber of Commerce. The Ambassador responded by
saying that while the United States can offer its support via
its commitments to the World Bank and IFC to such
capacity-building measures, the GOC also shares a level of
responsibility in creating a positive economic climate in the
country.


5. COMMENT: While the Chadians have positively received news
concerning the elimination of the Step 2 program, they will
undoubtedly continue to press for greater initiatives from
the U.S. to assist the development of the cotton sector. The
GOC may be willing to help in our efforts to further the
agricultural subsidies discussions, as long as there is a
continued commitment by donors to assist in reforming the

country's cotton sector.
WALL