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