SENEGAL AGOA - INPUT FOR 2007 PRESIDENT'S REPORT

UNCLAS DAKAR 000583

SIPDIS

SIPDIS

STATE FOR AF/EPS, EB/TPP/BTA AND AF/W

E.O. 12958: N/A
TAGS: ETRD SG
SUBJECT: SENEGAL AGOA - INPUT FOR 2007 PRESIDENT'S REPORT

REF: STATE 022438


1. Following is embassy's input on Senegal for the 2007 President's
report on AGOA keyed to the template outlined in reftel and last
year's report as published by USTR. This text has also been
provided to AF/W and AF/EPS via e-mail.


2. Begin embassy input:

MARKET ECONOMY/ECONOMIC REFORM/ELIMINATION OF TRADE BARRIERS:
Senegal's economy is largely market-based but has suffered from
stagnation due serious declines in fishing, phosphate exploitation,
and petroleum refinement activity -- traditionally three of the
country's largest contributors to GDP. The current situation, based
largely on agriculture, public investments directed by the top
levels of government, consumption, and foreign assistance, does not
bode well for productivity or GDP growth in the near term. In late
2006, Senegal approved an Accelerated Growth Strategy aimed at
achieving at least a 7.5 percent growth rate by 2010, targeting the
agro-industry, fisheries, tourism, textile, and information
technology sectors. Foreign investors face an unstable regulatory
environment and weak commercial law enforcement due to a lack of
resources and specialized judicial expertise. Firms providing goods
and services to government entities frequently complain of delays in
payment. Senegal is a member of the International Center for the
Settlement of Investment Disputes under the Washington Convention.
The Government accepts binding foreign arbitration of investment
disputes and foreign creditors receive equal treatment in making
claims against liquidated assets under Senegalese bankruptcy law.
The Senegalese Civil Code provides national treatment and
non-discrimination against foreign-owned businesses' property
rights. Senegal's Agency for Export Promotion (ASEPEX),has yet to
make a significant impact expanding the country's trade linkages.
In November 2006, the U.S. Mission to Senegal participated in the
biannual Dakar International Trade Fair (FIDAK) by highlighting
trade opportunities available to Senegalese producers under AGOA.
The Dakar office of the USAID-funded West Africa Trade Hub has been
especially active in targeting increased regional and international
exports for Senegal's seafood and specialty foods. The Hub also
provides services to potential buyers via a database of West African
exporters.

POLITICAL PLURALISM/RULE OF LAW/ANTI-CORRUPTION: Senegal is a
vibrant democracy with no history of coups d'etat or military
government. In February 2007, President Wade was re-elected to a
new, five-year term through an electoral process widely considered a
fair reflection of the voters' wishes. In the southern Casamance
region, low-level, occasionally violent, separatist activity
continues despite the signing of a truce in December 2004. Senegal
is a signatory to the UN Anti-Corruption Convention. However,
corruption remains a counter-productive reality in Senegal, despite
some recent measures passed by the Government to strengthen rule of
law, transparency and anti-corruption programs. Through its
Financial Intelligence Unit, Senegal's Government is creating a
potentially useful anti-money laundering framework.

POVERTY REDUCTION: In April, 2006, Senegal's completed its latest
IMF program, and, as of early 2007, discussions on a possible
follow-on program had not yet begun. The Government of Senegal has
outlined anti-poverty allocations from USD 138 million in bilateral
and multilateral debt relief. However, a historic lack of public
expenditure reviews makes tracking actual anti-poverty spending
difficult. Senegal is continuing feasibility studies for a proposed
MCC compact to build a commercial/industrial platform 25 miles east
of Dakar. This ambitious, potentially transformative project is
designed to promote economic growth and alleviate congestion in the
capital, where 80 percent of Senegal's industry is based.

LABOR/CHILD LABOR: Senegal has ratified all eight of the ILO core
labor rights conventions including Convention 138 on minimum age and
182 on the worst forms of child labor. Although freedom of
association and the right to strike are recognized, many
restrictions remain, including the right to strike. By law all
workers, except for security forces, can form and join unions.
Collective bargaining agreements were negotiated and are generally
upheld. In the rural areas there was no enforcement of child labor
laws and children are involved in the worst forms of child labor in
the mining and rock quarry sectors. The Government generally
respected its citizens' rights but there were problems in some
areas. The Government made some improvements during the year. In
April 2005, the National Assembly passed a law prohibiting human
trafficking, and two Senegalese citizens were prosecuted for
trafficking in 2006. The ILO is working with the Senegalese
Government and civil society in support of Senegal's Timebound
Program on the Elimination of the Worst Forms of Child Labor.

JACOBS