USTR DISCUSSES TIFA, TRADE ISSUES WITH EAC

UNCLAS DAR ES SALAAM 000933

SIPDIS

SIPDIS

DEPT FOR AF/E BYODER;
USTR FOR BJACKSON

E.O. 12958: N/A
TAGS: ETRD RW KE UG BU TZ
SUBJECT: USTR DISCUSSES TIFA, TRADE ISSUES WITH EAC


Proposed U.S. - EAC TIFA
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1. (U) On June 21, Bill Jackson, USTR Director of African
Affairs, discussed the proposed U.S. - East African Community
(EAC) Trade and Investment Framework Agreement (TIFA) and
other trade issues with EAC officials in Arusha. Peter
Kiguta, EAC Director General of Customs and Trade, and Flora
Musonda, EAC Director of Trade, stated that within the EAC
there remained questions at the expert level as to what the
TIFA entailed and how it would benefit the EAC. Jackson
explained the non-binding nature of the TIFA, and described
it as a "means of increasing our engagement" on trade and
investment issues. He further noted that the value and
benefits of the TIFA depend largely on what the TIFA partners
bring to the table in terms of issues and potential areas for
cooperation. He cited Rwanda, COMESA, and Mauritius as
examples of trade partners that the U.S. has engaged through
TIFA discussions with positive results. He encouraged Kiguta
and Musonda to consult with their counterparts in these
countries and in COMESA as they consider the TIFA, and they
indicated that they would do so. Jackson noted that while
the U.S. remains interested in a TIFA with the EAC, it was
not interested in undertaking an agreement for the sake of an
agreement and would wait to hear of the EAC's interest.


2. (U) Kiguta confirmed that the EAC members are currently
discussing a TIFA between the U.S. and the EAC itself, rather
than with the five individual EAC member states, as
originally proposed. Jackson explained that the U.S. had
prepared the text for signature with the EAC member countries
based on guidance provided by the trade ministers of Kenya
and Tanzania when the U.S. raised the prospect of a TIFA with
them in June 2006. In light of the new direction from the
EAC, he would look into the possibility of providing a
revised draft text reflecting the EAC as the signatory.
Musonda stated that the EAC members would continue to discuss
the TIFA, noting that with the recent expansion of the EAC to
five members, discussions had been moving slowly. She stated
that, if the U.S. could provide a revised draft text, the EAC
would seek to respond to it quickly, perhaps by as early as
August.


3. (U) COMMENT: Given the lack of movement on the proposed
TIFA by the EAC since fall 2006, the fact that the proposal
is still being debated at the expert level, and the EAC's
tendency to move slowly, it is unlikely that the EAC will
make any definitive decision on the TIFA soon, other than
perhaps a decision to continue discussing the TIFA proposal
with the U.S. However, the U.S. Embassy in Dar es Salaam has
begun an effort to raise interest in a TIFA at the State
House (presidential) level, so as to make Tanzania a champion
for an agreement with the EAC. END COMMENT.

Other Issues
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4. (U) In response to Jackson's request for an update on EAC
duties regarding used clothing, Musonda stated that action
was taken in the spring of 2005 to reduce the duty originally
proposed by the EAC, and that there were no plans to further
reduce the duty. Regarding EAC duties on almonds, Kiguta
explained that when the EAC Customs Union was established,
the EAC chose to include all nuts in a general category. He
claimed that it was not feasible -- and might even contravene
WTO commitments -- to subcategorize individual nut types in
separate tariff lines. Jackson said the doubted that any WTO
commitments would be violated by simply creating
product-specific tariff lines and urged Kiguta to re-examine
the categorization of almonds.


5. (U) Bill Jackson of USTR has cleared this cable.
RETZER