VZCZCXYZ0003
RR RUEHWEB

DE RUEHLGB #1047/01 3071122
ZNR UUUUU ZZH
R 031122Z NOV 06
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC 3406
INFO RUEHJB/AMEMBASSY BUJUMBURA 1569
RUEHDR/AMEMBASSY DAR ES SALAAM 0768
RUEHKM/AMEMBASSY KAMPALA 1472
RUEHKI/AMEMBASSY KINSHASA 0135
RUEHNR/AMEMBASSY NAIROBI 0647
RUEHFR/AMEMBASSY PARIS 0155
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUCPDOC/DEPARTMENT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS KIGALI 001047 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT PLEASE PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: ECON EINV ETRD PREL RW
SUBJECT: FIRST TIFA COUNCIL MEETING IN KIGALI 
 
 
¶1.  (U) Summary.  Deputy United States Trade Representative 
Ambassador Karan Bhatia led the USG delegation to the 
first-ever Trade and Investment Council Meeting held in 
Kigali on October 31.  Discussions covered such topics as the 
WTO DOHA round of negotiations, AGOA and bilateral trade, 
trade capacity building, investment promotion, and 
infrastructure.  Bhatia and the Rwandan delegation head, 
Commerce Minister Protais Mitali, agreed upon a 15-point 
workplan, and issued a communique which expressed firm 
intentions to intensify cooperation, including quarterly 
reviews of progress on the Work Plan, the hosting of an AGOA 
national workshop in Kigali in early 2007, and preliminary 
discussions on a possible Bilateral Investment Treaty. (Note: 
Work Plan and Communique are attached at end of this cable). 
End Summary. 
 
¶2. (U) Ambassador Bhatia, accompanied by AUSTR for Africa 
Florie Liser, AUSTR for Trade Capacity Building Mary Ryckman 
and other USTR personnel, and joined by Ambassador Arietti, 
USAID Director Mullally and other embassy and 
regionally-based USDA and USAID officers, met with the 
Rwandan delegation for a full day of discussion in Kigali. 
Minister Mitali was accompanied by the Rwandan Ministers or 
Ministers of State for Energy, Agriculture, Lands and 
Environment, Industry and Investment Promotion, and Foreign 
Affairs and Cooperation, two Presidential  Advisors (Great 
Lakes Envoy Ambassador Sezibera and NEPAD/MCC Advisor Francis 
Gatare) as well as officers of various governmental and 
business entities, including the Rwandan Investment and 
Export Promotion Agency (RIEPA), the Rwanda Private Sector 
Federation, the Rwanda Bureau of Standards, and the Rwanda 
Environmental Management Agency. 
 
¶3.  (U) The two delegations initially reviewed the proposed 
Work Plan, including such items as identification of trade 
barriers, improved customs procedures, consultation on AGOA 
implementation, protection of intellectual property rights, a 
strengthened financial sector, and capacity building.  The 
two sides agreed that the Work Plan as approved should be a 
dynamic and flexible document, to be refined and updated as 
circumstances dictated. 
 
¶4.  (U) The delegations then examined the WTO Doha 
negotiations, with Ambassador Bhatia expressing USG 
commitment to an ambitious, markete-opening outcome, 
including in the area of agriculture. The Rwandan delegation 
pledged continued support for a reinvigorated Doha process 
and flexibility on all sides, and also indicated its support 
for the USG position on the sectoral on drugs and medical 
devices. 
 
¶5.  (U) Regarding AGOA and bilateral trade, the Rwandan 
delegation conveyed its continuing efforts to increase the 
small level of AGOA trade, noting several obstacles:  limited 
production capacity, high transport costs, uncertain energy 
supplies, and capacity limitations regarding standards and 
required documentation.  Some successes were noted, 
particularly the sale of 200,000 baskets to Macy's and the 
development of the specialty coffee sector (NB: the 
delegation had an excellent trip to a coffee-washing station 
outside Kigali to see processing of coffee now being exported 
to the U.S. market).  The USG delegation urged intensified 
effort toward export diversification and targetted value 
addition, and offered the U.S. organics market as a possible 
opportunity.  Value-added products such as leather, jewelry 
and essential oils appeared to be possible areas for export 
development. 
 
¶6.  (U) On trade capacity, the Rwandan delegation noted 
ongoing constraints, including outdated legal and regulatory 
frameworks, an over-reliance on subsistence agriculture, 
limited access to capital, and the low volume and low value 
of the limited number of export products Rwanda produces. 
The USG delegation offered continued and focused 
collaboration on Rwanda's financial sector, regional 
integration of markets, identification of niche markets and 
appropriate products for the U.S. market, and assistance with 
skills development and standards upgrades. 
 
¶7.  (U) In assessing the business environment, RIEPA Director 
General Nkurunziza offered a spirited and ambitious reform 
agenda with a pro-private sector emphasis, including reform 
of RIEPA itself, a streamlined fee schedule for customs and 
warehousing clearance, labor law reform, the setting-up of 
commercial courts, a strengthened arbitration center, a new 
Commercial Registration Agency to assist with new business 
registration, new business laws almost completed, reform of 
the IPR regime, and a continued commitment to privatization. 
He offered Rwanda's vision of itself as a future regional 
services and trading center, serving a growing regional 
population with Rwanda as a hub for investment, transport and 
communications.  Ambassador Bhatia replied that a "gold 
standard" investment regime, such as that offered by the 
possible US-Rwanda Bilateral Investment Treaty (BIT), was key 
to attracting investment to Rwanda, and would help to ensure 
such things as free flow of capital and clear arbitration 
rules for disputes.  He noted that invesstment negotiators 
from State and USTR would be conducting exploratory 
discussions on a BIT with Rwandan counterparts on November 
1-2.  Ambassador Arietti added that while Rwanda had clearly 
adopted a reform agenda, it must not measure itself simply 
according to its own past performance, but rather as compared 
to the reform efforts of its regional competitors.  You may 
be improving, he said, but you must assess whether or not 
your neighbors are improving faster and more comprehensively. 
 
¶8.  (U)  In a brief discussion of goverance issues and 
Millenium Challenge Corporation assessment of GOR progress, 
Ambassador Sezibera announced the recent creation of a 
Governance Advisory Council, composed of representatives from 
public, private, civil society and faith-based organizations, 
to assist the GOR in expanding political space and reviewing 
its performance. 
 
¶9. (U) Finally, on infrastructure, the Rwandan delegation 
offered a balanced presentation of current limitations and 
opportunities within various sectors, noting the possibility 
for investment and growth in the energy, IT and transport 
areas.  The delegation discussed at some length its plans for 
a second international airport, as well as new roads, a 
possible rail link to western Tanzania, and hydro and thermal 
power plant possibilities.  We are ambitious, said Lands and 
Environment Minister Bazivamo, but we are realistic.  AUSTR 
Liser welcomed the Rwandan delegation's presentation, 
replying that Rwanda must make focused choices on 
infrastructure projects, and appeared prepared to do so. 
 
¶10.  (U) As a summary of the day's discussions from the USG 
side, Ambassador Bhatia noted approximately a dozen points of 
agreement and/or follow-on activities, including: 
--quarterly review of the Work Plan by Bhatia and Mitali 
--an early 2007 AGOA workshop in Kigali 
--a visit from the East and Central Africa Global 
Competitiveness Hub before the end of the year to discuss 
AGOA Category 9 certification (for handloomed goods). 
--opening discussions on a possible Bilateral Investment 
Treaty 
--identification of USTR Africa Director William Jackson and 
RIEPA Director General Williams Nkurunziza as POCs for TIFA 
matters. 
--continual consultations aimed at advancing the Doha 
negotiations and, specifically, the NAMA drugs and devices 
sectoral. 
 
¶11. (SBU) Comment.  The breadth of participation (several 
dozen senior Rwandan officials in attendance) and focused 
presentations by the Rwandan side impressed us.  Their 
clear-eyed vision of Rwanda, small, rural, and far from 
established trading hubs, but possessed of strategic outlook 
and a committed government, suggests that it will make the 
most of the TIFA framework and follow-on activities.  End 
comment. 
 
¶12. (U) Text of Communique: 
 
Communique from the Governments of the United States and the 
Republic of Rwanda regarding the October 31 Meeting of the 
U.S.-Rwanda Trade and Investment Council 
 
The first meeting of the U.S.-Rwanda Trade and Investment 
Council, under the terms of the June 2006 U.S.-Rwanda Trade 
and Investment Framework Agreement (TIFA), took place in 
Kigali, Rwanda on October 31, 2006.  The meeting was led on 
the Rwandan side by Minister of Commerce, Industry, 
Investment Promotion, Tourism, and Cooperatives Protais 
Mitali and on the U.S. side by Deputy U.S. Trade 
Representative Karan Bhatia.  Each delegation also included 
representatives from several other trade-related agencies 
within each respective government. 
 
Among the major agenda items covered during the day-long 
discussion were the World Trade Organization,s Doha Round of 
global trade negotiations; enhancing Rwanda,s use of 
opportunities available under the African Growth and 
Opportunity Act (AGOA); trade capacity building assistance; 
measures to improve the business environment and increase 
investment flows; ways to enhance U.S.-Rwanda investment; and 
issues related to trade-related infrastructure. 
 
The two sides agreed on the need to intensify cooperation on 
means to develop, increase, and diversify U.S.-Rwandan trade. 
 The two sides will collaborate in developing the program for 
a U.S.-sponsored AGOA National workshop for Rwanda, to be 
held in early 2007.  They will also deepen consultation on 
priority trade capacity building activities and on specific 
measures to improve the business environment and to promote 
trade linkages between our two private sectors.  They 
confirmed their intent to explore a possible Bilateral 
Investment Treaty between the two countries and jointly look 
forward to discussions on this topic to be held in Kigali 
later this week.  They also discussed existing and 
prospective activities and technical assistance related to 
improving Rwanda,s trade-related infrastructure.  Finally, 
the two sides agreed on the urgent need to breathe new life 
into the Doha negotiations and to work together toward an 
ambitious, market-opening outcome that sparks new global 
trade flows and promotes economic growth and development, 
especially among developing countries.  They agreed on the 
need to maintain momentum in sectoral negotiations, and 
Rwanda agreed in particular to undertake its best efforts to 
support the sectoral on pharmaceuticals and medical devices. 
 
At the outset of the meeting, the two sides agreed on a 
15-point workplan to guide ongoing work under the TIFA in the 
run-up to the next meeting of the Council in approximately 
one year.  They agreed to identify specific action items and 
establish priorities in the workplan and to develop quarterly 
status reports on progress on these action items.  In 
general, the two sides agreed to use the TIFA process to 
coordinate and leverage ongoing as well as future trade- and 
investment-enhancing initiatives in the two countries. 
 
Both parties agreed that the excellent discussions and 
subsequent agreement on next steps not only contributed to a 
very successful first meeting of the U.S.-Rwanda TIFA 
Council, but laid the groundwork for enhanced U.S.-Rwandan 
trade and investment under the TIFA as we move forward. 
 
End text. 
 
¶13.  (U).  Text of Work Plan: 
 
Workplan for the Trade and Investment Framework Agreement 
Between the Government of the United States of America and 
the Government of the Republic of Rwanda 
 
 
The Government of the United States of America and the 
Government of the Republic of Rwanda will endeavor to work 
cooperatively on the following priorities under their Trade 
and Investment Framework Agreement: 
 
¶1. Developing and implementing government policies that 
foster increased trade and investment between the 
   two nations; 
 
¶2.  Identifying market entry barriers and jointly working to 
eliminate them with a view toward increasing 
    trade; 
 
¶3.  Improving customs procedures, enforcement, and trade 
facilitation; 
¶4.  Coordinating and consulting on AGOA implementation, 
including the encouragement of value-added 
    production and trade diversification; 
 
¶5.  Coordinating and consulting on issues and positions in 
multilateral trade negotiations, including in 
    the World Trade Organization; 
 
¶6.  Promoting and facilitating private sector contacts and 
exchanges; 
 
¶7.  Promoting and protecting intellectual property rights; 
 
¶8.  Improving technical regulations and standards, including 
sanitary and phytosanitary (SPS) measures; 
 
¶9.  Improving regulatory, commercial, competition, labor, and 
environmental legislation, policy, 
    and enforcement; 
 
¶10. Strengthening agricultural trade and agribusiness 
linkages; 
 
¶11. Developing and strengthening the financial sector and 
improving access to trade finance, including 
    the promotion and protection of investment and 
encouraging investment flows; 
 
¶12. Promoting trade in services, including tourism and ICT; 
 
¶13. Promoting transparency and working to eliminate bribery 
and corruption in business transactions; 
 
¶14. Improving and developing trade-related infrastructure, 
including transportation and energy. 
 
¶15. Identifying priority capacity building needs relating to 
the above items, and furthering efforts to 
    address those needs. 
 
As agreed at TIFA Council meeting 31 October 2006 
 
End text. 
 
¶14.  (U) This cable was cleared by USTR. 
 
ARIETTI