VZCZCXRO2094
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #1545/01 3340450
ZNR UUUUU ZZH
R 300450Z NOV 06
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 6498
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLMC/MILLENNIUM CHALLENGE CORP  0124
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/DEPT OF LABOR WASHDC

UNCLAS SECTION 01 OF 03 MAPUTO 001545 
 
SIPDIS 
 
SIPDIS 
 
AF/S FOR HTREGER AND JMALONEY 
USTR FOR PCOLEMAN 
JOHANNESBURG TDA FOR DSHUSTER 
USDOC FOR RTELCHIN 
MCC FOR SGAULL 
USAID FOR AA/AFR AND AFR/SA 
 
E.O. 12958: N/A 
TAGS: ECON EAID EINV ETRD MZ
SUBJECT: U.S. - Mozambique Trade Investment Framework 
Council Talks 
 
MAPUTO 00001545  001.2 OF 003 
 
 
-------- 
SUMMARY 
-------- 
 
¶1.  (U) Summary.  Assistant United States Trade 
Representative (AUSTR) Florizelle Liser led an interagency 
visit to Mozambique October 16 through October 18.  The 
purpose of the visit was to conduct the first bilateral 
Council on Trade and Investment (TIFA Council) under the 
Trade Investment Framework Agreement (TIFA) signed in June 
¶2005.  In addition to the TIFA Council meeting, the 
delegation held bilateral talks, a joint press conference 
with the Minister of Industry and Commerce and met with the 
private sector to discuss trade facilitation and business 
environment issues.  The delegation included USTR Director 
for African Affairs Patrick Coleman, Millennium Challenge 
Corporation Country Director Stephen Gaull, Department of 
Commerce Pretoria Senior Commercial Officer Craig Allen, 
U.S. Trade and Development Agency Manager for Sub-Saharan 
Africa Doug Shuster, USDA Pretoria Agricultural Counselor 
Scott Reynolds, and State/AF/EPS Officer Janet Potash. 
During the TIFA Council the TIFA Workplan was reviewed and a 
joint summary of the meeting agreed upon.  End Summary. 
 
----------------- 
THE TIFA COUNCIL 
----------------- 
 
¶2.  (U) On October 16, AUSTR Liser and Mozambique's Minister 
of Industry and Commerce, Antonio Fernando, opened the 
bilateral TIFA Council, both stressing the bilateral trade 
potential between the United States and Mozambique, progress 
made to date on the business environment in Mozambique and 
the desire of both parties to continue Mozambique's economic 
growth through bilateral cooperation and assistance. 
 
¶3.  (U) After the opening remarks AUSTR Liser and Ana Maria 
Raquel, Permanent Secretary, Ministry of Industry and 
Commerce, shared positions on Doha, with the AUSTR 
encouraging Mozambique to take a more active role in the 
World Trade Organization.  Following the Doha discussion, 
the MCC's Stephen Gaull and Emilio Muchanga, Head of the 
Mozambican government's MCC Technical Unit then presented an 
update and trade-related highlights of progress towards a 
MCC Compact with Mozambique. 
 
¶4.  (U) The bilateral team reviewed the TIFA Workplan, as 
well as progress made in implementing the TIFA, highlighting 
programs and reforms undertaken by Mozambique as well as 
technical assistance and programs implemented by the United 
States. A USAID Maputo representative emphasized USAID's 
activities supporting and improving the environment for 
investment and trade, including long-term technical 
assistance, capacity building and sector-specific programs. 
 
¶5.   (U) During the closing session of the TIFA Council, 
AUSTR Liser emphasized the importance of focusing on 
specific key sectors and/or products for export development 
and assistance and the opportunities provided under AGOA for 
processed products.  (Note.  AGOA offers greater margins for 
processed products, as opposed to raw products, as non-AGOA 
countries generally face higher tariffs on processed 
products.  End note.)  Minster Fernando stressed 
Mozambique's need for greater technical assistance, 
including assistance in identifying and supporting 
appropriate sectors and products for the regional and US 
markets. 
 
¶6.  (U) At the conclusion of the TIFA Council on the 
afternoon of October 17, AUSTR Liser announced a USD 750,000 
program focused on facilitating and simplifying trade in 
Mozambique via streamlining the import and export process. 
This program, funded under the President's African Global 
Competitiveness Initiative and implemented by USAID, aims to 
cut import and export times in half within two years. 
 
¶7.   (U) Immediately following the TIFA Council meetings, 
AUSTR Liser and Minister Fernando held a well-attended joint 
press briefing that resulted in several media reports on the 
TIFA Council and US trade-related support to Mozambique. 
 
--------------------------------------------- -- 
 
MAPUTO 00001545  002.2 OF 003 
 
 
PRIVATE SECTOR ROUNDTABLE AND IPR PRESENTATION 
--------------------------------------------- -- 
 
¶8.  (U) During the afternoon of October 16, AUSTR Liser and 
Permanent Secretary Raquel led a bilateral roundtable with 
the private sector to discuss investment promotion and the 
business environment.  The roundtable was well attended by 
members of the private sector, who raised general 
observations regarding doing business in Mozambique and an 
overall desire to increase exports, including to the United 
States. 
 
¶9.  (U) Lance Khumalo, General Director of Unilever 
Mozambique and Fernando Santos of the Mozambican 
Intellectual Property Institute each gave a presentation on 
the status of the protection of Intellectual Property Rights 
(IPR) in Mozambique.  Both stressed the importance and 
effectiveness of the IPR Task Force, a joint endeavor by the 
private sector and government, in addressing ongoing IPR 
issues.  The cross-functional taskforce is comprised of the 
Ministry of Industry and Commerce, Ministry of Finance, 
Ministry of Interior, Ministry of Justice, Trade Marks 
Office, a private law farm and representatives from the 
private sector. 
 
--------------------------------------------- -- 
BILATERAL MEETING AND DINNER WITH THE MINISTER 
--------------------------------------------- -- 
 
¶10.  (U) On the evening of the October 16 the Ministry of 
Industry and Commerce hosted a dinner for both delegations 
following a bilateral meeting between AUSTR Liser and 
Minister Fernando.  Charge d'Affaires Elizabeth Raspolic and 
Patrick Coleman also participated in the bilateral. During 
the bilateral meeting, Minister Fernando and AUSTR Liser 
reviewed the TIFA Council discussions that occurred during 
the day, including progress on the workplan. AUSTR Liser 
also reported on her discussions that day with the 
Mozambican private sector. The dinner party included all 
members of both delegations as well as working level 
representatives from the Ministry of Industry and Commerce 
and the US Mission, creating an opportunity to discuss trade 
and investment issues in a more informal environment while 
strengthening working relationships. 
 
-------------------------------------------- 
BILATERAL MEETING WITH PRIME MINISTER DIOGO 
-------------------------------------------- 
 
¶11.  (U) On the morning of October 17 AUSTR Liser and Deputy 
Chief of Mission James Dudley attended a bilateral meeting 
with Mozambican Prime Minister Luisa Diogo and Minister 
Fernando.  AUSTR Liser noted that the United States has 
TIFAs with only a few key countries in Africa and emphasized 
the importance of identifying specific sectors and products 
for export development and assistance.  AUSTR Liser also 
mentioned the presentation she received on IPR issues and 
suggested that President Guebuza and Minster Fernando could 
use their pending visit to China to stress the problems 
presented by Chinese counterfeit products in Mozambique. 
 
¶12.  (U) Prime Minister Diogo praised USAID's support of 
CTA, the umbrella organization representing the private 
sector in Mozambique.  She also mentioned her hope that AGOA 
would be extended by the US Congress and stressed that 
Mozambique is on a positive path, citing macroeconomic 
stability, low inflation, a successful currency change, and 
the government's steps towards disaster readiness. 
 
--------------------------------------------- --------- 
PRIVATE SECTOR MEETINGS, SITE VISITS AND CCMUSA LUNCH 
--------------------------------------------- --------- 
 
¶13.  (U) After the meeting with the Prime Minister, AUSTR 
Liser and the delegation visited the Port of Maputo and met 
with the port concessionaire Maputo Port Development Company 
(MPDC).  Peter Lowe, CEO of MPDC, gave a presentation to the 
delegation highlighting the progress made at the port since 
MPDC took over operations in 2003.  However, he also 
emphasized the strain recent governmental decisions 
regarding scanning and the cost recovery plan to pay for 
scanning operations have placed on the private sector.  He 
 
MAPUTO 00001545  003.2 OF 003 
 
 
stressed his concern that the current situation would 
translate into decreased trade flow through Mozambique and 
eventual closure of the port.  (Note.  Additional 
information regarding the scanning debate in Mozambique will 
follow septel.)  In addition, Mr. Lowe discussed the 
critical role of the Maputo Corridor, which extends from 
Mpumalanga Province in South Africa to the Port of Maputo, 
in increasing trade and the need for a twenty-four hour 
border and rehabilitated railway line. 
 
¶14.  (U) After the port of Maputo, the delegation visited 
Maputo Clothing Company, the only apparel company in 
Mozambique currently exporting to the United States under 
AGOA.  Frank Roomer, CEO of Maputo Clothing Company, shared 
his belief that it is possible to successfully make apparel 
in Mozambique, but that there is a need to simplify customs 
procedures and to diversify market outlets both regionally 
and in the United States. 
 
¶15.  (U) The Mozambican-American Chamber of Commerce 
(CCMUSA) hosted a lunch for the delegation, allowing AUSTR 
Liser and delegation members to hear from Mozambican 
businessmen and women regarding their individual 
experiences.  Henk Son, President of CCMUSA, expressed the 
importance of the bilateral relationship and US technical 
assistance in Mozambique's continued economic growth.  A 
recurring theme throughout the lunch was the difficulty 
faced by Mozambican businesses in identifying appropriate 
sectors and products for export and the need for greater 
technical assistance and support in securing committed 
purchasers. 
 
----------- 
COMMENT 
----------- 
 
¶16.  (U) The TIFA Council, bilateral meetings and private 
sector interaction reinforced the ongoing positive business 
and trade relationship between the United States and 
Mozambique.  AUSTR Liser utilized this visit to stress the 
importance of Mozambique's continued commitment to improving 
the business environment and the critical assistance 
provided by the United States to help ensure progress and 
success.  Mozambique's stated commitment to increasing 
exports was exemplified by its progress on several TIFA 
Workplan elements and its desire to continue the working 
relationship with the United States and its agencies on 
capacity and technical issues.  As evidenced by existing 
concerns within the private sector, there is still much more 
work to be done; there is little doubt however that the 
United States will continue to support Mozambique in its 
efforts to move forward.  End Comment. 
 
17.(U) USTR has cleared this cable in draft. 
 
Dudley