VZCZCXYZ0007
PP RUEHWEB

DE RUEHRY #0438/01 1091620
ZNR UUUUU ZZH
P 191620Z APR 07
FM AMEMBASSY CONAKRY
TO RUEHC/SECSTATE WASHDC PRIORITY 0981
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUEHZK/ECOWAS COLLECTIVE

UNCLAS CONAKRY 000438 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR AF/W, AF/EPS 
PLEASE PASS TO AID/AFR 
TREASURY FOR OFFICE OF AFRICAN NATIONS 
 
E.O. 12958: N/A 
TAGS: ECON PREL PGOV ELAB PINS GV
SUBJECT: GUINEA'S EXPORT BAN RELAXED 
 
REFS: (A) Conakry 129 
      (B) Conakry 392 
 
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Summary 
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¶1.  (U) In brokering a suspension of the general strike that 
crippled Guinea beginning in January 2007, the former Guinean 
government agreed to questionable economic concessions, including a 
ban on agricultural exports. Initially scheduled to last through 
December 2007, the export ban has proved unsustainable (Ref A).  In 
a series of recent meetings with the labor unions, the "Patronat" 
(Guinea's employers union), and an informal council of prominent 
merchants, the new government negotiated a compromise that relaxes 
the export ban and generally satisfies all negotiating parties. 
This revision of the export ban agreement should strengthen economic 
stability as Guinea begins to respond more to market forces.  End 
Summary. 
 
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EXPORT BAN PROVES UNTENABLE 
--------------------------- 
 
¶2.  (U) On January 27, the former government of Guinea, the labor 
unions, and the Patronat signed a tripartite accord to suspend the 
general strike then paralyzing the country.  That agreement, which 
still forms part of the underlying deal amongst the parties now that 
a new government in place, included a ban on export or re-export of 
fuel and agricultural and seafood products (Ref A).  On March 24 and 
April 12, representatives of the labor unions, the Patronat, and 
GOHA, Guinea's largest association of private businessmen, met with 
the new Minister of Commerce, Mamady Traore, and Minister of 
Agriculture, Mamadou Camara, to discuss a revision of the ban.  All 
parties agreed that the initial benefits of domestic abundance had 
proved useful during and after Guinea's crises earlier this year. 
They also agreed that since Guinea is no longer operating in a 
crisis mode, a longer-term trade strategy is necessary, and the 
trade ban should be repealed.  They disagree on the details of the 
scope of the export ban repeal and the timeline. 
 
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GOVERNMENT AND MERCHANTS AGREE ON FULL REPEAL 
--------------------------------------------- 
 
¶3.  (SBU) On April 16, Econoff spoke with Mohamed Cheriff, president 
of GOHA.  Cheriff said the government representatives share GOHA's 
opinion that the ban should be completely repealed.  Cheriff said 
the Minister of Commerce was particularly concerned that the export 
ban breaches ECOWAS, Mano River Union and WTO protocols.  Cheriff 
said union and Patronat representatives understand the larger trade 
issues, but feel the "immediate needs of the Guinean people" are 
more important than any perceived violations of trade accords. 
 
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LABOR UNIONS AND PATRONAT FAVOR GRADUAL REPEAL 
--------------------------------------------- - 
 
¶4.  (SBU) According to Cheriff, representatives of the labor unions 
and Patronat agreed to again export sweet potatoes, peppers, eggs 
and certain seafood.  They refused to cede products the unions 
consider "staples of the Guinean people" such as rice, palm oil, 
beef, poultry, and all other fruits and vegetables.  Cheriff said he 
suspects the Patronat representatives favor full repeal, but are 
hesitant to counter the unions' position. 
 
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GUINEANS SEE NO INCREASED PURCHASING POWER 
------------------------------------------ 
 
¶5.  (SBU) The unions maintain the export ban is necessary in order 
to stabilize prices. The Guinean franc (GNF) has maintained its 
recent gains and has traded near 4000 GNF:1 USD for the past week 
(Ref B).  Although the GNF is valued some 30 percent higher than its 
average 2006 rate of 5200 GNF:1 USD, average goods in the market are 
not significantly cheaper throughout the country.  Guinea's fertile 
interior has an abundance of produce, partially because of the 
export ban, and partially because it is now harvest season for much 
local produce.  Despite this abundance, prices for local produce 
have not been substantially reduced. 
 
¶6.  (U) Imported goods, including most of the commercially available 
rice, remain expensive because they were purchased in hard currency. 
 Cheriff said consumers understand why foreign goods remain 
expensive, and grudgingly accept high prices for foreign goods. 
However, many merchants are at a loss to explain to consumers why 
domestic goods are not significantly less expensive if the official 
GNF is truly stronger as the new exchange rate suggests. 
 
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COMMENT 
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¶7.  (SBU) By addressing the export ban, the new Guinean government 
has tackled the issue of economic stability and wisely brought all 
major players to the negotiating table.  The government has allowed 
the unions who brokered the export ban to follow its repercussions 
to their logical end, and in doing so garnered their support.  While 
the government is likely mindful of the political clout the unions 
wield, the approach is reflective of what seems to be this 
government's general consultative manner.  We are not sure if a full 
repeal of the export ban is imminent, but it is clear the government 
favors that and may achieve it through political adeptness. 
 
MCDONALD