VZCZCXRO2847
RR RUEHAG RUEHAP RUEHBZ RUEHDE RUEHDF RUEHDU RUEHGI RUEHHM RUEHJO
RUEHLZ RUEHMA RUEHPA RUEHPB RUEHRN
DE RUEHMR #0075/01 0721517
ZNR UUUUU ZZH
R 121517Z MAR 08
FM AMEMBASSY MASERU
TO RUEHC/SECSTATE WASHDC 3600
INFO RUCNSAD/SADC COLLECTIVE
RUCNWTO/WORLD TRADE ORGANIZATION COLLECTIVE
RUEHMR/AMEMBASSY MASERU 4015

UNCLAS SECTION 01 OF 03 MASERU 000075 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT ALSO FOR AF/EPS, AF/S; 
PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: ETRD ECIN ECON BEXP BTIO LT
SUBJECT: LEAST DEVELOPED COUNTRIES SOLIDIFY DOHA POSITIONS AT MASERU 
MINISTERIAL MEETING 
 
 
MASERU 00000075  001.2 OF 003 
 
 
¶1.  (U) SUMMARY:  The Kingdom of Lesotho's Ministry of Trade and 
Industry hosted a Least Developed Countries (LDC) Trade 
Ministers' Conference February 27-29 in Maseru.  During the 
conference, which produced a "Maseru Declaration" on LDC 
positions, trade representatives from 36 developing nations 
reviewed progress made in the Doha Development Agenda Round 
(DDA) since the most recent meeting of LDC's in 2005 and 
reaffirmed LDC positions.  The ministerial consisted of over 
three days of closed and open meetings, including an address by 
Lesotho Prime Minister Mosisili and LCD consultations with 
trading partners including the United States, the EU, and WTO 
Director General Lamy. Delegates deliberated a wide range of 
issues, including Duty Free Quota Free (DFQF) market access, 
Agriculture, Non-Agriculture Market Access (NAMA), Trade 
Facilitation, Trade in Services, and Trade Related Intellectual 
Property Rights (TRIPS).  The meeting concluded with an open 
dialogue with major trade negotiating partners and the issuance 
of the "Maseru Declaration" which largely reiterated and 
consolidated previous positions, and on some issues (like cotton 
and DFQF) continues to run counter to U.S. views. Deputy U.S. 
Trade Representative Ambassador Peter Allgeier made a statement 
effectively outlining the USG commitment to complete the DDA 
talks in 2008 and to work with LDCs -- especially Africans -- to 
address key issues including preference erosion, DFQF, cotton, 
trade facilitation, and Aid for Trade.   End Summary. 
 
--------------------------------------------- ----- 
Prime Minister Mosisili Encourages LDCs Graduation 
--------------------------------------------- ----- 
 
¶3.  (U) Lesotho Prime Minister Pakalitha Mosisili inaugurated 
the February 2008 meeting of LDC Trade Ministers, attended by 
Deputy U.S. Trade Representative Ambassador Peter Allgeier and 
A/USTR for Africa Florie Liser, by calling on the Least 
Developed Countries to undertake all available measures to 
graduate from their current LDC status.  Only through 
development and consolidation of the legal framework, private 
sector, and human capital, Mosisili declared, would LDCs be able 
to escape the scourges of "high unemployment...widespread abject 
poverty, and disease." 
 
¶4.  (U) Offering Lesotho as an example of a typical LDC, 
Mosisili detailed a number of challenges including potential 
loss of revenue due to tariff cuts, lack of diversification, and 
a low national savings rate.  Most importantly, he pointed out 
that the greatest challenges to achieving full integration of 
LDCs into the multilateral framework are supply-side constraints 
and other limitations to competitiveness.  Finally, Mosisili 
urged incorporation of targeted programs in the DDA, such as Aid 
for Trade and the Enhanced Integrated Framework to help LDCs 
address trade inequities. 
 
-------------- 
DDA Discussion 
-------------- 
 
¶5.  (U) H.E. Maruping, Lesotho Ambassador to the WTO, led the 
general working discussion of the DDA.  While Maruping stressed 
apparent progress in several key areas - such as NAMA and 
Agriculture - he also highlighted key questions facing the LDCs, 
i.e., the scope, speed, and substance of the negotiations.  In 
addition, Maruping questioned whether the LDCs should 
immediately emphasize the horizontal process or instead focus on 
specific negotiating areas such as rules and services. 
Regarding the speed of negotiations, Maruping suggested that 
member nations would have to decide if adherence to a fixed 
deadline trumped substance. 
 
¶6.  (U) A number of LDC representatives voiced concern regarding 
the slow progress on a number of issues, including DFQF, 
simplified rules of origin, special and differential treatment 
(S&D), and Special Safeguard Mechanisms (SSM) for Agriculture. 
Issues such as capacity building, Aid for Trade, and technical 
assistance often surfaced.  For example, Seriba Ouattara, the 
Ambassador to the WTO for Burkina Faso, pointed out to Embassy 
Maseru EconOff that for many reasons capacity building should be 
raised to the top of the agenda. 
 
----------- 
Agriculture 
----------- 
 
¶7.  (U) During the agricultural discussions, numerous 
representatives stressed that the working texts do not address 
the monitoring of DFQF preferences, arguing vociferously that 
these items should be included in the modalities.  Agreeing that 
developed countries' lists of sensitive products should include 
 
MASERU 00000075  002.2 OF 003 
 
 
products of export interest to LDCs - coupled with a longer 
implementation period of 15 years and with serious back-loading 
- LDC representatives noted agricultural preference erosion as a 
high priority.  (NOTE: Regarding preference erosion, most 
delegates also agreed that developing countries, as opposed to 
LDCs, may seek an implementation period longer than 15 years. 
END NOTE.)  Additionally, delegates reached consensus that both 
tropical and diversification products should be discussed 
together, as well as that export credits, international food 
aid, and state trading enterprise issues still remained on the 
table. 
 
------ 
Cotton 
------ 
 
¶8.  (U) LDC representatives appeared to unanimously agree that 
reduction of trade-distorting domestic support for cotton was a 
priority for all LDCs - not just the "Cotton Four" African 
producers (Mali, Burkina Faso, Benin, and Chad).  Therefore, 
conference delegates reflected this sentiment in the Maseru 
Declaration.  (NOTE: The LDC position is virtually the same as 
the Cotton Four position.  END NOTE.)  LDC representatives 
expressed frustration with the continued reluctance of the U.S. 
and the European Union to address their concerns on cotton 
(septel). 
 
---- 
NAMA 
---- 
 
¶9.  (U) LDC representatives discussed a number of 
Non-Agricultural Market Access (NAMA) subjects, such as the lack 
of certainty regarding coverage and timeliness for Duty Free 
Quota Free (DFQF) market access.  For example, delegates voiced 
concern that there was still no established monitoring mechanism 
regarding DFQF, i.e., its scope, the frequency of reviews, and 
how Rules of Origin are addressed.  (NOTE:  A number of 
representatives argued that DFQF market access without 
simplified Rules of Origin would be of little value to LDC 
exporters.  END NOTE.) 
 
¶10.  (U) Delegates sounded reservations regarding the 
elimination of certain tariffs - particularly fish and seafood 
products - arguing that such developments would be disastrous 
for a number of LDCs.  Echoing the concern raised by Lesotho 
Prime Minister Mosisili in his opening address, various 
delegates maintained the importance of duties as a source of 
revenue, economic development, and stability.  Other delegates 
stated that special considerations - or adjustments - regarding 
tariff reductions should be made for developing countries who 
are members of customs unions that include LDCs. 
 
¶11.  (U) Representatives also expressed concern that LDCs lacked 
capacity to grapple with Non-Tariff Barriers (NTB) affecting 
their exports, some noting challenges with meeting sanitary and 
phytosanitary standards.  Several delegates called for a 
proposal advocating the elimination of all NTBs affecting LDC 
exports. 
 
¶12.  (U) In addition to LDC access to all Special and 
Differential Treatment provisions and exemption from reduction 
commitments, the LDC representatives agreed that there would 
have to be an agreement to incorporate trade and non-trade 
solutions in the NAMA and agricultural modalities. 
 
----------------- 
Trade in Services 
----------------- 
 
¶13.  (U) Arguing that maximum flexibility should be granted to 
LDCs and priority given to their export interests, delegates 
recognized "Mode 4" as a potential area of benefit for the LDCs, 
through which member nations could make meaningful offers 
regarding market access.  Also, delegates agreed that targeted 
technical assistance should be provided to LDCs in order to 
build improved regulatory and institutional framework and help 
address supply side constraints, particularly in key services 
sectors that support trade. 
 
¶14.  (U) They also discussed exemption from Most Favored Nation 
(MFN) obligations under the GATS agreement for LDCs. 
Additionally, delegates called for the WTO to assist LDC states 
in strengthening their capacity, efficiency, and competitiveness 
of domestic services in accordance with Article IV of the GATS. 
 
 
 
MASERU 00000075  003.2 OF 003 
 
 
----- 
TRIPS 
----- 
 
¶15.  (U) Identifying the ratification of the TRIPS amendment, 
and its resultant manufacturing capacity building, as a 
priority, LDC representatives exhorted member states to submit 
their "needs assessments."  (NOTE:  Only two countries by 
January 2008 had submitted their individual technical needs 
assessments.  END NOTE.)  The representatives also agreed to 
ensure submission of bankable projects to donors and the WTO 
Secretariat. 
 
SIPDIS 
 
¶16.  (U) The Maseru Declaration commits LDCs to support the 
amendment to the TRIPS agreement which mandates disclosure of 
origin of biological resources and associated traditional 
knowledge.  LDC representatives intended to address what they 
felt was misappropriation of patents and enhance development 
benefits that should accrue to the LDCs. 
 
------------------ 
Trade Facilitation 
------------------ 
 
¶17.  (U) Discussion of trade facilitation centered around 
several key issues/challenges, including high implementation 
costs of facilitation measures, proposals which go beyond 
negotiating mandate (i.e., corruption), and Enhanced Technical 
Assistance (ETA).  Most representatives agreed that the ETA 
should form the basis for LDC negotiations and capacity building 
initiatives.  Finally, the delegates emphasized that LDCs should 
not be required to undertake mandatory trade facilitation 
commitments until acquisition of the necessary capabilities is 
complete - as defined by the LDCs themselves. 
 
------- 
Comment 
------- 
 
¶18. (SBU) Ambassador Allgeier and A/USTR for Africa Florie Liser 
were both struck by the limited number of African Trade 
Ministers with longevity in their positions and, as a result, 
some Ministers had a less than comprehensive understanding of 
key Doha issues.  Former key ministers (from Lesotho, Ghana, 
Kenya, and Burkina Faso) with institutional memory on important 
Doha issues are now gone, and a new core group has not yet 
evolved.  This also has an impact on AGOA implementation, 
reflected by an apparent lack of understanding of major 
elements, such as products covered, rules of origin, etc.  The 
USG will need to determine more effective ways to establish new 
relationships and provide critical background information to the 
large number of new African Trade Ministers.  End Comment. 
 
¶19.  (U) This cable has been cleared by USTR PColeman. 
NOLAN