VZCZCXRO2996
PP RUEHMA RUEHPA
DE RUEHUJA #1314/01 1911541
ZNR UUUUU ZZH
P 091541Z JUL 08
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 3316
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHOS/AMCONSUL LAGOS 9556
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 ABUJA 001314 
 
SENSITIVE 
SIPDIS 
 
DEPT PASS TO USTR FOR AGAMA 
TREASURY FOR PETERS AND HALL 
DOC FOR 3317/ITA/OA/BURRESS, 3130/USFCS/OIO/ANESA/HARRIS 
DOE FR PERSON, HAYLOCK 
 
E.O. 12958: N/A 
TAGS: ETRD PREL EINV ECON PGOV KIPR EPET NI
SUBJECT: AMBASSADOR AND COMMERCE MINISTER DISCUSS TRADE AND 
INVESTMENT ISSUES 
 
SENSITIVE BUT UNCLASSIFIED -- NOT FOR INTERNET DISTRIBUTION. 
 
¶1. (SBU) Summary:  Ambassador and Commerce Minister Ugwuh 
discussed Nigeria's tariff barriers and bilateral trade and 
investment issues, the upcoming AGOA Forum, GON efforts to 
expand value-added manufacturing and increase non-oil 
exports, The bilateral investment treaty (BIT), prospects for 
an intellectual property (IP) commission and the Doha Round 
on June 10.  The Minister admitted that Nigeria's excessively 
high tariffs and large number of import bans were due to fear 
of competition.  He said he and the Finance Minister were 
working to lower tariffs and eliminate bans but had had 
resistance particularly from the Agriculture Minister (see 
septel).  He requested support in identifying potential 
investors for specific sectors such as fertilizer production 
to help develop productive capacity.  Minister Ugwuh said a 
draft proposal for a BIT was with President Yar'Adua and he 
hoped a BIT could be signed by the next TIFA Council.  He 
sought assistance on the proposed IP Commission and noted the 
GON and other African countries needed to focus more on the 
Doha Round.  The Ambassador and Minister agreed to establish 
working groups on AGOA, TIFA/BIT, Investment and IPR and find 
ways to encourage others in the GON to support elimination of 
trade barriers.  End summary. 
 
¶2. (U) Ambassador met with Minister of Commerce and Industry 
Charles Ugwuh at MCI on June 10.  The Minister was 
accompanied by senior ministry officials and representatives 
of the Nigerian Export Promotion Council (NEPC).  Acting AID 
Mission Director and Econ Counselor accompanied Ambassador. 
Subsequently the Ambassador and Ugwuh opened the U.S.-funded 
Intellectual Property workshop on June 24. 
 
Nigeria's Trade Regime 
---------------------- 
¶3. (SBU) The Ambassador reported to Minister Ugwuh that the 
USG was working hard to change the paradigm in bilateral 
economic relations, including by sponsoring a seminar on 
project finance for electric power projects, a workshop to 
familiarize Nigerian businesses with the products and 
services of U.S. credit and technical assistance agencies, 
and a range of efforts to support the growth of non-oil 
exports under the African Growth and Opportunity Act (AGOA). 
At the same time, the GON needed to reform its tariff and 
trade regime, to enhance two-way trade and allow growth in 
Nigeria's non-oil sectors.  Ugwuh admitted the GON maintained 
high tariffs and import bans "out of fear" of competition 
from manufacturers in other countries.  He said that he and 
Finance Minister Usman were working together to lower tariffs 
and eliminate bans.  At the same time, he was looking to 
establish industrial operations where Nigeria could gain a 
competitive edge, e.g. plastics or other oil and gas 
derivatives.  He said Nigeria was "caught in a vicious 
cycle," and inter alia not taking proper advantage of the 
African Growth and Opportunity Act (AGOA) although he still 
had his own reservations on AGOA's benefit.  Ambassador 
pushed back on this, noting the advantage to Nigeria's SME's. 
 
Bilateral Trade and Investment 
------------------------------ 
¶4. (SBU) The Minister welcomed the Ambassador's recent 
initiatives to move forward bilateral economic relations and 
said he looked forward to regular contact.  He lamented the 
lack of American investments outside of oil and gas, and said 
he greatly valued the potential for U.S. technology to 
contribute to Nigerian efforts to boost value-added 
production.  He admitted it was difficult to "arrange 
everything perfectly" in terms of the investment climate that 
U.S. companies wanted first, but recommended picking a few 
areas, including the power sector and fertilizer production, 
where he could talk specifics with U.S. firms, asking "What 
do you need to do a deal?" so he could then go to the 
President to get the right terms and conditions in place.  In 
the meantime, he was working with the Minister of State for 
Gas to allocate gas supplies for industrial processing, 
though there "was still untidiness" on gathering presently 
flared gas.  The Ambassador noted the importance of his 
points, but said lack of transparency and sanctity of 
contracts are a problem, noting that one of the frameworks 
important for U.S. companies to see is a bilateral investment 
treaty.  "American investors put great stock in the existence 
of BITs and a strong, working Trade and Investment Framework 
 
ABUJA 00001314  002 OF 002 
 
 
Agreement (TIFA)", she said. The Minister replied that a 
draft proposal for a BIT was with President Yar'Adua and he 
was hopeful that the U.S. and Nigeria could reach agreement 
on a BIT before the next TIFA Council. 
 
AGOA Forum 
---------- 
¶5. (SBU) The Ambassador emphasized that the July 14-16 AGOA 
Forum in Washington, DC would be focused on private sector 
investment and that the GON Delegation could also look for 
areas to move forward with the TIFA, including on 
intellectual property rights (IPR).  Nigerian Export 
Promotion Council (NEPC) representatives detailed their 
recent efforts to boost AGOA exports, including through a 
textiles training center in Lagos and proactive efforts to 
enter into contracts with U.S. buyers.  There were 140 
machines at the center and over 200 entrepreneurs had been 
trained recently, with three million dollars in contracts 
signed.  There remained a great need to develop human 
capital.  NEPC had set a goal of 25,000 textiles and related 
jobs by the end of 2009.  There was a need to source 
equipment for emerging enterprises.  Overall, NEPC was 
looking for areas where Nigerians could create value-added 
operations and then scale out.  Fish, shea butter and nuts 
were also promising areas.  NEPC and business people had a 
growing appreciation of the importance of packaging and 
standards.  Buyers from other countries including Japan had 
asked whether products were "approved in the U.S."  NEPC 
appreciated USAID and USDA support for regional workshops on 
packaging and standards.  Acting AID Mission Director told 
the Minister that AID would be happy to work with the 
Ministry of Commerce and Industry to address specific issues, 
including product tracing and identifying markets.  The 
Ministry was also trying to develop existing industrial 
development centers, which had been slated for privatization, 
as platforms to support the development of small and medium 
enterprises (SMEs) in line with the GON's cluster strategy 
for industrial development. 
 
Intellectual Property (IP) Commission 
-------------------------------- 
¶6. (SBU) Minister Ugwuh said latest GON thinking was to set 
up a broad-based IP Commission, along the lines of the 
existing Corporate Affairs Commission.  Though different 
ministries and agencies had some IPR responsibility, e.g. 
"trademarks belonged firmly in MCI," there was an emerging 
consensus to set up an IPC.  The GON welcomed any possible 
U.S. assistance to that end, including on-site advisors and 
technical assistance to answer basic questions such as "How 
to conclude registration processes?" and "How to store 
registrations?"  Subsequently the Ambassador and Ugwuh opened 
a USG funded IPR conference on June 24 where the ministers 
made promissing remarks on IPR issues and redressing concerns 
at the ports where he stated the goal is to clear goods 
within 48 hours. 
 
Doha Round 
---------- 
¶7. (SBU) The Minister stated that African countries had been 
preoccupied with Economic Partnership Agreement discussions 
with the EU, but needed to devote more attention to the Doha 
Round.  Nigeria would be working with other African countries 
to harmonize South-South positions towards making progress in 
the Doha Round. 
 
Establishment of Bilateral Working Groups 
----------------------------------------- 
¶8. (SBU) The Ambassador and Minister Ugwuh agreed to 
establish a working group that would address these issues in 
an effort to improve dialogue and move U.S. goals and 
objectives forward: 
 
-- AGOA (USAID - NEPC and MCI SME Department); 
 
-- TIFA/BIT (Econ Counselor - MCI Trade Director); 
 
-- IPR (Econ - MCI Perm Sec); and 
 
-- Investment (Econ Counselor - Nigeria Investment Promotion 
Commission). 
 
SANDERS