VZCZCXRO5413
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLS #0865/01 3270504
ZNR UUUUU ZZH
R 230504Z NOV 09
FM AMEMBASSY LUSAKA
TO RUEHC/SECSTATE WASHDC 7456
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RHMFISS/HQ USAFRICOM STUTTGART GE
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC

UNCLAS SECTION 01 OF 03 LUSAKA 000865 
 
SIPDIS, SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON ETRD ECIN EAGR TBIO XW ZA
SUBJECT: TRADE DELEGATION AFFIRMS COMESA RELATIONSHIP, JUMPSTARTS 
ZAMBIA RELATIONSHIP 
 
LUSAKA 00000865  001.2 OF 003 
 
 
SUMMARY 
------- 
 
¶1. (SBU) An inter-agency trade delegation led by Assistant United 
States Trade Representative Florizelle Liser visited Lusaka November 
1-5 to hold regional and bi-lateral trade talks.  The delegation 
held a Trade and Investment Framework (TIFA) Council meeting with 
the Common Market for Eastern and Southern Africa (COMESA) 
Secretariat on November 2.  At the TIFA meeting the two sides 
reaffirmed their strong partnership, discussed AGOA trade and 
options for enhancing U.S.-COMESA trade post-AGOA, , and pledged to 
work together on issues such as WTO/Doha Round and the trade aspects 
of the new Global Hunger and Food Security (GHFS) initiative, 
including a regional approach to biotech.  In bilateral meetings 
with the Zambian government (GRZ) on November 3, the two sides 
agreed to start an informal working group dedicated to expanding and 
diversifying bilateral trade.  The first working group meeting could 
take place, probably via digital video conference, in early 2010. 
The delegation also met with representatives of the Zambian private 
sector to discuss the challenges they face in exporting to the U.S. 
market.  The visit resulted in significant positive press for the 
delegation and for U.S. trade and development policies in Zambia and 
the region.  END SUMMARY. 
 
U.S.-COMESA TIFA MEETING 
------------------------ 
¶2.  (SBU) The delegation -- which included representatives from 
USTR, State, Embassy Lusaka, USDA, USAID, and USAID's Regional Trade 
Hubs for Eastern and Southern Africa -- held a Trade and Investment 
Framework (TIFA) Council meeting at the COMESA Secretariat on 
November 2.  It was the sixth meeting under the COMESA TIFA, and the 
first to be held at the COMESA Secretariat in Lusaka. 
 
¶3.  (SBU) At the opening of the meeting, COMESA Secretary General 
Sindiso Ngwenya noted that the African Growth and Opportunity Act 
(AGOA) provided an open door to African exporters, but that most 
African countries had not yet built the capacity to take full 
advantage of the program.  He stressed that further regional 
integration, and intra-regional trade and investment, was the key to 
developing that capacity.  AUSTR Liser affirmed that the U.S. 
partnership with COMESA was one of the strongest with an African 
regional organization, and that COMESA's progress in its free trade 
area, customs union, and agriculture and food security issues 
enhanced COMESA's global competitiveness.  The Ambassador, who is 
the U.S. Representative to COMESA, surveyed the U.S.-COMESA 
partnership's successful history, and highlighted USG assistance to 
COMESA, including the new USAID USD 8 million Integrated Partnership 
Assistance Agreement. 
 
WTO and DOHA 
------------ 
¶4.  (SBU) Ngwenya noted that some advanced developing countries, 
such as China and India, had opened their markets to African primary 
exports, but not to value-added products, thereby hampering the 
region's economic development prospects.  He lamented that COMESA 
had not yet been granted WTO observer status, and asked for U.S. 
support.  Liser stressed that while COMESA waited for observer 
status, its member countries had a large collective voice in the WTO 
right now.  She added that the United States would welcome African 
members' leadership in discussing an ambitious outcome in Doha talks 
that would create new market access in larger developing countries' 
markets - especially for the value-added products of African 
nations. 
 
The Future of AGOA 
----------------- 
 
¶5. (SBU) Liser noted that, while AGOA was at the center of the 
U.S.-COMESA relationship, the legislation is set to expire in 2015 
and AGOA's third-country fabric provision would end in 2012.  While 
stressing that AGOA's future would be decided by Congress, Liser 
challenged COMESA to think about what the future trade relationship 
should look like, and why the United States should extend AGOA (as 
COMESA has advocated) when many have argued that Africans have not 
taken advantage of it.  Moreover, Africans are developing trade 
partnerships with the EU in which two-way trade benefits are being 
negotiated. Ngwenya argued that regional investment and trade to 
create manufacturing capacity in textiles and other sectors meant 
that Africa was "on the verge" of being able to take full advantage 
of the trade program.  He also suggested that the post-AGOA 
U.S.-Africa trade relationship could be based on a "contractual 
arrangement" (like the EPAs with the EU) rather than a unilateral 
program (like AGOA).  (Note: COMESA Assistant Secretary General 
Stephen Karangizi later testified at a November 17 U.S. 
Congressional hearing on the future of U.S. preference programs. 
Among other things, he called for "permanent" extension of AGOA.) 
 
 
FUTURE COLLABORATION 
 
LUSAKA 00000865  002.2 OF 003 
 
 
------------------- 
 
¶6. (SBU) The TIFA meeting concluded with a substantial list of 
action items for further cooperation and collaboration, including; 
 
- Possible collaboration on the WTO Doha Healthcare Sectoral, which 
would reduce tariffs on pharmaceutical and medical products; 
- Explore cooperation on trade facilitation, especially with regard 
to Doha; 
- Develop a regional AGOA strategy to ensure that an integrated 
COMESA can leverage comparative advantages among its member states 
to develop trade opportunities; 
- Collaborate on biotech outreach and capacity building to COMESA 
member countries.  COMESA plans to have a biotech advisor in place 
in early 2010 to lead its efforts to secure acceptance of biotech by 
COMESA member states; 
- COMESA will provide its view on what the U.S.-COMESA trade 
environment could be post-2015 and whether/why AGOA should be 
extended; 
- Continued consultation on trade-related aspects in the COMESA 
region of the new Global Hunger and Food Security initiative; 
- Explore possible areas of cooperation on protection of 
intellectual property rights (IPR); and, 
- Review the potential marketability of products that have passed 
pest risk assessments, and assess prospective marketability of 
organic products from the region. 
 
U.S.-ZAMBIA BILATERAL TRADE 
--------------------------- 
 
¶7. (SBU) On November 3 the delegation turned to bilateral trade, 
meeting with Felix Mutati, Zambia's Minister of Commerce, Trade & 
Industry, and a wider group of GRZ representatives to explore ways 
to expand and diversify bilateral trade.  Repeating a common theme, 
Mutati lamented that while AGOA opened the door to Zambian 
exporters, Zambia had not yet developed the capacity to "reach the 
door."  He stressed that the GRZ needed to address barriers to 
increased trade and investment, and to inform U.S. investors and 
importers about Zambia.  To that end, he announced that the GRZ 
planned to launch a trade mission/road show to the United States in 
early 2010 to help forge private sector links between the two 
countries.  Liser noted that an amenable business climate is the key 
to attracting U.S. investment. 
 
¶8. (SBU) Liser said that the United States shared Zambia's concern 
over its very low volume of AGOA exports, but stressed the need for 
Zambian products to be marketable and competitive on the U.S. market 
to succeed.  She told Mutati that many USG agencies were ready to 
work with the GRZ on trade issues, and reiterated an earlier 
proposal to start an informal working group on bilateral trade and 
AGOA that would be a first step in creating a stronger collaborative 
relationship.  Mutati supported such a working group, noting that if 
the U.S. was seen to be engaged with Zambia it would give others 
confidence to follow.  Liser cautioned Mutati that it was not enough 
to be engaged with the U.S. - Zambia needs to ensure that it deals 
with negative perceptions of its commitment to rule of law and 
corruption to attract significant investment and bolster trade. 
 
¶9. (SBU) In subsequent working-level discussions between USTR and 
GRZ trade ministry officials, the GRZ indicated that it would be 
sending a letter to USTR formally supporting the working group 
concept and indicating that the ministry's permanent secretary would 
be the GRZ's point of contact.  It was agreed that the two sides 
would aim to hold the first working group meeting, via DVC, in early 
¶2010.  The concept paper for the working group, which USTR 
originally forwarded to the GRZ in the spring of 2009, proposed to 
establish an interagency U.S.-Zambia working group which would seek 
to develop an action plan for increasing and diversifying 
U.S.-Zambian trade and investment, with special attention to sectors 
that have export potential under AGOA. 
 
ZAMBIAN PRIVATE SECTOR WEIGHS IN 
-------------------------------- 
 
¶10. (SBU) As a follow-on to the bilateral meetings, the delegation 
met with representatives of the Zambian private sector to discuss 
their successes and challenges in accessing U.S. markets, including 
barriers that may be unique to Zambia.  Attendees noted that the 
U.S. market could be intimidating for small Zambian producers 
because it is so large, and local producers do not have the capacity 
to meet order sizes.  Delegation members, including a representative 
from USAID's Regional Trade Competitiveness Hub in Botswana, 
stressed that marketability and cost competitiveness were keys to 
the U.S. market, and that Zambian exporters could find success 
filling a niche market rather than competing in mass markets with 
lower cost producers.  Two local business associations pledged to 
become information clearinghouses for Zambian exporters wishing to 
access the U.S. market, and to work closely with the Trade Hub to 
increase Zambian exporters' understanding of AGOA, the U.S. market, 
 
LUSAKA 00000865  003.2 OF 003 
 
 
and their capacity to access it. 
 
POSITIVE PRESS 
-------------- 
 
¶11. (SBU) The trade delegation's visit to Lusaka garnered strong 
press coverage in print and on radio and television.  The opening 
statements at the COMESA TIFA meeting received wide coverage on 
November 3 in all media.  The bilateral meetings and AUSTR Liser's 
interviews on November 3 resulted in significant positive press, 
with stories in all media almost daily until November 10. 
 
¶12. (U) AUSTR Liser has cleared this message. 
 
BOOTH