US embassy cable - 04ABUJA2040

UNCLAS SECTION 01 OF 03 ABUJA 002040 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED 
 
STATE ALSO FOR USTR -- LISER 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, EIND, NI 
SUBJECT:  NOVEMBER TIFA TALKS IN ABUJA UNDERSCORE GON 
ECONOMIC POLICYMAKING INEFFICIENCIES 
 
REF:  Abuja 1942 
 
1. (SBU) Summary.  Assistant USTR for Africa Liser held 
talks in Abuja on November 11 with Nigerian economic 
officials in the context of the annual meeting of the U.S.-- 
Nigeria Trade and Investment Framework Agreement (TIFA) 
Council.  The discussions included a trade capacity building 
seminar on the U.S. African Growth and Opportunity Act 
(AGOA) and focused on intellectual property rights and 
tariffs and bans on U.S. goods including and textiles. 
Reflecting bureaucratic inefficiency, the GON had not 
approved a communiqu of the TIFA talks as of December 2. 
Similarly, it took nearly three weeks following the talks' 
conclusion for the GON economic ministries to clear a letter 
to USTR Zoellick removing a ban on U.S. textile imports. 
The GON's disorganization before and after the TIFA talks 
underscores how difficult it is for GON reformers like 
Finance Minister Ngozi Ikonjo--Iweala to "deliver the 
goods."  End summary. 
 
2. (U) On November 11 in Abuja, Assistant USTR for Africa 
Liser held talks with Nigerian economic officials in the 
context of the annual meeting of the U.S.--Nigerian Trade 
and Investment Framework Agreement (TIFA) Council.  The 
talks included a trade capacity building seminar on 
"Maximizing the Benefits of AGOA (African Growth and 
Opportunity Act) in Nigeria."  Nigerian Minister of Commerce 
Minister A.D. Idris Waziri led the GON delegation, while 
Florie Liser was assisted by Laurie--Ann Agama, USTR 
director for African affairs; Alicia Robinson--Morgan, U.S. 
Department of Commerce deputy director, Office of Africa; 
Roxana Henderson, U.S. Department of Agriculture (USDA) 
international trade specialist; and USDA attach Jamie 
Rothschild.  The talks focused on intellectual property 
rights (IPR), GON tariffs and bans on U.S. exports, and 
Nigeria's hope for increased textile exports under AGOA. 
 
Intellectual Property Rights Protection 
--------------------------------------------- --------------- 
---------------------------------- 
 
3.  (U) A/USTR Liser described Nigeria as the largest 
African market for pirated U.S. goods and requested 
specifics on Nigeria's protection of intellectual property 
rights (IPR).  John Asein, assistant legal director of the 
Nigerian Copyright Commission (NCC), replied that Nigeria's 
Office of the Presidency is strongly committed to an anti-- 
piracy policy.  Asein remarked that Nigeria has copyright 
inspectors, whom he termed the first line of defense, and 
that Nigeria has a CD registration/inspection system that 
monitors the production of music CDs.  "There is adequate 
legal machinery in place" to uphold the protection of IPR in 
Nigeria, Asein asserted.  Asein noted, however, that 
Nigeria's private--sector participation in intellectual-- 
property protection is weak, and that the Nigerian private 
sector can't or won't do much about the problem.  Asein said 
Nigeria is encouraging companies to reenter the market 
place, but holders of IPR need to regain confidence that 
their rights will be protected before they do so. 
 
4.  (U) Fred Agah, director of the Ministry of Commerce 's 
External Trade Department, said the Ministry of Commerce has 
created the framework for an IPR regime, and especially for 
alternative dispute resolution.  According to Agah, draft 
legislation dating to 2002 aims to reduce the time needed to 
produce results, and to establish an institution similar to 
the United States' International Trade Commission (ITC) to 
investigate complaints in a transparent manner.  Commerce 
Minister Waziri added that the GON is trying "everything 
possible" to protect trademarks, but he provided almost no 
specifics to accompany this assertion. 
 
Tariffs and Bans on U.S. Goods 
--------------------------------------------- --------------- 
-------------------- 
 
5. (U) Assistant USTR for Africa Liser highlighted the 
importance of investor certainty and policy predictability 
and consistency, and explained how import bans and tariffs 
undermine such an environment.  The USDA representative then 
requested a product--by--product listing of all U.S. goods 
that Nigeria has banned or on which it has imposed high 
tariffs.  Fred Agah replied that such a listing might not be 
available because the GON plans to implement a new tariff 
regime by July 1, 2005.  Agah said some changes in 
classification could be phased in as early as January 2005 
and imports will be classified according to four categories. 
He defined these categories as "essential goods," on which 
no duty will apply; "inputs," which will face a 5--percent 
duty; "intermediate goods," on which will be levied a 15-- 
percent duty; and "finished goods," the duty on which will 
be 20 percent.  The Federal Executive Council (cabinet) must 
approve the four categories of imports.  Agah said the GON 
is formulating its policy regarding what are finished goods, 
which he explained are goods destined for use in Nigeria. 
Further deliberations are necessary because some goods, such 
as educational materials,  will be duty free because they 
are essential, but are nonetheless finished products.  Agah 
also said the import bans would be lifted by 2007. 
 
6.  (U) Commerce Minister Waziri had said the United States' 
low level of imports of Nigerian non--oil products is prima 
facie evidence the U.S. tariff system discriminated against 
Nigerian goods, especially textiles.  A/USTR Liser responded 
that when Nigerians say they cannot sell in the U.S. market, 
this doesn't signal a market access issue but rather a trade 
capacity issue.  After Liser made clear that Nigeria's 
inability to compete in the U.S. market reflects unfavorable 
comparative costs and inadequate product marketing rather 
than U.S. market barriers, Waziri acknowledged that "the 
[United States'] door is wide open," but repeated that 
Nigeria's non--oil sector "can't compete" in international 
markets. 
 
7.  (U) Gladys Sasore, President Obasanjo's AGOA advisor cum 
CEO of the Nigeria Export Promotion Commission and special 
adviser to Obasanjo on export programs, disclosed that 
Chinese companies counterfeit copyrighted traditional 
Nigerian print designs.  She said six Nigerian textile 
companies have closed down because of this practice.  In the 
northern city of Kano, Sasore declared, 90 percent of 
printed cloth is counterfeited, meaning that the cloth 
itself bears an inaccurate statement of where the cloth was 
produced.  A/ USTR Liser responded that Nigeria could 
implement safeguard measures to combat dumping since China's 
World Trade Organization (WTO) accession agreement 
authorizes the use of special safeguards to prevent "market 
disruption."  Commerce Minister Waziri replied that he knew 
nothing about the relevant provision.   Liser responded that 
USTR could provide Nigeria relevant documentation. 
 
Nigeria's Erratic Preparation for the Talks 
--------------------------------------------- --------------- 
---------------------------------------- 
 
8.  (SBU) The GON's planning for the TIFA Council was poor, 
and it was evident repeatedly during the session that the 
Nigerian side had prepared inadequately for these talks. 
Two days before the session began, Nigeria's various 
agencies had not yet decided each ministry's role in the 
talks nor which officials would represent Nigeria, nor had 
the Ministry of Commerce ---- the TIFA Council's host ---- 
sent out invitations to other GON ministries to participate 
in the session.  Once the talks opened, the "program of 
events" that the Nigerian side distributed stated it was a 
"draft" document.  Also, Commerce Minister Waziri, who was 
an opening speaker at the TIFA Council, arrived late, noting 
that his staff had not informed him of the session's correct 
starting time.  Near the end of the talks, a Nigerian 
aviation official interjected to use this TIFA trade-- 
promotion session as a forum to urge the U.S. Federal 
Aviation Authority to provide technical assistance, safety 
and security equipment, and fire trucks to Nigeria. 
 
Precursory Side--Show 
--------------------------------------------- --------- 
 
9.  (SBU) Minister of Finance Ngozi, who did not participate 
in the TIFA talks, got caught up in similar disorganization 
elsewhere.  On November 10, the evening before the TIFA 
Council met, Ngozi had arrived more than three hours late 
for a reception at Ambassador Campbell's residence.  Ngozi 
had agreed earlier to meet with A/USTR Liser at the 
residence on what later became an hour--long discussion on 
the removal of Nigeria's ban on selected textile products of 
U.S. origin.  She arrived late because she had to attend GON 
meetings seeking to avert a threatened nationwide strike 
over higher gasoline prices.  This strike was set to start 
in five days.  The Nigeria Labor Congress had announced on 
October 14 its determination to carry out such a labor 
action.  (Begin comment.  The threatened strike was called 
off on November 15, one day before it was to begin.  Ngozi's 
delay in meeting with the U.S. delegation on a trade issue 
extremely important to Nigeria highlighted the lack of depth 
on the GON's economic--policymaking "bench," as well as the 
GON's consistent failure to address seriously the strike 
issue earlier, the threat of which had been made three weeks 
before the meeting at the residence with A/USTR Liser.  End 
comment.) 
 
Comment 
------------------------ 
 
10.  (SBU) Although up to 20 Nigerian officials were present 
at the talks at any one time, Fred Agah, director of the 
Commerce Ministry's External Trade Department, was the only 
unquestionably capable official present representing Nigeria 
that day.  Aside from Agah, no Nigerian officials present 
evinced substantial knowledge of WTO accession treaties and 
the related protection they offer to WTO members.  Because 
the GON has few trade experts and its bureaucracy is 
inefficient and ineffective, Nigeria's commerce minister had 
yet to release a GON interagency approved communiqu of the 
TIFA talks as of December 2.  We will transmit the text of 
the approved communiqu asap. 
 
11. (U) The TIFA talks were held at the Abuja NICON Hilton, 
one of the capital's two international--class hotels. 
During the discussions, and later at an evening reception 
also at the Hilton, the electricity supply failed perhaps 
seven times.  Although the hotel's generators provided some 
backup power, the NICON Hilton's air conditioning system 
operated either negligibly or not at all during the day and 
that evening.  The stifling resulting heat, which provoked 
d 
participants' dozing off during the day and may have 
accelerated the evening reception's premature conclusion, 
was vivid evidence of Nigeria's continuing infrastructure 
problems from which even its supposedly international--class 
hotels are not exempt. 
 
12.  (SBU) The TIFA Council talks were particularly 
important because they made it possible for the U.S. Del to 
reconfirm to the GON our concerns about Nigeria's ban on 
U.S. textile products (reftel).  This issue was the core of 
the discussion between A/USTR Liser and Finance Minister 
Ngozi on November 10 at the Ambassador's residence.  Despite 
Ngozi's having promised that evening to send a letter to 
USTR Zoellick by November 14 clarifying the matter, it took 
the better part of three weeks following the TIFA talks for 
the GON's economic ministries to conclude their interagency 
review of the letter in question.  It finally was given to 
us on December 2 despite our repeated attempts to obtain it 
earlier.  The GON's bureaucratic inefficiencies, as 
exhibited before and after the TIFA talks, underscore the 
immense difficulty of economic reformers like Ngozi to 
"deliver the goods," regardless of  their substantive skill 
and closeness to President Obasanjo. 
 
CAMPBELL