US embassy cable - 04MAPUTO1628

UNCLAS MAPUTO 001628 
 
SIPDIS 
STATE FOR AF/S 
STATE PASS USTR FOR PATRICK COLEMAN AND AUSTR LISER 
USDOC FOR RTELCHIN 
PRETORIA FOR USDA/FAS 
SENSITIVE 
E.O. 12958: N/A 
TAGS: ETRD, EAGR, ECON, MZ, Tobacco 
SUBJECT: MINISTER OF COMMERCE PRESSES CASE FOR TARIFF RATE 
QUOTA ON TOBACCO 
 
 
SENSITIVE BUT UNCLASSIFIED - DELIBERATIVE PROCESS 
REF: MAPUTO 01502 
Action request in Paragraph Four 
 
1. (SBU) On December 16, Ambassador La Lime met with GRM 
Minister of Industry and Commerce Carlos Morgado at 
Morgado's request to discuss the Mozambican government's 
October 14 request for tariff rate quota on several 
varieties of tobacco (request letter text in reftel). The 
Minister referenced the steep drop in tobacco production in 
Zimbabwe, and inquired about the possibility of transferring 
TRQ to Mozambique. He also asked for a formal response from 
the USG to the five specific requests posed in the October 
letter. Morgado emphasized the development impact of the 
country's tobacco industry and stressed the importance the 
government placed on this issue. 
 
2. (SBU) The GRM has made the request because of the rapid 
increase in tobacco production over the last few years, with 
backing by U.S.-owned companies. In particular, Universal 
Leaf Tobacco has dramatically increased production of flue- 
cured and burley tobacco in Mozambique, and is in the 
process of completing a factory in Tete province with the 
capacity to process 37,000 tons of tobacco in the 2005 
harvest season. Another American company, Dimon, Inc., 
plans to start construction of a tobacco processing plant in 
another province next year. 
 
3. (SBU) Comment: The Minister's decision to raise the issue 
with the Ambassador elevates the profile of the issue, 
indicating that this is not just a major issue for American 
tobacco companies, but for the Mozambican government in 
general. End Comment. 
 
4. (U) Action Request: Post requests a response we can share 
with Minister Morgado to the request reported in reftel. 
LA LIME