US embassy cable - 05MAPUTO159

UNCLAS MAPUTO 000159 
 
SIPDIS 
DEPT FOR L/T - ZYLMAN, L/EB - SVAT AND BLANCK, AF/S - 
TREGER, EB/IFD/OIA - ROCHE 
DEPT OF COMMERCE FOR MOZAMBIQUE DESK OFFICER - RTELCHIN 
DEPT OF LABOR FOR ILAB - PWHITE AND RYOUNG 
MCC FOR GAULL 
DEPT PASS TO CORPORATE COUNCIL ON AFRICA - TMCCOY 
DEPT PASS TO USTR - PCOLEMAN AND JSHRIER 
JOHANNESBURG PASS TO FCS - RDONOVAN 
JOHANNESBURG PASS TO USTDA - JBELL 
E.O. 12958: N/A 
TAGS: EINV, ETRD, ECON, BEXP, MZ, BIT 
SUBJECT: THE U.S.-MOZAMBIQUE BILATERAL INVESTMENT TREATY 
(BIT) FINALIZED 
 
REF: A. 01 STATE 44940 
B. EXCHANGE OF INSTRUMENTS OF RATIFICATION MEMO 
(01/25/05) 
 
1. On February 1 Ambassador La Lime and Mozambican Minister 
of Foreign Affairs and Cooperation Leonardo Santos Simao 
signed the Protocol of Exchange for the instruments of 
ratification of the US-Mozambique Bilateral Investment 
Treaty. The US-Mozambique BIT, formally known as the 
"Treaty Concerning the Encouragement and Reciprocal 
Protection ofInvestment" was signed earlier in Washington 
by both parties on December 1, 1998, ratified by the US 
Senate in November 2000 and ratified by the Mozambican 
Council of Ministers in December 2004. With the 
ratification instruments now exchanged, the Treaty enters 
into force on March 3, 2005. 
 
2. Bringing the BIT into force is an important step forward 
for investment and trade between the US and Mozambique. 
The BIT offers US investors greater protection for their 
investments and should therefore increase US investor 
interest in Mozambique. Total flow of US foreign direct 
investment (FDI) in Mozambique in 2004 was USD 860,000, 
making the US only the 17th largest foreign investor. 
South Africa continues to lead, investing USD 58.5 million 
in 2004 alone. The value of US exports to Mozambique in 
2004 (January-November) totaled USD 49 million. US import 
values from Mozambique for the same period totaled USD 10 
million. The US Trade Representative is considering 
working with the GRM this year to create a Trade and 
Investment Framework Agreement (TIFA) to further strengthen 
the bilateral trade relationship. 
 
3. Post is sending via registered pouch the Mozambican 
instrument of ratification and the US original of the 
Protocol of Exchange to the Office of the Assistant Legal 
Adviser for Treaty Affairs in the Department (ref B). 
LALIME