US embassy cable - 05MAPUTO1315

UNCLAS MAPUTO 001315 
 
SIPDIS 
STATE FOR AF/S - HTREGER AND AB/TPP/MTA NISSEN 
USTR FOR AHORAN, CBLISS AND PCOLEMAN 
COMMERCE FOR KBOYD 
E.O. 12958: N/A 
TAGS: ECON, ETRD, MZ 
SUBJECT: MOZAMBIQUE: RESPONSE ON WTO SERVICE NEGOTIATIONS 
INFORMATION REQUEST 
 
REF: STATE 176381 
1. (U) On October 6, Emboff discussed Mozambique's stance on 
WTO service negotiations with Ministry of Industry and 
Commerce National Director Luis Sitoe. Sitoe informed that 
Mozambique has not stated that its submission of a revised 
services offer is linked to negotiations of other aspects of 
the Doha Round, such as agriculture or non-agricultural 
market access. Sitoe stated that Mozambique would be 
prepared to table offers in services while awaiting movement 
in other areas. Mozambique's only significant commitment at 
present is in the banking sector, which was made some years 
ago. 
 
2. (U) Sitoe stated that relevant ministries (i.e. Tourism, 
Agriculture, Public Works, Health, Transport, Communications, 
etc.) will play a key role in decisions on service 
negotiations, as will the remaining major parastatals, 
including those operating in the airline, airport, rail, 
port, and fixed line communication sectors. According to 
Sitoe, all interested parties would have to agree to offers 
in their respective area before they could be offered up in 
the WTO. The legislature would not play a significant role. 
 
3. (SBU) There is a significant constituency within the 
ruling Frelimo party that believes the remaining parastatals 
should remain at least under partial state control, even if 
some limited private management or concessioning is allowed. 
Tourism and construction are already fairly open to private 
ownership and control, while the health sector remains a 
mixed system with much of the private provisions delivered or 
owned by individuals with close connections to the Ministry 
of Health. 
 
4. (SBU) Comment: The parastatals are not likely to retreat 
quietly from the service sector in Mozambique, and some have 
considerable political influence, particularly those 
operating in the port, rail, airline and energy sectors. The 
political establishment guards its privileges carefully, 
sometimes implementing measures that can serve to impede 
investment (e.g. making it difficult for qualified outsiders, 
whether foreign or Mozambican, to get licenses in sensitive 
areas). Further complicating the issue, the GRM has paid 
little attention to the services question in preparation for 
Hong Kong, as it has yet to fully understand what advantages 
can be gained by making services offers. A convincing 
argument will need to be made as to the benefits of trade in 
services, if we hope to engage Mozambique in this area. 
DUDLEY