US embassy cable - 03ABUJA152

UNCLAS SECTION 01 OF 02 ABUJA 000152 
 
SIPDIS 
 
 
SENSITIVE 
 
 
STATE FOR AF/W AND EB/TPP 
STATE PASS USTR 
COMMERCE FOR ITA/MAC 
GENEVA FOR USTR 
 
 
E.O. 12958: N/A 
TAGS: ETRD, NI, WTRO, USTR 
SUBJECT: NIGERIA: NEW GON COMMERCE MINISTER SUPPORTS STRONG 
TRADE TIES WITH UNITED STATES 
 
REF: A. ABUJA 40 
     B. ABUJA 29 
     C. 02 ABUJA 3357 
     D. 02 ABUJA 3351 
 
 
Summary 
------- 
1. (U) Minister of Commerce Ngelale told the Ambassador in a 
January 10 meeting that he intends to follow his predecessor 
as a strong voice for sub-Saharan Africa in the WTO. He also 
endorsed a constructive relationship between the United 
States and Nigeria on trade issues. A Ministry of Commerce 
official separately previewed Nigerian positions on current 
U.S. proposals in the WTO, indicating likely support for our 
TRIPs moratorium but opposition on agriculture. Minister 
Ngelale also expressed disappointment that Nigeria had not 
yet taken full advantage of AGOA and discussed how AGOA 
legislation pending in the National Assembly might be passed. 
End Summary. 
 
 
Maintaining a Strong U.S.-Nigeria Trading Relationship 
--------------------------------------------- --------- 
2. (U) Minister of Commerce Precious Ngelale told Ambassador 
Jeter in a January 10 meeting that he intends to be a 
constructive voice for sub-Saharan Africa in the World Trade 
Organization (WTO). He recognized with "pride and gratitude" 
that his predecessor was such a voice. Ngelale pledged to 
work within the WTO framework to ensure that developing 
countries are not disadvantaged in the world trading system. 
 
 
3. (U) Mentioning the productive relationship between the 
United States and Nigeria in recent years on trade issues, 
Ngelale hoped to continue working collaboratively with the 
United States in this area. In particular, he desired to work 
closely with Ambassador Zoellick and looked forward to 
meeting Zoellick at the Mauritius AGOA forum. 
 
 
WTO and GON Trade Policy Formulation 
------------------------------------ 
4. (U) Only on the job for two weeks, Ngelale recognized that 
he was still learning many issues, including the WTO. He was 
unable to respond to the Ambassador's queries on specific 
U.S. proposals such as our TRIPs moratorium, agricultural 
proposal, and our proposal for market access for 
nonagricultural goods, but he promised that Nigeria's 
positions would be formulated in terms of the broader 
national interest and not narrow vested interests. 
 
 
5. (U) Ngelale took on the Ambassador's suggestion that the 
Ministry and Embassy establish a working-level committee to 
discuss WTO issues, and on January 13, Ministry of Commerce 
Deputy Director for Bilateral Trade A. T. Ogunfemi and Deputy 
Director for Multilateral Trade Ibrahim Ma'ibbi provided 
Econoff with a preview of likely Nigerian positions on WTO 
issues. 
 
 
6. (U) Ma'ibbi said Nigeria would not likely back the U.S. 
agricultural proposal. In particular, he said Nigeria was 
concerned about significant tariff liberalization on 
agricultural goods because reducing tariffs on rice, for 
example, would spell the immediate doom of Nigerian rice 
farmers. Nigeria's non-oil economy, still agriculturally 
based, could not absorb the many dislocated farmers quickly, 
and this would hurt the Nigerian economy. Ma'ibbi also 
contended that tariff liberalization would put Nigerian food 
security in a more perilous state than it currently is as a 
net importer already. Ma'ibbi added that Nigeria would likely 
support efforts to limit domestic support and export subsidy 
programs in developed countries, but would like to see the 
door left open for developing countries to provide support 
for agricultural development. 
 
 
7. (U) On the TRIPS moratorium, Ma'ibbi characterized the 
U.S. offer as forward leading. He expressed appreciation for 
U.S. efforts to improve access to medicine for the treatment 
of serious health epidemics in Nigeria. However, he was 
unable to say unequivocally that Nigeria would support the 
U.S. proposal. On services liberalization, he said Nigeria 
would seek gradual liberalization. 
 
 
8. (SBU) Ma'ibbi emphasized that these positions were 
preliminary and would have to be adopted as the national 
trade policy. He went on to provide a candid assessment of 
the GON weaknesses in trade policy formulation. First, 
coordination was poor among agencies such as the Ministry of 
Commerce, Ministry of Finance, and Ministry of Industry. 
Second, the knowledge base of government officials on trade 
issues within each of these Ministries was low. Third, the 
Nigerian private sector generally opposed trade 
liberalization out of fear of increased competition. Without 
a domestic constituency for free trade, it is difficult to 
secure government resources for that objective, he said. In 
response to a query, Ma'ibbi promised to provide Econoff with 
suggestions on where assistance in trade capacity building 
would be most effective. 
 
 
AGOA 
---- 
9. (U) Echoing the Ambassador, Ngelale also was disappointed 
Nigeria has not taken full advantage of AGOA. He pointed to 
two key factors limiting his country's participation. First, 
he recognized that AGOA-consistent textile visa legislation 
needed to be enacted. Under his leadership, he contended the 
Ministry of Commerce would be prepared to take a more active 
role in getting the National Assembly to pass the measure. 
Ambassador Jeter pointed out that part of the problem was the 
AGOA-related measure had been included in an omnibus customs 
reform bill. The overall customs bill was facing stiff 
opposition for several reasons and the AGOA measure had 
become a casualty. Ambassador Jeter then suggested that the 
Assembly remove AGOA textile provisions from the 
comprehensive customs bill. Ngelale agreed to consider this 
option and readily accepted the Ambassador's offer to join 
him in a call on key legislators to explore it further. 
 
 
10. (U) The second reason for Nigeria's failure to take 
advantage of AGOA, according to Ngelale, is that 
stakeholders--in particular the private sector--do not fully 
understand the advantage that AGOA gives African nations. The 
Minister pledged to more actively educate the private sector 
on AGOA opportunities. 
 
 
Comment 
------- 
11. (SBU) The constraints in trade policy formulation 
described by Ma'ibbi confirm our belief that support for U.S. 
positions on trade issues will not be won in the public 
arena. Rather, the cultivation of relationships with key 
players such as Minister Ngelale will be vital. Fortunately, 
Minister Ngelale appears favorably disposed to maintaining 
close relations on trade issues. In the long-run, though, it 
is clear that trade capacity building will be important to 
maintaining and garnering more Nigerian support for our trade 
initiatives. We intend to assess the Commerce Ministry's most 
critical needs and recommend to Washington priority areas for 
capacity building support. 
 
 
12. (U) Meanwhile, the Economic Section will follow-up on the 
Ambassador's proposal to establish a working-level committee 
between the Embassy and the Ministry on WTO issues. We 
envision this committee will meet every six weeks. With 
support from our Public Affairs Section, we hope to provide 
the Ministry with the background information it needs to 
build its institutional capacity on WTO issues of priority to 
the United States. End Comment. 
JETER