Statement of the U.S. Representative
Delivered by Christopher Wilson, Deputy Chief of Mission.
October 6, 2015
Thank you, Chair. I would like to join in welcoming Minister Fortes and her very distinguished delegation from Cabo Verde to Geneva for this, Cabo Verde’s first Trade Policy Review.
Our commercial relationship with Cabo Verde is limited, with merchandise trade turnover accounting for only about one percent of the total. However, while Cabo Verde’s principal export markets are closer to home, our two countries enjoy a strong and growing commercial relationship. Cabo Verde has been a beneficiary of the U.S. trade preference program for sub-Saharan Africa – the African Growth and Opportunity Act – continuously since the program began 15 years ago. And we interact with Cabo Verde both bilaterally and at the regional level, through its membership in the Economic Community of West African States, ECOWAS.
As a member of ECOWAS, Cabo Verde stands to benefit from efforts to break down barriers to intra-regional trade, and we applaud the efforts made over the last year to finalize the ECOWAS common external tariff. We look forward to receiving more information on how Cabo Verde expects ECOWAS institutions and cooperation to address its economic problems, e.g., in agriculture and industrial manufacturing.
While Cabo Verde is not among the larger African countries, it sets a positive example in many ways, including its history of political stability and democratic governance, its high ranking on anti-corruption indices, and its efforts over the past ten years to pursue a market-orientated economic model that mainstreams international trade as part of its development strategy. We note the ambitious Strategic Trade Development Plan outlined in the Government’s report, and we look forward to its communication to WTO Members.
WTO accession has been a core element in Cabo Verde’s efforts to further integrate with the global economy. The terms negotiated were confident and ambitious, particularly in light of Cabo Verde’s vulnerable economic situation and, until just before its accession, status as a least-developed country (LDC). Throughout the negotiations, Cabo Verde emphasized its intent to use the accession process to (a) support its domestic economic reform policies, (b) provide a better policy environment for increased investment, and (c) provide a better life for its people. Not “trade liberalization for its own sake,” but rather a powerful tool to expand Cabo Verde’s economic horizons.
It should be noted that Cabo Verde bound every tariff line and was the first LDC to accede to the WTO under Article XII that accepted the provisions of the Information Technology (ITA) and Civil Aviation (CA) Agreements, taking its tariffs on covered products to zero over extended transitions. Since accession, Cabo Verde has continued to revise and refine its legislative structure for trade and established a National Trade Council within the government to formulate and coordinate its trade policy.
We have some concerns to note briefly today. Some of Cabo Verde’s tariffs are applied at rates higher than the bindings in their Goods Schedule. We look forward to the promised amendment to the tariff law that will deal with this issue. We note in certain cases connections between fiscal incentives and tariff exemptions on one hand and exportation on the other. Some of Cabo Verde’s customs fees do not appear to be approximate to the cost of customs services. A separate tax on imported food, agricultural, and health-related products and not on similar domestic goods, funds Cabo Verde’s Regulatory and Supervisory Agency for Pharmaceutical and Food Products (ARFA). We ask Cabo Verde to consider such issues carefully going forward, and we hope that the Trade Policy Review will help Cabo Verde address them.
We also join other speakers today in encouraging Cabo Verde to take steps to accept the Protocol for implementation of the Trade Facilitation Agreement and to provide relevant notifications related to that agreement.
In its Government report, Cabo Verde notes the challenges it faces in its participation in this organization. The short term revenue and competitiveness impact of reducing its tariffs, sustaining preference erosion from other Members’ tariff cuts, and eliminating discriminatory domestic measures—all of these present domestic challenges that may not, immediately, find compensation in the larger market and more abundant supply chains available through WTO membership and liberalization of the trade regime. For these reasons, we wish to lay particular emphasis today on our admiration of Cabo Verde for joining other Members in the difficult, ongoing work of aligning our trade regimes with WTO provisions going forward, something that challenges all of us every day.
Overall we give Cabo Verde high marks for its courage and persistence over the last seven years in working within the WTO system when protection is necessary, but in general pursuing an open trade and investment regime. We hope this trade policy review encourages a continuation of those policies. We have submitted questions and look forward to reviewing and discussing Cabo Verde’s responses.