East African Business Week (Kampala) NEWS
25 June 2007
Posted to the web 25 June 2007
By Daniel Karibwije Kigali
The office of the U.S. trade representative and the U.S. department of state announced recently that the United States and Rwanda have begun formal negotiations toward a Bilateral Investment Treaty (BIT).
A statement from from the United States Trade Representative (USTR) Office based in Washington DC, said this will strengthen investor protection and encourage the continuation of market-oriented reforms in Rwanda.
The statement added that Rwanda will become more competitive in trade with the inflow of the much needed investment finance.
"Foreign direct investment can be a powerful tool to stimulate economic development, even in the least developed economies, where government is committed to protect and encourage such investment," said deputy U.S. Trade Representative Mr. Karan Bhatia.
"The Rwandan government has opened its economy, improved the business climate, and is capturing the attention of a growing number of U.S. companies. We believe that a U.S -Rwanda Bilateral Investment Treaty can help to enhance the confidence of current and prospective U.S. investors in Rwanda and, ultimately, help promote the new investment that is essential to Rwanda's future."
US-Rwanda trade was valued at US$21 million in 2006, up 22% over 2005.
U.S. imports from Rwanda were valued at $8.9 million in 2006, up 41% from 2005, and consisted mainly of coffee and tungsten ores.
Rwanda has shown a growing interest in using its eligibility under the African Growth and Opportunity Act to increase and diversify exports to the United States.
In the past few years, Rwandan firms, with assistance from the U.S. Agency for International Development (USAID), have undertaken partnerships with U.S. retailers Macy's and Starbucks for trade in fine basketwork and specialty coffee, respectively. U.S. exports to Rwanda totaled $12 million in 2006, up 11% from 2005.
The assistant secretary of state for economic, energy, and business affairs Mr. Daniel S. Sullivan said, "An investment treaty would complement the progress Rwanda has already made on economic reform. It would demonstrate Rwanda's commitment to an open investment policy and deepen our economic relationship. A high quality investment treaty would also set a very positive example for others in the region."
Mr. Bhatia and assistant secretary Sullivan were speaking at an event at USTR to mark the start of the BIT negotiations. Rwandan Ambassador Mr. James Kimonyo also spoke at the event. Representatives of USTR's Trade Advisory Committee on Africa and several leading U.S. companies that are involved in Rwanda, or considering work there, also attended the event.
The negotiations with Rwanda are the first bilateral investment treaty talks with a sub-Saharan African country in nearly a decade.
The prospective treaty would help to improve the environment for U.S. investment in Rwanda, thereby supporting the Central African country's efforts to attract the capital it needs to accelerate economic development and tackle poverty.
Bilateral investment treaties are one of many tools that the Administration is using to help reform-minded African countries. The African Growth and Opportunity Act (AGOA), Trade and Investment Framework Agreements, and U.S. trade capacity building assistance are also helping African countries to grow their economies through increased trade.
The BIT negotiations will continue over the coming weeks. USTR and the State Department co-lead U.S. bilateral investment treaty negotiations.
Bilateral investment treaties are legally binding treaties that provide significant legal protections for investors and investments in BIT partner countries.
The U.S. BIT program encourages the adoption of market-oriented domestic policies that treat private investment in an open, transparent, and non-discriminatory way.
These protections have special importance in developing countries, where BITs help to increase investor confidence and thereby facilitate foreign investment and enhance economic growth.
Copyright © 2007 East African Business Week. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com).
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