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United States Launches Investment Treaty Negotiations with Rwanda

June 14, 2007



Washington, DC– The Office of the U.S. Trade
Representative and the U.S. Department of State announced today that the United
States and Rwanda have begun formal negotiations toward a Bilateral Investment
Treaty (BIT) that would strengthen investor protections and encourage the
continuation of market-oriented economic reforms in Rwanda. 

“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 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.”

Assistant Secretary of State for Economic, Energy, and
Business Affairs 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

Ambassador Bhatia and Assistant Secretary Sullivan were
speaking at an event at USTR to mark the start of the BIT negotiations. 
Rwandan Ambassador 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

In June 2006, the United
States and Rwanda signed a Trade and Investment
Framework Agreement (TIFA), which established a regular, high-level forum for
addressing a wide range of trade and investment issues.  The idea of a
United States-Rwanda BIT arose out of the TIFA discussions. 


The United
States currently has five BITs in force in sub-Saharan
Africa (with Cameroon, the
Democratic Republic of Congo, Mozambique, the Republic of Congo, and Senegal) out of a total of 40 U.S.
BITs in force worldwide.

A BIT would strengthen the existing bilateral economic
relationship between the United
States and Rwanda.  Two-way United
States-Rwanda goods trade was valued at $21 million in 2006, up 22 percent over
2005.  U.S. imports from
Rwanda were valued at $8.9 million in
2006, up 41 percent from 2005, and consisted mainly of coffee and tungsten
ores.  The Rwandan Government has shown a strong 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, have undertaken partnerships with well-known 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 percent from 2005.