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Remarks by Ambassador Demetrios J. Marantis for the Mauritius Chamber of Commerce and Industry

"Paving the Way to Future Growth"

Remarks by Ambassador Demetrios J. Marantis
Deputy United States Trade Representative

Mauritius Chamber of Commerce and Industry
Port Louis, Mauritius
January 17, 2012

*As Prepared for Delivery*

"A beloved American writer, Mark Twain, once reported that “Mauritius was made first and then heaven; and heaven was copied after Mauritius.” That is a compliment to make any country proud. But with all due respect to Mr. Twain, those words tell only a part of the story of Mauritius today. Mauritius’s heaven has also evolved into a vibrant, thriving, modernizing, and perhaps most importantly, diversifying, economy.

"On behalf of President Obama and the U.S. Trade Representative, Ambassador Kirk, I am happy to be here today to celebrate with you how far Mauritius has already come and the steps you continue to take toward future economic growth and prosperity.

"As a small island with limited resources and population, Mauritius faces many national and global challenges. But in so many instances, Mauritius has consistently overcome them. In fact, in 2012, the World Bank once again ranked Mauritius first among African economies, and twenty third worldwide, in terms of overall ease of doing business.

"Your great achievements to date, and your future growth trajectory, can be attributed not only to your impressive track record on democracy, openness to foreign direct investment, economic diversification, and expansion of trade, but also to your vision and determination to fully use every resource and opportunity available. You are a positive role model for fueling economic growth and development through trade and investment, and I applaud your success.

"I am also here today to celebrate the bilateral trade and investment relationship between the United States and Mauritius. We have come a long way together. And our bilateral trade ties serve as a microcosm of the success of U.S. trade and investment policies toward Africa. Our trade relationship rests on four pillars: our Trade and Investment Framework Agreement, or TIFA, ongoing negotiations to conclude a Bilateral Investment Treaty, Mauritius’s use of trade preferences provided under the African Growth and Opportunity Act, known as AGOA, and trade capacity building assistance.

"First, Mauritius has made full use of the opportunities under our U.S.-Mauritius TIFA to further liberalize and expand trade and investment. As a result of work under the TIFA, our trade and investment relationship is growing, and Mauritius is doing particularly well. The TIFA has significantly enhanced cooperation between Mauritius and U.S. trade agencies on topics such as AGOA, trade promotion, export diversification, sanitary and phytosanitary issues, services trade, trade-related infrastructure, and intellectual property rights. And the TIFA has been the major vehicle for identifying and coordinating delivery of trade capacity building and technical assistance.

"Second, in 2009, our countries agreed to negotiate a Bilateral Investment Treaty, or BIT, reflecting your interest in exploring every avenue for deeper engagement. The U.S.-Mauritius BIT will help to reinforce Mauritius’s trade and economic reform efforts and improve Mauritius’s already favorable investment climate by providing high standards of investment protection. Our BIT talks also signal to investors your strong commitment to providing a welcoming, attractive and stable environment for foreign investment. We look forward to accelerating the pace of these negotiations and bringing them to a successful conclusion as soon as possible.

"Third, Mauritius serves as a model for other sub-Saharan African countries in its use of the generous trade opportunities that the United States provides to African countries under AGOA. Mauritius is one of the most successful users of AGOA, resulting in part from the close and positive collaboration between the United States and Mauritius on AGOA implementation. Mauritius’s AGOA exports to the United States grew by 16 percent during 2010, in part due to a rise in apparel, toys, jewelry, eyeglasses, and value-added agricultural exports.

"AGOA trade has also resulted in significant increased investment, not only in Mauritius, but also across the region by Mauritian investors who are making major AGOA-related investments throughout sub-Saharan Africa.

"A key opportunity for AGOA beneficiary countries is the ability to export a broad range of goods duty-free to the United States. Yet the ability to diversify exports in order to take full advantage of opportunities offered by AGOA remains a key challenge for many AGOA beneficiaries. Mauritius is one of a handful of AGOA beneficiary countries that has developed and implemented its AGOA strategy, exporting a diverse range of value-added, competitive products to the United States. I am looking forward to seeing another great example of your diversification into value-added exports – eyeglasses production – when I visit Plastinax Austral later today.

"Fourth, Mauritius has also made effective use of U.S. trade capacity building assistance. USAID-funded regional trade hubs in Kenya and Botswana have helped Mauritian firms participate in a variety of U.S. trade shows, resulting in millions of dollars in new trade deals with U.S. companies. The success of our trade capacity building work – not just in Mauritius but throughout sub-Saharan Africa – underpinned President Obama’s decision last summer to launch the African Competitiveness and Trade Expansion initiative, which will provide $120 million in trade capacity building assistance over four years to help African nations to realize AGOA’s full potential.

"We know what we are doing today. But what about tomorrow? How can Mauritius’s vision and work for future economic growth help to lead the way forward for development in the region more broadly, and how can the United States help to make this vision a reality?

"AGOA is a key part of the United States’ effort to continue to drive economic growth and development in Africa. Since its launch in 2000, AGOA has provided opportunities for real people and businesses, and has contributed to the growth and development of African economies – as exemplified by Mauritius – through expanded and diversified trade. In fact, in 2010, non-oil imports under AGOA totaled $4 billion, up 18 percent from 2009, and included value-added products such as apparel, footwear, processed agricultural products, and manufactured goods.

"But AGOA can do so much more. That’s why the Obama Administration is working with Congress to extend to 2015 one of AGOA’s most important provisions related to the use of third-country fabric. That provision, which expires this September, allows countries like Mauritius to use fabrics produced in third countries to make apparel that is eligible for duty-free entry into the U.S. market.

"Looking further, as AGOA is set to expire in 2015, the Obama Administration is actively engaging AGOA beneficiaries, Congress, and stakeholders to determine what approach to take as we consider its seamless renewal.

"We are asking questions such as, how can we increase AGOA utilization across more countries and more products? While some AGOA beneficiaries, including Mauritius, are exporting a diverse range of products under AGOA, many other AGOA countries have yet to take full advantage of AGOA’s market access. So, how can we replicate Mauritius’ successes on this front? And what can other sub-Saharan countries learn from its successes?

"We are also asking how we can help African countries become more competitive so they can transition from being recipients of trade preferences, to negotiating two-way trade agreements that reflect Africa’s growing presence in the global trading system.

"And how do we achieve such a transition in light of uneven economic development across the countries of sub-Saharan Africa? These questions, and their answers, are critical for U.S.-Africa trade policy, for AGOA, and for the future of the U.S.-Africa trade and investment relationship.

"Beyond AGOA, the United States recognizes the importance of advancing African regional integration, which is critical to address the problem of small, fragmented markets that limit the volume of production, reduce foreign direct investment and importer interest, and raise the costs of importing and exporting across borders.

"The United States hopes that it can help support the integration process underway throughout the Continent, and we are doing so in some unique and innovative ways.

"For instance, we have TIFA arrangements in place with Africa’s key regional economic communities, including Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC), where we explore how the United States can best assist ongoing regional integration efforts.

"With the EAC, we are currently taking our work to a new level and are exploring a new trade and investment initiative with which will involve a potential regional investment treaty, new trade enhancing agreements, and stronger private sector dialogue. Even though Mauritius is not a member of the EAC, I would urge you to follow closely these ongoing talks because they represent a possible model for future engagement with Africa’s other regional economic communities.

"The United States also strongly supports the efforts of COMESA, the EAC, the Southern African Development Community to create a common market through the tripartite Free Trade Agreement by 2014. We also support the recently announced effort to create a Continental FTA. Such landmark agreements will ease the flow of goods and people across borders, and will foster a dynamic environment for economic growth across the entire region. The United States will continue to explore ways to assist you in these efforts, and I urge you to continue to make progress on this bold endeavor.

"Whether in the region, in the World Trade Organization, or bilaterally, Mauritius has been a true leader. You lead with your ideas. You lead with your vision. You lead with your ambition. And you lead with the concrete results you have achieved. It’s no wonder that just over a century ago, Mauritius caught the eye of Mark Twain. And it’s no wonder that today, Mauritius also beguiles investors, innovators, and entrepreneurs who want to make this heavenly paradise home."