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U.S. Renews Trade and Investment Talks with Angola

Thursday, April 03, 2014
Sandler, Travis & Rosenberg Trade Report

The U.S. resumed this week discussions with Angola under a trade and investment framework agreement signed in 2009. The Office of the U.S. Trade Representative states that the TIFA Council is a mechanism for regular, high-level dialogue on ways to “promote sound trade policies, attract investment to Angola, and advance sustainable and inclusive development,” but this week’s meeting was the first to be held since June 2010. Discussions focused on topics such as small and medium-sized enterprises, utilization of the African Growth and Opportunity Act, protection of intellectual property rights, agri-business prospects and development, and improving bilateral investment opportunities.

Some of these issues were also mentioned in USTR’s recent annual trade barriers report, which noted the following with respect to Angola.

- There have been increases in import tariffs on beer, fruit juices, vegetables and roofing materials, but the U.S. does not export much of these goods to Angola.

- Pre-shipment inspection requirements have been relaxed, but traders must obtain PSI services from private inspection agencies if they wish to benefit from “green channel” access or if PSI is required by their letter of credit agreement.

- The construction of two dry ports for container storage in the Luanda capital area and the diversion of some marine traffic to the port of Lobito have improved customs clearance. However, imports of certain goods may require specific authorization from various government ministries, leading to bureaucratic bottlenecks that can result in delays and extra costs.

- Fees for the use of clearing agents (which are required for shipments of $1,000 or more in value) have remained at about 1-2% of the value of the declaration despite an increase in the number of such agents in operation.

- Angolan law provides basic IPR protections and the legislature is working to strengthen existing legislation, but IPR protection remains weak in practice due to a lack of enforcement capacity.

- Angola is formally open to foreign investment, but incentives are negotiated on a case-by-case basis, the country’s legal infrastructure provides insufficient protection to foreign investors, and obtaining the proper permits and business licenses to operate in Angola is time-consuming. A private investment law was passed in May 2011 to help create a more investor-friendly environment, but many laws governing the economy have vague provisions that permit wide interpretation and inconsistent application across sectors.

- Corruption is prevalent in Angola due to an inadequately trained civil service, a highly centralized bureaucracy, antiquated regulations and a lack of implementation of anti-corruption laws.

USTR notes that total trade between the U.S. and Angola in 2013 was valued at $10.2 billion, but the vast majority of this amount ($8.7 billion) was accounted for by U.S. imports of crude oil from Angola, which benefit from preferential treatment under AGOA. Other U.S. imports from Angola included diamonds ($19 million), wood ($1 million) and rubber ($71,000). U.S. exports to Angola were valued at $1.5 billion and were led by machinery ($533 million), poultry ($249 million), iron and steel products ($133 million), electrical machinery ($104 million) and optic and medical instruments ($62 million).

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