By Helen I. Rouce
Washington File Staff Writer

Washington - The United States and Mauritius signed an agreement September 18 that is intended to strengthen and expand trade ties between the two countries.

The agreement, called a trade and investment framework agreement (TIFA), will provide a formal mechanism to address bilateral trade issues and help enhance trade and investment relations.

"Mauritius' experience demonstrates how trade and investment can fuel economic growth and development," said Deputy U.S. Trade Representative (USTR) Karan Bhatia, who signed the agreement in Washington along with Mauritian Foreign Affairs, International Trade and Cooperation Minister Madan Murlidhar Dulloo.

"The government of Mauritius has an impressive track record on democracy, economic growth, openness to foreign direct investment, economic diversification and the expansion of trade," Bhatia said.  "The TIFA will provide an opportunity for our governments to work together to expand trade between our two countries and to work more closely on a broad range of trade-related issues, including moving the World Trade Organization Doha Development Round forward, and on signing the African Growth and Opportunity Act [AGOA]."

Minister Dulloo added: "The signature of the TIFA illustrates the fact that both our countries want to build upon our existing political and economic ties in order to increase trade and investment."  He invited American enterprises to consider Mauritius as an investment destination.

The TIFA provides a mechanism for a more comprehensive trade and investment dialogue that will allow the two countries to explore common objectives and review possibilities for improving trade relations.

A United States-Mauritius Trade and Investment Council to be formed under the agreement will address matters such as trade promotion and development, export diversification, trade capacity building, intellectual property, labor, investment and environmental issues.  The council plans to establish an ongoing dialogue that will help increase commercial and investment opportunities by identifying impediments to trade and investment flows between the two countries and working to remove them.

MAURITIAN DEMOCRACY, PRIVATE SECTOR WELL ESTABLISHED

Mauritius, a small Southern African island nation located in the Indian Ocean east of Madagascar, is a well-established multiparty democracy that has a market-based economy with a strong and dynamic private sector. Since achieving independence in 1968, the country has developed from a low-income, agriculture-based economy to a middle-income diversified economy with growing industrial, financial and tourist sectors.  For most of this period, annual growth has been 5 percent to 6 percent.

Mauritius's economic growth has helped support more equitable income distribution, decreased poverty and a much-improved infrastructure.  The government's development strategy has focused on encouraging trade and economic reforms and facilitating a strong business sector for finance, telecommunications and services.

Total trade between the United States and Mauritius was valued at $252.7 million in 2005.  Significant Mauritian exports include textiles and apparel, sugar, processed diamonds, jewelry, eyewear, and canned and frozen fish.

An important positive trend is Mauritius's effort to diversify its exports to the United States.  The country is growing as an exporter of worked diamonds, sunglasses and eyewear and also has been able to attract significant investment in the services sector, particularly call centers and information communications technology.  Mauritius has attracted more than 9,000 offshore entities, with investment in the banking sector alone reaching more than $1 billion in 2005.

With its large textile sector, Mauritius is a major beneficiary of AGOA.  Exports from Mauritius under AGOA and the Generalized System of Preferences were valued at $152.6 million in 2005, accounting for 69 percent of the country's total exports to the United States.  AGOA has sparked significant investment in Mauritius, and Mauritian investors have made major AGOA-related investments throughout sub-Saharan Africa.

The United States has TIFAs with several other trading partners in sub-Saharan Africa, including Ghana, Mozambique, Nigeria, Rwanda, South Africa, the Common Market for Eastern and Southern Africa, and the West African Economic and Monetary Union.

The full text of the USTR press release is available on the office’s Web site.

For additional information, see Trade and Economic Development and African Growth and Opportunity Act.