The statement ordered Madagascar to take "concrete steps toward reestablishing a constitutional democratic government and the rule of law," else they would "seriously threaten" the continuation of U.S. trade preferences which the country had enjoyed for the last nine years.

The threat was issued after Andry Rajoelina, who seized power unconstitutionally last March, last weekend refused to attend talks in Mozambique with three former presidents with whom he has signed an agreement on a transition to democracy, an Allafrica.com report said.

The other presidents, including the man he toppled, Marc Ravolamanana, went ahead with the meeting and agreed on the allocation of posts in the transitional administration.

The U.S. statement said Madagascar has been a leading beneficiary of the African Growth and Opportunity Act (AGOA), the law dating back to the Clinton presidency under which African governments can access American markets on preferential terms if they open their economies, build free markets, observe the rule of law and work to increase political pluralism.

But, Kelly continued, "The March 2009 undemocratic transfer of power and the inability to establish a return to democracy have violated one of the vital criteria for Madagascar's continued eligibility for these trade preferences." He noted that the law requires President Barack Obama to decide every year whether a country is eligible to continue to receive its benefits.

The U.S. called on Madagascar to: Announce a full transitional government cabinet; establish a National Reconciliation Council; Make "clear progress" towards setting up an independent electoral commission; and Set a deadline for elections.