Madagascar: February 2001

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TRADE POLICY REVIEW BODY: REVIEW OF MADAGASCAR
TPRB'S EVALUATION  

The review enables the TPRB to conduct a collective examination of the full range of trade policies and practices of each WTO member countries at regular periodic intervals to monitor significant trends and developments which may have an impact on the global trading system.

The review is based on two reports which are prepared respectively by the WTO Secretariat and the government under review and which cover all aspects of the country's trade policies, including its domestic laws and regulations, the institutional framework, bilateral, regional and other preferential agreements, the wider economic needs and the external environment. A record of the discussion and the Chairperson's summing-up together with these two reports will be published in due course at the complete trade policy review of Madagascar and will be available from the WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.

Since December 1989, the following reports have been completed: Argentina (1992 and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bahrain (2000) Bangladesh (1992 and 2000), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992, 1996 and 2000), Burkina Faso (1998), Cameroon (1995), Canada (1990, 1992, 1994, 1996, 1998 and 2000), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995), Côte d’Ivoire (1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991, 1993, 1995, 1997 and 2000), Fiji (1997), Finland (1992), Ghana (1992), Guinea (1999), Hong Kong (1990, 1994 and 1998), Hungary (1991 and 1998), Iceland (1994 and 2000), India (1993 and 1998), Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995,1998 and 2000), Kenya (1993 and 2000), Korea, Rep. of (1992, 1996 and 2000), Lesotho (1998), Macau (1994), Madagascar (2001), Malaysia (1993 and 1997), Mali (1998), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), Mozambique (2001), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway (1991, 1996 and 2000), Pakistan (1995), Papua New Guinea (1999), Paraguay (1997), Peru (1994 and 2000), the Philippines (1993 and 1999), Poland (1993 and 2000), Romania (1992 and 1999), Senegal (1994), Singapore (1992, 1996 and 2000), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 and 1998), Sri Lanka(1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991, 1996 and 2000 (jointly with Liechtenstein), Tanzania (2000), Thailand (1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 and 1998), the United States (1989, 1992, 1994, 1996 and 1999), Uganda (1995), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).

 
 
TRADE POLICY REVIEW BODY:   REVIEW OF MADAGASCAR
CONCLUDING REMARKS BY THE CHAIRPERSON Back to top

We have had a thorough and constructive discussion of the trade policies of Madagascar. Members were impressed by Madagascar's recent strong economic performance, which they attributed to the strengthening of its market-oriented reforms, including trade liberalization. Members commended Madagascar on its interim Poverty Reduction Strategy Paper (PRSP) and sought clarification on the mainstreaming of trade in the PRSP. They noted that Madagascar's debt relief under the HIPC initiative would further assist its macroeconomic situation. Some concern was expressed about the pace of the privatization process and about restrictions on land ownership, which were negatively affecting foreign direct investment, particularly in the tourism subsector. Members encouraged Madagascar to continue the reform process so as to allow it to fully benefit from its rich resource base and enormous potential.

Members appreciated Madagascar's active participation in the multilateral trading system. Some Members urged Madagascar to join them in their support for the launch of a new round of multilateral trade negotiations. Members called upon Madagascar to improve commitments under the GATS, particularly in areas such as telecommunications, transportation and tourism, and to meet its WTO notification requirements. Members expressed hope that a revitalised Integrated Framework, in which Madagascar would be an early participant, would yield beneficial results in meeting Madagascar's technical assistance needs and its multilateral commitments. Members were supportive of Madagascar's initiatives towards regional and bilateral agreements to expand its trade, but urged Madagascar to ensure that such agreements remained consistent with the multilateral trading system.

Members urged Madagascar to strengthen its domestic process of trade policy coordination and were encouraged by Madagascar's intention to establish a national committee on WTO matters. Members commended Madagascar's reduction of import duties, although it was acknowledged that Madagascar might encounter problems of policy coherence given other recommendations to maximize revenue from import levies. Some concern was expressed about the high level and variety of additional import taxes. Suggestions were made that Madagascar increase the number of its tariff bindings on non-agricultural products. Members noted that Madagascar had just adopted the WTO provisions on customs valuation and inquired about implementation difficulties it might face. Questions were raised about pre-shipment inspection, quantitative restrictions on imports of products such as vanillin and precious stones, and about export promotion, including the export processing zone and export credit.

Members noted that Madagascar's economic performance had suffered somewhat because of its significant reliance on the agricultural sector which had faced serious climatic difficulties. In addition, some Members pointed out that Madagascar's agricultural exports could be expanded if markets were more open in developed countries. Noting that aquaculture was expanding rapidly in Madagascar, Members inquired about measures taken by Madagascar following the prohibition by foreign countries of some of its exports, mainly shrimp, on sanitary grounds. There was also recognition that Madagascar might further exploit non-reciprocal preferential treatment provided by developed countries to expand its exports if it improved its infrastructure and the competitiveness of its manufactured products, mainly textiles.

Members also sought further clarification on a number of issues, including:

• government procurement and eventual participation by Madagascar in the Plurilateral Agreement on Government Procurement;

• adoption of new competition legislation;

• implementation of the TRIPS agreement in January 2006;

• legislative and structural reforms in the mining and energy sector; and

• structural reforms in the services sector, especially in banking and insurance services.

Members appreciated the responses provided by the delegation of Madagascar to most questions raised during the meeting.

In conclusion, it is my view that this Review has given Members an opportunity to better understand the economic challenges facing Madagascar. Members were encouraged by Madagascar's economic performance and were optimistic about its economic prospects. Members encouraged Madagascar to maintain both the pace and the direction of its reforms, and urged that its bilateral and regional arrangements be WTO-consistent. In my personal capacity, I advocate that all Members support Madagascar in its efforts. In this respect, we should pay particular attention to Madagascar's request to the Membership for technical assistance.