TRADE POLICY REVIEW BODY: REVIEW OF BURKINA FASO AND MALI
TPRB'S EVALUATION Back to top

The Trade Policy Review Body of the World Trade Organization (WTO) concluded its first review of the trade policies of Burkina Faso and Mali on 18 and 20 November 1998. The text of the Chairperson's concluding remarks is attached as a summary of the salient points which emerged during the discussion. The review enables the TPRB to conduct a collective examination of the full range of trade policies and practices of each WTO member country 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 (per country) 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 the reports will be published in due course as the complete trade policy reviews of Burkina Faso and Mali 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), Australia (1989, 1994 & 1998), Austria (1992), Bangladesh (1992), Benin (1997), Bolivia (1993), Botswana (1998), Brazil (1992 & 1996), Burkina Faso (1998), Cameroon (1995), Canada (1990, 1992, 1994 & 1996), Chile (1991 & 1997), Colombia (1990 & 1996), Costa Rica (1995), Côte d'Ivoire (1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992), El Salvador (1996), the European Communities (1991, 1993, 1995 & 1997), Fiji (1997), Finland (1992), Ghana (1992), Hong Kong (1990 & 1994), Hungary (1991 & 1998), Iceland (1994), India (1993 & 1998), Indonesia (1991 and 1994), Israel (1994), Jamaica (1998), Japan (1990, 1992, 1995 & 1998), Kenya (1993), Korea, Rep. of (1992 & 1996), Lesotho (1998), Macau (1994), Malaysia (1993 & 1997), Mali (1998), Mauritius (1995), Mexico (1993 & 1997), Morocco (1989 & 1996), New Zealand (1990 & 1996), Namibia (1998), Nigeria (1991 & 1998), Norway (1991 & 1996), Pakistan (1995), Paraguay (1997), Peru (1994), the Philippines (1993), Poland (1993), Romania (1992), Senegal (1994), Singapore (1992 & 1996), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 & 1998), Sri Lanka (1995), Swaziland (1998), Sweden (1990 & 1994), Switzerland (1991 & 1996), Thailand (1991 & 1995), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 & 1998), the United States (1989, 1992, 1994 & 1996), Uganda (1995), Uruguay (1992), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).

TRADE POLICY REVIEW BODY:   REVIEW OF BURKINA FASO AND MALI
CONCLUDING REMARKS BY THE CHAIRPERSON Back to top

The first Trade Policy Reviews of Burkina Faso and Mali were conducted by the TPR Body on 18 and 20 November 1998. These remarks, prepared on my own responsibility, are intended to summarize the main points of the discussion; they are not intended as a full report. Further details of the discussion will be fully reflected in the minutes.

The discussion developed under three main themes: (i) macroeconomic and structural environment; (ii) multilateral and regional agreements; and (iii) trade measures and sectoral policies.

Members commended Burkina Faso and Mali on the liberalization and economic reforms they had undertaken. These, combined with the devaluation of the CFA franc in 1994, had resulted in steady economic growth, low inflation and improved international competitiveness of some products. However, progress in restoring balance to government finances and the current account had been limited and export competitiveness was, in general, hampered by the high costs of basic utilities supplied by public enterprises. In addition, external debt was high. Noting that exports, still confined mainly to cotton, livestock products and gold, hardly covered 50% of imports, Members sought clarification on measures to diversify both economies, while containing the negative effects of recurring drought. Questions were asked about delays in implementing privatization programmes and about the foreign direct investment (FDI) regimes, with emphasis on discriminatory treatment of non-regional investors under the planned WAEMU Community Investment Code (CIC).

Members inquired about the implementation of competition policies and the effects the WAEMU common external tariff (CET) would have on tax revenues owing to the heavy reliance of both Burkina Faso and Mali on trade taxes. Questions were raised on intellectual property rights and the steps being taken to bring the Bangui Agreement into compliance with TRIPS.

There was a certain worry about price controls that still applied to certain goods in Burkina Faso, and about provisions of its investment Act that gave preference to jobs for nationals and domestically-owned service suppliers.

Noting the relatively low level of FDI in Mali, Members asked about measures envisaged by the Government to attract foreign capital.

The representative of Mali said that the CIC would not discriminate against non-regional investors. The CIC, in combination with other actions taken to establish the WAEMU customs union, would help to attract foreign capital. Moreover, the WAEMU Treaty provided for Structural Funds and the implementation of common sectoral projects to compensate for negative effects resulting from participation in the customs union.

The representative also indicated that Mali relied on trade taxes both because of the low level of domestic production and because they were relatively easy to collect; however, diversification of production and improved collection of internal taxes were envisaged to reduce reliance on trade taxes. The Government depended on the private sector to diversify its production and its exports. The absence of a capital market in Mali was a major impediment to the implementation of the privatization programme, which would also cover the services sector. Since March 1998, Mali had been eligible for the IMF/World Bank initiative for Highly Indebted Poor Countries (HIPC). He added that updated data on FDI in Mali would be provided to the Secretariat. National legislation on competition was being amended with a view to bringing it into line with WAEMU provisions in this area. The Bangui Agreement on intellectual property was being revised to bring it into conformity with TRIPS. Environmental measures were being implemented to deal with the effects of the drought.

Confirming that the CET could reduce tax revenue, the representative of Burkina Faso noted that the broadening of the tax base and improved tax collection would contribute to offsetting the losses. He indicated some of the products that would be promoted for diversification purposes, including cotton, cereals and vegetables. A shortage of investors and the need for improved transparency had delayed implementation of privatization programmes. Liberalization would also involve basic utilities. Burkina Faso had been implementing its competition policy since January 1998. However, price controls were maintained on petroleum products as these were sensitive products. On the external debt, he noted that suitable actions would be taken under the HIPC. Moreover, structural adjustment programmes and the move to CET were preparing the economies of WAEMU members for increased competition; support from the international community was necessary. To deal with the drought, environmental action was being taken.

Members acknowledged the determination of Burkina Faso and Mali to base their trade relations on the principles of the multilateral trading system. Within this context, some Members inquired about assistance the WTO could provide to dispel worries about marginalization. Questions were asked about the coherence and coordination of regional agreements, especially WAEMU and ECOWAS to which both Burkina Faso and Mali were party. It was noted that Burkina Faso and Mali would need to improve intraregional competitiveness of their products to meet the increased competition that would result from the implementation of the CET.

Members inquired about the effects of preferential treatment granted to Burkina Faso and Mali under the Lomé Convention and the Generalized System of Preferences, and measures envisaged by these countries to adjust to any reduction of preferences that might result from multilateral liberalization.

Recalling the Integrated Programme for least-developed countries, the representatives of Mali and Burkina Faso indicated that they looked forward to its implementation for their countries. On preferential treatment, discussions among African ACP countries had stressed the need for ACP members to maintain their commercial position.

Coordination between the ECOWAS Secretariat and the WAEMU Commission contributed to avoiding inconsistencies between these two regional agreements. ECOWAS Members agreed that, in the long run it would be the only regional agreement in West Africa.

Members expressed their appreciation of the considerable progress made by Burkina Faso and Mali in liberalizing their trade regimes. However, participants voiced concerns about the complexity of their tariff structures and the low levels of WTO bindings with respect to non-agricultural products. Members sought clarification on the steps being taken to implement the CET in January 2000. Noting that neither country had legislation on contingency trade remedies, Members asked about plans for such legislation. Questions were also raised about the compatibility of restrictions on certain export products and the two countries' objectives to boost exports. It was noted that the countries' unilateral liberalization in the services sector was not reflected in their WTO commitments, and that restrictions on FDI in financial services and telecommunications monopolies were being maintained.

Members took note of the fact that, as a safeguard, Burkina Faso was implementing references prices on sugar. Specific questions were raised regarding local content schemes, other duties and charges, import licensing and state ownership in basic services, especially financial services.

Mali was encouraged to sign the Plurilateral Agreement on Government Procurement. Members noted that the special internal tax on certain products (ISCP) was included in the VAT assessment, and the service provision contribution (CPS) was applied although it did not appear in the list of other duties and charges bound by Mali. Concerns were expressed about provisions on state participation in the capital of mining companies.

The representative of Mali indicated that tariff rationalization undertaken by Mali since 1991 had prepared it for implementation of the CET. However, implementation would increase tariffs on capital goods and inputs from the current level of zero to 5%. Future imposition of other duties and charges would be in compliance with WTO commitments. Common legislation was scheduled to be introduced within the framework of WAEMU. On customs valuation, he indicated that Mali would apply the "transaction-value" basis from the year 2000. However, technical assistance was needed to familiarize customs agents with the system. An increase in the rate of the VAT would mitigate the reduction in tax revenues which might result from the planned abolition of the CPS. The representative added that the ISCP was a non-discriminatory internal tax. He added that the 3% export tax was the main tax on mining activities. Privatization of public enterprises, including SOTELMA, the telecommunications company, would improve competitiveness.

The representative of Burkina Faso noted that its customs tariff was simplified in July 1998 as a first step in the move to the CET. He added that the safeguard action on sugar was to prepare the state-owned sugar company for privatization. The ban on hides and skins was to protect an infant industry; a revision of the ban was under consideration. He indicated that, in general, the services sector was liberalized. He went on to note that the CSE was collected for livestock development purposes, while special authorization was required for the export of cereals and shea nuts for statistical reasons.

In conclusion, it is my sense that Members welcomed the collective participation by Burkina Faso and Mali in the review process and the significant steps taken by their authorities towards more open and deregulated economic and trade regimes. Members recognized the difficulties of such major adaptation, particularly given the challenges faced by both Burkina Faso and Mali as landlocked least-developed countries, with a small resource base. They strongly encouraged both countries to consolidate and build on the achievements of recent years. I also thought that Members were conscious that, if the policies pursued domestically are to achieve the desired results, it is important that they receive support at the regional level and within the multilateral trading system. Back to top