World Trade Organization	RESTRICTED
	WT/TPR/G/187 27 August 2007
	(07-3505)
Trade Policy Review Body	Original:       French

 

 

 

 

 

 

TRADE POLICY REVIEW   Report by   Cameroon

 

 

 

Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), the policy statement by Cameroon is attached.

Note:    This report is subject to restricted circulation and press embargo until the end of the first session of the meeting of the Trade Policy Review Body on Cameroon.

CONTENTS

 

                                                                                                                                               Page

introduction                                                                                                                                                                        5

I.              RECENT DEVELOPMENTS IN CAMEROON'S ECONOMY                                                                                5

II.            SOME RESULTS OF THE REFORMS UNDERtaken                                                                                        6

(1)           Structural Reforms                                                                                                                             6

(a)            In the area of trade                                                                                                                      6

(b)           Legal and institutional business framework                                                                           6

(2)           Sectoral Reforms                                                                                                                                  8

(a)            Financial sector                                                                                                                           8

(b)           Taxation                                                                                                                                        8

(c)            State-owned companies                                                                                                             9

(d)           SME/SMI and cottage industry sector                                                                                  10

(e)            Forestry and environmental sector                                                                                        10

(f)            Energy and water                                                                                                                      10

(g)           Telecommunications                                                                                                                 10

(h)           Transport                                                                                                                                    10

III.           PROSPECTS FOR CAMEROON'S ECONOMY                                                                                                    10

(1)           Sectoral Policies                                                                                                                                 11

(a)            Trade                                                                                                                                           11

(b)           Rural sector                                                                                                                                12

(c)            Road infrastructure                                                                                                                   12

(d)           Energy sector                                                                                                                             13

(e)            Social sectors                                                                                                                             13

(2)           Structural Reforms                                                                                                                           14

IV.           INTERNATIONAL TRADE NEGOTIATIONS                                                                                                     16

(1)           Trade Negotiations at the WTO                                                                                                  16

(2)           Negotiation of Economic Partnership Agreements (EPAs)                                               17

APPENDIX TABLES                                                                                                                                                                19

 

introduction

1.                   Since its last WTO Trade Policy Review in 2001, Cameroon has continued with its economic and social reforms (stabilization of the macroeconomic framework and structural reforms), with the support of the international financial community.

2.                   In 2003, for example, the Government of Cameroon adopted a Poverty Reduction Strategy Declaration.  Cameroon is currently implementing the triennial programme for the period 1 July 2005 to 30 June 2008, which was agreed with the IMF and is supported by the Poverty Reduction and Growth Facility (PGRF).

3.                   It was against this background that on 28 April 2006 Cameroon reached the completion point of the Heavily Indebted Poor Countries Initiative (HIPC) and, at the same time, qualified for the Multilateral Debt Relief Initiative (MDRI).  In the long term, reaching the completion point of the HIPC Initiative, which is already having a tangible impact, could secure for Cameroon some CFAF 2,544 billion by way of bilateral and multilateral debt remission, giving the country a sound basis from which to tackle the economic and social challenges it faces.  This will involve promoting and enhancing the viability of public finances and accelerating economic growth, particularly by developing infrastructure, boosting and diversifying exports and improving the business climate and competitiveness.

I.                   RECENT DEVELOPMENTS IN CAMEROON'S ECONOMY

4.                   The growth rates in Cameroon's economy are positive but remain inadequate to combat poverty more effectively.

5.                   Cameroon's main trading partners are:  France, the Netherlands, Italy, Spain, Belgium, China, the Federal Republic of Germany, the United Kingdom and the United States.

6.                   Exports and imports are growing, and Cameroon's main exports are:  oil, wood, bananas, coffee, cotton and cocoa.  Oil exports significantly influence the trade balance, which is in structural deficit.

7.                   Domestic production has clearly suffered from both active and unfair competition from finished products originating in countries with lower production costs, or as a result of smuggling.

8.                   The reasons for the situation described above are to be found in the structure of Cameroon's foreign trade.  Cameroon in fact imports manufactured products, petroleum oils and substantial quantities of cereals.

9.                   Domestic industry's production costs remain high, with the result that its products are not very competitive.  It is therefore essential to repair and upgrade the often obsolete production facilities, particularly with a view to the conclusion of Economic Partnership Agreements (EPAs) with the European Union by 31 December 2007.

10.               Cameroon is a predominantly agricultural country, but almost all of its traditional production and export sectors are static, if not in decline.

11.               Moreover, almost all traditional products are exported unprocessed, with insufficient added value.  This is the result of agricultural practices which remain small-scale, lacking adequate mechanization, using little fertiliser and with limited financial resources.

II.                SOME RESULTS OF THE REFORMS UNDERtaken

(1)               Structural Reforms

12.               In its endeavour permanently to establish an effective and more competitive market economy, the Government has continued to adopt measures designed to reform its trade policy, further liberalize economic activities and enhance its dialogue and partnership with the private sector and civil society through joint management of the economy, as well as to establish a competitive environment in various sectors.

(a)                In the area of trade

13.               The following general points are worthy of note:

·                     Elimination of quantitative restrictions on imports, licences and other import and export authorizations;

·                     freedom to fix prices and profit margins in accordance with market forces;

·                     prevention and suppression of anti-competitive trade practices;

·                     introduction of measures designed to guarantee fairness in commercial transactions, in particular through metrology controls, a crackdown on discriminatory sales, refusal to sell, holding of stocks for speculative purposes and conditional sales;

·                     implementation of legislation on dumping and competition;

·                     reorganization of tax and customs regimes to make them more effective and consistent with the subregional programme adopted within the Central African Economic and Monetary Community (CEMAC);

·                     implementation, as of January 2007, of the computerized system of customs administration (ASYCUDA) and the installation of a container scanner at the port of Douala, the main port through which goods enter the country;

·                     establishment in Douala of the Single Window for Foreign Trade Operations (GUCE) and introduction of the single electronic window, which is designed substantially to reduce delays in import and export procedures.

(b)               Legal and institutional business framework

14.               Since the 1990s, Cameroon has returned to the path of sound, sustained and lasting growth, having embarked on far-reaching changes in the legal system which have made it possible to put in place a legislative and regulatory framework that is liberal, attractive and geared to promoting an environment of competition and competitiveness.

15.               In 2002, the Government secured adoption of the Investment Charter by the National Assembly.  The Charter is largely based on the one adopted by the CEMAC States in 1999.  The sectoral machinery for its implementation, in particular the Investment Promotion Agency, the Export Promotion Agency and the National Agency for Standards and Quality have still to be put in place.  The Charter substantially strengthens the advantages and legal guarantees accorded to companies wishing to invest in Cameroon.

16.               As regards legal guarantees specifically, Cameroon is a party to both bilateral and multilateral investment guarantee agreements, including, in particular:

·                     The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, concluded under the auspices of the United Nations;

·                     the Washington Convention establishing the International Centre for Settlement of Investment Disputes (ICSID);

·                     the Seoul Convention establishing the Multilateral Investment Guarantee Agency (MIGA), which is designed to guarantee non-commercial risks;

·                     the OHADA Treaty, pursuant to which modern, straightforward legal rules based on international practice have been drawn up in the field of business law.

17.               As a result of its membership of OHADA, Cameroon also has available to it arbitral machinery – of both an ad hoc and an institutional nature – based on the most effective international instruments, such as the 1985 Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL) and the 1998 Rules of Arbitration of the International Chamber of Commerce.

18.               Finally, Cameroon is a party to the ACP-EU Partnership Agreement of 23 June 2000 which provides for arbitration machinery for the settlement of disputes between the African, Caribbean and Pacific States (ACP) and contractors, suppliers or providers of services, linked to European Development Fund (EDF) funding.

19.               As regards the legal system, the ongoing work of recent years has included implementation of the following measures:

(i)            Adoption of the Criminal Code, and its publication on the Government's web site;

(ii)           strengthening of the bench court system in commercial proceedings;

(iii)         translation into English and publication in the Official Journal of the OHADA uniform acts;

(iv)         increased oversight of the courts;

(v)          adoption in parliament of laws concerning the administration of justice and the organization of the Supreme Court and other courts and tribunals;

(vi)         in addition, the Audit Court has been set up and has begun its work.

20.               The adoption of this array of legal instruments reflects the determination of the public authorities to modernize further the legal and institutional business framework, in order to attract investment in an increasingly secure environment.

(2)               Sectoral Reforms

(a)                Financial sector

21.               The Government has taken measures to strengthen the financial sector.  In this connection, it should be noted that the Douala Stock Exchange began operations in 2006.

22.               As regards the Crédit Foncier (Land Bank), with the support of the Central African Banking Commission (COBAC), the Government has embarked on the organization of staffing and of the accounting and financial systems.  On that basis, a number of measures have been taken internally, including the introduction of management and performance indicators which have been widely disseminated at both branch and directorate level;  the preparation of management and audit procedure manuals;  and the refocusing of activities by prohibiting the opening of new current accounts and the granting of overdraft facilities.

23.               In the microfinance sector, following the measures taken in late December 2005 to secure strict implementation of the rules of establishment for institutions in the sector, the authorities took the following steps to improve their supervision:

            (i)         Increase in the number of inspections to ensure that certain microfinance institutions (MFIs) not authorized to operate were actually closed down;

 

            (ii)        expedited review of the files concerning networks of village banks to regularize their operations;  and

 

            (iii)       initiation of the process of evaluating the net worth and financial viability of the 508 MFIs authorized to operate.

 

(b)               Taxation

24.               The reform of 1 January 2004 is significant here.  It led, for example, to the proportional tax and the progressive surtax being amalgamated to form a single tax:  the personal income tax (IRPP), which is based on net overall income.

25.               The net overall income corresponds to net income in the following categories:

            (i)      Salaries, wages, pensions and annuities;

 

            (ii)     income from fixed capital;

 

            (iii)    property income;

 

            (iv)    profits from craft, industrial and commercial activities;

 

            (v)     profits from farming;

 

            (vi)    profits from non-commercial and equivalent professions.

 

26.               The same applies to members of civil-law partnerships (natural persons), joint ventures and de facto partnerships which are not liable to company tax.

(c)                State-owned companies

27.               Reform of State-owned companies has continued with the assistance of the World Bank and the International Finance Corporation.

28.               Major progress has been achieved in the process of privatizing SNEC (the national urban water utility), both as a result of the creation of CAMWATER, a State holding company that will ensure that the means of production are maintained and upgraded, and by placing the public drinking water service under a lease management contract.  The invitation to tender for the lease management contract under a public-private partnership was issued in February 2007.

29.               The process of demerging – winding up – and privatizing CAMAIR, a measure decided in December 2005, has continued with the creation, in 2006, of the Cameroon Airlines Corporation, a government-owned corporation, the majority of the shares in which will shortly be reassigned to a strategic partner.  In April 2007, the Government was obliged to declare unsuccessful the invitation to tender that had been issued, as the negotiations with the provisional successful bidder failed to produce a satisfactory bid.  In addition, the authorities have appointed a liquidator, which has already begun work.

30.               The invitation to tender for the privatization of CAMTEL was issued in June 2006.  It should result in the transfer of the majority of shares in that company to a major sector operator with the capital base and technical capacities essential for the modernization of telecommunications in Cameroon and the implementation of the relevant sectoral strategy.

31.               Moreover, the Government has set in place a restructuring plan for CAMPOST.  Under the plan, October 2006 saw the recruitment of a management team which took over management of the company in February 2007, once the management contract had been signed.  One of the management team's main responsibilities is to carry out preparatory work for the establishment of a subsidiary that will be responsible for CAMPOST's financial services.  In order to secure the reconstitution of CAMPOST's assets, the Government has:

(i)         Opened an escrow account with the Bank of Central African States (BEAC) to hold the transfers from CAMPOST made in implementation of the internal debt settlement plan;

(ii)        entrusted financial supervision of CAMPOST to the services of the Ministry of the Economy and Finance responsible for monitoring non-banking financial institutions, which will submit a quarterly supervision report.

32.               As regards State-owned hotels, a call for expressions of interest was launched to recruit a consultant who will be responsible for drawing up an inventory of these facilities with a view to their privatization.

33.               In parallel, the restructuring programme for other State-owned companies and public administrative bodies – which is primarily designed to reduce the financial burden they place on the national budget and steer them back to their fundamental responsibilities – continued, inter alia, through the reorganization of the Special Council Support Fund (FEICOM) and the provision of support for the resumption of the activities of the Cocoa Development Company (SODECAO).

(d)               SME-SMI and cottage industry sector

34.               Government policy on supervision of SME-SMIs and cottage industries has continued, including the launch of phase one of the proposed census of SMEs and the commencement of studies reviewing the possibility of creating handicrafts villages.

(e)               Forestry and environmental sector

35.               A Sectoral Forest and Environment Programme (PSFE) was adopted with donor support and is now up and running.

(f)                 Energy and water

36.               The Government has adopted a National Energy Action Plan for Poverty Reduction (PANERP) to promote access to basic energy services for the great majority of the population, with a view to achieving the Millennium Development Goals.  Similarly, a long-term development plan for the electricity sector is in the process of being finalized.  The aim here is to facilitate, by 2030, a substantial increase in the energy supply by some 10,000 megawatts, to provide for both population growth and economic development.  The plan fundamentally involves the implementation of several large-scale projects in the sector.

(g)               Telecommunications

37.               The Special Telecommunications Fund has been set up.  Designed to support investment policy in this strategic sector, this instrument will enable the Government to provide effective funding for the universal telecommunications service, and to develop telecommunications in a consistent manner throughout the national territory.  Moreover, the public authorities have already put into operation the first multi-purpose community telecentres in certain rural areas.

(h)               Transport

38.               In the field of air transport, the Air Transport Safety and Security Project has been put in place.  The Government's aim, following the liberalization of this sector, is to modernize civil aviation and bring it into line with international safety standards.

39.               As regards land transport, the policy that has been introduced is designed to ensure the safety of the vehicle pool and the ongoing financing of infrastructure maintenance.  In the port subsector, measures have been taken to liberalize and simplify procedures at the Port of Douala.

III.             PROSPECTS FOR CAMEROON'S ECONOMY

40.               The Government of Cameroon will further pursue structural reforms to facilitate private sector operations and to promote investment and growth.  This process requires measures to improve the transparency of public finance and to curtail the losses of State-owned companies and improve the services they provide.  To reduce the obstacles to growth and improve the business climate, efforts will be ongoing to extend financial intermediation, promote good governance, update infrastructure, further improve the regulatory framework in the vital sectors of the economy (in particular, energy, transport and forests) and encourage regional integration and international trade.

(1)               Sectoral Policies

41.               The authorities will continue to implement sectoral strategies in the areas of rural development, building and public works, energy, industry, trade and social sectors.  All of those strategies are – or will be – accompanied by a medium-term expenditure framework (CDMT).

(a)                Trade

42.               In internal trade, the Government will finalize and implement, in collaboration with the private sector and civil society, an internal trade development strategy based on:

(i)            Control of distribution channels and the training/professionalization of the sector;

(ii)           effective implementation of sectoral trade facilitation policies (by reducing road checks, harmonizing rules and facilitating procedures etc);

(iii)         improved consumer protection;

(iv)         cracking down on quality fraud and smuggling.  At the same time, the authorities intend to continue implementing measures to combat smuggling, forgery, illegal price rises and shortages artificially engineered for speculative purposes.

43.               As regards external trade, the Government's strategy involves implementing the rules and taking advantage of the opportunities afforded by Cameroon's membership of subregional and international bodies such as:  the Central African Economic and Monetary Community (CEMAC), the Economic Community of Central African States (ECCAS/CEEAC), the World Trade Organization (WTO) and the Organization of the Islamic Conference (OIC).  The authorities will also take advantage of the fact that Cameroon is a contracting party to the Cotonou Agreement of June 2000 and the African Growth and Opportunity Act (AGOA).

44.               In the area of regional integration, the Government will pursue regional negotiations with its partners within CEMAC, with a view to further liberalizing trade in accordance with multilateral principles.  To that end, it will endeavour to honour in full community commitments on the facilitation of transport and liberalization of trade, in particular, negotiation on the lowering of and compliance with the common external tariff (CET), and to refrain from introducing supplementary import taxes and duties.  It further intends applying the common rules of origin, improving employment market integration and promoting mutual investment.

45.               More specifically, measures to boost and diversify exports will be taken in the following areas:

·                     Promotion of the processing of certain products (cotton, fruit etc);

·                     consolidating traditional commercial partnerships;

·                     identifying new export markets for new production chains that are potentially rewarding for producers (white pepper, tea, pineapples, honey, ginger, dried fruits, vanilla, flowers etc);

·                     winning new markets and promoting a genuine and standard-setting 'Cameroon brand'.

46.               Exports of so-called ethnic products will be expanded, specifically in the direction of Cameroonians living abroad.  Particular attention will be paid to the development of new and modern forms of trade such as:  trade in services, fair trade, trade in organically produced products and trade in products from sustainable agriculture.

(b)               Rural sector

47.               The rural sector continues to be the dominant sector in Cameroon's economy, in terms of both its contribution to growth and its potential for reducing poverty.  To enable the rural sector to play its proper part in the country's economic and social development, the authorities have adopted – and have been implementing since 2006 – a rural development strategy that covers agriculture, livestock breeding, fisheries and forestry.

48.               More specifically, in relation to agriculture, the focus will be on supporting private operators with a view to doubling agricultural production by 2015, including by:

·                     Facilitating access to the land for young people in particular;

·                     facilitating access to credit to encourage microfinance institutions, and creating an agricultural bank whose facilities will be available to all categories of agricultural operator;

·                     starting cocoa and coffee cultivation development funds.

49.               In relation to livestock and fisheries, the strategy will continue to be based on improving the productivity and competitiveness of the production chains that are recognized as being profitable, including ruminants, short-cycle livestock breeding, semi-intensive livestock breeding, non-conventional livestock breeding, fisheries and commercial fish-farming.  As regards forestry, action will focus on the effectiveness of the Sectoral Forest and Environment Programme (PSFE).

(c)                Road infrastructure

50.               Given the importance of roads in the process of the country's economic and social development, the Government's policy in this area, implemented as part of the building and public works strategy, hinges on:

(i)            Extending the road network, taking account of the requirements of industrialization and regional integration policies, service hubs and the need to redeploy agricultural production;

(ii)          rehabilitating the sections of the road network that are in a poor state of repair, and regularly maintaining the whole of the network to keep it up to standard;

(iii)       conducting feasibility studies on the construction of new infrastructure.

51.               More specifically, major construction work will continue, and be completed, on infrastructure, including:

·                     Rehabilitation of the Wouri bridge, and renewing the urban road system in Yaoundé and Douala;

·                     building permanent links between Cameroon and the CEMAC countries, as well as between Cameroon and Nigeria;

·                     building a second bridge over the River Wouri;

·                     construction of a motorway between Yaoundé and Douala;  construction of a motorway ring road around the city of Douala, with a junction at Limbe where the port facility will be transformed as a result of the relocation of Cameroon's industrial and naval shipyard.

(d)               Energy sector

52.               There is still a substantial shortfall in electricity supply.  To remedy this problem, the Government intends finalizing and implementing the medium- and long-term energy plan.  The plan is designed to provide electricity in sufficient quantities, of good quality and at a lower cost to households, social services and industry.

53.               In the medium term, the industrial sector is regarded as pivotal in securing growth to reduce poverty.  Consequently, with a view to the entry into force, in 2008, of the EU-ACP economic partnership agreements, one consequence of which will be to dismantle customs barriers, the authorities are relying on being able to offer business in Cameroon an attractive framework in order to boost both levels of investment and competitiveness.

(e)               Social sectors

54.               The authorities will continue to implement sectoral strategies for education, health and social development.

55.               In the area of health, measures will focus both on improving the provision of care and services and on reinforcing the healthcare system.  In terms of improving the provision of care and services chiefly, the aim will be:

·                     To take further measures to combat infectious and parasitic diseases, notably HIV/AIDS, tuberculosis and malaria, as well as non-transmittable conditions such as diabetes, hypertension and cancer;

·                     to continue to improve access to essential generic drugs in health centres, at subsidized prices.

56.               In the area of education, the main focus will be on continuing to expand infrastructure and increase teaching staff, by building new classrooms and recruiting teachers at both nursery and primary, and secondary school level.  In higher education, measures will be taken in the following three sectors:

·                     The academic sector, by transition to the LMD (First Degree-Masters-Doctorate) system, bringing Cameroon's universities into line with that international standard;

·                     infrastructure, by building new academic infrastructure to cope with the huge increase in qualified young people wishing to go on to higher education;

·                     the university sector, particularly in relation to accommodation facilities and the provision of assistance to students.

57.               In the other social sectors, there will be a particular focus on promoting employment, low-cost housing and the socio economic integration of disadvantaged persons.  In the field of employment, the authorities intend:

·                     Finalizing and implementing the national policy document on employment;

·                     drawing up an employment plan for young people, women, the disabled, vulnerable groups and the long-term unemployed.  As far as low-cost housing is concerned, the main thrust will be to continue building low-cost housing units in Yaoundé and Douala.

58.               In regard to the socio economic integration of disadvantaged persons, it is the Government's intention:

·                     To finalize and implement the programmes for the protection of children experiencing difficulties;

·                     to continue the policy of combating exclusion by granting public assistance and subsidies to institutions that care for the needy, the elderly and marginal groups.

(2)               Structural Reforms

59.               Cameroon will pursue and, indeed, expedite reforms in relation to public finances, State‑owned companies, governance and the financial sector.

60.               In the area of public finance, in order to boost non-oil revenues, the action to be undertaken will include the following administrative measures:

·                     Improving the collection of personal income tax from individuals within the jurisdiction of tax centres for medium-sized companies set up in Yaoundé and Douala;

·                     stepping up efforts to combat fraud and smuggling, by completing the computer link between the Directorate-General of Taxes and the Directorate-General of Customs;

·                     reducing the number of tax and customs exemptions;

·                     abolishing minimum administrative values for all imported goods;

·                     improving VAT administration;

·                     implementation by the Government of the recommendations of the Tax Commission recently set up to reduce obstacles to growth and improve the business climate.

61.               To improve the quality of expenditure, the planned measures will focus on:

(i)            Continuing to consolidate the payroll database;

(ii)          the installation of new payroll software to replace ANTILOPE, which can no longer be guaranteed reliable and effective;

(iii)         improving take-up capacity for resources earmarked for public investment, particularly resources released as a result of debt relief;

(iv)        guaranteeing transparency in the award of public contracts and compliance with the requisite procedures.

62.               As far as State-owned companies are concerned, there will be a redoubling of efforts to complete the privatization of CAMAIR, CAMTEL and the operations of the Cameroon Development Corporation (CDC) in the hevea and oil-palm production sector, as well as to finalize the SNEC lease management contract in the context of a public-private partnership.  The process of privatizing SODECOTON will also be set in motion.  It is planned to recruit a consultant to prepare a study on cotton production and define the preliminary issues to be tackled prior to privatizing SODECOTON.

63.               In the financial sector, the Government intends:

(i)            Creating CAMPOST's financial subsidiary on the basis of the conditions laid down by COBAC;

(ii)          rehabilitating the microfinance sector and restructuring the Crédit Foncier in accordance with the plan agreed with COBAC, so that the institution refocuses on the financing of low-cost housing;

(iii)         implementing the action plan for the restructuring of SONARA to make that body more competitive.

64.               In the area of governance, the authorities will continue to implement the priority action plan for reform of the judicial system.  They will also continue to implement phase II of the priority action plan for the national governance programme.

65.               To sum up, being aware that the current rate of growth is insufficient to generate the resources of its own needed to attain the objectives set out in the Poverty Reduction Strategy and the Millennium Development Goals, the Government has begun the process of revising the PRSP of April 2003, with a view to producing a second-generation PRSP in 2007.  Currently being drawn up, the PRSP will cover a five-year period (2008-2012) and will be based on:

(i)         Consolidating the macroeconomic framework and promoting governance;

(ii)        promoting strong growth that will generate employment;

(iii)       mobilizing and encouraging human resources.  The primary aim must be to help achieve the objectives of Cameroon's development vision.  For the next decade (2008-2017), those objectives will be:

·      To double per capita income;

·      to reduce inequalities;

·      to reduce poverty.

IV.              INTERNATIONAL TRADE NEGOTIATIONS

66.               The Cameroonian authorities are aware that international trade can play a major role in fostering development and combating poverty.  Cameroon is therefore actively engaged in the negotiations within the WTO and, in the context of the Doha Development Round and the economic partnership agreements with the EU, within the group of Central African countries.

(1)               Trade Negotiations at the WTO

67.               Cameroon has many expectations regarding the Doha Round of negotiations.  The Government is confident that the progress achieved at the Hong Kong Ministerial Conference will not be called into question when the negotiations resume, particularly in relation to agriculture, the sectoral initiative on cotton (Cameroon being francophone Africa's third largest cotton producer) and aid for trade.

68.               Cameroon is ready and willing to work with the other WTO Member States to contribute to the process of resuming and finalizing the negotiations on the Doha Development Agenda.

69.               Cameroon expects those negotiations to be resumed in a way that reflects the spirit of Doha, that is to say by taking into account the interests of the developing countries, through:

            (i)      Improved market access for their products;

 

            (ii)     balanced rules;

 

            (iii)       implementation of targeted programmes of technical assistance and capacity-building, backed by sustainable funding.  The aim here is to ensure that the developing countries secure a share of growth in world trade commensurate with their economic development needs.  The concept of development must fully embrace the concept of special and differential treatment, the cornerstone of the Doha structure.  In that connection, the current round should produce a positive decision that takes account of the interests of those developing countries that do not fall into the category of least developed countries (LDCs), but cannot be categorized as emerging countries.

 

70.               Cameroon also accords a great deal of importance to the issue of aid for trade which should, in particular:

            (i)      Take the form of predictable and sustainable additional resources;

 

            (ii)        be provided in the form of grants and complement but not replace the development pledges entered into by developed countries;

 

            (iii)       ensure that the general concept of 'capacity-building' covers a broader field, including both basic infrastructure and trade-related infrastructure, supply issues and adjustment costs;

 

            (iv)       be free of any form of conditionality, as this would stand in the way of its use by the countries for which it is intended.

 

71.               The question of trade preferences is also important for Cameroon, particularly long-standing trade preferences, such as those applying to bananas.  Those preferences, which have so far underpinned the development of African countries, cannot be dismantled until there has been a transitional period of equivalent duration.

72.               As far as NAMA (non-agricultural market access) is concerned, Cameroon supports:

            (i)      The phasing out of tariff peaks, tariff escalation and non-tariff barriers;

 

            (ii)     a degree of protection for the fledgling industries of the developing countries.

 

(2)               Negotiation of Economic Partnership Agreements (EPAs)

73.               Cameroon is in the process of negotiating an economic partnership agreement with the EU in the framework of the Central African region.  The countries involved in the negotiations are:  Cameroon, Gabon, the Central African Republic (CAR), Chad, the Congo, Equatorial Guinea, the Democratic Republic of the Congo (DRC) and Sao Tomé and Principe.

74.               Cameroon is persuaded that the EPAs should be incorporated into the development policies of the ACP countries and regions and fully integrated into the European Union's development cooperation policies.  The EPAs should promote sustainable development, the gradual and harmonious integration of the Central African economies into the world economy and the eradication of poverty.

75.               More particularly, the EPAs should ensure:

·                     Promotion of lasting economic growth;

·                     expansion of productive and supply capacity;

·                     encouragement of the structural transformation of the ACP economies, their diversification and support for subregional integration.  That will require both the establishment of a proper period of transition and asymmetry compatible with WTO rules, and genuine attention to the development dimension.

76.               Regardless of how the cross-cutting nature of the development dimension is interpreted, it must, of necessity, include the following aspects:

            (i)      Reinforcement of overall productive capacity;

 

            (ii)     reinforcement of export capacity;

 

            (iii)    capacity to respond to market requirements;

 

            (iv)    capacity to engage in commercial governance;

 

            (v)        capacity to mobilize development resources, including foreign direct investment (FDI).

 

77.               It is important to mention that Cameroon needs additional resources to cover EPA-related adjustment and development costs.  This should also make it possible to ensure that the EDF resources currently available are not diverted from the development priorities of the ACP countries and regions.

78.               As regards the additional funding and relevant procedures, Cameroon supports:

            (i)         The idea of setting up Regional EPA Adjustment Funds (FORAPE) administered by the regional economic communities themselves, in order to meet the adjustment needs of the individual regions;

 

            (ii)        the view that the EU Member States should undertake to channel the aid funds in a coordinated manner through the financial institutions for regional development, such as the African Development Bank (ADB).

 

79.               In the interests of efficiency, Cameroon would like to see the EU avoid waiting until the year 2010 to achieve the target of €2 billion for aid for trade, since the EPAs are supposed to enter into force on 1 January 2008.

80.               In the interests of predictability and transparency, it will also be necessary to clarify how both the European Commission and the Member States – and indeed the other donors – will contribute to the different funds that are to be established.

81.               Again, in terms of strengthening EU intervention, Cameroon would like to see the EU increase its support to those countries that are not currently eligible for the budget support mechanism, to allow them to meet the eligibility criteria.  Cameroon would also like to see the creation of a budget heading for EPA adjustment in the context of the budget support assistance modality.

82.               Finally, Cameroon wishes to see the introduction of an effective monitoring mechanism that operates within the general framework of EU-ACP relations, and also at regional level.

83.               In the circumstances described above, the EPAs would then provide genuine instruments of development for the ACP negotiating countries.