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TRADE POLICY REVIEW: MADAGASCAR

2 and 4 April 2008

Concluding remarks by the Chairperson

This second Trade Policy Review of Madagascar has allowed us to significantly improve our understanding of its trade and related policies, and their evolution since its previous Review in 2001. Our discussions have greatly benefited from the participation of Mr. Razafimahefa, Minister of Economy, Trade and Industry, and his delegation. Our thanks are also due to our discussant, H.E. M. Mohammed Loulichki, for his thoughtful and stimulating contribution, as well as those of many delegations.

Members commended Madagascar on its impressive economic performance since 2002, with high real GDP growth rates and decreasing inflation. They expressed the hope that continued economic performance help reduce poverty. A least-developed country, Madagascar had benefited from comprehensive multilateral debt reduction and substantial donor support. It had liberalized trade by reducing the simple average tariff, eliminating mandatory pre-shipment inspection and other taxes on imports; customs procedures had been streamlined. Madagascar’s open skies policy had greatly expanded the supply of air transport services and helped revitalize tourism. Madagascar participated in regional integration through its memberships in COMESA and SADC, enjoyed preferential access to the EC market under the EBA Initiative and the Cotonou Agreement, and to the markets of other trading partners, including the US under AGOA LDC provisions. Madagascar was finalizing its negotiations on an Economic Partnership Agreement with the EC.

Members encouraged Madagascar to improve the transparency of its regime on trade and related policies by making key notifications on, inter alia, customs valuation, licensing procedures, and on restrictions maintained on SPS and TBT grounds. They urged Madagascar to comply with the national treatment principle with respect to excise duties on tobacco products and alcoholic beverages, and to fully align its regime on intellectual property rights on the relevant WTO provisions. The tax regime could be improved if ad hoc exemptions were reduced. Madagascar was encouraged to fully implement its new competition regime and to become an observer to the Plurilateral Agreement on Public Procurement.

Members enquired of plans to restructure the state-owned enterprise in the power sector with a view to attracting investment by independent producers. Madagascar was asked to clarify the state of its fishery resources and the measures being taken to manage them on a sustainable basis. Further information was sought on the investment regime, and on tourism services. Other issues of interest to Members included the regimes for business-related professional services and for express postal services; plans for expanding rice production and exports; and policies under consideration to sustain exports and reduce the trade deficit.

Members appreciated the responses provided by the delegation of Madagascar, and look forward to receiving written answers to any outstanding questions.

In conclusion, Members commended Madagascar on its participation in the multilateral trading system. They congratulated it on its commitment to trade reform and encouraged further steps to enhance the transparency and predictability of its trade regime, and adherence to WTO principles. Members urged Madagascar to improve its multilateral commitments on goods and services, notably by expanding their scope to more non-agricultural goods and to telecommunication and maritime transport services, as well as by lowering bound rates. Members could help by keeping their markets open to products and services of interest to Madagascar, and by providing technical assistance.